A challenging opportunity

India has the largest youth population — 66 per cent (808 million) of its total population; and the working age group population (15-59 years) is more than 62 per cent, of which 90 per cent is in the informal sector. Studies show that adequate opportunities for decent work are essential for social and economic mobility of youth. Development of entrepreneurship in youth is a practical approach to that end. A plethora of schemes have been rolled out over the last five years, aimed at developing skills and entrepreneurship among the youth. The idea is to support budding as well as existing entrepreneurs towards self-reliance by providing end-to-end entrepreneurship education, handholding and mentoring. Start-up India is surely a gamechanger, for it unfolds immense opportunities for educated young people with a wide range of state support. It is reported that around 27,000 aspirants were registered in 2020, and more than 1.5 lakh new jobs were created. However, the ambitious scheme has a lot of issues like viability of ventures, poor planning, technical capacity building, competition from the existing entities etc. that need to be properly addressed. Generally, aspirants from classes with 'economic power' (entrepreneurs by choice) receive the benefits of the schemes faster than the potential entrepreneurs from economically less capable sections (entrepreneurs by necessity) in spite of the inclusive nature of the schemes. Moreover, structural barriers such as economic slowdown, digital divide, geographical disparities and glaring socioeconomic inequalities impede economic mobility of marginalised sections.

Development of entrepreneurship is essential for economic growth, but all the same it needs to be viewed as a vehicle to help bridge the socioeconomic divide rather than widen it. Here comes the relevance of social entrepreneurship, a new concept of business for employment generation along with social benefit which has gained currency in the last two decades across the world. It is in consonance with the Sustainable Development Goal 8 — promoting inclusive and sustainable economic growth, full and productive employment and decent work for all. Social entrepreneurship is an opportunity for entrepreneurs from marginalised classes since it is based on 'not for profits' models and meant mainly for employment generation in local communities, especially in trades which the 'for-profit' firms in the formal sector find 'unviable'. Emphasis on social outcomes, rather than profit, is the distinguishing feature of social entrepreneurship — which differentiates it from commercial enterprises or cooperative bodies. Trade is run by close collaboration with members of the community with participatory governance to achieve financial self-sustainability in the market. The bedrock of social entrepreneurship is social capital which is mutual trust by shared values and understandings that binds stakeholders. Social enterprises render a great service to the economy by occupying intermediary space between the private and public sectors. Besides, these enterprises help the government save expenditure on social support.

Social entrepreneurship acquired popularity as an innovative business model, primarily due to declining trust in public institutions and gaps in performance of NGOs and charities. However, far from being an alternative, it is complementary to commercial models since it contributes to social change through economic empowerment of youth from marginalised sections and rural areas. According to a survey by the Global Entrepreneurship Monitor in 58 countries, overall, 3.2 per cent of working-age individuals have succeeded in social entrepreneurship in the start-up phase. When the rate of average start-up commercial entrepreneurships at operational stage in the world is 7.6 per cent, for social enterprises it is 3.7 per cent. Most importantly, gender gaps in social entrepreneurship are narrower than those in commercial entrepreneurship. The World Youth Report (UN), 2020, says that in 2016, around 871 million people in nine countries of Europe and Central Asia benefited from social enterprises which provided services and products worth six billion Euros alongside employment among the marginalised social groups. In Australia, they contributed 2-3 per cent of GDP with the creation of 2,00,000 jobs and it is expected that in the next ten years it could be a four per cent contribution to GDP with 5,00,000 jobs created. The report recommends higher funding for social entrepreneurship in order to achieve social imperatives, complementing the efforts of the state actors and private agencies to the same end.

In India, it is in its nascent stage but the success stories point to the vast potential the country has in social entrepreneurship. Study Hall Education Foundation (SHEF) led by Urvashi Sahni runs around 900 schools for more than four lakh disadvantaged girls, empowering them for better lives. Harish Hande, a pioneering social entrepreneur, runs SELCO — providing sustainable energy sources to rural areas in Karnataka with over 1,20,000 installations and more than 25 operating retail service centers in the state. Pipal Tree, a company by Santosh Parulekar provides formal training to rural youth and looks after placement in decent jobs across the country. Ajaita Shaw founded Frontier Markets which supplies affordable solar powered products in rural areas. Oorja Sustainable Solutions LLP by Karan Singh (Chandigarh) and Digi Swasthya Foundation (telemedicine platform) in Sant Nagar, Uttar Pradesh, by Sandeep Kumar are some latest success stories.

However, the path is not devoid of challenges. Insufficient funding, unsupportive tax regimes, regulatory changes, bureaucratic procedures and access to communication are some of the issues that need to be addressed through government's intervention. The areas of trade and scale of operations in social enterprising are different from those in commercial enterprises and, as such the benefits of Start Up India, like exemption from labour laws, access to finances, subsidies, tax holidays, training and handholding facilities cannot be readily availed of by the social enterprises as they are mostly at evolutionary stage; they need to be tailor made in tune with social and geographical specificities. Contribution through CSR, which is currently zero for social entrepreneurship, needs to be ensured since it is an emerging third sector between public and private sectors.

Government's support is crucial for the growth of social enterprises. Though most of the poverty alleviation schemes encourage SHGs through bank financing, they don't focus sufficiently on social entrepreneurship. In few states, manufacturing of goods for various government schemes such as school uniforms, furniture, stationery, agricultural inputs, biofertilizers etc. are entrusted upon social entrepreneurs but this is not adequate to scale up the business towards viability and self-reliance. 'Ready to eat' food stuffs (supplementary nutrition) in WCD Dept were earlier manufactured by SHGs through social enterprises but, of late, the business is given to state-run corporations in many states. MFP procurement and marketing of tendu leaves (bidi), tamarind, saal seeds, mahua, harra etc. — currently under state-owned corporations or cooperatives — are another huge area of business for social enterprising.

Certain sectors related to social benefit — such as health, education, transport, food products — proved goldmines for commercial entrepreneurs whereas these sectors have large potential for 'not for profit' and employment-oriented social entrepreneurship. While cab services and food products supply are run by MNCs, professional home services like plumbing, air conditioning, carpentry, electrification are now run by for-profit entrepreneurs. Social entrepreneurship too can be encouraged and supported in these sectors since they have huge social value and employment potential.

Social enterprises operate basically in the informal sector. Their transition to the formal sector is important, which is possible only when financial viability helps scale up the operations. Special focus is necessary to encourage social entrepreneurship equally alongside commercial entrepreneurship. An ecosystem needs to be developed with a synergy between aspirants and networks as well as conducive economic, educational, financial, institutional and technical conditions.

The writer is a former Addl. Chief Secretary of Chhattisgarh. Views expressed are personal