Can not-for-profit incubators change India?

The model could help the social sector make a concerted, collaborative effort towards well-researched innovation in crucial but overlooked areas

Updated: Sep 16, 2021 06:25:39 PM UTC
Image: Shutterstock

India is the land of philanthropy. Indian children grow up with stories of mythical kings who donated their kingdoms as acts of self-sacrifice. Religious and charitable institutions have been working to uplift people for centuries. We have success stories of cooperatives like Amul which have existed since the 1950s. But even with this rich history, two decades into the 21st century, we are still trying to push people out of poverty. As per a United Nations estimate, 28 percent of India’s population lives below the poverty line and it is home to a massive 40 percent of the global poor.

But finding solutions to the problems of roti, kapda, aur makaan for 1.3 billion people is an enormous task. We need to build pathways out of poverty for the people at the bottom of the pyramid. We need to provide access to education and health and empower people to create decent living conditions for themselves. However, the magnitude of the problem is such that a single theory of change cannot address it. We need a multiplicity of ideas and interventions to create lasting change and reduce disparity. And we need to nurture and incubate these ideas so that they can be developed into sustainable solutions with the impact as their primary goal.

Resource mismatch
In the recent years, there has been increasing awareness and support for the social sector. But non-profit organisations are largely dependent on grants and CSR funds to finance themselves. There are incubators and accelerators for MSMEs in the social sector, but they are usually ‘incubators of non-profits’ and not non-profits themselves. The investment thesis is also usually primarily tech-focused. And so, there are areas left within the social sector that are on no one’s radar. Many of the gaps aren’t even understood because we lack high quality and reliable data and research. The problems are complex to a degree that sometimes it outweighs the monetary rewards of working on them. So, a traditional business approach is unlikely to work.

To illustrate, as per industry estimates, there are eight million truck drivers in India. By and large, it is understood that their helpers (another 12 million) and them work in appalling conditions. Predictably, the industry faces a demand-supply gap—about 40 percent trucks remain idle at any given time.

The impact of improving truck drivers’ livelihood will be felt beyond the supply chain sector. Arguably, it could be the springboard for exponential growth across sectors and industries. It will positively impact our ability to respond to situations like the pandemic by aiding swift movement of medical supplies and apparatus. Improving the livelihood of truck drivers will resolve the bottlenecks that throttle the growth of industry.

So, why don’t we see more innovation aimed at solving the problem?

Because, there is no momentum to research and understand the problem, little incentive to innovate and solve it.

A different approach
The social sector needs not-for-profit incubators. Not simply ‘incubators of non-profits’ as stated before, but incubators that are not-for-profit themselves. We need an ecosystem to make a concerted, collaborative effort towards well-researched innovation in crucial but overlooked areas. Any number of MSMEs and social entrepreneurs might be working in these areas. With the right inputs, they can solve problems and create jobs on a large scale. But, they need the space and resources to develop innovative pilots, creative experiments and personalised solutions for India’s social challenges.

Just like a tech startup, social enterprises too need help to develop an initial idea, access finance and markets, and mentoring to point out gaps and opportunities. A not-for-profit incubator can create that ecosystem, without preconditions of any sort.

Such an incubator can venture into sectors and geographies that require interventions, and promote social innovation based on research. Social innovators can receive the support they need to create contextual solutions rather than being outcome oriented. There can be freedom to experiment and test their approach and space for structured learning for the individual and the enterprise. Such an incubator can become a platform for collaboration that will revitalise the social sector and amplify the overall impact.

Ripples of change
Social challenges in India are intricate tapestries rather than insurmountable peaks. MSMEs and social entrepreneurs can create ripples of change because their impact is larger than just the immediate benefit of their interventions. But they need holistic and in-depth support to break down complex problems into smaller needs that can be monetised and fulfilled. And a not-for-profit incubator can do just that.

The writer is a co-founder & CEO of LabourNet.

The thoughts and opinions shared here are of the author.

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