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Ajay Piramal, Chairman, Piramal Group
catalist 2014
“Partner With Govt To Scale Up”
In a social enterprise you can see the impact of what you are doing in the face of your customer in a very short time.
COMMENTS PRINT
SOCIAL ENTERPRISE
A new class of entrepreneurs are walking the tightrope between profit and social impact by forging strategic tie-ups with corporates, NGOs and the government. And they are here to stay
Rajat Ubhaykar
catalist 2014
Six years ago, in an attempt to counter competition and present differentiated content, Outlook Business decided to highlight the stories of social entrepreneurs as part of an annual issue.
Outlook Business
catalist
I have seen a variety of people with and without this guilt. Those who don’t have it really end up prospering. And those who have it invariably move out of the radar.
K Ramkumar
catalist 2014
If you don’t have character as a company, it is very difficult to move beyond satisfaction to trust.
D Shivakumar

I would like to begin by congratulating all the entrepreneurs who are present here today. To be an entrepreneur is a challenge and to be a social entrepreneur is even more difficult.

Why am I talking about entrepreneurship when today’s event is about social entrepreneurship? I’ll come to that in a bit. What is entrepreneurship? It is pursuit of an opportunity without regard to resources that are currently controlled by a person. And I’m sure all you entrepreneurs have gone through this. Entrepreneurship is having an idea, pursuing it without even knowing how you’ll fund it or take it ahead. There is no business plan, an entrepreneur doesn’t know that if in five years he/she will be able to do so much and, hence, so much capital would be required. It doesn’t work that way. Also, entrepreneurship is often perceived to be about new ideas, It is not necessarily about new ideas but a mix of old and new ideas. It’s about finding new ways to tackle the same old issues. Entrepreneurship is a creative application of traditional approaches.

What do I mean by that? For instance, let’s take the issue of education in India. We all know that it’s a big challenge. Working towards finding a solution for the education system is a not a new idea and there are many NGOs dedicated to the same cause. When an NGO named Pratham started off, it was dealing with the same issues that we have all addressed at some point of time. But, Pratham was focused on a new way of doing the same thing. That’s what I mean by entrepreneurship — it’s not necessarily about addressing a new problem but about how we approach it. The main difference between a social enterprise and a regular enterprise is that your consumer or the person who receives your product or service is not the person who pays for it. So in a way, as a social entrepreneur you are satisfying two sets of customers. One is the person who is the recipient of the service or product and the second is the person who funds us. That is a unique challenge that an entrepreneur faces and we must address that.

What is the role of a social enterprise in our country? The first role of an entrepreneur is to find innovative solutions to the problems faced by our country. For example, we all know that the standard of education in India is not what we want it to be. A report is released every January called the annual status of education report (ASER) that gives a status of education in the country and is accepted by the government as it collects feedback from thousands of people. One of the ASERs mentioned that reading and math abilities of 50% of fifth grade students equal that of second grade students. One of the solutions we identified was: instead of teachers, why don’t we look at the headmasters? In doing so we made a considerable difference.

 
 
"To run a social enterprise, one needs to be innovative, have passion, a bit of craziness and compassion in one’s heart"
 
 
But we need to realise that solutions for India are very different from the ones we come up with for the rest of the world. Within the country too, solutions for every region vary. Sometimes, we do things where we presume we are helping people without considering the long-term consequences. Several years ago, in Andhra Pradesh, the politicians decided that they wanted to give subsidised rice. So, the state began a Rs 1 rupee per kg rice distribution scheme. Thus, the demand for rice increased as it was cheap, the government procured rice on a large scale and people stopped growing millets and started growing more of rice. In fact, people in rural Andhra Pradesh wanted to ape what urban Andhraites did. So the consumption pattern in AP changed from millets to rice. This resulted in a steep rise in the number of diabetes patients in the state. As you know, millets are a healthier option than rice. This incident shows that at times, the action of subsidising rice — which was supposed to be a positive one — created a negative impact. In other words, we have to find solutions relevant to India and relevant to each region.

If you have to solve the problems of India, technology plays a crucial part. Today the cost of technology is low, there are a lot of people who use technology and, thus, as entrepreneurs we must use as much technology as we can.

The next important thing according to me is scale. If you’re going to start a small enterprise, I don’t think it can have a big impact and certainly cannot have a say in changing the country. In India, the largest source of money available is with the government. There is a large amount of money that the government spends on the social sector, and it is here that you can procure it, if you have the ability to scale and you have the model that clearly demonstrates the potential for change. Take the case of Pratham, the largest NGO reaching out to 33 million children, where the largest investor is the government. If you want to make an impact in the social space, then you must look at government funding.

The other thing I find in social enterprises is that there is often no desire to excel. To run a social enterprise one needs to be innovative, have passion, a bit of craziness and compassion in one’s heart. There are many ways of measuring impact and the return on investment. And it is not only in terms of money. If somebody asks me how to measure the impact of a mid-day meal programme in terms of money, I would say that it is impossible to do so. I could make a calculation, which will only justify the sum invested. But, there are other things to consider. For instance, how do you justify giving medicine to a person who has no access to healthcare? This is my constant argument with many such funds. You can look at return that is not necessarily monetary. I think it is fair for someone investing in any enterprise to have expectations of targets and of action against specified criteria. While all that is fine, we need to keep in mind that it will take a long time.

So, why start a social enterprise? In a social enterprise you can see the impact of what you are doing in the face of your customer in a very short time. The satisfaction that it gives, the change that you can bring about in the lives of unknown people is its biggest reward.

COMMENTS PRINT
SOCIAL ENTERPRISE
A new class of entrepreneurs are walking the tightrope between profit and social impact by forging strategic tie-ups with corporates, NGOs and the government. And they are here to stay
Rajat Ubhaykar
catalist 2014
Six years ago, in an attempt to counter competition and present differentiated content, Outlook Business decided to highlight the stories of social entrepreneurs as part of an annual issue.
Outlook Business
catalist
I have seen a variety of people with and without this guilt. Those who don’t have it really end up prospering. And those who have it invariably move out of the radar.
K Ramkumar
catalist 2014
If you don’t have character as a company, it is very difficult to move beyond satisfaction to trust.
D Shivakumar
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