By Nikhil Ravindra*
1. Introduction
1.1 General Overview
This research aims to promote essential social entrepreneurship policies to catalyze and regulate sustained growth of Bengaluru (a mega-city with nearly 12.4 million population and capital for the state of Karnataka). The city was named as the world’s most dynamic city by the World Economic Forum in 2017. Besides being India’s tech capital and one of the most buzzing cities having evolved to be known for innovation with technological progress, it is also home to several startups and entrepreneurs (Hall, 2018). The Forbes Magazine considers it as one of “The Next Decade’s Fastest Growing Cities” due to its tremendous transformation in the last two decades. However, a rapid transition such as this requires a transition towards sustainable economy to promote balanced development, which can be achieved through recognizing and promoting social entrepreneurship with economic and environmental co-benefits (SEED, 2015, 23), (Gibbs, 2006). (Wirtz & Volkmann, 2015), (Vivek, 2017) have stressed on the need to incorporate social entrepreneurship as a means to tackle urbanization associated problems.
A variety of ideas and solutions are required especially while addressing the challenges posed by the city of Bengaluru, which according to The Oxford, is among the top growing cities in the world (year 2019-35) in terms of Gross Domestic Product (GDP) growth assessment each year, increasing at a rate of 8.5% every year. The city has also emerged as the world’s fastest nature tech ecosystem according to a recent research released in London (NWN, 2021). The prediction has Bengaluru at the top of the list well ahead of Mumbai, the financial capital of the country. Surprisingly, Bengaluru will also be ahead of London, Munich, Berlin and Paris; thereby establishing itself as a global leader. It is evident that the Silicon Valley of India (tagline given to Bengaluru) is growing at a fast pace considering the investment pouring in from all ends in recent times.
1.2 Social Entrepreneurship vs Social Business
Social entrepreneurship is defined as solving social problems through innovative ways (in the form of new products and services), openness to learning and driven by social and ecological values (Wirtz & Volkmann, 2015), (SFSE, 2019). The organizational models are categorized into three: non-profit, for-profit and hybrid social enterprise (a combination of non-profit with a small degree of cost-recovery). However, it varies from a social business (a term developed by Grameen Bank founder Muhammad Yunus) where all surpluses are re-invested in the business and irrespective of the time period, the investors get back only the invested initial amount as shown in the below figure:
“In social business, a dollar is a dollar is a dollar. If you invest a thousand dollars in a social business, you’ll get back a thousand dollars – not a penny more” (Yunus, 2010, p. 2)
The idea of social entrepreneurship mainly revolves around creating business models which reduce the social, cultural, and environmental inequalities through the development of accessible products and services. The overall motive of many social entrepreneurs is a positive return to the society generally having non-profit goals covering various fields such as poverty alleviation, healthcare, technology and networking. In India as well, the field has picked up enormous popularity and can be accessed under two dimensions: one who strives to bring a social change by working closely with the policy makers and the others who go the extra mile to establish newer ideas, often less explored by the government. The latter are opportunists who are focused on filling the gap through innovative measures (BSCE, 2018).
2. Relevance and Challenges
2.1 Urban Development
Formerly well known as the Garden City, Bengaluru is losing its green areas including parks and open spaces due to urbanization. The urban expansion has enormously affected the residents and rural migrants leading to urban poverty, unemployment and housing shortage among other social and economic challenges (LCLUC, 2019). Roughly one million live in slums of which nearly 1/3 earn a monthly income of less than $55 (Ravi, 2018). Cumulative housing demand between 2016-2020 stands at 0.68 million units; whereas the cumulative supply estimated for the same period is just 0.22 million units (Khan, 2016).
A rapidly transitioning city such as this requires a transition towards a sustainable economy to promote balanced development, which can be achieved through recognizing and promoting social entrepreneurship with economic and environmental co-benefits (SEED, 2015, p. 23), (Gibbs, 2006). Social entrepreneurship has emerged as a growing trend in Bengaluru, with at least 30 registered social enterprises as of 2012 working in various sectors such as nutrition, education, healthcare and energy among others (Kuruganti, List of Social Enterprises in Bangalore, 2012). It is thus crucial to understand the policy related challenges faced by the Social Entrepreneurs in achieving their objectives, in addition to suggesting regulations which may attract more non-social entrepreneurs or startups and individuals to join hands in the progressive growth of the city. Both short term and long term innovative remedies are required not just to solve the social problems but to avoid what was quoted by a noted scholar:
“Unplanned growth will make Bengaluru a dead city” – Prof. T.V Ramachandra (an outspoken critic of uncontrolled urban growth).
2.2 Entrepreneurship Scene
Quoted by Varun Chawla (Founder of 91springboard), “Bangalore has all of the ingredients to create a world class tech ecosystem – investors, engineers, clients, experts – and the potential to build high-quality global startups at a fraction of the cost.” As per the StartupBlink Startup Ecosystem ranking of 2019, the city as shown in figure 3 is ranked number 1 in the country and 11th globally in terms of top startup city (StartupBlink, 2019). The number and quality of startups, infrastructure, business climate and public support for innovation are the criteria considered for the rankings (Roy, 2019).
Despite the top rankings, the future of the city’s startup ecosystem may be under threat and the Global Startup Genome Report 2019 highlights where the city’s startups need to step up. The report outcomes highlight the low ranking in terms of policy and research, the city having scored just 3 out of 10 (StartupGenome, 2019). This is due to the weak policy environment in India and low levels of research production in related sectors (Kapoor, 2019).
Social entrepreneurship has emerged as a growing trend in Bengaluru, with at least 30 registered social enterprises as of 2012 working in various sectors such as nutrition, education, healthcare and energy among others (Kuruganti, List of Social Enterprises in Bangalore, 2012). It is thus crucial to understand the policy related challenges faced by Social Entrepreneurs in achieving their objectives, in addition to suggesting regulations which may attract more non-social entrepreneurs or startups and individuals to join hands in the progressive growth of the city.
2.3 Entrepreneurship Policies and Research
In terms of policies, The Ministry of Skill Development and Entrepreneurship on July 15th, 2015 launched the ‘National Skill and Entrepreneurship Policy’ with the specific mention of social enterprises. Some other national ministries (e.g.; Ministry of Micro, Small and Medium Enterprises; Ministry of Finance) play a vital role in the institutional framework (BritishCouncil, 2016, p. 7). The Indian Government on 16th January 2016 launched Startup India with the aim of supporting entrepreneurs initiative managed by a dedicated team reporting to the Department for Industrial Policy and Promotion (DPIIT). The initiative however has received criticism due to long-pending policies, taxation issues, hurdles faced by startups in terms of infrastructure and bureaucracy (Inc42, 2019). In line with the national startup initiative, the Government of Karnataka in 2016 announced the establishment of India’s first dedicated startup cell aiming to promote Bengaluru and Karnataka as “the ultimate startup destination in the world” having released the Karnataka Startup Policy 2015-2020, developed by the Karnataka Innovation and Technology Society (KITS) and Department of Information Technology, Bio-Technology and Science & Technology (KITS, 2019). Some of its limitations are not having favorable policies including filing for exit and bankruptcy, and low awareness levels beyond the metro cities (Ghosh, 2018).
In the research field, despite the involvement and contribution of international organizations such as Germany’s GIZ, British Council and Asian Development Bank; the research in India is limited and focused on social enterprises which are private limited companies, partnerships and sole ventures by registration (BritishCouncil, 2016, p. 7).
3. Objectives, Methodology and Analysis
The primary research question is “How social enterprises play a crucial role in promoting sustained growth of Bengaluru?” with the following objectives:
Objective A is exploring the entrepreneurship governance ecosystem at national, state and city level. The research’s secondary question under this objective is what are the existing main policies (laws, schemes, programs and acts) at National, State, and City level along with their objectives, vision, strategies, and overall functioning processes? The research methodology followed is information collection through research reports, journals, and official websites of ministries (e.g. the Ministry of Skill Development and Entrepreneurship; the Ministry of Micro, Small and Medium Enterprises; and the Ministry of Finance) and knowledge from seminars and discussions on related topics. Objective B is investigating social enterprises avenues in the city to answer what are the categories, approaches, priorities and challenges faced by social enterprises in terms of governance? The answer for which is sought through media coverage, social media posts and studying blogs. Through Objective C, essential urban law remedies to boost social entrepreneurship are recommended by analyzing the outcomes of objectives A & B and by desktop research done on benchmarking local and international examples to come up with effective measures.
3.1 Objective A: Entrepreneurship Governance Ecosystem
The National Skill and Entrepreneurship Policy vision is “To create an ecosystem of empowerment by skilling on a large scale at speed with high standards and to promote a culture of innovation-based entrepreneurship which can generate wealth and employment so as to ensure sustainable livelihoods for all citizens in the country“ (GOI, 2015). Official data shows that the government has missed its skills training targets for each except one of the last five years. A government-appointed committee reveals that India’s goal of skilling 400 million people under the National Skills Development Program 2015 is largely unnecessary and unattainable (Mallapur, 2017). The policy also aims at promoting social entrepreneurs and grass-root innovators through various means and has identified social enterprises as an important instrument to address the various social issues such as poverty, unemployment and inequity. It encourages universities and academic institutions to actively promote social entrepreneurship in the country through ‘Social Entrepreneurship’ course, including online distance education. Grassroots innovations are encouraged, innovators are assisted to commercialize and up-scale their products and services through the national network of E–Hubs and several other platforms (IndiaFilings, 2021).
Indian Government’s Startup India aims to build a strong business ecosystem that is conducive for all startup growth. The aim is to empower startups to grow through innovation and design to drive sustainable economic growth and generate large scale employment opportunities. The Prime Minister’s vision is transforming India into a country of job creators instead of job seekers by catalyzing the startup culture through this initiative (StartupIndia, 2021). India is working on a start-up ecosystem based on the concept ‘Of the Youth, By the Youth, For the Youth’ and is currently the third largest start-up ecosystem globally with 41,000 start-ups and over 30 unicorns, a giant leap from 4 unicorns in 2015 (Assocham, 2021). The policies, rules and regulations in place do not support social cause and employees as much as it should.
Some of the other disadvantages of Startup Businesses in India are higher costs, tax and strict regulations. The startup ecosystem is still not very developed and hiring new employees could be a challenge (Sheth, 2016).
International Mobility has been in the forefront of talks at the national level, several collaborations are underway through technical collaborations with UK, Australia and the UAE for benchmarking and mutual recognition of standards and with the commitment to make India “the skill capital” of the world. Structured efforts through programs such as the India International Skill Center (IISC) program to counsel and guide potential emigrants, with a focus on skills tests, upskilling, language and pre-departure orientation. The Indian Government along with Japan’s cooperation is implementing Japan’s Technical Intern Training Program (TITP), an on-the-job training scheme providing three to five years of internship opportunities for foreign nationals in Japan with National Skill Development Corporation (NSDC) as the program implementer. To increase the outward mobility of blue and white-collar Indian workers, Government-to-government (G2G) and B2B partnerships are also being developed for the international markets of Western Europe, Canada, Australia and East Asia (Kumar, 2019). However, the quest and focus of international mobility has been on emigration but not on creating opportunities within the country to hold back its citizens. Despite all the efforts of skill development programs, India faces a severe skill shortage which is clearly seen from the study by the Organization for Economic Co-operation and Development (OECD) which ranks India in second position in terms of skills shortage as a % of firms with 10 or more employees (Kumar, 2019).
Addressing the challenge of low female participation in the labor force is a crucial factor as an analysis of labor force survey data suggests that women only make up 91.6 million workers of the country’s 395.2 million workers.
At the state level, the Karnataka Startup Policy 2015-2020 was proposed with the vision “to give wings to startups in the state through strategic investment & policy interventions by leveraging the robust innovation climate.” Some of the strategies in place include “fostering strong partnerships between Research & Development institutions and industry, creating incubation infrastructure through private-public partnership, promoting capacity building through exposure visits/workshops and also providing state support in the form of incentives and concessions (GOI, 2015). The Karnataka government holds regular meets such as the Invest Karnataka 2016—Global Investors Meet to boost entrepreneurship in the state and startup initiative ELEVATE 100, meant to discover innovative startups and social enterprises (Mohan, 2017). Channelizing Innovation for Social Impact is done in such a way that each year, 5 challenges are identified by a committee with representatives from the Government, subject specialists, NGOs, etc. The challenges would be posed in 5 identified areas and solutions selected through a rigorous selection process. The winning solutions will be awarded an initial grant, additional funding and may be taken up for implementation as a pilot project at an appropriate scale. (GOI, 2015).
“The state has several policies favoring startups. But if we want to scale and create a dynamic ecosystem for startups, infrastructure has to be smoothened out. Not much has been done in that regard,” Raja Lahiri, Partner, Grant Thornton India.
Along with the infrastructure woes, awareness around the funding assistance is very low, especially beyond the metros, the entrepreneurs say (Business League, 2018).
Apart from the Startup India initiative and “Make in India movement” launched in 2014, many other factors have contributed to the city being transformed into an Information Technology ecosystem which include access to top-tier educational institutions, economic liberalization and rapid digital transformation. The IT industry employs roughly 10 million people across India and accounts for nearly $85 billion in exports every year — 40% of which is concentrated in Bengaluru. Several accelerator and incubator initiatives like Microsoft Accelerator, 10,000 startups by Nasscom, and partnerships with corporates like Yes Bank, Tata Group, and Mahindra have ensured that the city entrepreneurship ecosystem remains conducive to digital transformation (The Scalers, 2021). Gaurav Gupta, Principal Secretary, Department of Information Technology, Biotechnology, Science & Technology, Government of
Karnataka points out the need for social entrepreneurship ventures and how there is a dire need for them to find viable solutions for public health problems, sewage management and Bengaluru’s traffic problems. To overcome these challenges, governmental partnerships with both educational and industry bodies to give social enterprises a boost is vital (Mohan, 2017).
3.2 Objective B: Social Enterprises Avenues
For several years now, the city has been a safe bet for many social enterprises to bring out creativity and spread the values. A catalogued study made by Vishy Kuruganti (a local blogger) from 2012 to 2020 studying 30 social enterprises that are currently active brings forth the diversities and progresses made by the enterprises over time. Medical health, effective supply chain management, financial institutions and information technology are a few of the many fields explored by them (Kuruganti, 2020). The top 7 Social Enterprises in Bangalore according to (Pradas, 2019) are BubbleNut Wash, Happy 60 Plus, Mitti Café, Pinky Minds, Tamaala, The Better Design Foundation and Worksera. BubbleNut Wash is multiplying its social impact by generating additional sources of income for rural communities living around forested areas by using nuts to generate biodegradable cloth washing detergents. Happy 60 Plus is devoted to satisfying the emotional, psychological and physical needs of senior citizens through activities and services. Mitti Café works towards removing environmental and social barriers for the integration of people with disabilities in society by creating food cafés in institutional spaces fully run by people with physical or intellectual disability. Pinky Minds is a mobile app platform to enable a private, confidential and even anonymous conversation with trained counselors for patients seeking mental support and help. Tamaala works towards re-valuing Indian artisans, many of whom leave their traditional jobs and move to cities as rickshaw drivers and house service.
The Better Design Foundation facilitates novel teaching methodologies and a more collaborative model in the field of pedagogy, developing new methods and practices for teachers and students to interact. Worksera is an online platform for women freelance professionals that facilitates matching with clients, as individuals or teams which allows for women’s personal development and economic independence.
The challenges faced by several social enterprises in the city depend on the problem being solved, but the two fundamental challenges during scale-up are usually related to funding and talent finding. Though several attempts have been made to grow the domestic universe of funding, the success has been limited, thus requiring the Indian impact ecosystem to continue relying heavily on global funding to help its organizational scale. The non-availability of local funds and year–on–year international funds restrain nonprofits from planning long term and affects sectors like health, education, and rural development. The real gap in talent finding is to fill in the mid-senior management level, which is critical to have when organizations are ready to scale. The absence of this layer is a big barrier to scale up. Although the country has some of the best laws and policies when it comes to issues of development, the challenge with policies has always been in how they are interpreted, implemented and how the resources are allocated to social enterprises at the local level. The most effective policies are those that are run as longer-term programs embedded in the communities they serve, such as gender-based violence, rural livelihoods, water and sanitation, education, primary healthcare, adolescent girls’ empowerment, and women’s participation in governance in comparison to short term projects, which explains why at least some progress in these areas is seen despite the odds (Rao, 2020).
3.3 Objective C: Remedies to boost Social Entrepreneurship
International mobility is a good approach, however, there needs to be a balance created in such a way that the skilled workers and professionals get opportunities within the country or still contribute to the growth of the country from outside through initiatives and local collaborations. Government to Government (G2G) arrangements are necessary to secure better terms for migrant workers and ensure better protection of their rights. The intention of making India “the skill capital of the world” is good, however the attempted focus on making it a “skill producing capital of the world” rather than a “skill training and retention capital of the world” has several drawbacks. It is crucial for the state government to take entrepreneurship to smaller towns also and reduce the overall burden and high economic expectations from the capital city of Bengaluru. The city of Bengaluru may be promoted as the
Skill Hub and Talent Capital; which allows for not just training but encouraging the professionals to remain and contribute to the country’s economy. The trained professionals can be given support to go back to their hometown or villages to then contribute to the local markets. Here is where social entrepreneurs of the city can play a vital role as changemakers. To overcome the shortages, engaging social enterprises with research organizations, academic institutions, think tanks and multilateral institutions that focus on education, skills and labor markets is crucial. New initiatives and collaborations across sectors, cities and states by social enterprises playing a pivotal role to deepen the knowledge pool and facilitate the creation of jobs is important. A macro-scale ecosystem, with Bengaluru city playing the role of an enabler, may help in the availability of talent and human resources for social enterprises as well as minimize bureaucratic and regulatory barriers for the progress of social enterprises. The ecosystem needs to work through a bottom-up approach towards breaking down barriers in international labor supply to ensure hassle-free movement of talent within and outside the country.
4. Conclusion
Social entrepreneurship is doing business for a social cause and can also be referred to as altruistic entrepreneurship. Their success is not measured in terms of profit alone but also how they have improved the world. The top social entrepreneurs are generally driven by an individual and strong desire to improve people’s lives. The future of India and especially Bengaluru city is on the brighter side with new social entrepreneurs following their paths in their ways, however newer policy reforms at various levels is necessary to aid the growth. The new policy reforms are necessary at all levels of governance. The National Government needs to address long-pending policies, taxation issues, hurdles faced by startups in terms of infrastructure and bureaucracy. Furthermore, targets need to be relooked into, such that attainable goals are aimed for, along with the need to focus on generating local funds from within the country rather than being overly dependent on international agencies. The national level ecosystem needs to be further developed, where hiring new employees is easier and other expenses like costs and taxes need to be reduced through smoother regulations.
Skilling initiatives on the topics of gender sensitization, creation of economic opportunities and social support should be encouraged. Providing residential facilities for women trainees, mentoring, and multi-disciplinary skill coaching and provision of social support through mechanisms such as local workshops need to be further explored. Karnataka state needs to look at addressing the infrastructure woes, develop a methodology to increase the awareness in terms of available funding assistance. The funding which is provided is mostly for seed-funding which does not really enable or support startups who are at a later stage of their solution development. Such startups should be connected with other funding institutions which would help in catalyzing their growth. There is no city level plan which is currently in place and Bengaluru’s social enterprises are more often tied to the close knit approach and regulations set in by the central and state government often linked with challenges. Some of the challenges which are to be overcome at the city level are how to fill in mid-senior management level and to provide training on how policies are interpreted, implemented and the resources allocated at the local level. The city entrepreneurs should be encouraged to come up with viable solutions to overcome the city’s infrastructural issues through governmental and institutional partnerships. Simultaneous approaches and support from not just metro cities like Bengaluru, but also smaller towns and villages will ensure a smoother transition in reaching the targets set by the central government.
Nikhil Ravindra completed his Master of Science in Urban Development in 2019 from TU Berlin, Germany with DAAD (German Federal Government) Scholarships and secured the ‘Urban Development Award’ for his Master’s thesis. In 2016, he completed his Bachelor Architecture from Acharya’s NRV School of Architecture, Visvesvaraya Technological University, where he was awarded the ‘University Third Rank’ and ‘Best Outgoing Student’ awards. He has 5+ years of experience, having worked as a Landscape Architect in Zoras, Architectural Consultant in Studio 69, and as an Independent Researcher. His other global experiences include a position as a Student Assistant at Habitat-Unit Germany, an Internship at Mimar Group in UAE, and participating in internationally funded summer schools/ trainings in South Africa, Bosnia – Herzegovina, Hungary and Romania.
Nikhil, mostly through funding, has presented papers in international conferences held in Belgium, India and Malaysia; and has several research publications. In October 2018, he co-founded a startup project idea ‘MAQAAD’ in Cairo, Egypt, and in May 2020, co-developed ‘CIANKI Associates’ in Bengaluru. His interests are in the fields of urban sociology, governance, environmental design, climate and social entrepreneurship. He currently is working as an Assistant Professor at Dayananda Sagar College of Architecture, Bengaluru, where he teaches Architectural Design, History of Architecture, Sociology & Building Economics, Communication Skills, Model Making, Urban Planning, Architectural Journalism and Research Methods.
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