At a recent April gathering of social enterprise entrepreneurs in Mumbai, a panel debated the build-out of an India-South East Asia Social Enterprise Corridor.
The idea is alluring. India is seeing a blossoming of social enterprises – commercial ventures which fulfil a neglected social or economic need – across the country. New ideas for finance, power generation, conservation, food production, crafts revival are being put to good use, with decent profits being made. According to Intellecap, an India-based social investment advisory firm which has raised $200 million over 10 years for social enterprises and was the curator for the gathering Sankalp Summit, there are 30,000 social entrepreneurs in India. More than 25% of the organizations they run – mostly addressing issues of education, healthcare and water – impact over 50,000 poor people annually. More than 60% of those entrepreneurs operate in regions with tough business environments, including low income states like Uttar Pradesh and Orissa. According to a recent survey released by Intellicap, 40% of India’s social enterprises operate in rural markets, and almost as many – 35% – produce goods and services for both rural and urban markets.
This means that Indian social enterprises are accustomed to working in varied environments – urban, rural, poor, remote, across genders, ethnicities, products and services. It means also that their experiences can carry into other milieus, making an engagement between India and South East Asia with its similar issues and traditions, possible and workable. India is the leader in social enterprise in Asia, and as Scott Lawson, chief executive of investor Sow Asia, explains, has much to share with South East Asia which is a decade behind India in this aspect. India is about to complete a Free Trade Agreement with ASEAN, and a separate one with Thailand which will enable easier trade in goods. It will be a natural for social entrepreneurs to piggy-back on the FTA, and provide solutions whichsays Lawson, “are too big even for governments to look at.”
At this time, neither Indian social entrepreneurs nor South East Asian societies are ready for a social enterprise corridor. Indian entrepreneurs aren’t ready to take such a giant leap forward as yet. Having acquired confidence and a place in niche markets at home, like most entrepreneurs they want to expand their products and services overseas. They are looking more narrowly now for distribution channels, networks and finding other entrepreneurs with whose products theirs would find a good fit. For instance, Atul Joshi, whose US and India-based company Envirofit markets smokeless stoves and solar lighting, and has seen success in the Indian and the African continent. He is looking for a distribution partner in the Philippines and may just have found it with fellow panellist Mark Ruiz’ Hapinoy convenience stores run by women microfinance borrowers in that country.
Such networking is the first step to establishing a ‘corridor’ of mutual learning and benefit, helping to build the fertile eco-system that will allow entrepreneurs to flourish.
Social enterprise goes beyond ‘bottom of the pyramid’ strategies; it requires open societies. South East Asian countries are relatively young democracies; many are still not fully open democratic societies and may still not welcome the grassroots activism that is the handmaiden of social change through social enterprise.
These hurdles will have to be faced, and overcome. Only then can a ‘corridor,’ both virtual and physical, be considered.
The elements of a successful corridor require the following:
- Visionary thinking
- Robust bilateral and multilateral policies
- Good diplomacy and serious government-to-government cooperation
- New regulation and regulators
- Enabling legal frameworks
- Financing
- A critical mass of entrepreneurs with capacity and ability
- Pilot projects
- Common technology
- Open source everything , to make it innovative, acceptable and adaptable
- Production facilities
- Contingent clusters of target populations
In short, an ecosystem must be developed.
Unlike Free Trade Agreements, which are easier to write and execute because they deal with a single element, i.e. trade, corridors are more complex. Like big cities, corridors are an aggregation of talent, financing, access to target populations, market access, and networks that allow the flow of capital and talent and technology. Instead of having pockets of development, a corridor allows an entire region to develop. It starts slow, like the curve of a hockey stick because it takes time and effort to set up the infrastructure, find the benefits of scale, and welcome talent in; but once the elements are in place, everybody rises together.
India has an edge in this development space. Indonesia and Thailand are behind the curve on some of the phone technology that India is already ahead on. So Indian entrepreneurs will have early mover advantage there, benefitting from the lessons and experience of India. This is the benefit of a corridor – being able to exchange and transfer information, expertise and a business model.
Intellecap and Sankalp can take the lead in vigorously promoting the networks that will be the precursor to such a corridor; perhaps the next conference can focus on putting together the elements required to do so.
Manjeet Kripalani is the co-founder and executive director of Gateway House: Indian Council on Global Relations, Mumbai.
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