Social Enterprises: Increasing reach through Government
Updated: Aug 19
Social enterprises are creating quite a buzz in the development space and if you are wondering what social enterprises are, you can start with this article. To put it simply, social enterprises are entities that identify persistent social problems or challenges and apply their entrepreneurial intent to innovate new business models, delivery mechanisms or distribution processes to address such issues (for profit or not for profit). One may ask the question- Isn’t that what the government is supposed to do? The answer is not a straightforward yes. While the government is entrusted by the people to solve development challenges, the very nature of development problems- termed as wicked problems- makes it difficult for one single entity to tackle them. To add to that, one would be limiting creative solutions and innovation if other stakeholders were restricted from participating in this space. Another issue to consider is the availability of resources. While most people think the government in the country is too big, data from the seventh pay commission suggests that the total staff in the government as a ratio to the total population is nearly one third of what it is in the USA (Read here). The issue is not just limited to numbers, but can also be extended to quality of available resources.
Given this problem, social enterprises have a huge role to play in solving developmental challenges in 2 broad ways 1) Coming up with innovative solutions and 2) Supporting with implementation of projects. The challenge here though is the lack of engagement platforms and in some cases, a lack of knowledge regarding engagement platforms between the government and social enterprises. What this leads to, generally, is that social enterprises work in very small and niche areas while the government continues on its own path leading to different actions on the wicked problem with no common strategy and sense of direction.
So, are there no platforms currently available to social enterprises to engage with the government? The most common path that the government engages to collaborate with the private sector is through tenders. But, given the very nature of the social enterprises in India, most are either ineligible or don’t have the wherewithal to engage through a tender process. The most common practice then, is to use networking as a mechanism to engage with government personnel and participate on a larger scale in solving the government . Here too, multiple barriers may dissuade enterprises from engaging with the government.
While there are some novel avenues for social enterprises to explore- such as fellowship programmes, projects promoted by multilateral agencies, government hackathons, collaboration with Consultants and single source procurement projects; there is a need to develop a structured path and an enabling environment for them to engage more directly with the government.
The government is taking steps to enable social enterprises through announcements such as the development of a social stock exchange, which can help improve the quality and performance of such entities, but more focus needs to be given towards creating an easy and accessible platform for collaboration. On the other hand, social enterprises too need to ensure their bit by building their knowledge of the policy space and governance structures in order to understand how their product or service can fit better and reach greater scale. In the current development ecosystem, building sustainable partnerships between the public sector and social enterprises is what can potentially catalyze holistic development that would enable India to truly reach its potential. This is where professionals and policy makers need to focus their attention and energies to create coordinated action to solve the wicked problems.