Hidden behind the innocuous facade of a typical two-storeyed, small-town shopping arcade in Vapi is a classroom like no other and yet like any other: plastic chairs are arranged in rows surrounded by computer desks lining the whitewashed walls, the students rise in unison excitedly mouthing a sing-song ‘good morning’, their eyes shyly evasive, but these are not impressionable children waiting to be moulded into adults. In fact, many of them have children of their own considering a significant number are housewives clad in dazzling saris, emerging out of a lifetime spent serving the household, while others are young girls of marriageable age chancing a lasting shot at self-sufficiency. Most of them are school dropouts while a handful are graduates. But what binds all of them is the indomitable spirit that has brought them to LabourNet and Hindustan Unilever’s (HUL) livelihood training centre for National Skill Development Council-approved two-month courses in beautification, workplace skills and retailing. LabourNet runs two centres around Vapi, one downtown and the other around 20 km away at Silvassa, the capital of Dadra & Nagar Haveli. The Vapi centre opened a month ago, while the one at Silvassa has been around for a year.
The centre has around 75 students in total, more than half of them female. The centre’s employees have to counter socio-economic customs that often discourage female education beyond elementary school as under-educated grooms might be intimidated by educated girls. However, these are not demure women who take things as they come. Mital Kansagra, a plucky 33-year-old, represents the go-getting attitude of semi-urban India. She is enrolled in the ‘Beauty and Hair Care’ course at the centre and requests me to ask LabourNet to translate the curriculum in Hindi since most students have only studied English for one or two years and aren’t proficient in it. Many housewives in the course intend to become entrepreneurs and start their own salon or sewing business at home. “Around 70% of students from the tailoring course are gainfully employed either at home, at a clothing factory on a daily wage contract basis, or have opened their own shop,” says Yasmin Shaikh, the tailoring trainer, who is currently overseeing her 15th batch. The placement figure for the workplace skills course stands at 50%.
“Initially, we thought we’d just connect workers to employers but we eventually found out that vocational training outcomes aren’t properly defined. How would you define a good carpenter and how will you reflect that in your training methodology? We had to devise our own training methodologies since mere classroom training wasn’t enough; we had to have a work-related approach,” says Vasudevan.
As she partnered with companies such as Panasonic, Godrej and HUL, Vasudevan realised that many in her target group of labourers didn’t want to move. So, she began to focus on getting them employment close to their place of residence. “Collaborative partnerships are the pillars of our entire model. The first pillar is the candidate himself because it has to make economic sense to him. Also, we need patient corporates because these are life-changing decisions the labourers have to take. Often, the socio-cultural milieu may not allow them to take certain decisions. For instance, questions like ‘why should I move’ crop up. We need corporates who will work with us through all these problems,” explains Vasudevan. Clearly, the localised approach at Vapi is a result of the learning that Vasudevan went through earlier. Now, her company works with 110 corporate clients across 40 skill segments such as carpentry, construction, welding and painting, and around 70% of its trainees find employment.
(Loo)crative: Mobile toilets installed by 3S at some schools can be used by people living nearby before and after school hours
The Right Fit
Every social enterprise has its own set of challenges depending on its business model and hence needs to collaborate accordingly to leap over hurdles. For instance, HeadHeldHigh Services (HHH), a rural livelihood training start-up co-founded by Madan Padaki, trains rural youth (mostly school and college dropouts) who can chart their own career course after completing their training. HHH has more than 20 Ruban Centres across the Gadag, Bidar, Tumkur, Raichur, Belgaum and Yadgir districts of north Karnataka, where rural youth are imparted English-language training and business skills and eventually find commission-based employment with corporates for selling their products in rural areas.
So, he started developing curriculum on the fly to impart English training to the youth. “Initially, the programme was extremely intensive, with around 16 hours of course work each day and no holidays. In the night, we would keep the BBC on for trainees. At the end of seven months, we witnessed a virtual miracle when we saw that the trainees were able to write and converse in English,” says Padaki.
Today, HHH runs a six-month residential programme for high school dropouts, which costs around Rs 15,000 (not including food and accommodation). In addition, HHH runs a four-month non-residential programme catering to college dropouts and graduates, for which it charges Rs 10,000. HHH has collaborated with the government as well as not-for-profits in order to scale. It has received Rs 25 lakh from micro loan-NGO Rang De as a kitty for its trainees to dip into; the trainees repay the amount from the salaries they get. Padaki is also trying to tap into CSR funds after the new Companies Act has made it mandatory. He is planning to approach pharmaceutical companies who wish to launch awareness campaigns regarding diseases and products in rural areas. “My pitch to companies is that I have rural youths who are technologically enabled and can communicate with the community and can conduct awareness sessions for Rs 500 per day,” says Padaki. The unfortunate part is that while HHH wants to create rural jobs, most of its corporate recruiters, including ChaiPoint, FirstSource, FreshWorld and Portea, are based in metros such as Bengaluru, Mumbai or Chennai, which defeats the purpose of rural upliftment.
The 3nethra ophthalmology device was developed by Forus Health in collaboration with IIT-M
Meeting The Mainstream
Given the dearth of rural opportunities, though HHH doesn’t mind its trainees being absorbed in mainstream corporate India, the response on the other end is not as enthusiastic. Deepak Arora, CEO, Essar Foundation, for one, remains unconvinced regarding the efficacy of social enterprises, especially in the skill development sphere. “Most of these enterprises are in the low-hanging fruit categories such as IT and service sector skills. But there is a serious mismatch between highly skilled labour required for the manufacturing sector, particularly in the heavy equipment sector costing Rs 3 crore-5 crore and social enterprises. So, corporates have to provide the training themselves. I think the six-month training provided here is superficial, because of which I don’t have much conviction in these organisations,” he says. Rajender Singh, CEO, DLF Foundation, also says that the company is not collaborating much with social enterprises and there is certainly no business benefit for DLF in entering such collaborations.
The divide is not just because of perception but also due to the differing objectives of the partners involved. “Forging partnerships is a complex affair. A for-profit corporate and a social enterprise will have different agendas, which have to match,” says Ronnie Screwvala, founder of Swades. While collaboration on an equal footing may be harped about in theory, it isn’t as easily achieved in reality. “The challenge is that companies don’t collaborate with other companies; NGOs don’t talk to each other. I might be exaggerating to make a point here but the first target is to recognise that we can’t do it all by ourselves and we need collaborations. When we don’t feel threatened by partnerships, it’ll start to happen,” says Shankar Venkateswaran, chief of Tata Sustainability Group. Collaborations between social enterprises and corporates can be of various kinds. “One type is the partnerships that are based on technology. Similarly, Unilever or Pepsi can give huge inputs to social enterprises in rural marketing. Supply chain management is another area of collaboration,” adds Ajit Mahadevan, India director of Acumen Fund.
Harsha Angeri, strategy head, Bosch India, though, is convinced that social enterprises can contribute substantially even in a collaborative model. “Social enterprises provide access to distribution networks to reach out to segments like BoP. Companies can thus avoid reinventing the wheel and leverage their network. Bosch is planning to use the reach and agility of social enterprises in new business models like selling eye-care solutions. Most companies today are restrained by their existing systems and procedures,” points out Angeri.
To Angeri’s delight, Forus Health, with its intelligent pre-screening ophthalmology device called 3nethra, is a social enterprise that has immensely benefited from technical collaboration. “Forus developed the device in collaboration with the Healthcare Technology Innovation Centre (HTIC), a joint initiative of IIT Madras and the department of biotechnology, which assisted Forus with image processing,” says K Chandrasekhar, co-founder of Forus along with Shyam Vasudeva Rao. In addition, Forus has partnered with Cognizant Foundation, the CSR arm of Cognizant. “Some deserving hospitals that can’t afford 3nethra are connected to the Cognizant Foundation. After due diligence, the foundation selects some of the hospitals and provides them with the machines,” says Chandrasekhar.
Chandrasekhar wants to develop an ecosystem for eye treatment. His strategy is to first target ophthalmologists and then diabetes specialists, and once people start taking the cost of not adhering to the diagnoses seriously, to launch the product in strategic public spaces such as railway stations and general hospitals. “The success of a product like 3nethra hinges on access, affordability and awareness. We are supplying the product at an affordable price and making it accessible to ophthalmologists. The guy who has access is the one who can create awareness, which will bring in a multiplication effect. As a start-up, we cannot afford to conduct awareness campaigns on our own,” says Chandrasekhar. While Chandrasekhar is keen that Forus outgrows its start-up status, as experienced elsewhere, this quest towards faster scaling up is inadvertently leading to an outcome that may seem out of sync with the idea of a social enterprise.
Tough Climb Up
As Vipin Kumar Rai, student mobiliser at LabourNet’s Vapi Centre has realised, the pursuit of scale brings along its own pressure. Rai is a man on a mission, tasked with distributing pamphlets in neighbouring households and convincing prospective students to enroll at LabourNet. He typically visits 35-40 households every day and asks them to think of this training as skill insurance against any unfortunate event and not just as a job opportunity.
Vasudevan, on her part, refutes the organisational coercion charge. “Since our inception, there has been a certain amount of pressure on individual centres because you can’t do without pressure in the vocational sphere. It’s not like school education, where people come and sign up with you; here, you have to go out and convince people and mobilise enrolments,” she points out. She adds that this pressure largely comes from within the organisation, as investors aren’t involved in the day-to-day operations of LabourNet; in fact, investors such as the Michael & Susan Dell Foundation and the Acumen Fund only entered the picture last year. “Though investors generally do have a certain RoI expectation, the ones on board with us are impact investors and believe in the planning exercise we undergo.”
Then again, LabourNet helps its centres exercise the same democracy when it comes to their future targets. “We believe that a change in thinking regarding vocational education can only come with scale. Our revenue estimates are calculated using a bottom-up approach; we follow a kind of federation structure wherein individual centres are asked to come up with targets. We only insist that centres honour their commitments; those that feel pressured probably started out with unrealistic target figures to begin with,” quips Vasudevan.
3S’ core activity is renting and maintenance of its mobile toilets. “Apart from rental income, we charge for cleaning and maintaining the toilet using deodorisers so that it doesn’t smell. We have been providing units directly to slums on a pay-and-use basis. We have also installed it in some schools. The model is such that the kids don’t pay for it but people who live outside the school can use it before and after school hours. We use only high-density polyethylene, which is 100% recyclable when the toilets get old. We also arrange for evacuation trucks, which arrive at regular intervals to suck out the waste and dispose it,” says Kher. 60% of the company’s staff belongs to the economically weaker sections of the society and 3S tries to afford dignity to a traditionally maligned and ‘impure’ profession.
Cleaning Up Their Acts
3S has also entered into contracts with the CSR arms of construction majors such as L&T and Lavasa to install and maintain toilets at their worksites. “Instead of companies building 100 toilets, we ask them to build 80 toilets and use the rest of the funds to monitor usage and impact. We offer impact measurement services to corporate CSR arms as well; we make sure people use the toilets, ensure the waste gets treated and provide the data to the corporation,” says Kher. The companies, on their part, are pleased with the services provided by 3S. HK Sinha, Delhi-based manager at L&T, says, “Our partnership with 3S over the past year has been successful. It has given us toilets on a hire basis, ensuring they remain hygienic and are cleaned on a daily basis.” Apart from CSR activities, L&T has collaborated with 3S to provide toilets for its regular construction sites, having installed 70-80 so far.
However, there is still hope: social enterprises can find success by aligning their objectives with the CSR cells of corporations. Right now, sanitation and hygiene seem to have captured everybody’s imagination. “Social enterprises can pitch to these CSR cells by reorienting themselves as a one-stop solution for their theme-based solutions. For example, water filtration for communities, including locally trained manpower, or comprehensive eye examination services/diabetic retinopathy packages, with all the necessary back-end specialist doctor connections,” says Angeri. Indeed, some corporations are planning on diverting their CSR funds to social enterprises. Shrikant Savangikar, director, quality and sustainability, SKF India, says that collaborations with social enterprises are in a preliminary stage but the company plans to move ahead.
Irrespective of the supposed fillip to social enterprises through CSR funds, scaling up a social business remains an uphill task that requires the concentrated efforts of multiple stakeholders and a sound business model. “It usually takes very long for a company to achieve scale. Sometimes, it doesn’t happen at all, but when it happens, it’s an absolute joy,” says Mahadevan. It remains to be seen if these differently motivated entities will find common ground and usher India into a golden age of impactful, professionally run social enterprises.
Profits At The Bottom Of The Pyramid
In India, the concept of social enterprise captured the popular imagination after management guru (late) CK Prahlad wrote about it in his book The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits. Prahlad posed a question that doubled up as a provocative answer, “What if we mobilise the resources, scale and scope of large firms to co-create solutions to the problems at the bottom of the pyramid (BOP), these 4 to 5 billion people who live on less than a $2 a day?” He described the BOP as a potential market with immense ‘latent purchasing power’ that could be tapped into by combining the investment capacity and resource strength of MNCs with the grassroots presence and fierce commitment of NGOs. This collaborative approach has resulted in the birth of social enterprises, made up of a professionally run company with a board of directors combined and armed with the impact-oriented approach of NGOs. As Prahlad posited, collaborations, indeed, play a vital role in helping social enterprises scale up.
The existential foundation of a social enterprise is rooted in the idea of serving customers and enriching their lives, and not merely offering a product or service for sale. Or as Venkateswaran pithily puts it, “In a normal business, the customer is a means to an end. In a social enterprise, the customer is an end in itself.” In a country like India with poor educational and healthcare infrastructure, the scope for enterprises to be social is immense and Angeri is critical of the desire in the corporate collaborator to see quick results. “Large corporates need to understand that market creation is different from pure business development in an existing market; traditional marketing strategies might fail in such cases. For example, simple aspects such as market sizing maybe a challenge, as the market is still being created,” he says. Screwvala agrees, “Anybody doing business in India just can’t assume that there is a huge, ready market because we have 1.3 billion people. Most markets have to be created. This requires concept selling and focus on operations, execution and marketing.”
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