In India, a number of things are coming together that can really change the complexion of our country over the next decade or two.
First, the social enterprise segment is burgeoning, and several social entrepreneurs have scaled their firms into viable businesses. Not only will their impact be felt through a much bigger platform, their success will also inspire more entrepreneurs to look at serving underserved customers. Second, a new generation of philanthropists is not just contributing financially towards social causes, but also taking a personal interest to ensure that their money drives in the desired change. Their contributions, as also of other traditional foundations, are now not only confined to grants but also support for-profit social enterprises. Third, the new regulation on mandatory corporate social responsibility will release a large pool of financial resources that, if deployed well, can lead to social upliftment. There is still no clarity on whether this money can be invested in for-profit enterprises, but if it can, many of these social businesses can scale up quickly.
While all of the above is great, there are also issues to ponder about. At this stage, when there is easy money and social entrepreneurs are springing up everywhere, there is a clear risk of profit being preferred over greater good. A particularly disturbing trend is impact investors actually co-investing with pure private equity firms and venture capitalists. This co-existence of contradictory objectives means: either the pure investor is resigned to a low return on investment because he can’t find better business models to invest in, or the impact investor is open to shifting focus to financial rather than social return, if not immediately, then some time in the future. Neither is a happy situation and, ideally, the balance lies somewhere in between.
Over the years, Outlook Business has covered more than 150 social enterprises across the length and breadth of the country and these entrepreneurs, with their passion and drive, point to a promising future. Hope you enjoy reading our 6th edition of Good Businesses.
