Social Entrepreneurship and Sustainable Business Models (PDFDrive)

EDITED BY
ANIRUDH AGRAWAL
PAYAL KUMAR
SOCIAL ENTREPRENEURSHIP AND

SUSTAINABLE BUSINESS MODELS
The Case of India

Social Entrepreneurship and Sustainable
Business Models
Anirudh Agrawal • Payal Kumar
Editors
Social
Entrepreneurship
and Sustainable
Business Models
The Case of India
Editors
Anirudh Agrawal Payal Kumar
Copenhagen Business School BML Munjal University
Copenhagen, Denmark Haryana, India
ISBN 978-3-319-74487-2 ISBN 978-3-319-74488-9 (eBook)

https://doi.org/10.1007/978-3-319-74488-9
Library of Congress Control Number: 2018936908
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This book is dedicated to all social entrepreneurs who make it their
business to transform society.
Foreword
India is a land of contrasts: while it is one of the fastest growing econo-

mies with increasing GDP, it also features amongst the lowest on Human
Development index, Hunger Index and Multi-Dimensional Poverty.
While the country boasts of the third largest technically qualified man-
power, it is unable to provide basic primary education to its children. As
a food-surplus nation, it also hosts the largest proportion of malnour-
ished children in the world. India features among the countries with the
largest number of millionaires, but it also has about one-third of its pop-
ulation living below the poverty line of Rs 47/day. It is one of the “young-
est countries” with the advantage of demographic dividends, but most of
its youth are also uneducated, unskilled and unemployable. Moreover,
during the last few decades, this gap has widened since the government
has been decreasing its welfare role in providing services to the “bottom
of the pyramid” segments. In order to help address these massive prob-
lems, social entrepreneurship is one of the most favourable strategies for
both society and the government.
Unlike traditional entrepreneurship literature, where the definition is
widely understood and established, social entrepreneurship as a construct
is struggling to establish well-defined boundaries in academia. Both as an
area of research and as practice, the diversity of its manifestation poses a
challenge in arriving at a uniformly accepted definition of what social
entrepreneurship is.
vii
viii Foreword
If one goes through the profiles of people who have been recognized,
celebrated and quoted in research and case studies as social entrepreneurs
(e.g., Ashoka Fellows, recipients of Schwab Social Entrepreneur of the Year,
Echoing Green Fellow), it is difficult to find a common conceptual thread.
These individuals work in very diverse fields (energy, human trafficking,
agriculture, worker’s rights, rural markets, etc.); use very different strate-
gies to make the social impact they intend to achieve (e.g., providing
affordable access to social goods and services, building value chains, or
social mobilization, activism and advocacy); and create different kinds of
organizational entities which range from pure for-profits to donation-
based NGOs while they have dissimilar backgrounds in terms of their
educational qualifications, work experience and family. It is not surpris-
ing that the academic discipline too is replete with very different defini-
tions of social entrepreneurship. As Broader (2009, p. 30) observed:
“Social entrepreneurship is allergic to definitions, many of us can’t describe
social entrepreneurship, but we know it when we see it.”
There are many reasons why defining social entrepreneurship is such
an important task. As a field of academic study, social entrepreneurship is
still in its formative stage. Researchers in the field represent a wide range
in their academic background (e.g., public policy, economics, marketing,
finance, social development, agriculture), and are guided by the lenses of
their disciplines in understanding the phenomenon. In addition, the
practice of social entrepreneurship itself is evolving with the emergence
of newer social issues and problems (e.g., impacts of climate change, refu-
gee crisis) which need be to be, and can be, addressed by individuals.
But perhaps the most important reason for this diversity of definitions
is that by its very nature, social entrepreneurship is embedded, and finds
manifestation, in the local social and cultural context. Societies differ in
terms of the significant social problems, which need to be addressed, and
therefore provide different kind of opportunities to the social entrepre-
neurs (Mair, 2010). Many problems, which are significant in the Indian
context (e.g., caste discrimination, substantial size of the ultra-poor seg-
ment, lack of access to basic social services such as primary education or
health care) would not be irrelevant in many other countries. Moreover,
societies also differ in terms of the enabling ecosystem mechanisms (e.g.,
sources of funding, regulatory environment, social and institutional
Foreword
ix
structures) which both constrain and enable the kind of solutions which
are possible and relevant in the local context.
While the term ‘social entrepreneurship’ is of recent origin and its aca-
demic pursuit even more recent, the practice of social entrepreneurship in
India has a long history (Shukla, 2010a). As a culture which reinforces
the values of “giving” and duty towards the collective well-being, Indian
society provides a fertile ground for active engagement with social issues.
Moreover, historically, the Independence Movement in pre-independent
India, and later social movements led by Vinoba Bhave and Jai Prakash
Narain, provided a strong impetus to building an empowered society
through creating social leaders who would facilitate economic and social
change. Many individuals who participated in such movements or got
inspired by them went on to establish social organizations which were
later recognized as social entrepreneurial ventures (e.g., SEWA, Amul,
Barefoot College, Sulabh International). These ventures have influenced
many social enterprises in other regions of the world.
* * *
It is in this background that this volume aims to provide a more contex-

tual understanding of social entrepreneurship in the Indian socio-
economic-political discourse. While Indian society shares many social
issues and venture models with other regions (e.g., microfinance, solar
energy enterprises), it is also characterized by its specific socio-economic
problems and institutional voids. This collection of studies provides a
more nuanced insight into this distinctiveness.
This volume is very much needed, given that the academic discipline
of social entrepreneurship has started growing in India. Many academic
institutes have started offering a full-time course (e.g., Tata Institute of
Social Sciences, Ambedkar University, Delhi) or specific courses (e.g.,
IIM Ahmedabad, IRMA, XLRI) on the subject. Furthermore, research
scholars have started doing their doctoral thesis specifically on social
entrepreneurship, thus creating the first generation of academicians with
a specialization in the discipline. This book may mark the beginning of
more such India-centric academic books on social entrepreneurship.
x Foreword
A large number of social entrepreneurial opportunities exist in socio-

economic disequilibrium. Indian social entrepreneurship is primarily
focused on addressing these large social and economic disparities. A large
number of Indian social entrepreneurial ventures work on the issue of
“providing access” to basic social goods and services (e.g., education,
health care, markets, energy, water) to the less-resourced and low-income
communities. These “markets of the poor” pose unique challenges, since
they are mostly characterized by low and irregular income, low savings
and access to credit, are often remote, dispersed and lack basic infrastruc-
ture, and so on. The challenge is even more for Indian social entrepre-
neurs since they mostly operate with limited funding and investments.
Therefore, to service these markets, the social entrepreneurs have to inno-
vate new solutions and models, which are unique in the Indian scenario.
In her chapter, Runa Deepika (“What Kind of Business Models Lead
Social Enterprises to Sustainability?”) compares two such business mod-
els which aim to negotiate these ambiguities.
Another major reason for definitional dilemma within social entrepre-
neurship is the lack of shared and standardized impact measures. Social
value creation and impact generation is the defining characteristic of
social entrepreneurship. However, without the shared impact measure or
normalized social impact measures, the definitional dilemma will con-
tinue to persist. In this context, the chapter by Anar Bhatt (Why Worry
About Your Impact? Rationale, Challenges, and Support for Indian Social
Enterprises’ Impact Measurement) discusses different impact measures
and highlights the bridging point in this very conceptual conversation.
In a larger context, if social entrepreneurship as a practice has to make
any noticeable impact on the society, it needs people with empathy and
motivation to engage in social entrepreneurship. There is a need to attract
more talent who can leverage on the opportunity/gaps, develop large-
scale solutions and address these disparities in access. This makes the
question, “why do people become social entrepreneurs?” quite relevant in
a societal context. The chapter by Preeti Tiwari (“Foremost Motivational
Factors to Become a Social Entrepreneur”) explores this issue and high-
lights how tapping into the potential of youth as social entrepreneurs can
make a significant contribution in solving these societal problems.
Foreword
xi
Provision of public goods through private for-profit social enterprises,

however, also highlights a moral and political dilemma, which is relevant
in contemporary India. Constitutionally and legally many of these ser-
vices (e.g., education, health care) are basic rights of the people, and the
state is mandated to provide them. Providing these services even for a
small fee/price, which the social enterprises do, goes against the spirit of
the rights-based approach. Isabel Salovaara (“Is Social Enterprise the
Panacea for School-Education-for-All in India?”) explores this debate
between private provision versus basic rights in the context of primary
education. Education in India is getting privatized creating gaps in the
quality of education delivered to children from lower income families. A
social entrepreneurial lens on education in India is vitally important.
The large inequalities and disproportionate distribution of access in
India has also given rise to another model of social entrepreneurship.
These are social ventures in which bridging the rich-poor, urban-rural,
and class-, gender- and caste-based disparities is a key mission. They aim
to build empowered, self-sustaining communities and do so by social
mobilization and collectivization of communities to become self-reliant
in meeting their own needs. This empowerment of less-resourced and
disadvantaged communities has also given rise to the uniquely Indian
phenomenon of “collective entrepreneurship” or “community-based
entrepreneurship”. The study by Balram Bhushan (“A Need-Based
Innovation Cycle to Serve the Poor: A Case of the Mann Deshi Mahila
Group”) provides interesting examples of such innovation in empower-
ing the community through collective action. The study by Ashok Prasad
and Mathew J Manimala (Circular Social Innovation: A New Paradigm for
India’s Sustainable Development) gives useful insights into how collective
entrepreneurship, social innovation and circular economy creates the
ground for more sustainable development. These studies are uniquely
Indian in context and practice, and one may observe knowledge external-
ity in other contexts and practices.
In fact, one of the very unique and indigenous social innovations in
India are the Self-Help Groups (SHGs). These are small groups of the
poor, which tap into their social capital and thus empower them to make
changes in their own lives. SHGs started emerging during the 1970s–1980s
xii Foreword
through the initiatives of a number of organizations such as Mysore

Resettlement and Development Agency (MYRADA), Deccan
Development Society (DDS), Association of Sarva Seva Farms (ASSEFA),
Professional Assistance for Development Action (PRADAN), and so on,
by mobilizing village communities (mainly women) to form small groups
to help each other and take collective community actions. Later in the
1990s, with the facilitation from NABARD and government, these
SHGs started proliferating and have morphed into an invisible, yet pow-
erful, social movement for social change (Shukla, 2010b). Presently, there
are about 9 million SHGs covering more than 100 million (or more than
40%) households in India. Many of these SHGs have also transformed
themselves into social enterprises which cater to the needs of local devel-
opment through sustainable models.
While SHGs have been studied in the context of poverty alleviation
and financial inclusion, their role as vehicles of social change has not been
fully explored in the research on social entrepreneurship. In this volume,
the study on two SHGs by Sangita Dutta Gupta (“Social Entrepreneurship
Through Micro Entrepreneurs of Self-Help Groups”) looks at this aspect
of SHGs as social entrepreneurial ventures.
One distinctive aspect of social entrepreneurship in India is the emer-
gence of the support ecosystem. For social enterprises, even with proven
innovative models, it is essential to scale up to make any significant social
impact. For this they need financial support mentoring and access to the
market. Traditionally, such support used to come in the form of grants
from the government or the donor agencies, government-organized
events or just plain hard work. However, these traditional systems of eco-
systems are gradually receding and are getting replaced by the impact
investors and accelerators who provide holistic ecosystem approach to
social entrepreneurial development.
In particular, the impact-investing firms use venture capital like invest-
ment method while navigating the competing logics of financial pru-
dence and social impact creation. One article in this volume explores the
nuances of impact investing in India and its impact on sustainable devel-
opment. The study by Anirudh Agrawal (“Effectiveness of Impact
Investing at the Bottom of the Pyramid”) identifies the operating prin-
ciples of successful impact investing and the qualities they focus on in the
Foreword
xiii
ventures, which create social impact while giving the financial returns to
the investor. Similarly, the chapter by Shambu Prasad and Joseph Satish
V (“Embedding Diversity in Social Entrepreneurial Research: India’s
Learning Laboratories”) provide an insightful narration of how such
social movements form the backdrop of social entrepreneurship in India.
Given the emergence of impact investing, sustainable accelerators and
the role these new forms are likely to play in the scaling up of social ven-
tures in India, these studies provide useful pointers towards developing a
social entrepreneurial ecosystem in India.
This book aims to open a conversation on social entrepreneurial studies,
its impact and its possibilities in the government policy. However, there
are many things that the book does not cover, and I hope it would in the
later volumes. Some of the things that are not covered in the book are how
automation and digitalization will impact the social fabric; how and what
strategies Indian policy makers must choose to leverage the social impact
bonds in social value creation, how government policies can rejuvi-
nate micro-entrepreneurs in India and what role can social entrepreneur-
ship play in job creation in India. Finally, the field needs more quantitative
studies on social impact and externalities. These studies would further
resolve the definitional dilemmas and would also move the field ahead.
* * *
Overall, this book is a useful contribution to research literature on social

entrepreneurship with a specific focus on the Indian context. It covers a
vast canvas of areas and issues which form a distinctive feature of the
Indian landscape of this practice and discipline. More importantly, it
delves into those aspects of Indian social entrepreneurship which nor-
mally do not feature in studies on this subject. As one goes through the
chapters and studies, they open up new perspectives and lenses through
which one can, and needs to, understand this sector in India.
XLRIMadhukar Shukla
Jamshedpur, India
xiv Foreword
References
Broader, G. (2009, Fall). Not everyone’s a social entrepreneur, beyond profit,
30–32.
Mair, J. (2010). Social entrepreneurship: Taking stock and looking ahead.
Working Paper, WP-888, IESE Business School, University of Navarra.
Shukla, M. (2010a). Landscape of social entrepreneurship in India: An eclectic
inquiry. Paper presented in the 2010 Research Colloquium on Social
Entrepreneurship (June 22–25, 2010), Said Business School, University of
Oxford.
Shukla, M. (2010b, January 4). An invisible revolution in rural India. Wall
Street Journal. Retrieved from http://online.wsj.com/article/
SB126258063197814415.html
Preface
There are many reasons that inspired us to put our heads together to
bring out this edited volume. The overriding driver was that India has
some distinctive social, economic and cultural characteristics that provide
a contextualization of the social entrepreneurship that is fairly unique.
In recent times, India has been moving towards a market-driven econ-
omy, which means that government-sponsored public services and public
subsidies are slowly diminishing. This, coupled with rising inflation, has
caused tremendous stress among those living below the poverty line in
India. The question that arises is, what market-driven solutions can be
devised to alleviate their hardships? Furthermore, the forces of climate
change are having an adverse effect on agriculture, weather and fresh
water availability. The agricultural sector accounts for 60% of employ-
ment in India. So how do we address the increasing problems of people
associated with agriculture?
To add to the complexity, the public healthcare system in India is
poorly managed while private healthcare is expensive. Any individual on
the margins may lose his entire savings if his loved once gets sick and
needs to be treated in a private hospital. Again, how can one create sim-
ple, efficient healthcare solutions to ensure that people do not get ensnared
in the poverty trap? Finally, dwindling resources and a rising population
in general, coupled with massive migration to cities such as Delhi,
Mumbai and Bengaluru, have created huge social problems. How can the
xv
xvi Preface
people and the government address these problems? We believe that one
of the most prominent strategies to address these multifarious problems
is innovative social entrepreneurship. It has been acknowledged that
social entrepreneurship, using sustainable development models, can
address these problems and help society greatly (Hockerts, 2010; Hockerts
& Wüstenhagen, 2010; Mair, Mart, Iacute, Ignasi, & Ventresca, 2012).
Historically, India has led the way in social entrepreneurship through
the Sulabh Toilet Project, Seva Café, SEWA and also a plethora of self-
help groups. Most recently, social enterprises like the TAPF, CRY and
Aravind Eye Care are striving hard to innovate and address social issues
in an effective manner. The increasing acceptance of social entrepreneur-
ship as a viable option can be seen not just from the rise of such enter-
prises but also by the trend in the top higher educational institutions in
the country, such as IRMA, TISS, IIT Chennai, IIM Bangalore, IIM
Calcutta, which have developed dedicated programmes on social
entrepreneurship.
Much of the work by scholars on social entrepreneurship in the Indian
context was published after the seminal book, The Fortune at the Bottom
of the Pyramid, by C. K. Prahalad (2004). The book considered the poor
as a potential market and explained how firms should innovate business
models and products to monetize this market. Since then social entrepre-
neurial research looked at social business models addressing goods and
services to the poor (Linna, 2012; Olsen & Boxenbaum, 2009; Seelos &
Mair, 2007). The downside of this research was that many firms ended up
marketing inconsequential products and services to the poor, of little
utility, such as Fair and Lovely Cream and microfinance products, lower-
ing their savings (Garrette & Karnani, 2009; Karnani, 2009).
More social entrepreneurial research came to light after the IPO of
SKS microfinance (Gunjan, Soumyadeep, & Srijit, 2010). In both the
Bottom of the Pyramid (BOP) business models (Karnani, 2011; Seelos &
Mair, 2007) and the SKS microfinance case (College & Baron, 2011;
Joshi, 2011), the social impact was considered implicit to the business
model. In other words, if a firm creates socially and sustainably relevant
products and services and sells them to the poor, this was considered to
constitute social entrepreneurship. The downside is that it does not cover
baseline studies and impact measurement post intervention, which is an
Preface
xvii
essential element for the legitimacy of the field in India. The work by
Sonne (2012) dwells on the emerging class of social entrepreneurs and
impact investment, which provides a neoliberal market perspective on
the emergence of the social entrepreneur while the study by Sonne and
Jamal (2014) maps and contrasts various social entrepreneurial
initiatives.
Recent institutionalization of social entrepreneurship practice and
impact investment in the UK and Europe (Harkiolakis & Mourad, 2012;
Heyman, 2013; Spear, Cornforth, & Aiken, 2009), clarifying financial
disclosures, social impact and development of both the social and market
space, calls for further theorization and operationalization of various ele-
ments of social entrepreneurship. Drawing from the institutionalized his-
tory of social entrepreneurship in the UK and Europe, this edited volume
strives to present empirical and theoretical peer-reviewed chapters, in
order to provide a deeper understanding of the social entrepreneurial eco-
system in India for scholars, entrepreneurs and policy makers (ICSEM,
2017). In terms of scholarship, this volume is a humble beginning, lim-
ited to exploratory and qualitative studies. We hope it will contribute in
some way to inculcating both the social entrepreneurial intentions and
social entrepreneurial business acumen across strata, from school and
university level, to village management and central government level
initiatives.
This volume is divided into two sections: Theoretical Contextualization
on Social entrepreneurship and, Sustainable Business Models and Impact
Investment. Each section has a series of dedicated conceptual and empiri-
cal papers. The chapters in the first part largely focus on conceptual
debates around social entrepreneurship in India, such as entrepreneurial
intentions, entrepreneurial empathy, dilemma around standardized social
entrepreneurial measures and problems with the social entrepreneurial
solutions to primary education in India. The chapters in the second part
study the self-help groups, impact-investing firms, circular economy,
accelerators and disruptive social entrepreneurial themes, weaving emerg-
ing trends and theory with the social enterprise cases from India. We
strive to provide empirical work that not only looks at the social innova-
tion from the market disequilibrium perspective and also presents a more
realistic perspective of the social entrepreneurship landscape in India.
xviii Preface
While this research work is of significant value, India still lacks specific
theorization and robust empirical validation and quantitative research in
social entrepreneurship (British Council India, 2015).
Future studies on social entrepreneurship in the Indian context would
do well to theorize and develop solutions around the following research
gaps. First, research must study different scaling models of social enter-
prises. It must study how social impact by social enterprises can be scaled
without grants or subsidies but through markets. Second, more research
is needed on the cooperative movement in India, beyond the dairy and
agriculture cooperatives, into newer areas of community self-sufficiency
and empowerment like renewable energy, education, healthcare and
water sharing. Finance is an important aspect of social entrepreneurship
and future research could explore newer models of impact investing,
quantitative and risk modelling of impact investing, microfinance and
public-private partnership (PPP) finance models, looking beyond impact
investing to public-private funding of social enterprises and social impact
bonds. Social entrepreneurs need support and guidance.
In this direction, research should also focus on how and what models
can be developed to support social enterprises. One such example is self-
help groups, which can be replicated at different socio-economic levels of
society. Furthermore, we also need to research how to increase the pro-
ductivity and income of the members associated with the SHGs. Another
support mechanism is through the accelerators and incubators focusing
on social entrepreneurship. Social entrepreneurship in India is in its
infancy. It needs extensive support and a social movement to develop at
each level of society, including national associations for social enterprise
to engage with government for redefining the tax breaks and incentives in
order to scale up social entrepreneurship.
To sum up, social enterprise addresses social problems and helps those
at the margins by using creative means (Defourny & Nyssens, 2010; Di
Domenico, Haugh, & Tracey, 2010) while simultaneously leveraging the
personality of the social entrepreneur (Smith, Besharov, Wessels, &
Chertok, 2012) and seeking rents both from the social problem and mar-
kets to ensure that the dividends generated while running the enterprise
are used for the benefit of the marginalized and not channelled towards
the shareholders (Yunus & Jolis, 1999). The promise of social
Preface
xix
e ntrepreneurship in a country like India is enormous as there are large

vicissitudes. We hope this volume is a window to that promise.
Copenhagen Business School Anirudh Agrawal

Copenhagen, Denmark
Frankfurt, Germany
BML Munjal University, Haryana, India Payal Kumar
References
British Council India. (2015). Social enterprise: An overview of the policy frame-
work in India.
Defourny, J., & Nyssens, M. (2010). Conceptions of social enterprise and social
entrepreneurship in Europe and the United States: Convergences and diver-
gences. Journal of Social Entrepreneurship, 1(1), 32–53.
Di Domenico, M., Haugh, H., & Tracey, P. (2010). Social bricolage: Theorizing
social value creation in social enterprises. Entrepreneurship Theory and Practice,
34(4), 681–703.
Garrette, B., & Karnani, A. (2009). Challenges in marketing socially useful
goods to the poor.
Gunjan, M., Soumyadeep, S., & Srijit, S. (2010). IPO in the Indian microfi-
nance industry: A SKS microfinance perspective. Advances in Management,
3(5), 23–30.
Harkiolakis, N., & Mourad, L. (2012). Research initiatives of the European
Union in the areas of sustainability, entrepreneurship, and poverty alleviation
by, 717, 73–79.
Heyman, M. (2013). The emergence and growth of social finance in the UK. Lund,
Sweden.
Hockerts, K. (2010). Social entrepreneurship between market and mission.
International Review of Entrepreneurship, 8(2; interested in the transforma-
tion of a sector induced by social entrepreneurship. More specifically), 1–22.
Hockerts, K., & Wüstenhagen, R. (2010). Greening Goliaths versus emerging
Davids—Theorizing about the role of incumbents and new entrants in sus-
tainable entrepreneurship. Journal of Business Venturing, 25(5), 481–492.
ICSEM. (2017, November 25). ICSEM Working Papers. Retrieved from
https://www.iap-socent.be/icsem-working-papers
xx Preface
Karnani, A. (2009). The bottom of the pyramid strategy for reducing poverty: A
failed promise. Economic and Social Affairs, (80).
Linna, P. (2012). Base of the pyramid (BOP) as a source of innovation:
Experiences of companies in the Kenyan mobile sector. International Journal
of Technology Management & Sustainable Development, 11(2), 113–137.
Mair, J., Martí, I., & Ventresca, M. J. (2012). Building inclusive markets in rural
Bangladesh: How intermediaries work institutional voids. Academy of
Management Journal, 55(4), 819–850.
Olsen, M., & Boxenbaum, E. (2009). Bottom of the pyramid: Organizational
barriers to implementation. California Management Review, 51(4), 100–126.
Prahalad, C. K. (2004). The fortune at the bottom of the pyramid: Eradicating
poverty through profits. Wharton School Publishing.
Seelos, C., & Mair, J. (2007). Profitable business models and market creation in
the context of deep poverty: A strategic view. Academy of Management
Perspectives, 21(4), 49–63.
Smith, W. K., Besharov, M. L., Wessels, A. K., & Chertok, M. (2012). A para-
doxical leadership model for social entrepreneurs: Challenges, leadership
skills, and pedagogical tools for managing social and commercial demands.
Academy of Management Learning & Education, 11(3), 463–478.
Spear, R., Cornforth, C., & Aiken, M. (2009). The governance challenges of
social enterprises: Evidence from a UK empirical study. Annals of Public &
Cooperative Economics, 80(2), 247–273.
Yunus, M., & Jolis, A. (1999). Banker to the poor: Micro-lending and the battle
against world poverty.
Contents
Part I Theoretical Contextualization 1
1 Embedding Diversity in Social Entrepreneurial Research:

India’s Learning Laboratories 3
C. Shambu Prasad and V. Joseph Satish
2 Education Conversations: Situating Social Enterprise

in India’s Education Discourse 31
Isabel M. Salovaara
3 Factors Affecting Individual’s Intention to Become a Social

Entrepreneur 59
Preeti Tiwari, Anil K. Bhat, and Jyoti Tikoria
4 Why Worry About Your Impact? Rationale, Challenges

and Support for Indian Social Enterprises’ Impact
Measurement 99
Anar Bhatt
xxi
xxii Contents
Part II Sustainable Business Models and Impact Investing 117
5 Towards a Better Understanding of Business Models

of Social Enterprise in an Uncertain Institutional
Environment 119
Deepika Chandra Verma and Runa Sarkar
6 Circular Social Innovation: A New Paradigm for India’s

Sustainable Development 141
Ashok Prasad and Mathew J. Manimala
7 Social Entrepreneurship Through Micro-Entrepreneurs

of Self-Help Groups 161
Sangita Dutta Gupta and Susmita Chatterjee
8 Stimulated Innovation Cycle to Serve the Poor: A Case

of Mann Deshi Mahila Group 177
Balram Bhushan
9 Effectiveness of Impact-Investing at the Base

of the Pyramid: An Empirical Study from India 207
Anirudh Agrawal
Index 247
Notes on Contributors
Anirudh Agrawal is a PhD fellow at Copenhagen Business School and a visit-

ing assisting professor at Bennett University. Previously he was a full assistant
professor at Jindal Global University. His areas of interest are social entrepre-
neurship, impact-investing, entrepreneurship, corporate entrepreneurship and
entrepreneurial ecosystems. He teaches entrepreneurship, strategic manage-
ment, CSR and social entrepreneurship. He has published and presented articles
in international journals and conferences. In his previous stint, he was an engi-
neer-product manager with a focus on product development from robotics to
water cleaning machines.
Anil K. Bhat graduated in Mechanical Engineering in 1982 from REC (now

NIT), Srinagar and obtained his doctorate (fellowship) from IIM Bangalore.
His specialization is marketing research and his methodological contribution
has been in the area of ‘cluster analysis of rank-order data’. He is a member of
the Academy of Management (AOM), American Marketing Association (AMA)
and a Fellow of the Institution of Engineers (India). He has more than 80 pub-
lications to his credit and has conceptualized, designed and conducted many
MDPs both for private and for public sector companies. He has served as a
management expert on Union Public Service Commission expert panel. He has
been certified as an Entrepreneur Educator by STVP Stanford, NEN and IIMB.
Anar Bhatt is a PhD fellow at IIM Ahmedabad. Prior to her PhD studies she
worked as a consultant and researcher for many social entrepreneurship and
xxiii
xxiv Notes on Contributors
sustainable development advisory firms. Her last research was with Okapia,
where she published many studies on social entrepreneurship from India. In
addition, she is actively involved with USAID, helping in their developmental
programmes all over India.
Balram Bhushan (Fellow in Management) is Assistant Professor of Human

Resource Management at the Tata Institute of Social Sciences. His research
interest includes social entrepreneurship, employee engagement, training and
development and organizational design. The main theme of his research and
teaching revolves around value creation. Prior to joining the doctoral programme
at XLRI, Jamshedpur, he taught engineering students for two years.
Susmita Chatterjee is Assistant Professor in Economics and also a visiting pro-

fessor at the Department of Commerce for MPhil-PhD course work at the
Maharaja Manindra Chandra College, Kolkata. She studied at the Multipurpose
Government Girls’ School and graduated from Lady Brabourne College, Kolkata
(1997). She completed her M.Sc. in Economics from Calcutta University
through Presidency College (1999) and M.Phil from Calcutta University
(2006). She holds a PhD from the Department of Economics, Calcutta
University (2013). She has done postdoctoral research at IIM Calcutta. She has
a number of publications to her credit with reputed publishers such as Springer,
Emerald, Sage and others.
Sangita Dutta Gupta holds a PhD in Economics from Jadavpur University, India.
She has more than 16 years of teaching experience. She is Associate Professor of
Economics at IFIM Business School, Bangalore. She has a number of publications
to her credit with reputed publishers such as Emerald, Sage and others. She has
presented her research papers in many international and national conferences and
is on the editorial board of two journals and a reviewer of an Emerald journal.
Payal Kumar professor at BML Munjal Univeristy, has rich experience in

senior positions in the higher education and corporate verticals, with a strong
track record in both scholarship and leadership. Some of the senior positions she
has held include professor and registrar at a university in North India, where she
was instrumental in launching the university’s publishing and research division.
In an earlier avatar she worked as vice president, editorial and production at
SAGE India Publications Pvt Ltd. Kumar has published widely in journals, is
the author of five international books on leadership in India, and is also series
Notes on Contributors
xxv
editor of a six-volume book series on Leadership and Followership (Palgrave

Macmillan). Her research interests include gender, diversity, and mentorship.
Mathew J. Manimala (Fellow-IIMA) has served as the director, XIME,

Bangalore, and as a professor and chairperson of OBHRM Area at the Indian
Institute of Management Bangalore (IIMB), where he has also served as the
Jamuna Raghavan Chair Professor of Entrepreneurship and as the Chairperson
of N. S. Raghavan Centre for Entrepreneurial Learning (NSRCEL). His earlier
academic positions were at the Administrative Staff College of India (ASCI) and
Cochin University of Science and Technology (CUSAT). He is a recipient of the
Heizer Award of the Academy of Management for his outstanding research in
the field of new enterprise development and has published several research
papers and books in the areas of entrepreneurship and organizational behaviour.
He is the editor of the South Asian Journal of Management.
Ashok Prasad is the Cofounder of Clothes2Causes—a social enterprise, serves

as a visiting faculty at XIME, Bangalore, and is pursuing doctoral research at
XLRI, Jamshedpur. He holds an MBA from the University of Delhi and has also
completed the Master of Liberal Arts-Sustainability programme from Harvard
University with Honours (Dean’s List). He previously worked as a business man-
ager in India and the Middle East.
C. Shambu Prasad is Senior Professor of Strategy, Public Policy and

Entrepreneurship at IRMA University, Gujarat, India. Previously, he was a full
professor at Xavier Institute of Management. He has published many articles on
social entrepreneurship, rural marketing and innovation in the agricultural sector.
He has taught social entrepreneurship in many national and international univer-
sities. He was a Fulbright scholar at Cornell University in 2013. He obtained his
bachelor’s degree from IIT Delhi and master’s degree and PhD from IIT Madras.
Isabel M. Salovaara is the Assistant Director of the Jindal Centre for Social
Innovation & Entrepreneurship at the O.P. Jindal Global University. She com-
pleted her MPhil in Social Anthropology as a Gates Scholar at the University of
Cambridge and has been the recipient of a Fulbright-Nehru Student Research
Award in India.
Runa Sarkar is Professor of Economics at the Indian Institute of Management

Calcutta. She has co-edited the India Infrastructure Report (IIR) 2010 on
Infrastructure Development in a Low Carbon Economy and IIR 2009 on
xxvi Notes on Contributors
Land—A Critical Resource for Infrastructure. She has authored Environment,

Business, Institutions (2017), and co-edited Essays on Sustainability and
Management: Emerging Perspectives (Springer, 2017).
V. Joseph Satish is a PhD researcher in Science, Technology & Society Studies

(STS) at the Centre for Knowledge, Culture and Innovation Studies (CKCIS),
University of Hyderabad, India. His research focuses on relations between sci-
ence and religion in India. His case study ‘Dharani: Nurturing the earth, foster-
ing farmers’ livelihoods’ won the first prize in the Oikos International Case
Study Competition (2017). He is on the editorial board of Intersect: The Stanford
Journal of Science, Technology and Society.
Madhukar Shukla is Chairperson, Fr Arrupe Centre for Ecology &

Sustainability and a professor (Strategic Management & OB) at the XLRI
Jamshedpur (India). He has served as a member of the advisory council of
University Network for Social Entrepreneurship (founded by Ashoka: Innovators
for the Public and Skoll Centre for Social Entrepreneurship, Oxford University)
and is on the jury for the Oikos Case Competition on Social Entrepreneurship.
Jyoti Tikoria holds a PhD from the Department of Management Studies, IIT
Delhi (2009). She is an assistant professor in the Department of Management at
BITS Pilani—Pilani Campus since July 2009. Her primary areas of interest in
teaching and research are Strategy & Entrepreneurship, Technology Management,
R&D Management and Intellectual Property Rights Management. She has
more than 40 publications in journals and conferences of repute to her credit.
Apart from this, she is Faculty-in-Charge, Center for Innovation, Incubation
and Entrepreneurship (CIIE) at BITS Pilani—Pilani Campus.
Preeti Tiwari is a doctoral research candidate in the Department of

Management, BITS, Pilani. Her scholarly interests are entrepreneurship, social
entrepreneurship and hybrid entrepreneurship. She is active in research and has
authored more than 20 research papers in international journals and conferences
of high repute. She is a regular reviewer for International Journal of Entrepreneurial
Behavior & Research and Journal of Global Entrepreneurship Research.
Deepika Chandra Verma is a final-year doctoral student in the Economics

Group at the Indian Institute of Management Calcutta.
List of Figures
Fig. 1.1 Social entrepreneurship ecosystem in India (as of 2013).

Source: Authors’ own 8
Fig. 1.2 Incubators in India 2017—Startup and TBI. Source: Collated
by authors from Startup India (2017) and NSTEDB (2016)
for TBIs 19
Fig. 1.3 Technology-based incubators in India—state-wise in 2017.
Source: Collated by authors from Startup India website
(Startup India, 2017) and NSTEDB (2016) for TBIs 20
Fig. 1.4 Zone-wise incubators in India. Source: Collated by authors
from NSTEDB (2016) 20
Fig. 3.1 Proposed social entrepreneurship intention model 69
Fig. 8.1 Representation of second-order coding scheme.
Source: Author’s own 197
Fig. 9.1 The economic pyramid source. Source: Arnold and Valentin
(2013)210
Fig. 9.2 Effectiveness of impact-investing at the BoP segment.
Source: Author’s own 240
xxvii
List of Tables
Table 1.1 National-level social entrepreneurship events in India

2008–20159
Table 3.1 Social entrepreneurial studies in India 63
Table 3.2 Descriptive statistics (mean and standard deviation) and
correlation of the variables used in the study 84
Table 3.3 Measurement model 85
Table 3.4 Overview of hypotheses 86
Table 4.1 Social impact assessment frameworks by academia 101
Table 4.2 Social impact assessment frameworks by funders 107
Table 5.1 PTEC at a glance 127
Table 5.2 Disabling institutional environment and risk 131
Table 5.3 Motivation behind business model changes 134
Table 5.4 Comparison of business model changes 136
Table 8.1 Structural representation of data 188
Table 8.2 Illustrative evidence from bank and foundation: Ms Chetna,
the founder 191
Table 8.3 Illustrative evidence from foundation: Ms Vanita, the CAO 192
Table 8.4 Illustrative evidence from bank: Ms Sushma, the CFO 193
Table 8.5 Cross-unit comparison 195
Table 9.1 Summary of the problems at the BoP segment of the society 212
Table 9.2 Detailed summaries of the cases 220
Table 9.3 Summary of the cross-case analysis 223
xxix
xxx List of Tables
Table 9.4 Discussion on the effectiveness of impact-investing at the

BoP segment 233
Part I
Theoretical Contextualization
1
Embedding Diversity in Social
Entrepreneurial Research: India’s
Learning Laboratories
C. Shambu Prasad and V. Joseph Satish
Abstract The Indian social entrepreneurial ecosystem is acknowledged

by many as a site for emerging business models that could simultaneously
address the challenges of poverty and inequitable growth. But the spurt
in social entrepreneurial activity has not been matched by conversations
on the diversity of approaches that make Indian social entrepreneurial
initiatives unique. We suggest that situating social entrepreneurship
within narratives such as ‘fortune at the bottom of the pyramid’ or ‘social
business’ discounts the rich ways in which social entrepreneurship has
been shaped by actors in India including the well-known Ashoka founda-
tion, which began its journey in India. India has been an important site
for experiments, a learning laboratory where a vibrant civil society has led
social innovation and also demonstrated the role of communities as social
C. S. Prasad (*)
Professor, General Management (Strategy and Policy) Area,
Institute of Rural Management Anand, Anand, Gujarat, India
V. J. Satish
Centre for Knowledge, Culture and Innovation Studies, University of
Hyderabad, Hyderabad, India
© The Author(s) 2018 3

A. Agrawal, P. Kumar (eds.), Social Entrepreneurship and Sustainable Business Models,
https://doi.org/10.1007/978-3-319-74488-9_1
4 C. S. Prasad and V. J. Satish
entrepreneurs. In this chapter, we suggest that social entrepreneurship in

India needs to be explored within a longer narrative of social innovation
in India that precedes in many ways the rise of social entrepreneurship as
a phenomenon in the twenty-first century in Europe and the United
States. In this chapter, we first present a quick overview of some of the
recent initiatives in the social entrepreneurial landscape in India present-
ing some gaps in understanding the social sector from the much-hyped
governmental initiatives on Startup India as well as by presenting a case
for a rethink on social entrepreneurship in India. We situate the diversity
of Indian social entrepreneurship by theoretically grounding it within the
larger context of social movements. Second, we look more closely into
the idea of producer-owned cooperatives, which emerged in the Indian
civil society space, and how these unique social enterprises demonstrate
principles of social entrepreneurship quite different from the dominant
narratives.
Introduction
Global interest in social innovation and social entrepreneurship has
grown considerably since the 1990s, prompting several educational insti-
tutions, governments, philanthropic foundations and non-governmental
organizations (NGOs) to engage with the phenomenon (Chell,
Nicolopoulou, & Karataş-Özkan, 2010). The role of social entrepreneur-
ship in addressing the needs of the marginalized and adding value to
society has been widely acknowledged (Rey-Martí, Ribeiro-Soriano, &
Palacios-Marqués, 2016), and social entrepreneurship has been celebrated
as ‘one of the most alluring terms on the problem-solving landscape
today’ (Light, 2008).
We believe that moving the field forward requires a shift from who
undertakes social innovation to how to undertake social innovation
(Phillips, Lee, Ghobadian, O’Regan, & James, 2014). Addressing this
research gap will require exploring a range of heterogeneous contexts with
diverse socio-economic histories and political ideologies, informed by per-
spectives from practice and outside the traditional technological domain
Embedding Diversity in Social Entrepreneurial Research: India’s… 5
(Shaw & de Bruin, 2013). This is particularly so since the academic litera-
ture indicates a near absence of perspectives and authors from developing
countries. It has also been suggested that synthesizing social entrepreneur-
ship research with social movement approaches could provide conceptual
clarity in understanding institutional patterns across cultural categories
(Dacin, Dacin, & Tracey, 2011). The evolution of social entrepreneurship
in developing countries like India with its alignment to advocacy and
social movements (Nicholls, 2006) provides a suitable and fresh context
for social entrepreneurship research in developing countries.
A general tendency in social entrepreneurship research is a reference to
a supposed ‘trans-Atlantic’ divide (Bacq & Janssen, 2011) between two
groups: a European group with the United Kingdom as leader and an
Americas group with the United States of America heading it (Granados,
Hlupic, Coakes, & Mohamed, 2011). Several reviews of social entrepre-
neurship definitions have failed to identify any definition conceptualized
by academicians in developing countries (Dacin et al., 2011; Rey-Martí
et al., 2016; Zahra, Gedajlovic, Neubaum, & Shulman, 2009). A biblio-
metric analysis of social entrepreneurship and social enterprise literature
from 1991 to 2010 reveals that only 10% came from the developing world
(Asia, Africa and South America put together). This study also found that
53% of all articles on social entrepreneurship were covered under the
management and business disciplines with social sciences accounting for
only 4.5% (Granados et al., 2011). Within innovation studies, scholars
have warned against ‘backing the winners’ in looking at innovation for
development. Soete (2011) informs us that the process of innovation is
actually much more complex and challenging in a developing country
context. This domination of research on social entrepreneurship by a few
countries and disciplines has led scholars from outside the United States
and Europe to seek diverse international perspectives which account for
various social, cultural and political considerations (Chell et al., 2010).
This chapter makes two contributions: (1) submits a case for greater
recognition of diversity of social entrepreneurial models, both historically
and spatially, and (2) presents the implications of this diversity for India
and the world to further the agenda for practice and research in the field
of social entrepreneurship. We address the following key research
questions:
1. What is the general thrust of the dynamic and changing current social
entrepreneurship landscape in India?
2. How do ideas on social innovation and social entrepreneurship in
India relate to each other?
3. How can an understanding of the historical context of social innova-
tion in India contribute to social entrepreneurship research and
practice?
ngaging with the Concept of Social

E
Entrepreneurship in India
India today is known both for its increasing number of billionaires (Datta,
2016) and for being home to some of the largest number of poor and
hungry in the world (UNDP, 2016). This ironical context has established
India as an important site for debates on social entrepreneurship among
developing countries. Indian fellows in the Ashoka network of social entre-
preneurs (who form the largest contingent from a single country in the
network) have helped shape the discipline since the early days of the disci-
pline. Many celebrated case studies on social entrepreneurship are from
India (say Aravind Eye Hospital; Hartigan, 2006; Rangan & Thulasiraj,
2007). Although there is an increasing interest from Indian scholars work-
ing on social entrepreneurship and social innovation (Prasad, 2016), it is
incommensurate with the growth in the field as well as the need for a more
plural understanding of the phenomenon in India. A study that analysed
72 empirical articles on social entrepreneurship had only 4 within a geo-
graphic setting in India (Short, Moss, & Lumpkin, 2009).
This chapter adopts the ‘inheriting’ approach to research on social
entrepreneurship as this offers an alternative beyond definitional issues
and debates (Steyaert & Dey, 2010). The ideas suggested under the
‘inheriting’ approach—contextualizing, historicizing and connecting—
are useful in understanding social entrepreneurship in the developing
world. To implement this approach, we utilize a series of methods to offer
greater clarity and analytical insights. We use a narrative analysis of a
predominant Indian magazine on social entrepreneurship in India and
the operations of the Ashoka network in the country. We use the case
study of Villgro Innovations to show how Indian social entrepreneur-
ship has shifted from the broader conception of social innovation to a
narrower understanding of scalable, social enterprises. Finally, we trace
the history of social innovation in India and explain the need for plac-
ing social entrepreneurship within the broader school of social innova-
tion. By providing a range of methods for our analysis, we offer fresh
analytical insights and theoretical contributions to the field of social
entrepreneurship.
apturing the Social Entrepreneurship

C
Landscape in India
The Hidden Narrative Behind Forums and Magazines
The emerging picture of social entrepreneurship in India cannot be

assessed accurately as the literature continues to be silent on the Indian
context (Rey-Martí et al., 2016). However, the field of social entrepre-
neurship, like the parent discipline of entrepreneurship, is constructed
‘within and through social processes’ (Lewis, 2013) and informed by a
vibrant presence of debates in the form of mega-events and magazines.
Figure 1.1 provides a representative picture of the various actors (and
mechanisms) in which the social entrepreneurship landscape operated in
India (as of 2013). Table 1.1 lists some of the national-level events on
social entrepreneurship in India from 2008 to 2015.
The character of social entrepreneurship has experienced several
changes due to the entry of newer actors, particularly foundations pro-
moting social entrepreneurs and media publications. These actors have
elsewhere been shown to have the resources and have been effective in
shaping the overall agenda of social entrepreneurship (Dacin et al., 2011).
Of particular interest to the Indian context is the magazine Beyond Profit,
which is an initiative of Intellecap, a consulting and investing company
with a mandate to ‘build and scale profitable and sustainable enterprises
dedicated to social and environmental change’ (Intellecap, 2016). The
Annual
Conferences on
SE Ex: Sankalp Social Venture
Forum
Awards for SE Capitalists
Ex: Schwab SEoY Ex: Acumen, Lok
Capital
Social Networks
Volunteer for SE
Fellowship Ex: Honey Bee
Ex: Vilgro, Bhumi Network
Social Make Sense
Entrepreneurship
Ecosystem in
India Foundaons
Youth Forums for Promong SE
SE Ex: Khemka
Ex: Foundaon for Foundaon, Ford
Youth SE Foundaon
Mentorship-
Academic
Business
Instuons with
Development
SE center Government Consultants
Ex: ISB, TISS, IRMA Legal Ex: UnltdIndia
Ex: CAPART, DBT,
DST,DIT
Fig. 1.1 Social entrepreneurship ecosystem in India (as of 2013). Source: Authors’
own
inaugural issue of Beyond Profit was launched in 2009 and saw another 22
issues, with an online readership of more than 30,000 and 7000 subscrib-
ers in more than 130 countries (Intellecap, 2009). The magazine re-
evolved in the form of a new monthly magazine in 2011, Searchlight
South Asia, which emerged after Intellecap became a partner in the
Rockefeller Foundation’s Searchlight Network (Intellecap, 2011).
A closer look at the various issues of Beyond Profit indicates a shift
towards a particular form of social entrepreneurship, namely, for-profit
Table 1.1 National-level social entrepreneurship events in India 2008–2015

No. of
Event Organized by Location events
Sankalp Forum Intellecap Mumbai 7
Khemka Forum on Social Khemka Foundation Indian School of 6
Entrepreneurship Business,
Hyderabad
National Conference on Fr. Arrupe Centre for XLRI, Jamshedpur 7
Social Entrepreneurship Ecology &
Sustainability (FACES)
Villgro Unconvention Villgro Chennai 4
Development Dialogue Deshpande Foundation Hubli 8
Source: Authors’ own
social enterprises. In October 2010, an article titled ‘Is India Really a

Hotbed for Social Enterprise?’ in the magazine begins with cases on
Indian social enterprises, such as Aravind Eye Hospital and Jaipur Rugs,
and goes on to ask ‘Is India better at producing social entrepreneurs than
other countries?’ The answer provided refers to India’s ‘long, rich love
affair (sic)’ with non-profit organizations. Social enterprises are presented
in the article as a graduation from a tryst with NGOs that are not always
‘accountable, transparent or sustainable’. The article concludes stating the
presence of ‘a certain ethos in India which makes it possible for social
enterprise to thrive …. This attitude, a mix of confidence, perseverance,
and “can’t-touch-this,” known as jugaad, is an Indian way of getting
things done using any means, against the odds’ (Clinton, 2010).
As a pioneering social entrepreneurship media publication in India,
Beyond Profit is a good barometer of the enthusiasm and vibrancy in the
sector. However, it also reflects a bias in the way the field is represented.
In its special issue on social entrepreneurship curriculum in 2011, this
bias and the intended audience become quite evident. The issues carried
no insight from academics involved in teaching the subject in India, even
though Ashoka University’s Handbook had identified a minimum of
dozen educational institutions offering courses in the discipline, the same
year (Ashoka, 2011). In a response to the question ‘Why is social entre-
preneurship creating interest in B schools?’, the replies ranged from
‘B-schools [are] … responding to a growing need among large corpora-
tions … to act as responsible corporate citizens globally’ and that ‘MNCs
like Unilever and ITC Limited came out to help people mitigate their
basic market inefficiencies in areas like health, medicine, transportation
and education’ (Callard & Kulkarni, 2011). This clearly reflected a par-
ticular strand in Western academia which neither accurately reflects the
evolution of social entrepreneurship in India nor is it the dominant opin-
ion shared by teachers and researchers of the field in India. (A recent
compendium of Indian courses on social entrepreneurship brings this out
rather clearly.)
Some of the concerns with the assumptions and dominant trends in
the sector have been voiced in many forums. A key concern relates to the
important issue of inclusion and exclusion in social entrepreneurship. In
June 2013, Ashoka, a pioneer in the field of social entrepreneurship with
a 30-year presence and instrumental in popularizing the concepts of
social entrepreneurship (Sen, 2007), had its own major event. Fifty years
ago on his first visit to India, Ashoka’s founder Bill Drayton was influ-
enced by Vinoba Bhave and the Bhoodan (land-gift) movement. His
interest in Mahatma Gandhi and his involvement in the civil liberties
movement in America helped him rethink a global future based on empa-
thy (Bornstein, 2004). At the India Future Forum, Drayton wondered
whether Ashoka could root empathy in its everyday work and ethos.
Ashoka’s rebranding as an organization guided by the principles of empa-
thy needs to be seen not just as an organizational strategy but also as a
lens to understand how different actors interpret social entrepreneurship.
These kinds of variations between how investors and practitioners per-
ceive different strategies to promote the field have resulted in a wider gap
between research and practice, not only in India but elsewhere too (Hand,
2016).
eclaiming Social Innovation for the Diverse

R
Challenges of the Hinterlands
Social innovation has been described as being ‘practice-led where the

“wisdom of practice” is more advanced than theory’ (Mulgan, 2012).
Others have pointed out that the social entrepreneur as a change agent
should not be detached from the society and community in which she is
embedded within; the interaction between the social entrepreneur and

the context is crucial to the understanding of social entrepreneurship.
This reduces characterizations of heroic success stories but rather focuses
on the learning trajectory ‘such as accommodation to the venture, stress,
economic and professional value, ethics’ (Dacin et al., 2011; Mair &
Martí, 2006).
A review of the Indian landscape has several new actors who have
shaped the sector by aligning with several global actors even as many
governmental and non-governmental agencies are unable to provide lead-
ership to the sector (Satish & Prasad, 2011). This globalization of social
entrepreneurship in India has created a vibrant market for social impact
investment but largely only favours urban and English-speaking actors
than rural and vernacular-based social innovators, favouring more
market-centric initiatives than ones that speak of socio-political move-
ments. Reaching India’s hinterlands is still a serious challenge for social
entrepreneurship (Shukla, 2012).
However, the need to focus on social entrepreneurship as a learning
process has been institutionalized quite literally in the Tata Jagriti Yatra—a
unique annual train journey that takes hundreds of young Indians on a
15-day national odyssey, introducing them to unsung heroes of India
with an aim to awaken the spirit of entrepreneurship (Shukla, Farias, &
Tata, 2012). This train journey contextualizes the field for researchers and
potential social entrepreneurs since the diversity of actors in the land-
scape is quite vast; a map of actors by the Centre for Social Innovation
and Entrepreneurship (CSIE) shows more than 300 actors in the land-
scape (CSIE, 2013).
Promoting social entrepreneurship in a developing country like India
thus requires exploration ‘outside of a traditional science and technology
setting’ (Shaw & de Bruin, 2013). This idea has received prominence in
the Indian setting in the past. The decade-long journey of one such orga-
nization—Villgro—indicates how new actors have shaped the entrepre-
neurial ecosystem in India as well as influenced the shift in emphasis in
India in recent times. Villgro, one of the prominent actors in the social
enterprise ecosystem, was founded by Ashoka Fellow Paul Basil. Paul
formed the Rural Innovation Network (RIN) in 2001 as a non-profit
venture to incubate enterprises based on successful rural innovations.
Using a venture capital investment model, RIN identified promising

ideas and mentored the entrepreneurs behind the ideas, helping them
refine, promote and market the ideas (Ashoka, 2002). RIN aimed to cre-
ate rural wealth through local needs and knowledge supplanted by skills
that an incubator could offer. RIN also initiated awards that helped
increase the outreach, and in less than 5 years was able to link with more
than 600 innovators. A rigorous screening process meant that only one in
nine innovators would receive incubation support.
In 2009, RIN was renamed Villgro following a branding exercise and
review. The original mission to ‘sustain the spirit of innovation, encour-
age experimentation and nurture the creativity of rural innovators’ was
revised to a mission that ‘believes in supporting and nurturing sustain-
able, market-based innovations that impact rural households’ (Rural
Innovation Network, 2002). Villgro had ‘shifted its target group from
very early stage incubates to early-late stage incubates’ and ‘seems better
equipped or committed to supporting more mature incubates’ (Villgro,
2012). Although Villgro’s social business incubation in India is com-
mendable and has contributed to inclusive innovation (Sonne, 2012), it
is still a moot point whether this model has wide applicability across
India. Despite recent interest by Villgro and other actors to move to
India’s hinterlands, the absence of an entrepreneurial climate in the
poorer regions of India suggests a need for rethink and greater discussion
on institutional and contextual issues (Raina, 2016). Furthermore,
Villgro’s focus on technology-based innovations has excluded support to
some promising social innovations that work on services and livelihoods
in rural areas but not technology focussed.
The change in Villgro’s mission from generic support for creative social
innovations to one focussed exclusively on market-based innovation is a
reflection of changes in the external environment. Social entrepreneur-
ship in India today is now tilted more towards social enterprises rather
than the larger processes of social innovation. This interest in social enter-
prises tends to frame discussions in particular ways. For instance,
Intellecap in a study defines a social enterprise as fulfilling four criteria:
they are to be for-profit, they are committed to social impact, they have a
base of the pyramid (BOP) focus and they serve a critical-needs’ sector
(Intellecap, 2012). This idea that all social entrepreneurs need to adopt
business practices to become more effective is being increasingly ques-

tioned even in the West. Berger and Kohomban (2013) argue that the
idea that ‘business is the panacea for all that ails nonprofits’ is one-sided
and uninformed and that it might be more useful to explore the cross-
pollination between the profit and non-profit sectors. By contextualizing
social entrepreneurship historically in the Indian context, in the follow-
ing section, we make a case for the plurality of ideas and the need to pay
greater attention to some perspectives in developing countries that often
do not get heard (Gabriel, Engasser, & Bound, 2016). In fact, we suggest
that an important contribution of developing countries to social entre-
preneurship literature is to avoid projecting a particular way, social enter-
prises currently, as the way forward and suggest that there is a need for
different ideas to co-inhabit the social innovation space.
andhian Roots of the Social Innovation

G
Movement in India
This rethinking on social entrepreneurship as part of social innovation we
suggest opens up spaces for a better contextualization of social entrepre-
neurship in developing countries. We shall show below how social inno-
vation in India has had a rich history often rooted in social movements
inspired by Gandhi’s vision for the freedom movement to several initia-
tives such as the technology for development movement. These move-
ments shaped the thinking of many Indian social entrepreneurs in India,
though only few of them were engaged in social enterprises as it is under-
stood today but yet contributed significantly to social change.
The history of social entrepreneurship in developing countries, and
India in particular, is complex and often aligned to advocacy and social
movements (Nicholls, 2006). Such an alignment is often rejected by the
‘Western’ assumption that advocacy cannot be part of social entrepre-
neurship (Light, 2008) which effectively neglects many social innova-
tions in India. However, recent research has provided insights into the
similarities between social movements and social entrepreneurship. Both
are concerned with social transformation; also, the tactics used in social
movements (mobilization of people, dissent, negotiation, etc.) are useful

for social entrepreneurship research and practice (Mair & Martí, 2006).
The best example of the social movement roots of social innovation in
India is seen in Bill Drayton’s founding of Ashoka, which promoted its
first-ever fellow from India in 1982. Bornstein’s (2004) account of
Drayton’s journey indicates the deep influence of Gandhi and his fol-
lower Vinoba Bhave who led a silent revolution for land reforms through
his famous Bhoodan (or land-gift) journey in the late 1950s. In explicitly
recognizing Gandhi and Vinoba Bhave, Drayton reminds us of the his-
torical context of social innovation in India, often forgotten in under-
standing the goals of social entrepreneurship today. The creative impulses
of what is today called social enterprise and social entrepreneurship in
India could be traced to the Indian national movement. Mohandas
Gandhi spearheaded a movement that involved large numbers of Indians
not just in the political struggle for freedom but also in the creation of an
alternate space and vision. Gandhi re-invented the swadeshi (self-
sufficiency) movement as swaraj (self-rule) and, in this process, also cre-
ated a cadre of community workers on a national scale who could run
social enterprises such as a rejuvenated hand-spun hand-made cloth
industry (khadi) that empowered millions. Gandhi’s idea of voluntary
action resulted in institutions which promoted rural livelihoods such as
the All India Spinners Association (AISA) in 1923 and the All India
Village Industries Association (AIVIA) in 1934. It is seldom appreciated
that these movements had nation-wide talent contests and awards for
innovations for the best spinning wheel. The Rs 1 lakh (7700 pounds)
prize for an improved spinning wheel in 1929 by AISA had attracted
several entries, but unlike today the movement did not celebrate the
innovators in these contests as social entrepreneurs. In fact, the contest
had no winners but had created an atmosphere for social change and citi-
zen participation in innovation (Prasad, 2002).
Gandhi’s and the khadi movement’s contribution to social innovation
was not just on the products of innovation but importantly in the process
and the design of innovation as a space for and by civil society in areas
that required ‘tender nursing’ which neither the state nor the market
could institutionally provide for. Social innovation from civil society,
Gandhi believed, was large and had substantial scope for research. Gandhi
developed alternative institutions that would produce and train social

innovators. He viewed his own ashrams (religious hermitages), tradition-
ally associated with spaces for spiritual and religious practice, as laborato-
ries. They not only played an important role in the freedom struggle but
also served as sites for experiments in cotton growing, processing, spin-
ning and weaving, agriculture, rural industries and so on. The ashrams
were also sites for practising experiments in transforming social relations.
In ashrams, more men engaged in spinning, an activity long seen as wom-
en’s domain. The potential of civil society organizations and social move-
ments to bring about institutional innovations of this kind is seldom
recognized in the current literature (Prasad, 2002).
Historically, the ideas of sarvodaya influenced organizations in inde-
pendent India leading to the development of several initiatives focussed
on rural upliftment outside the formal Gandhian movement. Prominent
among these were Baba Amte’s Maharogi Sewa Samiti that transformed
the lives of lepers (founded in 1949), Manibhai Desai’s Bharatiya Agro
Industries Foundation (BAIF) that pioneered innovations in livestock,
Association for Sarva Seva Farms (ASSEFA) in 1969 that worked on
guiding the landless to work on bhoodan lands and Ela Bhatt’s Self
Employed Women’s Association (SEWA) in 1972 that pioneered wom-
en’s empowerment by organizing the poor. These initiatives were varied
in their clientele but had the inspiration of Gandhi in common as well as
the belief in the idea of social innovation as a space for civil society orga-
nizations. Looking at these initiatives from a social change perspective
can throw new light on the potential of social innovations (Prasad, 2002).
Apart from Gandhi, there have been several social innovations from
civil society in their respective institutional contexts. The late 1970s and
early 1980s of the twenty-first century saw several institutions that sprung
up in different parts of India keen to take innovations to rural India. The
Application for Science and Technologies in Rural Areas (ASTRA) at the
Indian Institute of Science Bangalore in 1974, the Murugappa Chettiar
Research Centre in Madras (1977), the Centre of Science for Villages
(CSV) at Wardha (1978), the Centre for Technology and Development
in Delhi and Himachal Pradesh (1982), the Barefoot College (earlier
Social Work and Research Centre) in Rajasthan (in 1980s), Development
Alternatives in Delhi (1983), the Integrated Rural Technology Centre
(IRTC), Mundur closely associated with the People’s Science Movement

in 1987, the People’s Science Institute in Dehradun (1988) and the
Honey Bee Network (1989) are some of the organizations that have
worked in the field of social innovation. The government has also played
an important role in supporting and incubating some of these centres
(Prasad, 2005).
Social innovation in India today can be understood better by exploring
the contemporary revival of ideas such as Swaraj, Trusteeship and
Sarvodaya (or universal upliftment). In 2013, Azim Premji, the billion-
aire owner of the corporate house of Wipro, became the first Indian to
sign the Giving Pledge that commits high net worth individuals to give
generously to philanthropic causes. Premji committed a large volume of
his assets, estimated at about $16 billion, to charitable trusts. He joined
100 others in the new globalization of giving movement, but importantly
in doing so evoked the Indian concept of trusteeship. In explaining his
decision, Premji said, ‘I was deeply influenced by Gandhi’s notion of
holding one’s wealth in trusteeship, to be used for the betterment of soci-
ety and not as if one owned it’ (Bakshi, 2013).
Some of the innovations from these centres have led to social enter-
prises and they have been some of the earliest incubators in India of
social innovations in diverse fields. A few of the founders of some of
these institutions have been recognized as social entrepreneurs and their
work has featured in journals such as MIT’s Innovations (Roy & Hartigan,
2008). There, however, seems to be a discontinuity between the earlier
generation of ‘social innovators’ and the current era of ‘social entrepre-
neurs’. Although the earlier sets chose to source and create ideas locally,
the current trend is more towards using the power of connections to
source globally and diffuses and scales them locally with appropriate
customization.
Social Innovations and the Question of Scale

A key difference between social innovators then and now in India is the
attitude to scale. Earlier initiatives often chose to scale not the organiza-
tions but their models and believed in open-sourcing processes. Today
though, the emphasis on scale is very high on the agenda of social enter-
prises led largely by the current investment scenario. Anil Gupta (2010),
a pioneer in grassroots innovation, has questioned the idea that scale
alone can solve poverty and argued that scale in some contexts can even
be the enemy of sustainability. Social innovations, especially those which
help marginal communities, may remain in a niche but can add value to
their unique local contexts. Gupta suggests a need to evolve a fresh model
of innovations building upon an Indian cultural and social strength. The
ecosystem for innovation at the basic level must have a large diversity of
ideas and innovations to choose from.
The excessive focus on scalable technological innovations and products
can have detrimental effects on policy design and practice. India’s Science,
Technology and Innovation Policy of 2013 (Government of India,
Ministry of Science and Technology, 2013) has largely bypassed social
innovations by individuals and organizations in the citizen sector. This is
only representative of the fact that social innovation arising from Indian
civil society seems to have fallen out of favour due to the inherent bias for
scalable, market-based innovations. As Dees (2013) has suggested, social
innovations of the future have to arise from decentralized problem-
solving, and social entrepreneurship is the epitome of a decentralized
exploration of alternative solutions to social problems.
A good starting point for this is one of the most celebrated cases in social
entrepreneurship world over, the case of the Aravind Eye Hospital (Rangan
& Thulasiraj, 2007). The case became popular with C.K. Prahalad’s Fortune
at the Bottom of the Pyramid (Prahalad, 2005). The video accompanying
the book shows the founder of Aravind Eye Hospital, G. Venkataswamy,
speaking about drawing insights from McDonald’s model of standardiza-
tion. In the book Infinite Vision, however, Mehta and Shenoy (2011) show
how the world’s greatest business case for compassion was carefully con-
structed over decades with the influence of the Indian mystic Aurobindo
and Gandhi guiding Venkataswamy during difficult times. Mehta and
Shenoy’s narration of Kasturi Rangan’s difficulty with his business school
colleagues indicates why practitioner perspectives and theories are impor-
tant in the Indian context. Rangan explains his difficulty in incorporating
ideas of spirituality into the case, even though he felt it was integral to the
case. The success of the powerful case masks its interpretation.
The current accounts of Aravind Eye Hospital tend to suggest that

social enterprises need to follow the ‘McDonald model’ rather than inter-
pretations that suggest a careful construction of a system that is uniquely
Indian which hardwired the spirit of service (Matalobos, 2012). There are
few detailed accounts of practitioner perspectives of social entrepreneurs
in India (say Mirchandani, 2006) which lay out social and cultural context
of these social innovations. Understanding how a business model takes
shape therefore requires a deeper investigation into the social, historical
and cultural context of the innovation which can lead beyond current
understanding of social entrepreneurship. The latter would allow for the
rooting of ideas of decentralized problem-solving, open solutions, resil-
ience thinking and experimentation within the Indian social context.
Startup India and Inclusive Innovation

There has been a significant policy push by the Government of India to
encourage startups in recent times (Subrahmanya, 2015). The Startup
India Action Plan, launched with significant fanfare in January 2016,
seeks to build a strong ecosystem for nurturing innovation and startups
in the country that would drive sustainable economic growth and gener-
ate large-scale employment opportunities. The policy push has yielded
results in terms of the number of startups and incubators created. A
recent estimate by NASSCOM (2017) indicates that India has emerged
as the third largest country in terms of number of incubators to promote
startups with more than 140 incubators and accelerators in the country.
A closer look at the numbers, however, reflects the regional biases in dis-
tribution apart from the focus on technology and a particular version of
innovation that is less inclusive.
Incubators have been supported by the Department of Science and
Technology (DST) through its various schemes and after a few cases of
promoting incubators in academic institutions, DST supported the cre-
ation of technology-based incubators (TBIs) that would be separate enti-
ties that would nurture and invest even in promising ideas that could
become commercial successes. By 2013, there were 54 TBIs across India.
The new initiative of the Indian Government has placed startups within
the Department of Commerce and Industry with provision of possible

tax-breaks for startups and a renewed thrust on promoting incubators
through various means. The latest list of incubators indicates that there
are 146 incubators across the country and not more than 25 that are
common to the two lists. There have been several newspaper reports on
the failure of the policy to attract startups including the very definition.
Many startups have realized that the promises have really not translated
in the field, and several innovative ideas that are not tech-based have gone
out of the radar.1 Importantly, the definitions of startups provide little
incentive for those areas—rural and social enterprises—where policy sup-
port is needed most. For the purposes of this chapter, we however restrict
ourselves to the spatial biases of innovation as seen through the policies
(Figs. 1.2 and 1.3).
The region-wise distribution of the same indicates significant bias
towards incubation services in southern and western parts of India.
Figure 1.4 shows that nearly 67% of incubators are located in southern
and western India covering eight states. While the numbers of incubators
have increased, the clustering of incubators in a few states and regions of
India suggests that the hinterlands continue to be neglected. It is of course
Incubators in India 2017 - Startup and TBI

33
19
12 11 11
10 10
8 7
3 3 3 2 2 2 2 2 2 2 1 1
Fig. 1.2 Incubators in India 2017—Startup and TBI. Source: Collated by authors
from Startup India (2017) and NSTEDB (2016) for TBIs
Technology Based Incubators State wise 2016

18
16
14
12
10
8
6
4
2
0
AP
Goa
Uarakhand
Orissa
Kerala
West Bengal
Karnataka
Telangana
UarPradesh
Delhi
Gujarat
Haryana
Rajasthan
Maharastra
Tamil Nadu
Fig. 1.3 Technology-based incubators in India—state-wise in 2017. Source:

Collated by authors from Startup India website (Startup India, 2017) and NSTEDB
(2016) for TBIs
Zone wise Incubators in India

17
31 South 51%
West 16%
75
North 21%
East & Central 12%
23
Fig. 1.4 Zone-wise incubators in India. Source: Collated by authors from NSTEDB
(2016)
true that some of the incubators such as the Rural Technology Business
Incubator (RTBI) of IIT Madras do have a focus on social enterprises or
the more recent incubator at the Institute of Rural Management Anand
(IRMA) Gujarat has a focus on agriculture and rural and social enter-
prises, and their support is pan-Indian. However, these are exceptions to
the general rule that favours innovation that is largely seen primarily
from the lenses of technology. In fact, very few academic incubators in
India have been created outside engineering colleges.
The skewed nature of the discourse on startups has implications for the
emerging social entrepreneurial ecosystem. Even as there were discussions
on India’s innovation ecosystem highlighting its uneven or non-inclusive
nature (Bound & Pickard, 2007; Dutz, 2007; Krishnan, 2013), recent
trends seem to indicate that existing inequalities in the social entrepre-
neurial ecosystem have actually strengthened in recent times. Some recent
initiatives to broad-based innovation in underserved regions are welcome
(Gabriel et al., 2016); however, overall there is much to be done in terms
of rooting social innovation and its traditions in India.
Implications for Future Research

Social entrepreneurship is a contested academic discipline (Choi &
Majumdar, 2014) and can be seen as lacking in standards, being opaque
and academically ‘weak’. Social entrepreneurship researchers and practi-
tioners should avoid seeking a quick fix for deep and wicked problems,
such as poverty, inequality and climate change, and might be better off
following recent rethinking in social innovation that has sought to
enhance conversations and dialogues among diverse actors, especially to
those rejected by dominant players in a free-market economy. This is
particularly so in the context of developing countries like India where the
challenges of inclusive innovation and growth are quite high. Although
they continue to be spoken of in policy circles, there is little clarity on
processes that can enable this inclusion. Being open to alternative and
conflicting social innovation imaginations can help in this process. In this
concluding section, we suggest five broad themes for five specific actors
in the social innovation ecosystem.
olicy Makers: Social Innovation as a Strategy

P
for Social Change
The adoption of the ‘social innovation school of thought’, instead of the

‘social enterprise school’, will allow for greater inclusivity and consistency
for challenges of inclusive growth. Much can be learned from policies
framed for social innovation in the United Kingdom (Leadbeater, 2007)

or design-led innovation in Denmark (Bason, 2013). Leadbeater has sug-
gested that social enterprise policy needs to be framed within a compre-
hensive strategy for social innovation. Policy makers need to provide an
accommodating environment with incubation support to social enter-
prises so that they can adopt a comfortable position in the market while
also driving social change. This dissenting and transformative role of
social innovation challenging existing market-based systems needs greater
attention. India’s National Innovation Council (NIC) has avoided the
rebranding of older science and technology policies into innovation poli-
cies without opening up social innovation spaces (NIC, 2013).
Public policies in India have often promoted access to Information
Communication Technologies (ICTs) through providing low-cost tablets
or by providing hardware for rural broadband networks. Although these
are necessary, more important is the software that fosters innovation
spaces allowing for more collaboration. Gupta (2013) speaks about the
need for an engagement between formal and informal sectors. Urama
and Acheampong (2013) suggest that for innovation to benefit the entire
society, policies must establish democratic platforms where diverse actors
can participate. Won-Soon Park (2013), the Mayor of Seoul who used his
experiences as a political activist while shaping a city where ‘Citizens are
the Mayor’, suggests that the new reality—cooperation and collabora-
tion, rather than conflict and competition—holds the key to social inno-
vation. Dees (2013) calls for an open-solution society, while Drayton
(2013) suggests that ‘the new organizational model must be a fluid, open
team of teams’.
cademics: Social Innovation Not as Business

A
Opportunity but Societal Change
An understanding of social innovation leading to social change empha-

sizes newer frames for academics to look at the world. Solving a new
brand of interconnected global, ‘wicked problems’ (Conklin, 2008), calls
for newer academic inputs. Westley (2013) argues for a greater use of
resilience theory that allows for looking at problems systemically (not just
systematically) and by focussing on adaptive capacities of systems. These

approaches allow for greater focus on processes rather than products. If
innovation needs to be democratized there is a need to see the poor not
just as sinks for “bottom of pyramid” markets (Prahalad, 2005) but as
sources of ideas (Gupta, 2013).
ocial Investors: Imagining Inclusive Strategies

S
for India’s Hinterlands
There is a danger of social innovation discussions being focussed in a few

developed nations or a few metros within developing nations. Social
entrepreneurship can follow similar patterns of exclusion as business
entrepreneurship unless greater effort is made in investing for longer
terms in underserved regions (Satish & Prasad, 2011). Social enterprises
and entrepreneurs located in these regions are not necessarily investor
ready. Shifting locations can help rethink problems and ideas as well.
Using experiences of a Sankalp Forum in the state of Bihar in India,
George (2013) makes a case for moving out of London and New York.
ocial Incubators: Rework Mechanisms to Emphasize

S
Experimentation and Learning
In a review of lessons that Rockefeller Foundation has learnt in support-

ing innovation, Rodin (2013) points to experimentation and risk-taking
as paramount for promoting social entrepreneurship. Creating spaces for
failing safely is an important activity that currently is supported by some
foundations but rarely through public policies in India. Rodin empha-
sizes that innovation needs time, demands patience and requires incuba-
tion. Capital’s expectations of returns are often so high and are not easily
met from many developing countries’ contexts. Adding the adverb
‘patient’ to capital is not likely to change things on ground unless there is
a willingness to revisit financial goals regularly. There is a greater need to
focus on incubation of ideas, especially at very early stages of innovation.
Although the Government of India today supports more incubators
(Satish & Prasad, 2011), the impatience to reach scale and simultane-
ously prove ideas can run counter to what might be required for creating
social change. Gandhi emphasized Prayog or experiment and expressed a
need for ‘Right to Experiment’ (Prasad, 2005). As has been pointed out
earlier, public policy support for technology applications in rural areas
had played an important role in supporting innovation in civil society.
An emphasis on social innovation can help enhance the support extended
by social incubators in India (Gabriel et al., 2016).
Conclusion
Taking the case of India, we showed that there has been little contribu-
tion to perspectives from developing countries. In India, there has been a
growth beyond the journals in other spaces where social entrepreneurship
is discussed. However, we noted that much of the discussions mirrored
the business school settings of the West favouring for-profit social enter-
prises as the way forward to solving societal problems. We indicated chal-
lenges posed from the hinterlands of India to this model and presented a
case for contextualizing and historicizing social innovation as part of a
larger narrative on traditions of social movements in India. We showed
how these traditions have celebrated the diversity of models and demon-
strated the important role of civil society organizations (or citizen sector
as Drayton refers to them) in the social innovation space. We showed
how much of the recent discussions on social innovation have favoured a
greater role for citizens to solve societal problems through open innova-
tion and open teams, and how this shift in some sense makes an impor-
tant shift in the way we look at the poor. Allowing for processes that
enhance their capacity to innovate rather than treating them as markets
for products or services enables a shift in attention from the hallowed
rooms of finance capital to processes and policies for institutional changes
that many innovation and entrepreneurship scholars have argued for.
Some recent attempts by citizens working in collaboration to formulate
science policies in developing countries (Knowledge in Civil Society
(KICS), 2011) and foregrounding the principles of plurality, justice and
sustainability could be fruitfully extended to social entrepreneurship too.
Notes
1. See, for instance, ‘Startups flaws are beginning to tell’ http://www.live-
mint.com/Opinion/O0pYk8coMMU5AWMkS76bbK/Startup-Indias-
flaws-are-beginning-to-tell.html or ‘Startup India action plan falling short’
www.livemint.com/Opinion/dsoVRGzssN5LKBQnWlj74K/Startup-
India-action-plan-falling-short.html (accessed 18 July 2017).
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2
Education Conversations: Situating
Social Enterprise in India’s Education
Discourse
Isabel M. Salovaara
Abstract In India, recent estimates indicate that nearly a third of social

enterprises work within the education sector. These organizations are
entering a discursive field in which some of their contrasting features,
including public and private interests, profit-making and social impact,
are fraught with ideological implications already deeply vested in the sec-
tor. Within this discursive field, one particularly divisive debate concerns
whether to enhance educational opportunities, especially for low-income
and socially disadvantaged groups, primarily by working to reform gov-
ernment schools or by embracing the increasing privatization of the
schooling sector that has marked the past several decades. This chapter
draws upon interviews with thought leaders in the fields of social enter-
prise and education in India to illuminate key points of tension in this
debate and how they might affect the position and perception of educa-
tional social enterprises.
I. M. Salovaara (*)
Jindal Center for Social Innovation & Entrepreneurship (JSiE),
O.P. Jindal Global University, Sonipat, India
e-mail: isalovaara@jgu.edu.in

https://doi.org/10.1007/978-3-319-74488-9_2
32 I. M. Salovaara
Introduction
In a recent survey of social enterprises in India, 30% of respondents said
that they worked in the education sector (British Council, 2016, p. 26).
This was the second largest representation of any sector, exceeded only by
the related category of skill development (53%). As the presence and
prominence of social enterprise increase within India’s education sector,
these hybrid organizations enter a discursive space in which some of their
contrasting features, including public and private interests, profit-making
and social impact, are particularly fraught with ideological implications
already deeply vested in the sector. This chapter seeks to explore whether
‘social enterprise’, as an emergent conceptual category in India, has the
potential to open a space for dialogue between those who favour the
reform of government schools as the primary strategy for expanding edu-
cational opportunities at the school level and those who favour a greater
emphasis on the private sector. It considers what approaches would be
needed to ensure that the development of India’s social enterprise sector
in the education space can transcend or even help resolve these debates
rather than exacerbating them.
Social enterprises, regardless of legal incorporation, are typically seen
as combining a sustainable and potentially scalable business model along
the lines of a commercial start-up with a social or environmental mission.
This hybridity is hailed by many as the engine for achieving large-scale
positive impact, but it also contributes to uncertainty and scepticism
about the nature of social enterprises and where they fit within the exist-
ing landscape of public interest actors. At present, India lacks an explicit
legal entity designated as a social enterprise. In the education sector,
wherein almost any organization can make a plausible claim to having a
social mission, distinguishing a social enterprise from other players is par-
ticularly difficult and presently depends almost entirely on the decision of
the organization’s leaders to adopt this particular positioning strategy.
The general lack of clarity around social enterprise has the potential to
intensify pre-existing concerns among Indian educationists about the
ever-expanding and not always clear role of the private sector in educa-
tion. For example, one education scholar referred to the ‘[i]ncreasingly
Education Conversations: Situating Social Enterprise in India’s… 33
opaque, intertwined, and complex sets of “new/non-traditional” non-

state private actors … that operate by blurring the lines between “doing
business,” profit-making, and “doing good”’ (Srivastava, 2016, p. 2). If
social enterprises in the Indian education system do not develop ways of
ensuring transparency in their practices and roles, they may intensify
ideological controversies that are counter-productive to cooperative par-
ticipation in ensuring high-quality education for all.
This chapter seeks to offer direction to social enterprises in the educa-
tion sector by contextualizing some of their diverse approaches within
the debates about public and private inputs into India’s education sys-
tem. These observations and reflections emerged from my time spent
conducting anthropological fieldwork in the education sector in Delhi
from 2014 to 2015 and again in 2016, and from my work at the Jindal
Centre for Social Innovation & Entrepreneurship from 2016 to 2017.
However, I give prominence in the chapter to the voices of a small num-
ber of thought leaders in the fields of education and social enterprise,
with whom I conducted semi-structured interviews in March and April
2017 (interviews were conducted with P.R. Ganapathy, President (India),
Villgro Innovations Foundation; Kiran Bhatty, Senior Fellow, Centre for
Policy Research and Founder-Coordinator, The Forum for Deliberations
on Education; Parth Shah, Founder and President, Centre for Civil
Society; Suman Bhattacharjea, Director of Research, ASER Centre
(speaking on her own behalf ); Kavita Anand, Executive Director,
Adhyayan and Ashoka Fellow; Vikas Jhunjhunwala, Founder and CEO,
Sunshine Schools; and Sonia Agarwal, Chief Academic Officer, Effect
International). These interlocutors were purposively selected from diverse
ideological standpoints with the intent to map a discursive spectrum of
perspectives on the issue of public and private inputs into India’s school
education system.
I describe in the chapter’s first section two occasions during the above-
mentioned periods of participant observation when debates around the
roles of the public and private sectors in Indian school education led to
forms of discursive deadlock. The chapter’s following sections unravel key
points of tension in these debates. These points of tension include questions
about the right mix of public and private school management, the poten-
tial of for-profit schooling and the forms and meanings of educational
34 I. M. Salovaara
evidence. In addition to highlighting areas of conflict, however, the chap-

ter in its third section seeks to draw out some directions and recommenda-
tions suggested by the comments of these thought leaders, which may
contribute to productively shaping the future of social enterprise in Indian
school education. As the chapter’s title suggests, I allow each section to
unfold as a sort of conversation among diverse perspectives, with the
intention not to arbitrate the debates but to illuminate them as areas for
reflection, and potentially intervention, by social entrepreneurs.
Taking Sides
The question of the public and private sectors’ roles is only one among
many points of contention in discussions of educational reform in India.
Indeed, in some respects, it seems to be a distraction from more pressing
issues—from the actual work of ensuring that children are learning,
regardless of their socio-economic and schooling status. However, this
debate remains significant because it divides the field of individuals and
organizations that might otherwise cooperate to achieve these aims.
Actors who are, or merely appear to be, on one side or the other of the
debate are shunned by those on the other. Therefore, understanding what
is at stake on each side of this issue is a prerequisite for social entrepre-
neurs developing innovative solutions that can garner broad-based sup-
port in the education fraternity. The two vignettes below illustrate these
divergent trajectories of discourse and their tendency to arrest possibili-
ties for cooperation.
In June 2015, a professor of education from Jawaharlal Nehru
University delivered a well-attended talk on ‘Poverty, Markets and
Elementary Education in India’ as part of the Forum for Deliberations on
Education, a platform intended to bring together diverse stakeholders in
the education field for collaborative discussion. During the talk, the
speaker presented her argument that ‘powerful advocacy networks’ are
the driving force behind the promotion of private education and market
principles in the schooling of the poor in India and globally (cf.
Nambissan, 2014, p. 2). During the question and answer session at the
conclusion of the presentation, the head of an initiative to improve school
leadership asked the speaker whether she had a constructive alternative to

offer to the budget private schools regime. He also suggested that the
motives of the research organizations and other members of the ‘advocacy
networks’ discussed were ultimately in common with those of their crit-
ics—to improve education for low-income children—and that even
incremental or partial improvements were better than nothing at all.
Rather than opening up a discussion, however, these questions were
strongly rebuffed by the speaker and others present at the event. The crux
of their argument was that it is unacceptable to hold different quality
standards for poor children than for their socio-economically privileged
peers, whereby schools that are minimally adequate or marginally better
than government schools are considered sufficient.
In December 2016, the Centre for Civil Society (CCS) hosted the
eighth annual School Choice National Conference on the theme ‘New
Education Policy and Budget Private Schools’. Present at this event were
some of the people and organizations that form part of Nambissan’s
‘advocacy networks’, including politicians, academics and other thought
leaders favouring measures to promote private education for the poor.
The majority of attendees were school leaders from the National
Independent Schools Alliance (NISA), a network of low-fee private
schools organized by the CCS. During one of the panels, a prominent
educational economist presented a paper demonstrating the cost-
effectiveness of low-fee private schools as compared with the government
sector. She opened her presentation with the argument that most school
systems around the world are built on ideology or bureaucratic whims
rather than ‘evidence’. Examining data around declining enrolment in
government schools and learning outcomes in schools with fees lower
than the state’s per-pupil expenditure, she emphasized that low-fee pri-
vate schools like those run by many people in the room offered better
value for money than India’s public education system (see Kingdon,
2017). The key policy implication, expressed in her contribution to the
issue of NISA Namaskar magazine distributed at the conference, as well
as in other talks at the same event, was that education funds should be
distributed directly to students and parents rather than schools (Kingdon,
2016). Government’s role as a provider of education was drawn deeply
into question.
36 I. M. Salovaara
These two episodes illustrate the polarizing nature of questions about

public and private schooling in India. In each case, influential thought
leaders presented research that, in different ways, undermined the legiti-
macy of schooling providers in one or the other sector. During the first
event, the challenge to the apparent one-sidedness of the presenter’s argu-
ments drew a stern rebuttal rather than opening up a conversation. At the
second event, no one present raised any objections to the findings—a
testament, in part, to the self-segregation that ensures that a conference
thematically focused on ‘school choice’ will draw few advocates of the
government’s role as a provider of education. In their own ways, both
events therefore demonstrate the deep fault-lines that this debate has
carved in the landscape of educational reform in India.
In some cases, educational entrepreneurs may already have strong
commitments on one side or the other of these fault-lines and may choose
to align themselves with the particular organizations and networks that
share those perspectives. However, if social entrepreneurs choose to
approach these debates themselves as problems in need of innovative
solutions, their work may be able to ameliorate or move past these ideo-
logical roadblocks. In any case, social entrepreneurs entering education
from other backgrounds must gain an awareness of these debates and
different ways of navigating them if they are to ensure broad buy-in and
support for their innovations. The next section of this chapter disaggre-
gates several areas of contention within educational discourses of which
these two episodes formed a part.
Tensions and Debates

The Public–Private Mix
Since liberalization, the number of privately managed and funded

schools, and the proportion of India’s students attending them, has
increased. As of 2014–2015, about 30% of India’s school-going students,
age 6–18 years, attended private (unaided) schools (Kingdon, 2017). In
urban areas, however, the proportion was much higher, with about 42%
of children attending private schools (Kingdon, 2017). The apparent
trend of declining enrolment in India’s government schools is a signifi-

cant catalyst of debate in the education fraternity. The exodus of students
from government schools is taken by many as indictment of their quality,
but not all stakeholders view these data in the same way. As P.R. Ganapathy,
President (India) of Villgro Innovations Foundation, observed in our
conversation:
[One] big challenge is admitting that public schools are failing the popula-
tion. Now the enrolment statistics tell it clearly themselves—we are seeing
the enrolment go down every year—but people still do not accept that
public schools are failing. (Personal communication, March 29, 2017)
Those who contest this interpretation can point to the substantial pro-
portion of the top two income quintiles studying in government and
aided schools in 2004–2005 (Nambissan, 2013, p. 9), or to the Annual
Status of Education Report (ASER) for 2016, which indicated that the
proportion of students in government schools held constant between
2014 and 2016. However, the more fundamental point of contention
around enrolment numbers is what kind of interventions they necessi-
tate. Although some stakeholders call for the government to relinquish its
role as a provider of education, and instead to finance private school pro-
vision through tools such as vouchers, some call for reinvigorating public
schools through deep and systemic reform.
These two opposed responses generate significant tension within the
education community. Both sides feel that the other enjoys privileged
access to channels of power, whether in the form of international, capital-
backed ‘advocacy networks’ that favour privatization of education for the
poor (Nambissan, 2013; Nambissan & Ball, 2010), or the support of the
Indian government for ‘socialist’ approaches to schooling
(V. Jhunjhunwala, personal communication, March 30, 2017). The ulti-
mate effect, as social entrepreneur Vikas Jhunjhunwala, founder of
Sunshine Schools, explained, is to create the sense of a ‘zero-sum game,
an I win-you lose situation, where nobody is hearing the other side out’
(V. Jhunjhunwala, personal communication, March 30, 2017). This
sense of ideological competition forecloses opportunities for collaboration.
For example, in our conversation, Parth Shah of the CCS reflected that
38 I. M. Salovaara
his organization sometimes has difficulty engaging with certain key play-
ers in the education system, such as teacher unions, because CCS is
thought of as the ‘voucher people’ (personal communication, April 10,
2017).
Whether the social enterprise sector can repair or surmount these rifts
remains to be seen. As a whole, the sector cannot be said to stand entirely
on either side of the issue. Anand and Jhunjhunwala, both social entre-
preneurs in the education field whose work has been recognized by prom-
inent social enterprise support organizations, hold disparate opinions on
this debate. Anand envisions a possibility of nearly universal, high-quality
government schooling in India through her organization’s work:
[India] should be like countries where you have public and private, but
public education serves 90 percent or 95 percent of the students, and pri-
vate education serves five percent. … So if there is a way in which Adhyayan
can influence this to ensure that public education becomes high quality all
the way up to the 10th or even the 12th grade, and 95 percent of the stu-
dents are served by public education, then we will feel that we’ve succeeded.
(K. Anand, personal communication, April 6, 2017)
Jhunjhunwala, on the other hand, believes that the private sector, including
low-fee schools like Sunshine Schools, offers the greatest potential to improve
Indian education. Both, however, adopt a holistic view of the education
landscape. Anand’s social enterprise, Adhyayan, seeks to work with both
private and government schools to implement peer assessments of school
quality based on international standards. And Jhunjhunwala criticizes the
current state of India’s public, low-fee private and elite private schools with
almost equal vigour (personal communication, March 30, 2017).
Data about the proportion of India’s students attending government
and private schools thus elicit mixed responses. Trends towards increasing
private school enrolment appear to predominate, but just what these
trends might mean for the future of India’s education system will depend
on the response of policymakers, educationists and indeed social entre-
preneurs. Can the momentum of privatization be the engine for quality
improvement, or do we need massive re-investments in government
schools? Are there strategies that might strengthen both sectors simulta-
neously and avoid the trap of a ‘zero-sum game’? If the evolving platforms
to support and convene social entrepreneurs offer opportunities for dia-

logue among those on different sides of this debate, the social enterprise
space may provide one opening for relieving this particular point of dis-
cursive tension.
Markets and Profit-Making in Education
Another issue that follows from the debate about privatization of India’s
school education sector is the question of markets and profit-making.
Although schools in India cannot, at present, run legally as for-profit
entities, some stakeholders argue that allowing for-profit schooling would
bring needed transparency and quality improvements to the sector.
Others contend that for-profit schooling would only exacerbate educa-
tional inequality. At the most fundamental level, these two perspectives
diverge over the question of whether the ‘market’ is an appropriate con-
ceptual model for the schooling sector.
In some ways, conceiving of schooling as a marketplace offers clear and
compelling ways of understanding the burgeoning number of private
schools in India. Educational entrepreneurship exists because certain
socio-economic groups have the desire and the financial wherewithal to
pay for a schooling that they perceive to be better than the free (govern-
ment) option. Some leaders of India’s social enterprise sector view this as
an opportunity to fulfil demand created by the aspirations of even rela-
tively lower income groups:
If you look at the family budget of a family living on less than 15,000
rupees a month, their dreams fuel expenditure on education … And so it
is possible, if you create effective products that are well-designed and that
are reasonably priced, that you actually create a sustainable revenue model.
That is why we are finding that the most ambitious parents are pulling their
children out of public schools and putting them in private schools, even
though that puts significant strain on the family budget. There is a propen-
sity to pay. (P.R. Ganapathy, personal communication, March 29, 2017)
For other commentators, however, the conception of the education space

(and particularly schools serving the poor) as a ‘market’ is not axiomatic,
40 I. M. Salovaara
as many advocates of privatization seem to see it. Nambissan (2013) and

Srivastava (2016) argue that this view is a contingent product of the
intervention of particular networks of powerful actors and corporate
backers across international borders, sometimes flouting national laws
(Srivastava, 2016, p. 5) and undermining education’s status as a public
good. Tracing the evolution of the low-fee or ‘budget’ private school mar-
ket, Nambissan notes a shift around 2012 from private schools catering
to the very poorest sections of society (which were financially unsustain-
able for the corporate houses that had initially established them) to those
catering to the slightly better-off, able to afford fees of INR 600–1200 per
month (2014, p. 12), drawing into question the social motivations of the
managing companies. Srivastava (2015) points out that relying on mar-
ket dynamics to school the poor is likely to result in the further neglect of
children already subject to forms of social exclusion based on gender,
caste, extreme poverty, seasonal migration or remote location. Nambissan
likewise casts a doubtful eye on school chains in Africa, which she says are
‘presented as the new for-profit, low-cost scalable models for schooling
the “poor”’ (2013, p. 14).
At present, India’s Right to Education Act forbids for-profit entities
from managing schools. Nevertheless, some of these international chains,
such as Bridge Academies, have now begun operating in India through
hybrid models that circumvent the prohibition against for-profit school
management. According to Shah and Jhunjhunwala, many other private
school providers in India use accounting methods that skirt the spirit,
and often the letter, of the law to extract the substantial profits that school
owners can realize once the land on which the school sits—the greatest
expense—has been paid off (V. Jhunjhunwala, personal communication,
March 30, 2017). The necessity of such extralegal practices discourages
more professionally run companies from entering the schooling ‘market’
to provide higher-quality options:
Because of [the non-profit requirement for schools], the serious funders

who would put in serious amounts of money … are not putting in the kind
of money that they would like to … because there isn’t legally a way to
make money … The brand would be [negatively] affected. (V. Jhunjhunwala,
personal communication, March 30, 2017)
Hence, permitting legal profit-making in the education sector would

bring marked improvements:
By allowing schools that do want to charge high fees … to become openly

for-profit, [parents] have a way of knowing that this school is for-profit—
and if I choose to send my child to that school, certainly I have to pay what
the prices are—while the other school is genuinely non-profit. … I think
allowing that legal option would allow us to differentiate between good
schools and bad school … and that would become one way to clean up the
sector. (P. Shah, personal communication, April 10, 2017)
Both Shah and Jhunjhunwala argue that allowing explicitly for-profit

schooling would help, over time, reduce the number of ‘bad actors’ in the
school management business through a variety of means, including
increasing competition, bringing in direct investment from India’s
highest-performing corporate houses and creating additional transpar-
ency for parents to choose where to send their children.
Arguments on each side of this issue of markets and profit-making
unfortunately fail to answer the core concerns on the other. The promo-
tion of for-profit schooling by particular international networks does not
necessarily mean that the benefits of transparency and investment can-
not follow from introducing this legal option in India. At the same time,
while allowing schools to adopt a for-profit model of incorporation may
open up more and higher-quality options for the middle and lower-
middle classes in relatively well-serviced urban areas, these benefits may
not translate to more remote, sparsely populated areas, for instance, or
to female children of families whose limited budgets lead them to choose
different schooling options for their children based on gender. If we
assume that there will always be some students for whom the govern-
ment system is the only viable schooling option, even a best-case sce-
nario blossoming of high-quality, relatively low-cost, for-profit schools
could exacerbate inequality in the system as a whole. Social entrepre-
neurs, and the social enterprise sector (including support organizations),
must remain cognizant of these ethical implications to foster a range of
solutions that attend to the needs of diversely disadvantaged students
and families.
42 I. M. Salovaara
Educational Research and Evidence
As the range of solutions that social entrepreneurs develop expands, the

sector will need ways to confirm that these interventions are having a
positive impact. Measurement of social impact is an important hallmark
of the social enterprise space, and ‘evidence-based’ interventions are
increasingly vaunted in some circles in the education sector. This would
appear, therefore, to be an area of positive convergence between educa-
tion and social entrepreneurship. However, what exactly constitutes reli-
able or decisive ‘evidence’ of an educational intervention or model’s
impact is for some still an area of contention.
The question of evidence becomes entangled with ideological stances
towards public and private provision of education in India, in part,
because findings of the ASER in 2014 seemed to indicate that students
of private schools performed (marginally) better in tests of basic literacy
and numeracy than their peers in government schools. Although a ran-
domized controlled trial (RCT) in Andhra Pradesh showed that
accounting for family characteristics virtually erases this advantage
(Muralidharan & Sundararaman, 2013), many advocates of public
schooling, speaking at events such as those described in the opening
vignettes, write off ASER entirely because the evidence it presented
appeared to suggest that private schools perform better. Moreover, advo-
cates of private schools use ASER data liberally, despite the caveat pre-
sented by Muralidharan and Sundararaman’s study. In our conversation,
Bhattacharjea reflected on these kinds of selective borrowings from edu-
cational research: ‘If you aren’t willing to engage in an evidence-based
discussion, then it becomes all about ideology. Then you co-opt what-
ever piece of the evidence suits you, whether or not it actually makes
sense’ (personal communication, March 31, 2017). Bhattacharjea’s
organization, the ASER Centre and its parent organization Pratham
focus on promoting scalable, evidence-based interventions to improve
learning outcomes. The ASER Centre undertakes research both on the
overall state of learning levels and school enrolment in India and, with
partners such as the Jameel Poverty Action Lab (J-PAL) at MIT, on
specific interventions implemented by Pratham.
But the evidence that these and other organizations gather is not always
conclusive, and any grey areas remain open to ideologically driven inter-
pretation. Srivastava reflected on this problem in an article in The
Guardian:
I recently experienced first-hand how evidence can get lost in translation

when I was interviewed by The Economist for that cover story [‘The
$1-a-week school’, 2015] and briefing. After I described the nuances of the
evidence on affordability, achievement, and the development of the sector,
I was dismayed by the certainty of claims on the superiority of private pro-
vision. Partly the problem is that, in an age of quick fixes and silver bullets,
we are uncomfortable when evidence does not point to black or white
conclusions. (Srivastava, 2015)
Indeed, the term ‘evidence’ itself can become fraught. Nambissan places
the word ‘research’ in inverted commas when she describes the work of
some actors in ‘advocacy networks’ promoting private education, setting
off as an unreliable category the forms of evidence gathered through, for
example, RCTs. Bhatty raised a similar concern about a recent review by
3ie of studies of educational interventions:
What struck me about the review itself was … that most of the studies …
were quantitative studies that had been reviewed, and 90 percent of them
were RCTs [Randomized Controlled Trials], and so obviously what they
showed was only one particular type of analysis of the education sector. …
You have to spend more time with the social structures, the administrative
structures—you have to be willing to give time to understand that if you
really want to find a solution. (K. Bhatty, personal communication, March
31, 2017)
As Bhatty’s comment suggests, concerns persist about these forms of evi-

dence being themselves partial, in both senses of the word; in the absence
of rigorous qualitative studies to examine the social contexts of a given
intervention, purely or primarily quantitative evidence cannot provide
conclusive answers about why a particular intervention does or does not
work.
44 I. M. Salovaara
Thus, although there is agreement among many stakeholders that

genuine engagement with evidence is needed to guide improvements in
the education sector, there is not always agreement about what types of
evidence provide sufficient insight. These disagreements exacerbate the
debates about public and private schooling mentioned in the two pre-
vious sections because the use of certain types of research to support
specific ideological stances taints those findings and methods in the
eyes of opponents. These responses reflect the two different but inter-
linked types of problematic engagement with evidence, including
ASER, that Bhattacharjea described: a refusal to consider the evidence
and a misuse or partial use of evidence to serve particular ends (the lat-
ter suggested also by Srivastava’s comment, above). Social enterprises,
as they undertake processes of impact measurement and model valida-
tion, must avoid the pitfalls of selective choice or narrow conceptions
of ‘evidence’ if they are to engage openly with stakeholders in the edu-
cation field.
Transparency and Regulation
Closely intertwined with questions of evidence are questions of regu-

lation in the education sector. Stakeholders debate the question of
what kinds of data points should be monitored to ensure that govern-
ment and private schools are meeting certain minimum quality stan-
dards. At the moment, official data sources such as the District
Information System for Education (DISE) use the Right to Education
Act’s input- and infrastructure-based framework to regulate schools.
Bhattacharjea argued that this approach amounts to not regulating
education per se:
There’s no regulation in this country of education processes at all. So a lot

of people can and do get away with promoting things that may sound
desirable but either are not particularly desirable or have a cost to school
users, to parents, that may not be visible or appropriate. … There is very
little regulation. The regulation that there is has to do with the RTE Act,
which is not useful in terms of getting at what happens inside the class-
room. (S. Bhattacharjea, personal communication, March 31, 2017)
These current requirements—for example, that schools should sit on a

parcel of land of certain size and have a playground—disadvantage
smaller private schools because of the high cost of land, forcing them
either to close or to operate illegally. However, proposals to change regu-
latory frameworks to emphasize educational output (e.g., learning out-
comes) instead of input spark debate about exactly what to measure and
how to measure it.
There does seem to be agreement across the ideological spectrum that
current regulatory patterns are not sufficient to ensure transparency in
the sector. Those favouring an emphasis on public provision of educa-
tion, for example, argue that privatization processes have not been sub-
ject to appropriate regulation. Nambissan describes public–private
partnerships, the intervention of private actors in activities from adopt-
ing a school or classroom to providing computer training for teachers, as
a ‘“creeping” form of privatization where private organizations are given
easy access to public institutions’ without sufficient oversight or transpar-
ency (2013, p. 8). Bhatty echoed this concern in our conversation:
It would be important to understand exactly under what terms and condi-

tions they [Public–Private Partnerships for school management] are allowed
to operate: What is their relationship with the state? What is the kind of
regulatory framework under which they function? … and maybe to move
toward a more neutral, independent kind of monitoring and regulatory
framework, and that would I think make it more palatable to all sides.
(K. Bhatty, personal communication, March 31, 2017)
Yet even advocates of privatization point to transparency issues that plague

the private sector, particularly the use of spurious accounting methods to
illegally, or at least deceptively, extract profits from the supposedly not-for-
profit schooling sector (P. Shah, personal communication, April 10, 2017;
V. Jhunjhunwala, personal communication, March 30, 2017).
Despite the agreement about the need for change, proposed solutions to
ensure greater transparency and better regulation often diverge.
Jhunjhunwala and Shah both recommended legalizing for-profit schooling
for the explicit purpose of increasing transparency within the education
sector. Shah and others have called for school regulation based on ASER-
like learning levels:
46 I. M. Salovaara
I think regulation focused on learning outcomes [is needed], though I

know it’s easier said than done. Learning outcomes are not one single thing
… [But we need] some objective way of assessing learning, and then
designing regulatory system around that—how do we promote this bench-
mark and how to we recognize schools that perform well by this bench-
mark? … Those could be private schools or government schools. (P. Shah,
personal communication, April 10, 2017)
Bhattacharjea, too, emphasized that better understandings of how chil-

dren learn must be incorporated into regulatory frameworks for educa-
tion. Bhatty, on the other hand, argued that some inputs such as
infrastructure and teacher salary—which low-fee private schools are least
likely to be able to comply with, and which even government schools
often circumvent through the hiring of contract and para-teachers
(Bhatty, De, & Roy, 2015)—must be included in regulatory frameworks.
Resolving these questions of exactly what to regulate will be a central
challenge for the future of the sector.
A recurring theme in my conversations, however, was that the crux of
the matter may not lie in the question of more or less regulation, but
rather in the regulatory approach. In our conversation, Bhatty suggested
that the new ‘neutral, independent’ forms of monitoring and regulation
that are needed do not necessarily have to be controlled by the state.
Imagining and implementing robust forms of non-state regulation, such
as community-based monitoring or Adhyayan’s school peer assessments,
which can apply equally to the public and private sectors, may be produc-
tive avenues for social enterprise innovations. At the same time, social
entrepreneurs must remain cognizant of the current debates around regu-
lation and the tensions between input- and outcome-based frameworks if
they are to devise solutions that satisfy all sides.
Prospects for Social ‘Edupreneurship’ in India

The foregoing sections sought to outline certain points of tension that
emerge in discourses on public and private inputs into education. They
explored debates about the appropriate proportion of government and
privately managed schools, market-based frameworks for understanding

the education sector, evidence of impact and questions of regulation.
These debates are significant for social entrepreneurs in the education
space because their work often crosses and complicates traditional bound-
aries between public and private interest, further destabilizing under-
standings of what to regulate and how to regulate it (consider Bhatty’s
and Nambissan’s comments about public–private partnerships, above).
Given this contested ideological landscape, how can social enterprises
best intervene to support improvements in India’s school education sys-
tem that empower and engage a broad range of stakeholders? This next
section of the chapter outlines four strategic approaches that respond to
tensions outlined above, indicating a few directions that the social enter-
prise sector and individual social enterprises might take to work coopera-
tively and collaboratively with actors across the spectrum of perspectives
outlined above while maintaining appropriate forms of transparency and
accountability. In brief, these strategic approaches encapsulate (a) finding
systemic solutions, (b) moving beyond schooling markets, (c) utilizing
and expanding the knowledge base through action research and (d) dis-
tinguishing social enterprise models.
To surmount debates about public and private schools, social enter-
prises should place emphasis on finding systemic solutions. Such solutions
recognize that quality is a problem across the education space and re-
imagine, rather than tinker at the edges of, current systems. More nar-
rowly conceived solutions that draw on the technical and managerial
backgrounds of many social entrepreneurs entering the education field at
present may not, as Bhattacharjea noted, be those that are most needed
to overcome present challenges. The need for intervention at a funda-
mental level, perhaps even bypassing distinctions between the public and
private sectors to reach out to children directly, was a key theme in our
conversation:
Unless you really grapple with the barriers to children’s learning, just pro-
viding materials isn’t [going to solve the problem]. I mean, technology is
[seen as] ‘the answer’ these days … People tend to see it as a wonderful
thing, but in many ways it’s just reinforcing the same situation … What
social enterprises can and should do is develop and implement models that
48 I. M. Salovaara
do address children, not address curriculum, and to the extent possible in

ways that are scalable. (S. Bhattacharjea, personal communication, March
31, 2017)
Bhattacharjea’s call for scalable interventions is one which the social

enterprise sector, for which scale is of central concern, is eager to answer.
ASER and Pratham’s programmes to promote Teaching at the Right Level
(TaRL), which has been tested by the J-PAL, are one example of a scalable
intervention that re-envisions age-grade schooling itself at a fundamental
level. India’s educational social enterprises should aim to develop others.
The concept of a systemic solution thus encompasses and also extends
beyond the question of scalability, already crucial to the ethos of the
social enterprise sector. For Bhatty, interventions that bypass the school-
ing system are not adequate to solve current challenges; she emphasized
the importance of addressing, rather than ignoring, underlying social and
administrative structures. Shah, too, recognized the particular need to
alter the ways in which teachers and principals in government schools
participate in educational interventions:
[One] thing I think we could do to open a dialogue is empower govern-

ment schools. … With all good intentions, state governments are doing
one intervention after the other. … I don’t know that principals and teach-
ers even have a say in any of these matters. … We need to figure out how
to give them a voice. (P. Shah, personal communication, April 10, 2017)
Shah’s observation about overloading government schools and teachers

with a battery of interventions in which they have no or little say suggests
that social entrepreneurs could contribute to more systemic change by
addressing the issue of teacher and principal ownership of educational
transformations. Such systemic solutions will likely require policy change
as well. However, social enterprises can play a role in this area by both
campaigning for and implementing such change. One example of a social
enterprise that adopts a policy implementation approach is Indus Action,
which raises awareness and circulates information to eligible families to
implement the section of the Right to Education Act that guarantees
seats in private schools for socio-economically disadvantaged groups.
Social enterprises can be both innovators and enablers of systemic change

in favour of educational equity.
Social enterprises can further direct their efforts at moving beyond
schooling markets. One way in which social enterprises have already moved
beyond markets for schooling per se is through their work in the skill
development sector—one that has received a great deal of emphasis from
the Government of India in recent years, including the formation of a
new Ministry of Skill Development and Entrepreneurship in 2014. Skill
development, which typically emphasizes vocational training as opposed
to literacy, numeracy and other skills often acquired in the classroom,
seeks to recognize and enhance the experiential learning of men and
women in, for example, trades, crafts and industry. The social enterprise
sector has embraced this mission. Indeed, the largest proportion (53%)
of Indian social enterprises surveyed for the same British Council report
cited previously said that their work included skill development for their
beneficiaries (British Council, 2016, p. 26). However, this emphasis on
skill development, particularly as an alternative to school education
reserved primarily for the lower classes, generates its own set of debates
about educational inequities (see, e.g., Sadgopal, 2016; Santhakumar,
2016). Although it may avoid questions about public and private school-
ing, it shifts rather than resolves the locus of discursive tension.
What, then, might be other ways in which social enterprises can sur-
mount debates about the appropriateness of market models for the
delivery of schooling? In our conversation, Bhatty suggested that the
private sector, including social enterprise, could realize great value for
the education sector without igniting the controversies discussed in the
first section of this chapter by implementing technology-based and data-
gathering solutions not for direct teaching but for making information
about local schools available at the local level for effective community-
based planning:
I think the private sector can play other supportive, facilitative roles as well,
not just in being the providers of the school per se, but they could support
research, they could support more community initiatives, they could …
help build bottom-up data and information systems which are sorely,
sorely lacking. And even though we talk a lot about decentralized planning
50 I. M. Salovaara
et cetera, none of it really exists, and a large part of it is that actually data
in a decentralized fashion is not available at the local level. (K. Bhatty, per-
sonal communication, March 31, 2017)
Educational social enterprises have already taken up many of these

approaches. The emphasis on community-based initiatives is evident in
the work of Educate Girls to mobilize parents and local authorities to
increase girls’ school participation in Rajasthan, in the efforts of Saajha to
empower School Management Committees (including parent members)
in Delhi, as well as in some of the educational social ventures that former
Teach for India Fellows are developing through the InnovatED incuba-
tor. Further efforts to transform the technical and managerial expertise
that many aspiring social entrepreneurs bring to their work into reliable,
actionable and locally available information about the education system
would be welcomed by a wide range of stakeholders.
In concert with implementing these interventions, educational social
enterprises must also utilize and expand the knowledge base through action
research. As discussed in the section ‘Educational research and evidence’,
some stakeholders do not consider current research and evidence sur-
rounding the effectiveness of particular educational interventions in
achieving particular aims as a wholly neutral category. Nevertheless, the
existing research can and should serve at least as a starting point for social
entrepreneurs in the education field. Review articles (e.g., Asim, Chase,
Dar, & Schmillen, 2015; Snilstveit et al., 2016), impact evaluations (e.g.,
Banerjee, Banerji, Duflo, Glennerster, & Khemani, 2010; Banerjee, Cole,
Duflo, & Linden, 2007; Banerjee et al., 2016; Banerji, Berry, & Shotland,
2014; Duflo, Berry, Mukerji, & Shotland, 2015), as well as descriptive and
prescriptive reports such as the Public Report on Basic Education in India
(PROBE Team, 1999; see also De, 2011) and, at an international scale,
the Global Education Monitoring Report (UNESCO, 2016) and Millions
Learning (Robinson, Winthrop, & McGivney, 2016) offer c ommentary
on an expansive array of present challenges and potential solutions. For
example, the 3ie systematic review (Snilstveit et al., 2016) that Bhatty
discussed above considers interventions at the levels of children, house-
holds, schools, teachers and systems and their differential effects on enrol-
ment, attendance, learning outcomes and school completion for students
in low- and middle-income countries. Although Bhatty found the range of

methodologies represented in this review to be too narrow, the main find-
ing of the report—that there is no single intervention that significantly
and positively affects both school participation and school effectiveness—
in itself indicates the need both for new kinds of interventions and for
further research to determine why existing interventions do or do not
work and how they might be improved. Social entrepreneurs can contrib-
ute to these efforts.
As an example, consider how a social entrepreneur might approach the
evidence offered in ‘The Pitfalls of Participatory Programs’ (Banerjee
et al., 2010), a discussion of the outcome of a randomized evaluation of
three initiatives to improve learning outcomes through community
involvement in Uttar Pradesh. The study concluded that programmes
that provided communities with additional information but no clear
channel of action failed to improve students’ learning levels. This evi-
dence is directly pertinent to social entrepreneurs who might take up the
challenge that Bhatty presented of increasing the availability of informa-
tion to communities to encourage their involvement in processes of edu-
cational improvement. There are several approaches that a social
entrepreneur in this area might take to incorporating the findings of this
article into their work. First, the social entrepreneur might engage in
further exploration of the potential of the type of interaction that did
work: the one that provided a direct channel of action (in this case, in the
form of tutoring). However, the social entrepreneur might also choose to
examine the structure of the programmes that seemed less effective; he or
she might explore the addition of supplementary features, or the poten-
tial of these programmes in a geographic area with a different socio-
cultural makeup. Given that the authors of the article provide only
tentative suggestions of why the unsuccessful programmes might not
have worked in Uttar Pradesh, a social enterprise implementing a similar
intervention in a similar social context could also contribute to expanding
the knowledge base by rigorously documenting the processes and
responses through an action research approach. Rooted in the education
field, action research entails the direct involvement of programme imple-
menters and participants in cyclic processes of developing, carrying out,
reflecting upon and adapting programmes. If the educational social
52 I. M. Salovaara
enterprises operating across diverse local contexts contribute to a growing

body of evidence on education through such research, then they can con-
tribute to resolving discursive tensions about the narrowness of existing
evidence.
Finally, to address concerns about transparency and appropriate forms
of regulation, India’s social enterprise sector must devote energies towards
distinguishing social enterprise models—both from more traditional non-
profit and for-profit organizations and from each other. The task of devel-
oping shared understandings of what constitutes a social enterprise, as
opposed to an NGO or a socially conscious commercial business, takes
on a particular urgency in the field of school management, wherein the
number of small-scale private actors is large and nature of the work is to
some extent inherently ‘social’, thereby raising complex questions about
how to distinguish a social enterprise from any other player.
In our conversation, Ganapathy highlighted the crucial issue of intro-
ducing and delineating social enterprise models that are qualitatively dis-
tinct from certain other actors in the private schooling sector:
[In the private school sector,] there is also a plethora of fly-by-night opera-
tors who promise a lot but don’t deliver any results. … There is a role here
for genuine social enterprises that can rigorously measure their outcomes
… and do this all with a sustainable revenue model. (P.R. Ganapathy, per-
sonal communication, March 29, 2017)
Yet although Ganapathy suggested that forms of rigorous measurement

and sustainable revenue models can be some of the defining features of a
‘genuine’ social enterprise, Shah raised the possibility that the ability to
articulate a social mission in appropriate terms may prove an exclusionary
criterion that disadvantages those with real social motivation but limited
capacity to describe their social enterprise model:
It’s not only a distinction between for-profit and non-profit [that defines a
social enterprise]. It’s something else. … If [the intention of the owners] is
the definition, then how do I judge [that]? Some people are Harvard-
educated and smart enough to tell you the right language, while the guy
who’s living in a slum who starts a school in the slum obviously doesn’t
have the vocabulary of that kind, even though that’s why he is running a
school. So we’d be biased toward people like us who run social enterprises
and are able to talk about larger vision and mission, against the guy who
says, I see the need in my community for a school, I can run a school, and
maybe I can do a decent job of it. That guy obviously is not going to be in
the social enterprise conference. And I don’t know then what demarcation
can be drawn, unless between being savvy and in tune with the current
demands of the times and not being so savvy. (P. Shah, personal communi-
cation, April 10, 2017)
Conversely, it is also possible that among those more ‘savvy’ organizations

and individuals may be some businesses who choose to cloak purely
profit-making intentions akin to those of ‘fly-by night operators’ in the
more attractive garb of social enterprise, as Srivastava seems to imply
(2016, p. 2).
Currently, given the lack of a distinct form of legal incorporation for
social enterprises in India, the only way to distinguish social enterprise
actors from others in the field is through the forms of recognition offered
by social enterprise support organizations such as Villgro, Ashoka, UnLtd
and School for Social Entrepreneurs, among others. However, each of
these support organizations uses different definitions and criteria for
selecting the recipients of the various forms of monetary and non-
monetary support that they offer. For example, Ashoka now awards social
‘Changemakers’ of many types, including activists and others not usually
classed specifically as ‘social entrepreneurs’. School for Social Entrepreneurs
supports aspiring founders of both for-profit and non-profit entities,
whereas Villgro and other organizations that make financial investments
in social organizations favour a for-profit definition of social enterprise.
What may therefore be required within the field of social ‘edupreneur-
ship’ is not a single definition but rather efforts towards developing a
typology to set apart diverse forms of social enterprise. Just as some of my
interlocutors called for a graded recognition system for schools similar to
the NAAC accreditation system for universities (P. Shah, personal com-
munication, April 10, 2017), so social enterprises in the education sector,
and organizations such as Central Square Foundation that work specifi-
cally to support them, might develop some form of clustering system not
54 I. M. Salovaara
for ranking purposes but to distinguish models and strategies for change.
Criteria for developing such a system might include mode of incorpora-
tion (for-profit, non-profit or hybrid), geographic reach and type of ser-
vices delivered (school management, in-school supplementary services
and outside-school complementary services). Finer distinctions within the
last two categories could further serve to develop networks for sharing best
practices in, for example, education technology or school leader training.
Common understandings for the question that Shah posed—how to
judge an entrepreneur’s social intentions—should be developed with a
close consideration of the diversity of background and experience that
social entrepreneurs may possess. Achieving a shared set of definitions will
contribute to the integration of social enterprises within the existing edu-
cation ecosystem by increasing other stakeholders’ understanding of their
functioning and, perhaps, providing a basis for a future regulatory frame-
work recognizing social enterprises’ unique characteristics.
Conclusion
Social enterprise within the education space in India is diverse, and the
individual perspectives of leaders of social enterprise span the full breadth
of positions on the right mix of public and private educational inputs.
Although social enterprises may provide services within the government
system to supplement its services, the low-fee private school business model
provides an alternative to that system. Each of these models and their mul-
titude of manifestations has the potential to exacerbate pre-existing con-
cerns of diverse institutional-level players in the education field.
The first section of the chapter described two situations that exemplified
of the forms of discursive blockage that occur because of differing opinions
about the roles of public and private schooling, especially for the economi-
cally disadvantaged, in India. The second section delved into the constitu-
ent elements of these debates, including disagreements about the appropriate
mix of public and private educational provision, the concept of markets
and profit-making in the schooling sector, the meanings and reliability of
educational evidence on these issues and the need for improved transpar-
ency and changes in regulation. These issues, in one sense peripheral to the
actual work of teaching and learning, are nevertheless crucial for social
entrepreneurs to consider because they divide many stakeholders in the
field of education reform. Given this discursive scenario, the chapter’s third
section discussed the prospects for social ‘edupreneurship’ in India. This
section argued that there are certain broad strategies that social enterprises
may take in an effort to move beyond, or at least not intensify, the debates
previously discussed. These include seeking and supporting systemic
change, considering interventions beyond schooling markets, building
upon and increasing the educational evidence base through action research
and increasing the transparency of the sector as a whole through developing
shared understandings of social enterprise typologies.
It is undeniable that disagreements persist about the kinds of solutions
that are required within the education sector in India and that can be prac-
tically supplied by the social enterprise sector. The social enterprise sector
will not—and probably should not—contain itself to only the narrow
range of interventions that are palatable to actors of all ideological stances
with regard to public and private educational inputs. However, social
entrepreneurs must recognize that their work becomes a part of these con-
versations whether they actively participate or not. Developing an under-
standing and a position within these discourses can help the social enterprise
sector in education to develop innovations that enjoy broad support from
current players in the field. For social enterprises to transcend the blockages
in discourse outlined in the first and second sections of this chapter, it may
be necessary for stakeholders in India’s social enterprise space to move
towards clearer understandings of what social enterprise can mean in this
context. Developing a shared understanding of educational social enter-
prises, with inputs even from those more sceptical of private inputs into the
education system, will be crucial for the sector’s advancement.
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for all (Global Education Monitoring Report). Paris: UNESCO. Retrieved
from http://unesdoc.unesco.org/images/0024/002457/245752e.pdf
3
Factors Affecting Individual’s Intention
to Become a Social Entrepreneur
Preeti Tiwari, Anil K. Bhat, and Jyoti Tikoria
Abstract There are good numbers of success stories of social enterprises

in India such as Arvind Eye Centre, Barefoot, Farm2Food Foundation,
AYZH, Jaipur rugs and Selco Solar. There is a need to the number of such
social enterprises in India. This chapter discusses the various factors that
affect an individual’s intention to become a social entrepreneur. This
study, conducted among students of India’s leading technical institutions,
indicates that self-efficacy was found to be the strongest predictor of
entrepreneurial intention.
P. Tiwari (*)
T.A. Pai Institute of Management, Manipal, Karnataka, India
A. K. Bhat • J. Tikoria
Department of Management, Birla Institute of Technology & Science, Pilani,
India
e-mail: anilkbhat@pilani.bits-pilani.ac.in; jyoti@pilani.bits-pilani.ac.in

https://doi.org/10.1007/978-3-319-74488-9_3
60 P. Tiwari et al.
Introduction
Individuals encounter opportunities constantly, but not all individuals have
the ability to recognize and transform those opportunities into successful
ventures. The identification of right entrepreneurial opportunity is inten-
tionally oriented behaviour. Entrepreneurial behaviour is largely predicted by
entrepreneurial intention. Investigating the motivation behind entrepreneur-
ial intention is therefore considered as an important activity that helps in
understanding and predicting entrepreneurship (Krueger, Reilly, & Carsrud,
2000). Although the intention is a very strong predictor of actual behaviour,
it must be specified that the formation of intention may be identified a long
time before actual behaviour, and behaviour may also never take place.
Social entrepreneurial intentions (SEIs) can be deemed as a psychologi-
cal behaviour of human beings that persuades them to gather knowledge,
perceive ideas and execute social business plans to become a social entrepre-
neur (Mair, Robinson, & Hockerts, 2006). ‘Social entrepreneurship’ has
been attracting widespread interest across the world. It is considered as the
prospective solution to ‘social exclusion’ by providing sustainable and inno-
vative solutions to the social, cultural and environmental problems. In
developed and developing countries, social entrepreneurs are consistently
bringing a profound social change by addressing some of the most pressing
social problems such as poverty, social inclusion, inadequate public services
and environmental problems (Zeyen et al., 2012). Along with the priority
given to social value creation, social entrepreneurs are also generating eco-
nomic value to ensure their own financial viability (Mair & Martí, 2006)
and indulging in delivering innovative solutions.
‘Social entrepreneurship’ has gained an increasing importance in India in
recent years. As compared to population growth, the rate of social entrepre-
neurship is still low in India. The fact that social entrepreneurship growth is
low in India is actually a ‘problem’ as the country may have omitted a novel
path to support its citizens (Datta & Gailey, 2012). Social entrepreneurship
is desirable for development of India; however, the current speed is very slow.
This raises an important question for policy makers as to how can
social entrepreneurial activities be enriched and increased in India?
Krueger (1993) suggested that entrepreneurship can only increase if
the overall quality and quantity of entrepreneurship are nurtured, and
this can only be nurtured if entrepreneurship thinking grows. Although
Factors Affecting Individual’s Intention to Become a Social… 61
most of the studies based in the international context are focusing on

individual cases offering individual-level analysis, they are overlooking
the antecedents and prerequisite which are necessary to encourage the
social entrepreneurial activities in those regions (Koe, Nga, &
Shamuganathan, 2010; Mair & Martí, 2006). To encourage and support
the social enterprises, it is required to closely analyse and understand the
factors that affect the thinking process of the individuals. This research is
guided by a similar intention to explore the factors that will prove to be
helpful in promoting social entrepreneurial activities in India.
The objective of this research study is to develop and test a set of
hypotheses to find out the relationship between individual-level anteced-
ents and SEIs. This is an empirical study that addresses SEI by assessing
the influence of ‘emotional intelligence’ (EmInt), ‘moral obligation’
(MO), ‘self-efficacy’ (SEff) and ‘social entrepreneurial education’ in a
single theoretical model. It is hoped that the result of this study will
enable policy makers and educators to promote more social entrepre-
neurial activities at the university level, especially in developing coun-
tries. Despite the fact that most of the well-known social enterprises work
in the South Asian subcontinent, still the phenomenon of social entre-
preneurship is relatively under-researched. To summarize, the main focus
of this chapter is to propose a model to find out the effect factors on an
individual’s intention to become a social entrepreneur. We use primary
data collected from undergraduate students across premier technical uni-
versities of India to test our hypotheses.
Social Entrepreneurship in India

Social entrepreneurs are considered as the key players in delivering basic
services and opportunities to the untouched sectors of India. Some are
using innovative, cost-efficient and often technology-driven business
models that put forward essential services to those who are short of access.
Others are working hard at removing barriers that prevent access
(Intellecap, 2012). These social entrepreneurs are recognized not only in
India but also on a global level. Many of these organizations work on an
impressive scale—serving millions of low-income households and trans-
forming their quality of life (Khanapuri & Khandelwal, 2011).
62 P. Tiwari et al.
India’s current population is 1.32 billion and it also has world’s second
largest labour force of 516.3 million people. In spite of the fact that the
hourly wage rates in India have more than doubled over the few couple
of years, the latest World Bank report states that approximately 350 mil-
lion people in India currently live below the poverty line. This signifies
that every fourth Indian is deprived of even basic necessities such as
nutrition, education and health care, and many are still wracked by
unemployment and illiteracy. Social entrepreneurs can prove helpful in
eradicating these issues by placing those less fortunate on a pathway
towards a meaningful life (Lans, Blok, & Wesselink, 2014). India is set to
become the world’s youngest country with 64% of its population in the
working age group. This motivated the authors to investigate what factors
affect the intention formation process that encourages young generation
towards social entrepreneurship. Social entrepreneurship in the context
of India is still an understudied topic with limited research studies that
usually fall short of empirical data to support. Research studies that have
been so far conducted in India mostly use case studies or storytelling
approach. They were more focused towards the concept of social innova-
tion through incubators and government initiatives (Sonne, 2012) and
towards cases of social entrepreneurs with the mission of rural develop-
ment (Tiwari, Bhat, & Tikoria, 2017a, 2017b). Selective research studies
conducted in India in the field of social entrepreneurship are shown in
Table 3.1.
Most of the literature available in the field of entrepreneurial inten-
tions or more specifically social entrepreneurship is centred in Europe
and other Western countries. Social set-up and environmental factors
affecting the process of social entrepreneurship are very different in this
part of the world as compared to the factors covered in the existing
research studies. The most familiar sociocultural factors influencing
entrepreneurship are education, religion, caste, family background and
social background. In her article, Tiwari et al. (2017a, 2017b) felt that
sociocultural factors are important in the Indian environment for starting
a business. Sociocultural factors such as education, religion, caste, family
support and social background were considered by her, and empirical
results confirm that sociocultural factors are important in the creation of
entrepreneurial intentions. Ethnically, India has possessed a unique set of
Table 3.1 Social entrepreneurial studies in India

S. No. Author(s)/year Nature of study
1 Ganly and Mair Case study analysis of Gram Vikas in Orissa, India
(2009)
2 Seth and Kumar An explorative case study regarding social
(2011) entrepreneurial ecosystem in India
3 Khanapuri and Qualitative research study dealing with fair
Khandelwal (2011) trade and scope of social entrepreneurship in
India
4 Shukla (2012) Working paper dealing with a contextual
framework of social entrepreneurship in India
5 Datta and Gailey Case study analysis of women cooperatives in
(2012) India
7 Chowdhury and Case study analysis of Gram Vikas in India
Santos (2010)
8 Sonne (2012) Case study of social business incubators such as
Villgro and Aavishkaar
sensitivities and socio-psychological mindset. Rather than comparing

India to other countries, this research study concentrates on how social
entrepreneurship intentions are generated in India. This chapter tries to
bridge this gap and validate the SEI model in the Indian context.
In the previous sections of this chapter, researchers highlighted the
meaning of social entrepreneurship and its development in India. In this
section, the authors discuss the existing social entrepreneurial model and
other important research studies dealing with the SEIs.
Literature Review
In this section, we discuss the existing social entrepreneurial models and
other important research studies dealing with the SEIs to arrive at the
research gaps.
Short, Moss and Lumpkin (2009) in their now classic article detailed
the gaps in the existing literature that need to be addressed by researchers
in the field of social entrepreneurship. They made an assessment of
research of past 20 years by analysing different domains of publications
and citations. They found out that most research studies were descriptive
64 P. Tiwari et al.
(38%) and explanatory (55%) in nature. Research studies that tried to

find out the motivating factors of social entrepreneurs were only a few
(7%). There is thus an immense need to contribute towards theory-based
empirical studies in this area of social entrepreneurship. More specifically,
Short et al. (2009) put forth some research questions worth investigating,
namely, ‘Are certain personality characteristics uniquely associated with
social entrepreneurs?’ and ‘What enables or hinders social entrepreneur-
ship and what motivates individuals to become social entrepreneurs?’
These are some of the research questions that we pursue in this study.
Dacin, Dacin and Matear (2010) in an article in the Academy of
Management Journal state that most of the research articles in the field of
social entrepreneurship have tried to define social entrepreneurship or
have tried to find out what are the dimensions of social entrepreneurship,
but what was needed was more theory-based research approach to under-
stand the phenomenon of social entrepreneurship.
Shepherd (2015) emphasized that the field of social entrepreneurship
will not grow unless research questions are principally ‘theory-driven’. He
suggested a potential research focus and related theories, namely, social
value creation, opportunity creation and discovery, risk-taking, innova-
tion management, diffusion of innovation, role of technology, process of
venture creation, relationship with institutions, simultaneous production
and economic value areas that need to be addressed by researchers in the
field of social entrepreneurship.
Liñán and Fayolle (2015) conducted a systematic literature review on
entrepreneurial intentions. A total of 409 articles related to entrepreneur-
ial intentions published between 2004 and 2013 (inclusive) were anal-
ysed. Out of these, they found only 17 articles that were focused on the
intentions towards very specific entrepreneurial activities. On the basis of
this analysis, they identified two themes that seem to be gaining momen-
tum: social and sustainable entrepreneurship intentions. They further
stated that social entrepreneurship intentions are undoubtedly the most
promising subject and should be explored further.
To our knowledge, the first attempt to develop a model that could
capture SEI formation was done by Mair and Noboa (2006). In their
model, they used individual variables to measure intentions and sug-
gested that intention to start social enterprise develops from perception
to desirability, which was affected by cognitive-emotional construct con-

sisting of empathy as an emotional factor and moral judgement as a cog-
nitive factor, and perceived feasibility was affected by enablers consisting
of SEff and social support (Mair & Martí, 2006).
In their model, Mair and Noboa adopted the classical previously tested
Shapero’s model of the entrepreneurial event and expanded it by adding
constructs of perceived desirability and perceived feasibility. Antecedents
that distinguish this model from traditional entrepreneurial models are
empathy and moral judgement. However, we cannot deny the fact that
not everyone who is exhibiting empathy and moral judgement becomes
a social entrepreneur. But a certain level of empathy and moral judge-
ment is required to trigger SEI process (Mair & Martí, 2006).
Vansandt, Sud, Marmé, Vansandt and Marme (2009) tried to test
social intention formation. In their qualitative research study, they sug-
gested three critical catalysts that can enhance the effectiveness of any
social enterprise. These catalysts were defined as effectual logic, enhanced
legitimacy through appropriate reporting metrics and information tech-
nology (IT). They further described that these three catalysts could
potentially act as enablers to predict SEIs (Vansandt et al., 2009). In their
research study, they explore alternate methods of expansion, scaling and
replication, and then examine potential catalysts which can enable social
entrepreneurs to attain their goals of social improvement.
Nga and Shamuganathan (2010) conducted a research study in
Malaysia. They tested the effect of personality traits in predicting the
characteristics of social entrepreneurship on a sample of 181 Malaysian
students (Nga & Shamuganathan, 2010). The findings of this research
study found out that agreeableness positively influences all dimensions of
social entrepreneurship, whereas openness exerts a positive influence on
social vision, innovation and financial returns. The big five personality
theory used in this chapter did not really prove useful in predicting char-
acteristics of the social entrepreneurs.
Kirby and Ibrahim (2011) carried out a research study to find out the
role of social entrepreneurial education in Egypt. The basic highlight of
this research study was that they tried to find out awareness of social
entrepreneurship among Egyptian students so that the policy makers
could modify their policies to encourage students to opt for social
66 P. Tiwari et al.
e ntrepreneurship as a career choice. A sample of 183 students were used,

and the result of the study found out that Egyptian students do not have
complete and appropriate knowledge about social entrepreneurship.
Ernst (2011) carried out another research study to test SEI on a sample
of 203 students from four different German universities. She used ante-
cedents such as the personality traits, human capital, social capital role
model, age, gender, education and experience to predict the SEI. The
effect of these antecedents was mediated by variables taken from the the-
ory of planned behaviour (TPB). In her study, Ernst (2011) failed to find
out any link between empathy and SEIs; surprisingly, empathy showed a
negative and reverse relationship with SEIs.
To validate the Mair and Noboa’s (2006) model, an attempt was been
made by Forster and Grichnik (2013). In their article, they adapted Mair
and Noboa’s (2006) model and tested its applicability on a sample of 159
corporate volunteers. They replaced perceived social support with per-
ceived collective efficacy and defined it as the type of environment and
guidance organizations can provide to explore opportunities and develop
social ties (Forster & Grichnik, 2013). Contrary to the results obtained
in the studies described in the above paragraphs undertaken in different
countries, they found positive relationships between empathy, perceived
social norms, SEff, perceived collective efficacy and SEIs with mediation
by perceived desirability and perceived feasibility. Hockerts (2015a,
2017) made an attempt to validate the model of Mair and Noboa. He
modified the model by removing the mediating variables (perceived
desirability and perceived feasibility) from the model and tested the direct
effect of MO, entrepreneurial SEff, empathy and perceived social support
on SEI. Hockerts (2015a) further added construct ‘prior experience’ in
the model, and the effect of prior experience was mediated by the above-
mentioned four antecedents. He carried out this research study on three
different samples and found out some positive relationship with the SEI
(Hockerts, 2015a).
For identifying the antecedents that motivate individuals to opt for
social entrepreneurship, Shumate, Atouba, Cooper and Pilny (2014)
conducted a qualitative research study. In-depth interviews with 20 social
entrepreneurs suggested that there are 2 possible paths that lead to the
social entrepreneurship. The first one is an ‘activist path’, and the second
one is a ‘business path’. The finding of this research study suggested that
both activist and business social entrepreneurs were motivated by their
family background and transformative early adulthood experiences that
act as a moral basis for creating a social start-up. Although this research
study provides an interesting side by being based on the ‘evolutionary
theory’, it failed to find out whether these antecedents directly lead to the
formation of social start-ups or required some mediators that facilitate
this process. Germak and Robinson (2014) also conducted a qualitative
study to find out the motivating factors of the nascent social entrepre-
neurs. In-depth interviews of the 16 nascent social entrepreneurs identi-
fied five major themes, namely, personal fulfilment, helping society,
non-monetary focus, achievement-orientation and closeness to a social
problem that motivates individuals to start their social venture.
Tran, Tran, Von Korflesch and Von Korflesch (2016) tried to find out
the utility of social cognitive theory in finding out individual intentions
towards social entrepreneurship. Their research provides a new conceptual
model to predict SEIs. In their conceptual model, antecedents such as
social entrepreneurial SEff and social entrepreneurial outcome expecta-
tions directly affect SEIs. Factors of big five personality traits and contex-
tual factors (role model, education and perceived support) were used as
antecedents to social entrepreneurial SEff and social entrepreneurial out-
come expectations. Social entrepreneurial SEff also affects social entrepre-
neurial outcome expectations. This study is unique in the sense that they
use social cognitive theory as research framework to predict SEIs.
More recently, Tiwari et al. (2017a, 2017b) conducted a research study
to find out the role of cognitive styles to predict SEIs. Empirical results of
this study suggest that students with analytical cognitive style have a
higher level of SEIs. The results of this research study show that both the
cognitive styles (analytical and intuitive) are needed to shape these inten-
tions. Although in this study the intention is slightly skewed towards the
analytical style which may perhaps be explained by the technical nature
of the education that the respondents were imbibing, it precludes prefer-
ence for a particular cognitive style.
It is now clear that social entrepreneurial literature dealing with the
factors that lead to the development of social venture follows two different
approaches. Through the first approach, researchers have tried to find out
68 P. Tiwari et al.
qualitatively the motivating factors for social entrepreneur/nascent social

entrepreneurs. Through the second approach, researchers have tried to
capture the pre-venture creation phase by quantitative approaches. This
stream of researchers has tried to find out the factors that affect SEI for-
mation. Our research study also focuses on the intention formation phase
of social enterprise creation.
Although a few research studies have tried to empirically test the effect
of antecedents on SEIs, these studies are mere replications of each other.
The major limitations of Ernst’s (2011) research study are that in spite of
the fact that it attempts to measure the intention of management gradu-
ates of German universities, it fails to capture the type of support they
should receive from their university if they opt for social entrepreneur-
ship as a career. This is in divergence with the findings of Kirby and
Ibrahim (2011) that university support can prove an important tool in
boosting social activities among students at the university level (Kirby &
Ibrahim, 2011). The limitation of Forster and Grichnik’s (2013) model is
that they used corporate social volunteers to predict social intention for-
mation process as comparing corporate volunteers with social entrepre-
neurship is not advisable (Hockerts, 2015a).
Shook, Priem and McGee (2003) suggested that researchers should try to
examine and integrate different intention models. The two most used models
in the field of entrepreneurial intentions are ‘the TPB’ and ‘Shapero’s theory
of entrepreneurial event’. About the TPB, Ajzen (1991) said that actions are
followed by conscious judgements to act in a certain way. According to Ajzen,
there are three determinants of intention to act. These are ‘attitude towards
the behaviour’, ‘subjective norm’ (SN) and ‘perceived behavioural control’
(PBC). Shapero and Sokol’s (1982) model of the entrepreneurial event pres-
ents a process model of new enterprise formation. In this model, the three
major factors that are estimated to influence an individual’s intentions to act
in a certain way are ‘perceived desirability’, ‘perceived feasibility’ and ‘propen-
sity to act’. Researchers have pointed out that these two models are more or
less similar to each other (Krueger & Shepherd, 2002).
Shapero’s construct of perceived desirability is a combination of Ajzen’s
attitude towards behaviour and SNs. Perceived feasibility explained by
Shapero is similar to PBC of TPB. We adopt the TPB as the research
framework for a set of major advantages of the TPB that is explained in
Antecedents
1. Emotional Attitude towards

Intelligence becoming a
social
2. Moral entrepreneur
Obligation
Social Social
3. Self-efficacy Subjective
entrepreneurial entrepreneurial
Norms
intention Behaviour
4. Social
entrepreneu
rial
education Perceived
behavioural
control
Fig. 3.1 Proposed social entrepreneurship intention model
the later part of the chapter. But one of the major advantages of TPB is
that by splitting perceived desirability into two different variables, namely,
attitude towards behaviour and SNs, the TPB provides extra information
(Mueller, 2011). On the basis of extensive literature review, we now pro-
pose the following theoretical framework to test SEI (see Fig. 3.1).
Hypothesis Development
Social Entrepreneurial Intention
According to the TPB, the individual behaviour could be predicted from

its consequent intentions (Ajzen & Fishbein, 1970). Researchers have
described intention in many different ways. Bird (1998) defines inten-
tion as a state of mind that motivates a person towards a certain goal or a
path. Intention can be considered as a precondition that governs planned
behaviour (Souitaris, Zerbinati, & Al-Laham, 2007). According to
Krueger (1993), ‘Entrepreneurial intention can be defined as the com-
mitment of a person towards some future behaviour, which is projected
toward starting, a business or an organization.’ Various research studies
emphasize the importance of intentions as one of the crucial constructs
in predicting planned behaviour (Krueger & Brazeal, 1994). The
entrepreneurial intention is thus an indispensable tendency towards for-
mation of an enterprise and is also an emerging research area that attracts
70 P. Tiwari et al.
a substantial number of researchers. Ziegler (2009) mentioned that what

prerequisites were contributing to motivate people to act as a social entre-
preneur is yet to be fully explored.
ttitude Towards Becoming a Social Entrepreneur

A
(ATB)
An attitude is a propensity to act towards or against something in the

environment which thereby becomes positive or negative. Attitudes are
based on the summation of the individual’s beliefs and the process of
evaluations associated with those beliefs. Appolloni and Gaddam (2009)
suggested that behaviour of an individual depends on a person’s beliefs
and attitudes, and those attitudes and beliefs play a crucial role in shaping
an individual’s action. Ajzen (1991) defined attitude towards behaviour
as a degree to which a person has a good or a bad assessment or evaluation
of the behaviour in question. ATB refers to one’s personal pull towards
particular target behaviour. Rossmann (2010) defined beliefs and percep-
tions regarding the personal desirability of performing a behaviour, which
is in turn related to expectations regarding the personal impact of out-
comes resulting from that behaviour.
The term ‘attitude towards the behaviour’ is associated with the
TPB. Although the TPB was initially developed in the field of psychology
due to its wider scope and extensive applicability, TPB is very well adapted
and used in various other fields (Iakovleva & Kolvereid, 2009; Krueger,
1993; Krueger & Carsrud, 1993; Kautonen, Gelderen, & Fink, 2013).
One of the characteristics that make TPB very attractive is that the stan-
dard model of TPB can be adapted and changed according to the specific
domain of the study (Krueger et al., 2000). Ajzen (1991) stated that
actions are followed by conscious judgements to act in a certain way.
According to him, there are three determinants of intention to act. These
are ‘attitude towards the behaviour’, ‘SNs’ and ‘PBC’. Attitude is differ-
ent from the traits with respect to the evaluative nature towards certain
specific intentions (Armitage & Conner, 2001). Iakovleva and Kolvereid
(2009) highlighted the fact that attitude towards behaviour has a direct
and a strong positive significant effect on entrepreneurial intentions.
Therefore, efforts should be made towards changing personal attitudes of

the person (Vinogradov, Kolvereid, & Timoshenko, 2013).
In the entrepreneurial intention studies, ATB proved to be an impor-
tant factor that affects intention in a positive manner (Koçoğlu & Hassan,
2013). In many studies, ATB is a strong predictor of entrepreneurial
intentions followed by PBC (Krueger & Brazeal, 1994). According to the
research study conducted by Zampetakis, Kafetsios, Bouranta, Dewett
and Moustakis (2009), attitudes have a strong influence on entrepreneur-
ial intentions; hence, attitude is, in fact, a deterministic antecedent for
intention. This highlights that every digression in attitude is directly lead-
ing to a digression of the same degree of entrepreneurial intention.
Krueger et al. (2000) found that attitude towards behaviour showed a
strong positive relationship with the intention.
According to Kolvereid and Isaksen (2006), a positive attitude towards
becoming an entrepreneur and an ability to start one’s own venture pre-
dicts entrepreneurial intentions. Carsuard and Brannback (2011) revealed
that if a person has a positive attitude towards starting his or her own
venture which is aligned with his or her overall aim in life, then, most
probably, he or she will form an entrepreneurial intention.
In the field of social entrepreneurship, Ernst (2011) tests the effect of
attitude towards becoming a social entrepreneur on SEIs. She found a
strong positive significant relationship between people’s desirability to be
a social entrepreneur and SEIs. As suggested by Ernst (2011), we also
used ATB as ‘attitude towards becoming a social entrepreneur’, that is, the
degree to which a person possesses positive or negative assessment towards
social entrepreneurship as a career option. Based on the above discussion,
we next propose the following hypothesis:
H1 : Attitude towards becoming a social entrepreneur has a positive effect on

SEIs.
Subjective Norms
It refers to the perceived social pressure to execute or not to execute a behav-

iour and comprises the pressure of family, friends and other important
people. Ajzen and Fishbein (1977) defined SN as ‘the person’s perception
72 P. Tiwari et al.
of social pressure to perform or not to perform the behaviour under consid-

eration’. Researchers unanimously agree about the societal pressure in car-
rying out certain behaviour but are not aligned regarding the actual source
of that pressure (Liñán, 2004). SNs are always considered as the most con-
flicting element in the TPB. Meta-analysis study conducted by Armitage
and Conner (2001) found SNs as the weak predictor of entrepreneurial
intentions.
In the SEI study, Ernst (2011) also found an insignificant relationship
between SNs and the antecedents used in the study. However, a direct
relationship between SN and SEIs was found to be a significant one. In
this research study, we consider the recommendation given by Liñán
(2007) and Kennedy et al. (2003), and measure the effect of SNs on atti-
tude towards becoming the social entrepreneur and PBC.
As India is a society with clear collectivistic traits, this means that high
preference is given to the social framework. Family, friends and various
other associated subgroups affect the individual decision-making process.
Thus, it is very important to measure whether SNs are helpful or not in
predicting the SEIs. Based on the above discussion, we next propose the
following hypothesis:
H2 : SNs have a positive effect on SEIs.
Perceived Behavioural Control
PBC can be considered as the antecedent for the actual levels of control
(Armitage & Conner, 2001). More specifically, PBC is an individual’s
belief about his or her ability for carrying out a certain task. Hence, PBC
encompasses the evaluation of the ‘do-ability’ of the target action (Ajzen
& Thomas, 1986). In entrepreneurial research, PBC is considered as one
of the strongest predictors of intention. Liñán and Chen (2009) define
PBC as ‘the perception of the ease or difficulty of becoming an entrepre-
neur’. With respect to this definition, we defined PBC as ease or difficulty
in becoming the social entrepreneur.
In entrepreneurial intention studies, there is an ongoing debate about
the fact that SEff and perceived behaviour control are the same as they
both measure the ability to carrying out a particular activity. In a similar
fashion, Ajzen (2002) considers SEff as a subset of PBC. In this study,

SEff is not considered as equivalent to PBC. But for the purpose of this
study, SEff is identified as task-specific (Krueger & Dickson, 1994)
whereas PBC as a broader concept. As defined by Ajzen (2002), PBC is
the perceived acceptance or difficulty of performing the behaviour, and
therefore, it includes various activities required to perform that task.
Hence, in this study, SEff and PBC are used and measured separately.
Based on the above discussion, we next propose the following
hypothesis:
H3 : PBC has a positive effect on SEIs.
ritical Antecedents Used in the Research

C
Study
Emotional Intelligence
The term ‘emotional intelligence’ was first popularized by Thorndike in

1920 when he identified the relationship of EmInt with the concept of
social intelligence. According to Thorndike and Stein (1937), EmInt is
the ability of individuals to manage his or her emotions and feelings
wisely (Thorndike & Stein, 1937). Later on, Gardner (2007) carried out
research and came up with seven intelligence areas known as multiple
intelligence theory. This area attracts the attention of various researchers
from the field of sociology and psychology. The concept of EmInt is
divided into two schools of thought: the first one is of mental ability
models (Salovey & Mayer, 1990) and the second one mixed approach
(Gardner, 2007). The ability model of EmInt is based on the concept of
emotions and cognitive intelligence. The basic assumption of this is that
person will recognize the capabilities of individuals that control their
emotions (Salovey & Mayer, 1990). According to mental ability, EmInt
is defined as capabilities related to emotions and emotional information
dispensation (Mayer et al., 2014). Whereas EmInt defined by the mixed
model comprises various personal attributes such as the need for achieve-
ment and flexibility that will help individuals manage one’s emotions and
relationships (Boren, 2010).
74 P. Tiwari et al.
Till date, few researchers in the field of entrepreneurship research tried

to find out the effect of EmInt on entrepreneurial intentions. Shepherd
(2004) in his conceptual model of entrepreneurship formation blames
emotional factors for the business failure. Zampetakis et al. (2009) tried
to find out the effect of EmInt on creativity, proactivity and attitude
towards becoming an entrepreneur. Zampetakis et al. (2009) in their
study found out that EmInt positively affects creativity and proactivity
and plays an important role in the development of the attitude.
Various research studies emphasized the importance of EmInt regard-
ing managing stress and emotional breakdown (Slaski & Cartwright,
2002; Tsaousis & Nikolaou, 2005). Managing stress is often linked with
a positive attitude towards entrepreneurship and entrepreneurial inten-
tions. The role of EmInt to predict SEIs has not been studied yet. EmInt
is also very important for social entrepreneurs as they have to provide a
creative solution to the unmet demands of the society. Hence, channel-
ling and managing emotions and feelings can provide social entrepre-
neurs with an important competitive edge. For that reason, it is always
good to use EmInt to predict SEIs. Therefore, the following hypotheses
are formed on the basis of above explanation:
H4a : EmInt has a positive effect on the attitude towards becoming a social
entrepreneur.
H4b : EmInt has a positive effect on the SNs.
H4c : EmInt has a positive effect on PBC.
Moral Obligation
MO has multiple meanings. MO is a metaphysical commitment, but in

the long run, it is supposed to produce something physical, like an action
or a change. In general, MO is defined as the tendency of helping others
within religious limits (Bryant, 2009). Initially, Fishbein (1967) used
moral element along with attitude towards behaviour and SNs to predict
intentions. MO in relation to social entrepreneurs is related to the extent
to which social entrepreneurs are fully committed to their idea and feel
morally obliged to pursue them.
Mair and Noboa (2006) used first MO in their proposed model for
SEI. In their research, they suggested that the key element that differentiates
social entrepreneurs from business entrepreneurs is the MO. Dave Roberts
said that social entrepreneur should have high moral values (Roberts &
Woods, 2000). While Hendry (2004) came up with the ‘bi-morality’ per-
spective of the society according to which ‘we have two conflicting sets of
guidelines for living’, there are individuals who are more motivated by a
sense of duty towards society. In a similar fashion, social entrepreneurs are
born within normal people with an urge of doing good for the betterment
of the society and for the development of the nation on a whole (Thompson,
2008). Boschee (1995) mentioned that social entrepreneurs are one who
can balance ‘moral imperatives and the profit motive’ (Boschee, 1995).
Two prominent studies that tried to find out the relationship between
MO and SEIs are by Mair and Noboa (2006) and Hockerts (2015a). In the
first study conducted by Mair and Noboa (2006), they adopted MO as the
antecedent for social desirability. Mair and Noboa (2006) followed
Kohlberg’s three-stage model of moral development. The basic issue with
the Kohlberg’s model is that it is morally inclined. We need to find out why
a particular individual feels morally obliged towards something. Hockerts’
(2015a) adopted Haines, Street and Haines’ (2008) model to measure
MO. He considered MO as a subprocess of the decision-making process
that motivates individual to make a moral judgement before forming moral
intentions. We have followed Hockerts’ (2015a) assumption of the MO,
which states that MO is considered as the degree to which a person feels the
sense of responsibility to help underprivileged people in a given situation.
MO as an antecedent is very important for a social entrepreneur as it
conveys the intention that addressing a particular social problem is an
appropriate thing to do. Based on the above discussion, we next propose
the following hypotheses:
H5a : MO has a positive effect on the attitude towards becoming a social

entrepreneur.
H5b : MO has a positive effect on the SNs.
H5c : MO has a positive effect on PBC.

76 P. Tiwari et al.
Self-Efficacy
The term ‘self-efficacy’ came into limelight when Bandura (1999) used
it in social learning theory. He defined SEff as a person’s belief regarding
his or her ability to accomplish a certain task. SEff refers to an individ-
ual’s conviction in their personal capability to complete a job or a spe-
cific set of tasks (Bandura, 1990; Bandura & Bandura, 1997).
Entrepreneurial SEff is described as the degree to which one believes
that he or she is able to successfully start a new business venture
(Sánchez, 2010). SEff is considered as one of the best predictors of
career selection (Bandura, 1971). Various researchers have found that
SEff envisages opportunity identification; therefore, it is always advis-
able to study it regarding entrepreneurial intention phenomena (Krueger
& Brazeal, 1994).
The importance of SEff as an affecting antecedent is also identified by
researchers in the field of social entrepreneurial research. In social entre-
preneurial research, Mair and Noboa (2006) suggest that ‘high level of
SEff allows a person to perceive the creation of a social venture as feasible,
which positively affects the formation of the corresponding behavioural
intention’ (Mair & Martí, 2006). Ernst’s (2011) study states that SEff
does not show any significant relationship with SNs, but showed a posi-
tive significant relationship with both attitude towards becoming a social
entrepreneur and PBC. Hockerts (2015a) also emphasized the impor-
tance of SEff in his study. Therefore, SEff is an important element of
intention formation not only in the entrepreneurial intention studies but
also in SEI studies.
In conclusion, social entrepreneurship always works towards solving
any social issues such as education and rural areas. Specifically, in a devel-
oping country like India, social enterprises face a lot of problems due to
lack of resources and limited opportunities. In such scenario, SEff is con-
sidered as an important attribute that motivates people towards social
entrepreneurial activities. Based on the above discussion, we next propose
the following hypotheses:
H6a : SEff has a positive effect on the attitude towards becoming a social
entrepreneur.
H6b : SEff has a positive effect on the SNs.
H6c : SEff has a positive effect on PBC.
Social Entrepreneurship Education (SEdu)
As described by Liñán (2004), entrepreneurship education can be defined

as ‘the whole set of education and training activities—within the educa-
tional system or not—that try to develop in the participants the inten-
tion to perform entrepreneurial behaviors, or some of the elements that
affect that intention, such as entrepreneurial knowledge, desirability of
the entrepreneurial activity, or its feasibility’. Scholars have empirically
provided evidence that entrepreneurship education is an effective means
of inspiring students’ intention towards an entrepreneurial career (Fayolle,
Gailly, & Lassas-Clerc, 2006; Lee, Chang, & Lim, 2005; Matlay, 2008).
Matlay (2008) in his longitudinal study conducted over a 10-year period
found that all the 64 graduates in his research sample, who had under-
gone entrepreneurship education, became entrepreneurs.
In entrepreneurial intentions’ studies, entrepreneurial education is cat-
egorized into two broad categories, namely, entrepreneurial awareness
education and education for start-ups.
1. Entrepreneurial awareness education: Example of entrepreneurial

awareness education would be elective courses offered by universities
such as Stanford and Harvard. These types of courses are specifically
designed for management or engineering streams. Tutors do not really
aim to convert students into entrepreneurs, but they act as an advisor
to facilitate their future professional career selection.
2. Education for start-up: This type of education would be centred on the
explicit realistic aspects related to the start-up phase: how to get financ-
ing, awareness about legal regulations, knowledge about taxation and
78 P. Tiwari et al.
so on (Lorz, 2011). Although entrepreneurial educational background

proved to have been an important factor in entrepreneurial intention
studies, researchers failed to find any relationship between entrepre-
neurial educational background and SNs (Ernst, 2011; Liñán &
Chen, 2006; Wu & Wu, 2008). With respect to this research study, we
assume that entrepreneurial educational background affects attitude
towards becoming a social entrepreneur.
In the field of social entrepreneurship, there are a handful of research

studies that have tried to measure the effect of education on SEIs. Penner
et al., (2005) in his research study of prosocial behaviour found out that
an increase in education and income level of individual increases his or
her social activity. Harding and Cowling (2006) also points out that full-
time educational course increases social entrepreneurial activities. Kirby
and Ibrahim (2011) carried out a research study to find out the level of
awareness about social entrepreneurial education in Egyptian universi-
ties. Findings of this research study revealed that although governments
provide a lot of initiatives to promote social entrepreneurship, changes
had to be made in the education system to encourage students to think
and behave more entrepreneurially, at the same time equipping them
with the skills to start their own ventures on graduation.
Ernst’s (2011) study exposure to social entrepreneurial courses showed
a positive relationship with all the three antecedents of the TPB. In
Hockerts’ (2015a) study, students’ SEIs motivate them to opt for courses
related to social entrepreneurship. In the social entrepreneurship litera-
ture, education directly or indirectly is related to the intention formation
process. Based on the above discussion, we next propose the following
hypotheses:
H7a : SEdu has a positive effect on the attitude towards becoming a social
entrepreneur.
H7b : Social entrepreneurship education has a positive effect on the SNs.
H7c : Social entrepreneurship education has a positive effect on PBC.

Research Methodology
Data Collection and Sample
Following extensive literature survey, appropriate statistical methods were

used to examine the effect of exogenous variables on SEI. To select the
sample for the research study, we followed Krueger’s (1993) suggestion
that to accurately measure the entrepreneurial intentions, the sample
should be selected from the population of those who are currently facing
major career decisions. Although various entrepreneurial intention stud-
ies have used a sample of undergraduate students, no prior Indian study
has used undergraduate students to measure SEIs. Primary data were col-
lected through distributing the questionnaire to the students of one of
the premier private universities in India, which has been consistently
rated as No. 1 technology university in private sector in India. The
method of sampling used was quota sampling. Responses were collected
from final-year students of engineering as they are clearer about their
professional choices. In the questionnaire, an explanation was prefixed
regarding privacy of their response and meaning of social entrepreneur-
ship. Besides these explanations, the researcher explained the meaning of
terms such as social enterprise, social entrepreneurship and SEIs to the
participants. Six hundred questionnaires were distributed to the students,
out of which 435 completed their questionnaires. A total of 59%
(N = 257) of the respondents were male and 38% (N = 178) were female,
and the average age of the respondents was approximately 20 years.
Measures
Social Entrepreneurial Intention
In the literature of entrepreneurial intentions, there are various scales that

measure intentions. For this study, the six-item scale used was adopted
from Krueger et al.’s (2000) study. The items were measured on a 7-point
Likert scale with 1 = strongly disagree and 7 = strongly agree. Cronbach’s
alpha value was 0.85.
80 P. Tiwari et al.
Attitude Towards Becoming a Social Entrepreneur
To measure attitude towards becoming a social entrepreneur, we used

scales developed by Ajzen (2002) and Entrepreneurial Intention
Questionnaire (EIQ; Liñán & Chen, 2006, 2009). Pretesting of these
scale reduced the items and final scale comprised five items. Cronbach’s
alpha value was 0.77.
Subjective Norms
To measure SNs, the authors used EIQ (Liñán & Chen, 2006, 2009).
EIQ consists of two sets of three items that measure the normative belief
and motivation to comply. To measure SNs, the ratings on two sets were
multiplied and averaged to generate the score (Rueda, Moriano, & Liñán,
2015). Cronbach’s alpha value was 0.75.
Perceived Behavioural Control
To measure PBC, researchers used five-item scale developed by Liñán and

Chen (2009) and modified by Ernst (2011). The items were measured on
a 7-point Likert scale with 1 = strongly disagree and 7 = strongly agree.
Cronbach’s alpha value was 0.88.
Independent Variable
Emotional Intelligence
To measure EmInt, the authors used the short version of 30-item Trait
EmInt questionnaire. A 7-point Likert scale was used to measure the
items, and out of a total of 30 items, 15 items are negatively coated, for
example, ‘I usually find it difficult to regulate my emotions.’ Validity and
reliability of this scale to predict entrepreneurial intention were tested by
Zampetakis (2011) and Zampetakis et al. (2009). A sample item to mea-
sure EmInt is ‘I’m usually able to influence the way other people feel’,
and Cronbach’s alpha value was 0.81.
Moral Obligation
Hockerts (2015b) developed the social entrepreneurial antecedent scale

(SEAS) to measure MO, empathy, previous experience in social activities
and social entrepreneurial SEff. It is a newly developed scale in the field
of social entrepreneurial research. Various social intention studies (Ernst,
2011; Forster & Grichnik, 2013; Hemingway, 2005; Nga &
Shamuganathan, 2010) were considered while forming this scale. SEAS
was validated in three different populations (Hockerts, 2015b). Therefore,
to measure MO, the researcher used SEAS. Cronbach’s alpha value for
MO was 0.74.
Self-Efficacy
To measure social entrepreneurial SEff considering the recommendation

given by Bandura and Bandura (1997), we developed a five-item scale for
which Cronbach’s alpha was 0.83.
Social Entrepreneurial Education
To measure social entrepreneurial education, we divided it into three sub-

categories. First three questions were related to whether the sampling ele-
ment had taken courses related to social entrepreneurship, and next three
questions comprised social entrepreneurship awareness following the rec-
ommendation of Kirby and Ibrahim (2011). And in the last subcategory,
students were asked whether they were involved in courses related to
entrepreneurship and business ethics. The responses were measured in
‘yes’ or ‘no’, where ‘yes’ was coded as 1 and ‘no’ coded as 2. Cronbach’s
alpha was 0.91 for this scale.
Data Analysis
For data analysis, SPSS version 20 is used. According to the recommenda-
tion given by Anderson and Gerbing (1988), we followed two-stage ana-
lytical method to test the model. In the first stage, we fitted measurement
82 P. Tiwari et al.
model to the data set collected, and at the second stage, structural equa-
tion modelling (SEM) was used. SEM was also used to examine the valid-
ity and reliability of each scale used in the study. Moreover, SEM is also
suitable to find out the interrelationship in a proposed model (Hair,
Black, Babin, & Anderson, 2009). Maximum likelihood procedure was
used to analyse the data.
To measure the model fit, the chi-square (χ2) value was calculated. The
insignificant value of the χ2 test signifies good fit model (Hu & Bentler,
1998). Absolute fit indices used to identify the relationship between a
priori model and sample data that demonstrate the superior fit models
are the χ2 test, goodness-of-fit index (GFI), adjusted goodness-of-fit index
(AGFI), the root mean square residual (RMR) and the root mean square
error of approximation (RMSEA). The comparative fit index (CFI) is
most used of fit indices. The value of CFI varies from 0 to 1, and rule of
thumb for the perfect fit model is 0.90 (Cheung & Rensvold, 2002).
Recommended values of the several indices are as follows:
(a) GFI: GFI ranges from 0 to 1, with values higher than 0.9 indicating
a good fit to the data.
(b) AGFI: Similar to GFI, values higher than 0.9 indicate a good fit
model.
(c) RMR: For the perfect fit model, RMR values <0.5 are ideal, but val-
ues equal to 0.08 are considered acceptable (Bentler & Bonett, 1980).
(d) RMSEA: RMSEA 0.08–0.10 indicates a mediocre fit and below 0.08
shows a good fit.
Results
Descriptive analysis was used for data cleaning and interpretation.
Normality of data was tested using the Shapiro–Wilk test value. If the
significant value of the Shapiro–Wilk test is greater than 0.05, then data
are considered as normally distributed; if it is lesser than 0.05, data are
not considered as normally distributed (Razali & Wah, 2011). In this
research study, Shapiro–Wilk value was 0.538 with df = 0.02. Therefore,
data are not normal. Besides this, there are three indices that are used to
measure the normality of the data, that is, univariate kurtosis, univariate
skewness and multivariate kurtosis. Although there is no standard con-
sensuses regarding the acceptable limit for non-normality, non-normal
data of univariate kurtosis <0.7 and univariate skewness <0.2 are accept-
able (Finney et al., 2006). Univariate skewness of each variable used in
this research study was <0.889 and univariate kurtosis value was <1.335 in
absolute values. Hence, non-normality of the data set was not a problem
for carrying out further analysis.
Descriptive statistics and correlation are shown in Table 3.2.
Measurement Model
Confirmatory factor analysis was conducted on two control variables,

namely, gender and family business background, and on seven exogenous
constructs (attitude towards becoming a social entrepreneur, SNs, PBC,
EmInt, MO, SEff and social entrepreneurial education).
The summary of derived statistics for measurement model is shown in
Table 3.3. The χ2 value was calculated, and normally insignificant value
of χ2 is considered good for the fit model. χ2/df was 9.173 (χ2/df < 5.0),
which is considered an acceptable model (Hair et al., 2009). RMSEA
value of the measurement model was 0.07 (90% confidence level) and
RMR value was 0.06. The derived GFI value was 0.89 and AGFI was
0.91. Comparative fit indices of measurement model were 0.85 and
Tucker–Lewis index (TLI) = 0.91. Therefore, it showed that the model is
moderately fit. Moreover, the average variance extracted for each variable
was as follows: ATB = (0.704), SN = (0.692), PBC = (0.822), social
entrepreneurial education = (0.611), EmInt = (0.730), MO = (0.658),
SEff = (0.885) and SEI = (0.756). The average variance explained (AVE)
values showed how much variance an antecedent explained in compari-
son to the variance explained by measurement error. As suggested by
Fornell and Larcker (1981), AVE value should be above 0.50. In this
study, AVE values of variables range between 0.51 and 0.84, which are
considered as good reliability values of the indicators.
84
Table 3.2 Descriptive statistics (mean and standard deviation) and correlation of the variables used in the study
Construct Means SD ATB SN PBC EmInt MO SEff SEdu SEI
P. Tiwari et al.
ATB 6.02 0.50 0.710

SN 5.67 0.52 0.26** 0.718
PBC 7.65 0.64 0.53** 0.16* 0.721
EmInt 5.11 0.45 0.49** 0.28* 0.26* 0.649
MO 6.01 0.21 0.61** 0.156* 0.43* 0.56* 0.753
SelfEff 6.59 0.58 0.49** 0.34** 0.54* 0.47* 0.26* 0.791
Edu 5.19 0.49 0.18** 0.31** 0.52** 0.52* 0.49** 0.43** 0.834
SEI 6.27 0.59 0.39** 0.51** 0.44** 0.43** 0.31** 0.51** 0.41** 0.871
Note: Diagonal values are the square root of average value explained between the variables and their items. Off-
diagonal elements are correlations: **p < 0.01, *p < 0.5. To measure discriminant validity, diagonal values should be
higher than off-diagonal values in the same row and column
SD, standard deviation; ATB, attitude towards becoming a social entrepreneur; SN, subjective norms; PBC, perceived
behavioural control; EmInt, emotional intelligence; MO, moral obligation; SelfEff, self-efficacy; SEdu, social
entrepreneurial education; SEI, social entrepreneurial intention
Table 3.3 Measurement model

Absolute Incremental Parsimonious
S. No. Model fit measures fit measures fit measures
Model χ 2/
1 χ2 df RMR GFI AGFI CFI TLI PCFI RMSEA
1008.34 9.17 0.06 0.89 0.91 0.85 0.91 0.747 0.061
RMSEA, root mean square error of approximation; df, degree of freedom;
RMR, root mean square residual; GFI, goodness-of-fit index; AGFI, adjusted
goodness-of-fit index; CFI: comparative fit index; TLI, Tucker–Lewis index;
PCFI, parsimony comparative-of-fit index
Structural Model
The results of SEM analysis are shown below. The model fit indexes are
given in Table 3.4. Our hypothesized model showed acceptable fit to the
data: χ2/df = 11.19; RMSEA = 0.059; standardized RMR = 0.030; non-
normed fit index (NNFI) = 0.81; CFI = 0.89. These values showed that
our proposed model showed meeting the goodness-of-fit criteria sug-
gested by Hu and Bentler (1999).
The first model tests the relationship between the constructs of the
TPB, namely, attitude towards becoming asocial entrepreneur, SNs and
PBC with SEI. Hypothesis (H1), that is, attitude towards becoming a
social entrepreneur, showed a positive significant relationship of medium
value (β = 0.21***). SNs (H2) highlighted positive significant relation-
ship of small size (β = 0.19***). The result of SNs shows better relation-
ship than previous entrepreneurial intention studies (Engle et al., 2010;
Heuer & Liñán, 2013; Rueda et al., 2015) where SNs showed a weak
relationship with entrepreneurial intention. PBC (H3) disclosed the
strongest impact on SEI (β = 0.39***). Therefore, TPB factors were able
to explain the moderate percentage of social entrepreneurial variance
(R2 = 0.31). An R2 value of 0.11 showed that attitude towards becoming
a social entrepreneur and PBC points to the moderate variance of SNs.
Alternative Model 1 showed acceptable fit to the data (χ2/df = 3.62,
RMSEA = 0.051, SRMR = 0.060, NNFI = 0.88, CFI = 0.85,
AGFI = 0.82).
86 P. Tiwari et al.
Table 3.4 Overview of hypotheses

Hypothesis
Hypothesis accepted/rejected
H1: Attitude towards becoming a social entrepreneur has a Accepted
positive effect on social entrepreneurial intentions.
H2: Subjective norms have a positive effect on social Accepted
entrepreneurial intentions.
H3: Perceived behavioural control has a positive effect on Accepted
social entrepreneurial intentions.
H4a: Emotional intelligence is positively related to attitude Accepted
H4b: Emotional intelligence is positively related to Accepted
subjective norms.
H4c: Emotional intelligence is positively related to Accepted
perceived behavioural control.
H5a: Moral obligation is positively related to attitude Accepted
H5b: Moral obligation is positively related to subjective Rejected
norms.
H5c: Moral obligation is positively related to perceived Accepted
behavioural control.
H6a: Self-efficacy is positively related to attitude towards Accepted
becoming a social entrepreneur.
H6b: Self-efficacy is positively related to subjective norms. Accepted
H6c: Self-efficacy is positively related to perceived Accepted
behavioural control.
H7a: Social entrepreneurship education has a positive Accepted
effect on the attitude towards becoming a social
entrepreneur.
H7b: Social entrepreneurship education has a positive Accepted
effect on the subjective norms.
H7c: Social entrepreneurship education has a positive Accepted
effect on perceived behavioural control.
The second model tests the relationship between the effect of EmInt,
MO, SEff and social entrepreneurial education on attitude towards
becoming a social entrepreneur. EmInt (H4a) and SEff (H6a) highlighted
the positive significant relationship as (β = 0.20**, p < 0.01) and
(β = 0.18**, p < 0.01) with attitude towards becoming a social entrepre-
neur and MO (H5a), and social entrepreneurial education (H7a) showed
moderate effect (β = 0.13**, p < 0.01) and (β = 0.15**, p < 0.01) with
attitude towards becoming a social entrepreneur. The result of this

research is similar to the Zampetakis et al. (2009) where EmInt does not
directly affect attitude and intention but positively affect antecedents
used in the study.
The third model tests the relationship between the effect of EmInt,
MO, SEff and social entrepreneurial education on SNs. EmInt (H4b),
SEff (H6b) and social entrepreneurial education highlighted the positive
significant relationship (β = 0.19**, p < 0.01), (β = 0.22**, p < 0.01) and
(β = 0.18**, p < 0.01), respectively, with SNs. MO (H5b) showed the
insignificant relationship (β = −0.006, p < 0.208) with SNs.
The fourth model tests the relationship between the effect of EmInt
(β = 0.24**, p < 0.01), MO (β = 0.11**, p < 0.01), SEff (β = 0.16**,
p < 0.01) and social entrepreneurial education (β = 0.25**, p < 0.01) on
PBC. All the four antecedents showed a significant relationship with
PBC.
Discussion
The TPB
According to Krueger (1993), antecedents do not directly affect inten-

tion, but they affect attitude and which later influence intentions.
Therefore, in this research study, the authors used the TPB as the research
framework. The result of the TPB is in line with similar studies from
entrepreneurship: ‘attitude towards becoming a social entrepreneur’ and
‘PBC’ show high significant positive effects on SEIs. This implies that
the students who are expected to develop an SEI are those who have a
positive perception towards becoming a social entrepreneur. But fond-
ness towards the idea of becoming a social entrepreneur is not adequate;
the conviction that one could actually go through with it is also impor-
tant. The result of the study also suggests that SNs also affect the SEIs.
Findings regarding the result of SNs are contradictory to the previous
study of Ernst (2011) where SNs did not show any significant relation-
ship with the social entrepreneurship intention. Therefore, the role of
SNs should be explored further in the collectivist country like India
88 P. Tiwari et al.
where there exist strong family ties. Exerted pressure from the important
people and close surroundings does affect the decision-making process.
Hence, for the future research, SNs should be taken as the central factor
that not only affects intention process but also controls other factors’
interaction.
Antecedents
The relationship between antecedents taken and the constructs of the

TPB is found to be of relevance for the formation of SEIs.
Empathy showed the strongest relationship with attitude towards
becoming a social entrepreneur. This suggests that an ability to put your-
self in other’s situation means that individual will also be apt to perform
in a way that solves other’s problems. This shows that empathy plays an
important role in developing attitude and intentions. The findings regard-
ing SEff and SEI are in line with the findings of the previous study which
stated that SEff has been found to be significantly related to state occupa-
tional interests and occupational choice among college students (Boyd &
Vozikis, 1994). Hockerts (2015a) found out that social entrepreneurial
SEff showed a strong significant relationship with the SEI. The impor-
tance of SEff to predict SEI was also proved by Forster and Grichnik
(2013) and Ernst (2011).
Social entrepreneurial education also showed a strong positive signifi-
cant relationship. Identifying entrepreneurial education as an important
predictor of intentions, various researchers have emphasized that entre-
preneurship education should be included in entrepreneurial intention
model (Liñán, Rodríguez-Cohard, & Rueda-Cantuche, 2011; Peterman
& Kennedy, 2003). Exposure to entrepreneurial or social entrepreneurial
courses and training programmes changes individual’s attitudes towards
social entrepreneurship and thus affects their SEIs.
With this study, we have contributed to the growing body of empirical
literature on social entrepreneurship by synthesizing results from the lit-
erature on entrepreneurial intentions. This is probably the first empirical
study conducted in India in the field of social entrepreneurship. This
research study can be proved helpful in this part of the world where social
entrepreneurship as a phenomenon is growing at a tremendous speed,
but research in this field is still struggling to pave their path.
Practical Implications
The findings of the study have provided very important and useful implica-
tions for the government policy makers. The positive relationship of entre-
preneurship education and SEff is insightful for policy makers at the
Ministry of Human Resource Development (HRD) to establish the formal
social entrepreneurial courses in all secondary and tertiary learning institu-
tions, providing a better social or entrepreneurial environment and facilitat-
ing new venture creation in India. It is important to pay attention to trends;
students who become social entrepreneurs begin in their teens. Students
have to appreciate their role as future leaders within an ecosystem compris-
ing businesses, society and the environment. Internalization of the inter-
connectedness of economic, social and environmental concerns requires
continual reflective learning reinforcements across different disciplines of
academia to promote holistic grasps of the principles of sustainability.
Within this context, collaborative efforts between academic institutions,
corporations and society are required to provide input towards a more
comprehensive education system that addresses the relevant modus ope-
randi for sustainable development. Once they have the knowledge about
social entrepreneurship, this will encourage them to be self-employed. To
facilitate new social venture creation for the younger generation, the gov-
ernment should provide the funds and supporting infrastructures, as well
as remove the impediments in the social entrepreneurial career path. If
policies do not change, social entrepreneurs cannot thrive.
This study provides the extended model to the scholars for investigat-
ing the formation of entrepreneurial intentions among undergraduates in
the higher learning institution. The proposed theoretical framework may
be referred by other researchers in future studies. Eventually, it would be
interesting to use the measures developed here to test in longitudinal
studies whether social entrepreneurial education does indeed impact the
measures.
90 P. Tiwari et al.
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4
Why Worry About Your Impact?
Rationale, Challenges and Support
for Indian Social Enterprises’ Impact
Measurement
Anar Bhatt
Abstract For social enterprises, the impact assessment practice can serve
as an important differentiator from its commercial competitors, particu-
larly while attracting impact-focused capital. The development and
implementation of impact assessment tools for social enterprises have
piqued the interest of academicians as much as it has challenged the prac-
titioners. Followed by a discussion of how social impact is conceptualized
in theory, this chapter studies the actual tools used by social enterprises in
practice. Recognizing that the interdependence between social enterprises
and their funders is deeper as compared with other stakeholders, the
chapter details the various tools developed by and for impact investors. It
also reviews the challenges and the support available for impact assess-
ment for social enterprises in India.
Social enterprises in India have proliferated across high-impact sectors such

as agriculture, health, clean energy, education and affordable housing. Most
of these sectors have seen this boom within the past decade implying the
A. Bhatt (*)
IIM Ahmedabad, Ahmedabad, India

https://doi.org/10.1007/978-3-319-74488-9_4
100 A. Bhatt
youth and vigour of the social enterprises (Allen, Bhatt, Ganesh, & Kulkarni,
2012). Within these sectors, there exist equivalents, the conventional busi-
nesses, that cater to the same target consumers or community. The twofold
mission of achieving financial sustainability and social impact depicts the
hybrid nature of social enterprise (Doherty, Haugh, & Lyon, 2014). Social
enterprises in India have come to mean an entity that functions across the
two-way spectrum of profit-focus and social-focus resembling the ‘spec-
trum’ described by Dees (1998). However, many social enterprises, espe-
cially the for-profit ones, seem to lack any differentiator that marks them
apart from a conventional one which has a similar business model. This has
led to discussions among both academics and practitioners on the need to
create such a marker that identifies the concept of social enterprise.
Therefore, academicians studying such entities have focused on the pres-
ence of an organization’s primary mission to create social value as the defin-
ing aspect of it to be qualified as social enterprise (Dacin, 2011). Much like
non-profits, governments and some corporations, social enterprises have
started to measure their social impact. Social impact measurement exercise
can serve as an important differentiating tool for social enterprises that will
help them position their work and impact clearly among impact investors
and customers. This chapter attempts to understand the rationale behind
the social impact measurement undertaking of social enterprise, the role of
primary stakeholders in influencing the metric they used and brief review
of the existing impact measurement techniques in India.
Given the hybrid nature of social enterprises, the contemporary
research focuses on improving their efficacy in terms of finance, human
resource and operations, rather than adding to the already vast discus-
sions on definitions and taxonomy (Doherty et al., 2014). With the
increasingly ambiguous understanding of what a social enterprise is and
what sort of organizations identify themselves as social enterprises, there
is a need for a differentiating, qualification factor. The key feature that
distinguishes social enterprises should be their commitment to create
social impact, and a system to assess and measure the difference they cre-
ate is a clear marker of this commitment. Scale and sustainability are
often thought of in the context of an enterprise’s financial achievements.
Whether the impact is scalable and sustainable has received little a ttention
in social enterprise literature. Although such an attempt has been made
Why Worry About Your Impact? Rationale, Challenges… 101
by Cecilia et al. (2015) to classify available tools to measure social impact,

a study that makes this relevant to the social enterprise sector in India is
yet to be undertaken. After going through how social impact assessment
frameworks have been conceptualized in literature, the chapter dives into
the motivations of social enterprises to measure their impact. It gives an
overview of current practices, followed by key roadblocks.
onceptualizing Social Impact Assessment

C
Frameworks in Theory
The social impact assessment is an intricate process that requires a balance
between customization to the social enterprise’s context and standardiza-
tion to the sector norms and practices. This section also draws on the
frameworks that were developed to measure social impact for all kinds of
institutions. The dichotomous aim of the impact measurement exercise has
caught the imagination of academicians and practitioners alike leading to
plenty of innovative frameworks to find good in the work that social enter-
prises do, as outlined in Table 4.1. The balanced scorecard (BSC) concept
by Norton and Kaplan, when appeared in the Harvard Business Review in
1992, popularized the notion of measuring achievements and performance
Table 4.1 Social impact assessment frameworks by academia

Author(s) Tool Key features
Elkington The 3P’s approach Developed for corporations to measure
(1997) their social, environmental and
economic performance
McLoughlin SIMPLE Steps include scoping, mapping, telling,
et al. (2009) tracking and embedding the process
Bassi and SAVE Measures performance of organization,
Vincenti culture, value, governance, systems and
(2015) processes across macro, meso and micro
levels
Ebrahim and Performance Based on the scale (geographic reach) and
Rangan assessment scope (range of activities) aligned to the
(2014) framework mission of the organization
Source: Author’s own. 3P, people, planet and profit; SIMPLE, social impact for
local economies; SAVE, social added value evaluation
102 A. Bhatt
of companies beyond finance. The BSC included four dimensions: finan-

cial, customer satisfaction, efficient internal business processes and innova-
tion and learning (Kaplan & Norton, 1992). This was widely implemented
in organizations across the private and public sectors and customized for
social enterprises by Social Enterprises London (Kaplan, 2010; Watson &
Whitley, 2016). In his pioneering work, Elkington (1997) provides the
triple bottom-line assessment structure for corporate performance in terms
of social and environmental impact in addition to the economic achieve-
ments, encompassing the three Ps: people, planet and profit. Like BSC, the
three Ps’ approach has given direction to plenty of subsequent impact
assessment frameworks that measure their work along the three dimen-
sions. Another innovative method is the social return on investment
(SROI) grounded in the cost–benefit analysis theory, designed by the
Robert Enterprise Development Fund. Although it has been developed by
an organization, it has received attention from academia and practitioners
alike. It uses financial measures as proxies for every social objective of an
initiative which could be government scheme or service by an NGO or
social enterprise (Gutiérrez-Nieto, Serrano-Cinca, & Camón-Cala, 2016).
SROI is practised and accepted internationally by a variety of institutions.
McLoughlin et al. (2009) proposed a method that they call SIMPLE, short
for social impact for local economies. Testing the tool with 40 social enter-
prises, the researchers propose five crucial steps for the exercise to aid the
development of a social impact assessment system: scoping, mapping, tell-
ing, tracking and embedding. From the feedback that they received,
although social enterprises acknowledge the value of the lessons that such
an exercise offers, embedding the system within their operations is chal-
lenging. Although acknowledging that it is a time-consuming process, the
tool lays emphasis on communicating the measured impact with the social
enterprises’ stakeholders. More recently, academicians have come up with
tools that lay more emphasis on the individual, ground level realities and
challenges of social enterprises. Ebrahim and Rangan (2014) in their
empirical framework emphasize on elucidating the mission of the social
enterprise followed by the actions envisaged to achieve the mission in the
context of the magnitude of the issue to be solved: the framework they
propose is applicable to a variety of organizations while also allows for
customizing the metrics to the enterprise’s situation. Bassi and Vincenti
(2015) presented the social added value evaluation (SAVE) method of

assessment that includes aspects such as all kinds of resources with an orga-
nization, culture, value, governance, systems and processes. The method
was based on the hypothesis that a social enterprise creates impacts at
micro, meso and macro levels.
Although there are various tools to choose from, social enterprises’
motivation to conduct a social impact assessment and the adoption of a
methodology depend on the grant or investment-related compliances.
Barraket and Yousefpour (2013) in their study of five Australia-based
social enterprises suggest that although the impact assessment is driven
by the motive to gain legitimacy, the attitudes of senior management
determine the sustainability, consistency and continuity of this practice.
Social enterprises also adopt mixed methods to study their impact
(Clark, 2012). Studies on the social impact assessment methods that
social enterprises in India adopt indicate that qualitative methods (case
studies and focus groups) are widely used: common themes from descrip-
tive narratives from clients and beneficiaries are the basis for the selec-
tion of metrics (Haski-Leventhal & Mehra, 2015; Kulkarni, 2014). For
instance, a non-profit social enterprise uses qualitative methods where it
deems fit in addition to quantitative measures. For a project with orga-
nizing waste pickers, they include testimonies of members who report
reduction in harassment by police and increase in dignity after possess-
ing a company ID card that provides them with a recourse in an other-
wise hostile environment.
otivations of Social Enterprises to Measure

M
Impact
Findings from studies that look at motivation of for-profit entrepreneurs
put a question mark on the assumption about the validity of their claim
to fame through their social mission. Using the data from The Netherlands
and Belgium, Bacq, Hartog and Hoogendoorn (2016) critically examine
the legitimacy of the social entrepreneurial narrative wherein social
impact is supposedly prioritized over financial objectives and found that
the motives are rather mixed. Bacq et al.’s conclusions about European
104 A. Bhatt
social entrepreneurs are much like their Indian counterparts as a recent

British Council survey of Indian social enterprises suggests. Nearly three-
fourths of the social enterprises surveyed prioritize pursuing profit over
their social mission, unlike the remaining minority of 28% who focus
predominantly on social or environmental concerns (Natu, Singh,
Shandilya, & Jaiswal, 2016). These studies further raise conceptual and
practical issues with the validity of the social motivation claim of the
social entrepreneurs.
By the virtue of their focus beyond profit, social enterprises can be
perceived as organizations that take up impact assessment exercise with
the motive of increasing their outreach and performance. Evidence from
various studies indicates a contradictory scenario where social enterprises
measure impact primarily to validate their worth to their stakeholders,
using the metrics as a signal of their quality (Barraket & Yousefpour,
2013; Haski-Leventhal & Mehra, 2015; Kulkarni, 2014; Molecke &
Pinkse, 2016). It is no surprise then that the stakeholders influence the
method adopted by social enterprises to measure impact because they are
the primary audience of the resulting metrics. Indian social enterprises
are no exception. They assess impact to ensure deeper collaboration with
their varied stakeholders as well as obtain a reliable marker of their com-
mitment to social impact and quality while planning their forthcoming
interventions and initiatives (Haski-Leventhal & Mehra, 2015). However,
this does not necessarily mean silent compliance on the part of all social
enterprises. Social enterprises, in an attempt to cope with the pressure,
try to adopt a ‘bricolage approach of measurement’ (Molecke & Pinkse,
2016). Molecke and Pinkse’s concept of the bricolage approach points to
the tendency of social enterprises to blend diverse impact management
approaches that best suit their context rather than the standardized for-
mats prescribed by their dominant stakeholders (2016). This necessitates
a need for a more flexible approach for impact assessment, because no
two social enterprises have identical context even if the standardized way
seems to be the more ideal one. Therefore, Costa and Pesci (2016) empha-
size on the need for adopting a more diplomatic method to measure
social impact, one which takes into consideration the multitude of stake-
holders closely connected to the social enterprises.
ole of Funders in the Impact Assessment

R
Undertakings of Social Enterprises in India
The relationship between the social enterprises and their stakeholders,
especially the closely interlinked funders, influences the motivations,
decisions and practices around the impact measurement system followed
(Nguyen, Szkudlarek, & Seymour, 2015). Social enterprises invest in
social impact assessment because it ‘signals’ the relevance and quality of
their offerings and reduces the information asymmetry between the
enterprise and their stakeholders, particularly funders (Haski-Leventhal
& Mehra, 2015). Although most studies focus on what is the best way to
measure impact, this relationship is often ignored. So who measures
impact in India for social enterprises and what do they use to measure it?
The interdependence between social enterprises and their funders is
deeper as compared with other stakeholders. It is no surprise then that
the impact reporting system is dependent on and controlled by funders.
Most standard impact assessment tools, including the more recent cus-
tomizable ones, are created keeping this relationship between the impact
investors and their investee social enterprises into consideration.
It is challenging to ensure that social enterprises are funded such that
the desired social impact is realized, especially in a context where growth
and profit are primary economic goals (Chell, Spence, Perrini, & Harris,
2016). Moreover, where it is not certain that financial goals are achieved
by an enterprise, it is even more uncertain that it will be able to realize its
social mission (Clark, 2012). Despite this, as it is crucial for funders to be
constantly aware of the social enterprise’s financial performance, it is also
important for the impact investors to keep track of their portfolio enter-
prises’ progress in terms of their social goals. Funding agencies often have
a very stringent system of measuring impact that they expect their grant-
ees or investees to follow; however, the funders often do not clearly artic-
ulate their own system of assessing the social impact even if they can
potentially demonstrate social change on a large scale (Ebrahim &
Rangan, 2014). Fund with a clear social mission will be able to enforce
that commitment from its investees. A funder that prioritizes ethical
lending and attainment of social goals can assess a potential borrower’s
106 A. Bhatt
social and financial achievements to align it with the funder’s core mis-
sion (Gutiérrez-Nieto et al., 2016). This can be achieved through assess-
ing the past records of the social enterprise, its social impact, human
resources and available capital following the ‘social credit score model’
proposed by Gutiérrez-Nieto et al. (2016).
In its report published back in 2012, Gesellschaft fur Internationale
Zusammenarbeit (GIZ) recognizes various challenges that the social
enterprise sector faces in the impact measurement sphere: dearth of India-
relevant metrics was the primary one of all apart from severe scarcity of
authorized intermediaries that follow global impact measurement stan-
dards adaptable to entities working across diverse sectors and regions.
The report also points to the lack of transparency in investment deals by
impact investors. Since then, a wide range of initiatives have been under-
taken by various organizations towards developing impact assessment for
social enterprises, especially focused on the for-profit ones to enable com-
parisons of the scale of socio-environmental impact for investors.
Moreover, international donor and aid agencies such as GIZ, International
Finance Corporation (IFC) and United States Agency for International
Development (USAID) have been taking the lead to finance the develop-
ment of impact measurement systems for social enterprises. There are
several assessment systems in use by social enterprises through their
funders in India, as described in Table 4.2. Although some use the stan-
dard Global Impact Investing Ratings System (GIIRS) and Impact
Reporting and Investment Standards (IRIS) way of assessing impact, oth-
ers develop a more nuanced method suited to their context.
The GIIRS provides ratings to portfolio of investors seeking to measure
the impact that their investee companies are creating, such as the existing
standard credit risk rating agencies. The GIIRS ratings are based on the B
Impact Assessment (both developed by B corporation) and are considered
gold standard that encompasses a comprehensive review of an enterprise’s
engagement with its employees, clients, communities and environment as
well as its corporate governance system (B-Analytics, 2017). IRIS is an
online, freely available index of widely used, validated and recognized
metrics to gauge social, environmental and financial achievements of a
venture or an investment; the metrics are used by leading impact investors
and other funders, and the online guides are comprehensive for new users
Table 4.2 Social impact assessment frameworks by funders

Organization Tool Key features
B Lab GIIRS Follows a ratings approach, measures
the social and environmental
performance
Robert Enterprise SROI Financial measures as proxies for social
Development Fund objectives
Global Impact IRIS Developed by network of funders,
Investing Network offers standardization
Intellecap PRISM Brings forth the regional impact of fund
Legatum Ventures SII Measures impact through six
dimensions including behaviour
change and longevity of the change
Innovations for PPI Measures poverty levels of the clients
Poverty Action served by social enterprises
Acumen Fund Lean Data Focuses away from compliance and
emphasizes on practical ease of
implementation
Source: Author’s own. GIIRS, Global Impact Investing Ratings System; SROI, social
return on investment; IRIS, Impact Reporting and Investment Standards;
PRISM, Portfolio Risk, Impact and Sustainability Measurement; SII, Social Impact
Index; PPI, Progress Out of Poverty Index
to pick up (Global Impact Investing Network, 2017). IRIS is popular

because of its all-inclusive range of metrics as well as possibility of stan-
dardization to enable evaluations of differences in performance of various
investments (Sekar, 2015). One of the impact investors, Unitus Seed
Fund, follows the IRIS catalogue of impact metrics across the social,
financial and ecosystem areas to assess the performance of their invest-
ments (Sekar, 2015). The social impact category of metrics includes the
number of individuals living below the poverty line that the social enter-
prise has benefitted, as their client and as their employees, and the extent
of underserved areas that the social enterprise operates in, that is, the
backward states and districts. It also has sector-specific metrics to measure
the impacts their investee companies are m aking in the sector. For
instance, social enterprises within the agriculture portfolio of Unitus are
measured against four areas in which they enable farmers: access to inputs,
information, market linkages and financial services (Sekar, 2015).
Although IRIS does not have any verification system in place, using IRIS,
108 A. Bhatt
one can compare social performance of different organizations in the

same sector or region even if the individual enterprise can pick the metrics
they wish to report (Clark, 2012).
Although GIIRS and IRIS offer global standardization, there are oth-
ers that help funders align the assessment system to the Indian context.
Portfolio Risk, Impact and Sustainability Measurement (PRISM) was
developed by Intellecap, an India-based social sector consulting firm, in
collaboration with the GIZ and IFC. During the development phase of
PRISM, the starting point to identify the extent of potential impact was
to identify backward geographical regions of India based on district (local
government administrative unit) level data on development indicators
(Intellecap, 2016). It is one of the few metrics that factors in the context
within which the social enterprise operates in while assessing the impact
of the investment. However, its core focus is on the investment’s impact
rather than the difference the social enterprise is making, if any, because
the utility of the tool was for impact investors. The pilot testing of PRISM
was done by five funds: Unitus Seed Fund and Omnivore Partners in
addition to the three funds of the Intellecap-affiliated companies—
Aavishkaar India Micro Venture Capital Fund, Intellegrow and
Aavishkaar-Goodwell Fund I (Intellecap, 2016). Assessing its utility,
United Seed Fund testified PRISM’s adaptability and multi-dimensional
approach as its comparative advantage (Sekar, 2015). More recently,
Acumen Fund introduced ‘Lean Data’ that lays more emphasis on the
enterprises’ needs and less on compliance requirements. It uses low-cost
mobile technology such as SMS to collect data from social enterprises’
users and customers (Adams, Gawande, & Overdyke, 2015). Legatum
Venture, another eminent impact investor and part of the Legatum
group, has invested in the financial inclusion sector in India. The Legatum
Foundation has developed a SII to support socially responsible and moti-
vated investors to distinguish investments that are aligned to their own
goals from regular ventures. The SII is envisioned to be ‘defensible, trans-
parent, comprehensive, comparable, replicable, and maintainable’. The
Index includes six core components: breadth of impact—the number of
people the venture or undertaking benefits; changing paradigms—the
extent of change in behaviour and attitudes of the people it worked with;
well-being—the level of increase in the standard and quality of living
experienced by the beneficiaries; empowerment—the agency and auton-

omy that a community has to pursue its goals; depth of impact—the
extent of ‘lasting, positive changes’ in the lives of impacted individuals;
and quality of project implementation—assessing the efficacy of the project
implementation (Legatum Foundation, 2017). The PPI developed by
Innovations for Poverty Action, as the name suggests, can be used as a
metrics for assessing the poverty levels of clients that social enterprises or
businesses serve. The Index, because it is a measure of income, is objective
and can be a reasonably standardized scale to compare a variety of social
enterprises operating in different contexts. Used in combination with
other indicators of impact assessment, a social enterprise can get a more
complete picture of the improvement in the well-being of their clients
(Innovations for Poverty Action, 2017).
There have been several initiatives to develop relevant metrics for
impact assessment of investments in social enterprises that are both rele-
vant and standardizable while being affordable to resource-constrained
social enterprises. Impact assessment is an activity that previously did not
fetch any financial benefits, although it meant that social enterprises must
bear the cost of the logistics of implementing the measurement system.
Now with an increasing number of investors who care about impact,
social enterprises see value in investing resources to measure the differ-
ences they are making to the community, society and the environment.
According to the British Council survey (2016), Indian social enterprises
can avail acceleration services from organizations that open doors to
funding and mentorship in addition to research assistance in developing
impact reporting metrics suited to the enterprise (examples they mention
include The Centre for Innovation Incubation and Entrepreneurship at
the Indian Institute of Management, Ahmedabad, and Dasra’s Social
Impact Accelerator Programme). However, as compared with incubators
and accelerators, the funders, donors and investors are more equipped to
and adept at measuring and tracking various kinds of performance of
their grantees and investees, respectively; this is partly owing to the stakes
that the investors have in their portfolio companies while investing in
them (Kulkarni, 2014). Therefore, of the various kinds of support orga-
nizations working with social enterprises, funders are in a relatively better
position to implement social impact system. This resembles the scenario
110 A. Bhatt
in Vietnam where the mutual dependence between the social enterprises

and the organizations that fund them determines the formers’ system of
impact measurement (Nguyen et al., 2015).
Impact Assessment Support Available to Social

Enterprises
There is a plethora of organizations that offer social impact assessment
services at different levels of granularity and domains across high-impact
sectors. In addition to large consulting firms such as McKinsey &
Company, Price Waterhouse Coopers and Ernst and Young, there are
social innovation ecosystem enablers such as Unltd India, Intellecap and
Dasra that work with social enterprises on measuring their impact.
McKinsey in collaboration with the Foundation Center created TRASI,
short for Tools and Resources for Assessing Social Impact (McKinsey,
2017). Despite the number of solution providers available, the ones that
specifically cater to the needs of social enterprises are limited.
S3IDF enables a supportive ecosystem for small and micro-
entrepreneurs who deliver infrastructure services to the poor who other-
wise lack access to grid extensions, irrigation canals or piped networks. It
provides access to finance, technology and business development support
to these entrepreneurs and measures its impact along five dimensions.
First is the benefits accrued to the end-users of the infrastructure services
measured through the number of end-user families or businesses, and
increased income or convenience for the end-user business. Second is the
economic performance of the infrastructure delivery enterprises them-
selves measured through the entrepreneur’s income, productive assets and
the jobs created by the enterprise. Third dimension is the positive or neg-
ative net environmental externalities created by these enterprises assessed,
for instance, through the quantum of kerosene displaced by use of solar
lighting and therefore reduction in carbon emissions. Fourth aspect is the
measures indicating ecosystem changes that enable such businesses: capi-
tal leveraged from local banks of other financial institutions, technologies
adapted and technology suppliers creating such small-scale solutions.
Finally, the indicators of social change are captured through narratives

such as how increased income led to children of entrepreneurs or end-
users going to school or increased economic participation of women.
Similarly, Catalyst Management Services (2016) in their service offering
of impact assessment customizes the metrics to be used for their clients,
using both the existing ones such as PPI and SROI to newly developed
ones. Niiti Consulting offers impact measurement services to corporates
for their CSR initiatives, non-profits for their development interventions
and social enterprises for the products and services. Their services include
developing a strategy for impact measurement, implementing the exer-
cise, followed by detailed reports (Niiti Consulting, 2017).
The forums and associations representing social enterprises and impact
investors in India have acknowledged the importance of impact measure-
ment for the sector, but have taken limited tangible measures to ensure
and encourage best practices. The National Association of Social
Enterprises, formed in 2012 to give advocacy platform to its members,
articulated developing code of conduct for social impact assessment met-
rics as one of its core objectives (Gooptu, 2012). However, what actions
it has taken to enforce such a code on its members is not clear. Indian
Impact Investors Council (IIIC) is a member-based association of socially
responsible and motivated investors. IIIC provides support to the indus-
try and members in terms of standardized impact assessment. Its
Definitions and Measurement Sub-Committee, comprising members
such as Acumen, Caspian and Michael and Susan Dell Foundation, over-
sees the development of impact assessment metrics framework to ensure
standard and regular reporting. Both the associations have identified the
need for measuring impact as one of the factors that will serve as a dif-
ferentiator for impact investments and social entrepreneurship from their
regular counterpart and envisage support through research (Dutt et al.,
2014; Gooptu, 2012; Indian Impact Investors Council, 2016). The
Social Audit Network of India, which primarily worked with large-scale
corporations and NGOs, has begun to support social enterprises by pro-
viding them with training through their Centre for Social Initiative and
Management (San India, 2010).
112 A. Bhatt
The Roadblocks on the Way to Measurement

Social enterprise runs into various hurdles while assessing social impact,
particularly because they work and collaborate closely with a wide range
of stakeholders who in turn try to influence the enterprise’s decisions
resulting into paradoxical situation within the organizational context
(Barraket & Yousefpour, 2013). Allocating already scarce resource in
terms of time and money on measuring impact will mean compromising
on other endeavours of the social enterprise, and if this exercise does not
result into some tangible, actionable insights, the organization may lose
motivation to remain consistent with the process. For instance, the
impact of a certain intervention by the social enterprise on its client or
beneficiary’s behaviour is difficult to measure but has important implica-
tions while designing the impact measurement strategy (Haski-Leventhal
& Mehra, 2015). In addition, the impact measurement exercise carries
the risk of misattribution and establishment of false causality—it is pos-
sible that an improvement in a social outcome can be because of factors
beyond which the social enterprise has influenced (Haski-Leventhal &
Mehra, 2015).
Because the social enterprises are short on means in terms of finance,
technical know-how, time and manpower to measure impact, a stan-
dardized measure will save time on designing a new one (Haski-
Leventhal & Mehra, 2015). The standard measure, however, has its
own limitations while applying to social enterprises because many of
the assessment systems are suited for larger companies and not early
stage for-profit social enterprises with a small team (Sekar, 2015). It is
imperative to ensure that assessment is instrumental in scaling impact
and not only a mere compliance requirement exercise for funders.
This will mean that social enterprises should be able to afford to carry
out such an exercise and make it part of their routine processes. For
this, social enterprises need to participate in the building and imple-
mentation of impact assessment system to ensure that the goals of
various stakeholders involved in the measurement are in tandem
(Noya, 2015).
Concluding Notes
Donald Campbell in his groundbreaking work initiated the debate on the
importance of measuring initiatives that claim to improve human lives.
There have been plenty of methods and approaches in line with the diverse
views because the debate is still ripe on the best way to measure impact. The
starting point was measuring public sector programmes by the government
and the NGO sector. Although the ecosystem for the NGO is better devel-
oped as compared with that of social enterprises, the argument is still alive
on whether the social enterprise is liable to measure impact because it is also
sustaining its own operations. Apart from the handful of academic attempts
to classify the assessment tools, there has been no systematic attempt to
map the available social impact assessment systems against the needs of
Indian social enterprises. TRASI, an online resource of about 150 tools, is
an attempt towards that, but it lacks user-friendliness because it only sorts
according to the owner of the tool and the type of tool. A more granular
filter on average cost and key metrics used would help social enterprise and
impact investors make a more informed and quicker shortlist.
Focusing on social impact assessment can be tough for social enter-
prises given the pressure to survive and thrive within their respective sec-
toral contexts which include unique challenges within the value chain
within which the enterprise operates. With these survival challenges, how
do social enterprises invest their resources in measuring social impact that
proves the legitimacy of its claimed social mission? Assistance from
funders helps them initiate the process while they undertake the exercise
to fulfil the funding norms. However, entrenching the practice within the
operations of the social enterprise without putting additional burden is a
gap that is yet to be filled. If the existing metrics are standard, they do not
fit the social enterprise’s context, and if they meet these two criteria, they
fail to meet the needs of an enterprise in its early stages. An ideal impact
assessment system should be as follows:
1. Standard that can be compared across social enterprise for investor to use
2. Suited to regional, social and cultural context
3. Relevant to the growth stage of a social enterprise
4. Inclusive of the sector in which it operates
114 A. Bhatt
Who should bear the time, effort and financial cost of social impact
assessment remains a debated topic, both in the academia and practitio-
ner worlds; the importance of the assessment practice, however, is only
increasing. Impact assessment should serve as a key differentiator for
social enterprises from their conventional competitors. Using it as a tool
to demonstrate the impact that they are creating, it can strengthen their
credibility as a socially and economically relevant businesses.
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Part II
Sustainable Business Models and
Impact Investing
5
Towards a Better Understanding
of Business Models of Social Enterprise
in an Uncertain Institutional
Environment
Deepika Chandra Verma and Runa Sarkar
Abstract Social enterprises, like other organizations, need to change

their business models under uncertain institutional environment, to sus-
tain. All organizations engaged in the social sector are not social enter-
prises. The difference is important because to social enterprises, the aim
is not only value creation and sustainability but also empowerment of its
customers and the local community. This chapter demonstrates how
social enterprises survive in uncertain institutional environments through
a continuous adaptation of their business models through comparative
case studies of two organizations working in the social sector trying to
address infrastructure gaps of poor access to electricity and open defeca-
tion. It also aims to show the difference in the business models of social
enterprises and social businesses that gets revealed when organizations are
faced with a dilemma.
D. C. Verma (*) • R. Sarkar

IIM Calcutta, Kolkata, India
e-mail: deepika11@iimcal.ac.in; runa@iimcal.ac.in

https://doi.org/10.1007/978-3-319-74488-9_5
120 D. C. Verma and R. Sarkar
Introduction
Social enterprises emerged to address the mass poverty and absence of
markets in developing countries (Santos, 2012; Seelos & Mair, 2007).
Such ‘striking social’ entrepreneurial ventures ‘address basic needs’ (Santos,
2012). Extant literature clarifies its stand that the predominant focus of a
social enterprise is value creation instead of capturing value (Santos,
2012). However, this implies neither that social enterprises do not need
profits to sustain nor that creating a business model is a one-time exercise.
However, there is a need to segregate social business from social enterprise.
It is true that private sector organization too can create value for the bot-
tom of the pyramid sustainably (Velamuri, Anant, & Kumar, 2015), but
all private businesses engaged in the social sector are not social enterprises.
This further implies that a private business engaged in the social sector is
more inclined towards value capture than a social enterprise, and the dif-
ference gets revealed more clearly when such organizations face a dilemma.
This chapter demonstrates this by focussing on understanding changing
business models under an uncertain institutional environment of two
organizations engaged in the social sector addressing two basic needs,
power and sanitation through comparative case study analysis.
Energy poverty is a serious problem in India. In 2005, the electrification
rate was 62%, that is, there were 412 million people without access to
electricity (International Energy Agency, 2007). About 48% of this popu-
lation was rural. Grid-based electrification is often not available to remote
villages and households, because of the infeasibility of expanding the dis-
tribution network to sparsely populated areas. In 2005, the cost of con-
necting all to the central grid was estimated to be around $17 billion
(International Energy Agency, 2007). In 2015, there were still 240 million
people with no access to electricity in India (International Energy Agency,
2015). Grid extension (GE) has environmental issues too that are rooted
in its energy source which is largely thermal. The poor power condition has
been a huge gap and a policy challenge. Power Tech Company (PTEC;
name masked for anonymity) is an organization that has been generating
and distributing clean power in rural India for the past ten years.
Another large infrastructural issue India faces is open defecation. Around
600 million people defecate in the open in India (WHO/UNICEF, 2014).
Towards a Better Understanding of Business Models of Social… 121
About 53% Indian households do not have a toilet (‘More than half of
Indian households don’t have a toilet’, 2013). The rural households are even
worse off. A total of 70% of rural households do not have any access to
toilets. Unavailability of water in many rural and urban areas acts as a deter-
rent of using enclosed toilets (Routray, Schmidt, Boisson, Clasen, &
Jenkins, 2015). There are no sewerage plants in rural India. The direct dis-
charge of sewerage is polluting three-fourths of the country’s water bodies
(Mallapur, 2016). Bio Toilet Private Ltd (BTPL; name masked for ano-
nymity) is an organization that works with NGOs to install bio-toilets in
rural areas.
We will compare the institutional environment of each organization as
well as how their business models evolved over time to understand the
following:
(a) What were the uncertainties faced by each organization at different

points in time and what was the relationship between these risks and
the institutional environment?
(b) How were the changes in each organization’s business model related
to the uncertainties of the institutional environment?
(c) What is the difference between the business models of social enter-
prises and social businesses?
This chapter is organized as follows. Section ‘Literature review’ reviews

the literature. This is followed by a brief section on methodology. The
case studies are described in section ‘Case studies of PTEC and BTPL’. In
section ‘Analysis’, the research questions are explored with the help of the
two cases. Section ‘Conclusion’ concludes the chapter, with some answers
to the above questions.
Literature Review
Social enterprises need to be sustainable and scalable (Lumpkin, Moss,
Gras, Kato, & Amezcua, 2013). Sustainability for social enterprises is also
seen inclusive of environmental sustainability so that social enterprises
while causing positive social change do not lead to another social problem
in the form of environmental degradation. Scalability refers to the speed

and ease with which a system can be expanded (Lumpkin et al., 2013).
Scalability is important in the context of social entrepreneurship because
it implies an increase in the impact of social change created by social
enterprises. However, attaining the goal of sustainability and scalability is
not always easy for social enterprises. They often face an uncertain envi-
ronment because of poor institutional support. In fact, social enterprises
are viewed as organizations characterized by significant level associated
with risk (Defourny & Nyssens, 2010). Their financial viability depends
on the ability to secure adequate resources especially based on the share of
income earned through economic activity (Defourny & Nyssens, 2010).
Although the goal of long-term survival fused with environmental sus-
tainability is desired by social enterprises to maximize social benefits,
often the ventures with environmental products are prone to additional
uncertainty on account of slow social acceptance because of behavioural
and institutional reasons (Verma & Sarkar, 2017). Similarly, each project
started by social enterprises cannot be scalable. However, scalability is sig-
nificant for social enterprises especially if they deal with social innovations
(Defourny & Nyssens, 2010). The scaling up of social enterprise and
social innovations is symbiotic and also fraught with risk (Defourny &
Nyssens, 2010). With risk being a crucial aspect of social enterprise sus-
tainability, managing risks becomes necessary.
Social enterprises face the dual challenge of creating social value and
managing risks in an uncertain institutional environment. Business
model becomes an essential tool for social enterprises as it describes the
rationale of not only value creation, delivery and capture (Osterwalder &
Pigneur, 2010) but also risk management (Corkindale, 2010; Mohr,
Sengupta, & Slater, 2005) by building capacities and strategic alliances
with other organizations, government agencies and development practi-
tioners (Seelos & Mair, 2007).
Past research has focussed on how organizations engaged in the social
sector can serve the poorest of the people and earn profits simultaneously
through innovative business models (Linna, 2012; Mair & Marti, 2009;
Seelos & Mair, 2007). Organizations successfully engaged in the social
sector may also need to revise their business model over time to manage
risks resulting from unforeseen institutional changes that need changes
which require overcoming the set mental models conceptualized by man-

agement about the institutional environment (Sosna, Trevinyo-Rodríguez,
& Velamuri, 2010). Recent work (Velamuri et al., 2015) while compar-
ing business models of private firms with not-for-profit trusts shows that
private sector organization too can create value for the bottom of the
pyramid sustainably. However, all private businesses engaged in the social
sector and targeting bottom of the pyramid are not social enterprises
(Santos, 2012). They can be for-profit with corporate social responsibility
(CSR), social businesses or social enterprises (Wilson & Post, 2013).
CSR initiatives are a percentage of profits diverted to social sector by a
profit-maximizing firm (Yunus, Moingeon, & Lehmann-Ortega, 2010).
Social businesses aim at both profit and social value creation (Wilson &
Post, 2013). Social enterprises aim at offering sustainable solutions to
problems with ‘local expression but global impact’ and are predominantly
focussed on value creation. They promote value creation and empower-
ment (Santos, 2012). The two kinds of organizations are often treated
alike because of their similarities.
Therefore, the aim of this chapter is to investigate whether all private
organizations working in the social sector are social enterprises or not. The
authors propose that organizations reveal their true location under uncertain
institutional environment. The authors thus study and compare the chang-
ing business models of two organizations engaged in the social sector.
Methodology
This chapter compares two case studies (PTEC and BTPL) in the two
changing institutional environments engaged in addressing infrastructure
gap (power generation for the rural poor and eradicating open defecation,
respectively) through environment-improving innovations in a develop-
ing country (India) with a focus on evolving business model. The insights
from social enterprise literature are tested using this analysis. The chapter
uses comparative case study analysis because case study research ‘focuses
on understanding dynamics present within single settings’ (Eisenhardt,
1989) and provides ‘thick descriptions of single or multiple cases’ to
deepen understanding, test or generate theories (Eisenhardt, 1989).
The data collection and analysis were iterative and interdependent.

The data collection and analysis commenced in late 2014 and continued
till early 2017. In the first stage, questionnaires were prepared based on
the secondary data collected online on the two organizations. These ques-
tionnaires were e-mailed to their management along with a small write-
up. In some cases, the questionnaires were followed by Skype and

telephone conversations. After the emergence of a clearer picture of the
organizations through these data, the gaps in the authors’ understanding
were identified. These gaps helped the authors when they made field visits
to the site. In the next step, the authors developed cases using the primary
and secondary data (please refer to Verma and Sarkar (2017) for the
PTEC case and Sarkar and Deepika (2016) for the BTPL case; the
authors may be contacted for further information regarding the case
studies) to illustrate how innovations are translated into business models.
The final round of analysis aimed at engaging with the collected data to
develop a deeper understanding of business models of social enterprises
in an uncertain institutional environment.
Case Studies of PTEC and BTPL

This section presents the two case studies. PTEC is an organization that
has been generating and distributing clean power in rural India for the
past ten years. BTPL is an organization that works with NGOs to install
bio-toilets in rural areas. The case study on each organization will focus
on its business model innovations and the motivations for such innova-
tions in brief. These innovations will be explored in this section to answer
the research question identified through the review of the literature.
PTEC Case
Triple-P Foundation (TPF; name masked for anonymity) was set up as

an NGO in 2007. Its goal was to empower rural poor by spreading clean
energy solutions. The founders of TPF had invented a 35-kW compression-
ignition engine that was able to run on pure producer gas to generate
power using the locally available organic material. The gasifier had the
ability to use multiple types of feedstock. It replaced fossil fuels for gen-
erating power completely while using the locally available material. After
finishing their prototype, TPF got a financial grant from the Ministry of
Renewable Energy. It set up a biomass energy generation and distribution
plant in a remote Indian village. Because of its earning plus funding from
other sources approach for sustainability, TPF’s services though very
cheap were not free. In 2008, it was registered as a private limited com-
pany, PTEC, probably because of an expectation of raised income beyond
what was permissible under the society’s registration act which was a
result of its expanding operations. In these villages, PTEC installed and
operated biomass-powered AC mini-grids.
PTEC’s founders had initially devised a rigorous cleaning and mainte-
nance programme of the biomass char that aided its 35-kW compression-
ignition engine to run on pure producer gas. PTEC’s cleaning mechanism
was later automated under the guidance of Shell Foundations which pro-
vided PTEC technical, financial and visionary support since 2008. A
single PTEC biomass plant supplied power to about 500 households and
small businesses through a local electricity grid. The gasifiers were used in
AC mini-grids extending 1.5 km and supply minimum 6 hours of power
on a pay-as-you-go system. Each plant used three quintals of rice husk
per quintal. PTEC’s revenue target for each plant was about Rs 40,000
per month in 2014. Users paid a minimum of Rs 100 per month with a
connection charge of Rs 100. The plants were installed after a pre-
installation energy audit of households to assess the demand, determin-
ing the community’s paying capacity and obtaining commitments from a
minimum number of households for revenue guarantee. Each plant was
a near replica with the same kind of gasifier, generator and layout. PTEC
received Rs 7.80 lakhs for each plant from the Ministry of Renewable
Energy. The standardized layout, low fixed cost and negligible expense of
civil works allowed for economies of scale and easy relocation. The small-
scale generation enabled the off-grid villages to access electricity for the
first time. Families were able to replace smoky kerosene lamps with
brighter electric light and use phone chargers, radio and TV at home.
New businesses in need of electric power to run machinery could be
started, and the existing businesses were able to extend their working
hours with better light. In its operations, PTEC minimized its wastewa-
ter discharge by recycling water in the cooling plants.
Because of issues embedded in the behaviour of the locals who were
PTEC’s clients/beneficiaries, it faced several roadblocks trying to estab-
lish trust. PTEC sought to increase its stakeholders’ involvement by
encouraging them to work with it directly. Some of these efforts were
employing locals, sourcing raw materials locally, leasing land from locals
instead of the government, hiring local women to manufacture incense
sticks using the biomass plant waste, offering the locals to become fran-
chise partners and training locals.
By 2010–11, PTEC had expanded to nearly 80 plants across the region.
However, the extension of the National Power Grid to some locations with
PTEC plants hit it hard. Because of the distinct advantage in the quality
of service, these PTEC plants lost their clients/beneficiaries. PTEC real-
ized that it had to revise its business model to adjust for this loss. It aimed
to capture the remoter areas which were infeasible locations for the exten-
sion of the grid. PTEC’s experience with solar micro-grids in Africa helped.
Since 2012, PTEC also installed solar DC micro-grid extending 300 m to
reach remote hamlets with a meagre population. Off-grid solar DC micro-
grids, powered by rooftop photovoltaic (PV) systems, worked well for
electrifying remote locations. Each micro-grid served 10–20 households at
a time for 6 hours per day. Each house connected was metered through
world’s lowest cost smart pre-paid meter designed by PTEC to keep the
cost of monitoring, against electricity theft, low because the solar micro-
grid connected less affluent locations with low population density. The
solar PVs were manufactured by the technical partners of PTEC. The solar
DC micro-grids had several advantages over the biomass AC mini-grids,
such as lower cost of operation, less labour and no need to manage waste.
However, the capital expenditure of this system was relatively higher (more
than twice) because of the high cost of deep cycle rechargeable batteries to
store electricity for use in not so sunny weather. In 2016, around 2500
households are powered through the DC micro-grid.
From 2014, onwards, PTEC realized that its beneficiaries’ expectations
regarding power supply and service quality had increased because of the
constant comparisons with the grid-electrified villages in the neighbourhood
of PTEC villages. Moreover, the lack of enough institutional support and
committed financing threatened PTEC’s sustainability. PTEC, since its TPF

days, had aimed at improving its service quality by generating and distribut-
ing solar power during the day and biomass power at night. This plan was
executed, and in 2015, PTEC successfully launched its first biomass and
solar-powered hybrid plant, which made it one of the cheapest energy plants
that effectively served rural low-income communities by producing electric-
ity through solar grid during the day and biomass gasification at night with
comparable service quality to the National Power Grid.
By the end of 2015, PTEC had 70 operational plants supplying power
to 20,000 households across 350 villages and employed 375 rural people
in various capacities with 17 locals as its franchisee partners. PTEC had
also started marketing its incense sticks under the brand name ‘Jasmine’.
It was also extending its hybrid model to its other locations. Table 5.1
gives a picture of what PTEC does at a glance. PTEC has kept revising its
business model in the absence of adequate institutional support to remain
sustainable. PTEC’s business model innovations have made it one of the
world’s lowest cost biomass and solar energy-commercialized venture.
Table 5.1 PTEC at a glance

Services Details
Power services • Domestic and commercial power supply through
biomass gasification through its eco-innovation
• Domestic power supply through solar DC micro-grids
• Domestic and commercial power supply through
hybrid model
Environmental • A net saving of around Rs 3 crores and
services 15,000 tonnes of carbon dioxide equivalent
per annum
• Supply of rice husk from local rice mills
• Sourcing of other materials locally to reduce carbon
footprint
Livelihood services • Employment to locals in plant operation
• Employment of local women in incense stick making
• Training university for skill development
Social services • Obvious social advantages of electrification
• Metering instils value of electricity and prevents its
wasteful consumption (another eco-innovation)
Business • Franchisees to involve locals and business training
development • Local value addition—rice husk to power, rice husk
services ash to incense sticks
Source: Verma and Sarkar (2017)
BTPL Case
Original equipment manufacturer (OEM) CORP (name masked for ano-

nymity) was set up in 2008 by the founder of BTPL. It functioned as a
service agent for OEMs of controlled discharge toilet system (CDTS).
(CDTS discharges waste on the run only after the train speed reaches
30 kmph. This way discharge takes place away from the station.) Its job
was to monitor and maintain the toilets on behalf of the companies that
had made the installations in the railways and provided the spare parts.
OEM CORP worked on trains starting and stopping from and at the sta-
tion. The OEM CORP team saw the problem and contacted the system
vendors for solutions on the phone after which the actual serving took
place. The team maintained a job-card to track how much time and mate-
rial went into the maintenance. The regular maintenance led to an
improvement in the system and an increase in the efficiencies of the team.
Eventually, the coaching depot officers and the senior divisional mechanical
engineer took interest and started appointing specific people for the work-
ing and maintenance of the system. OEM CORP by this time had begun
supplying spares of CDTS to the railways as well. Its experience in CDTS
maintenance led to the formation of a network of supporting institutions
for OEM CORP.
CDTS was not an entirely environmental product and was more like a
piecemeal measure to take care of the conditions near the railway sta-
tions. The problem of waste discharge on the tracks persisted in places
away from the station that corroded the tracks. Around 2010, Defence
Research and Development Organization (DRDO) decided to release
licences for the commercial production and sale of its innovation, biodi-
gesters. A prototype was made for the railways in 2011.
The biodigester technology used anaerobic bacteria to decompose fae-
cal waste. DRDO developed a specific strand of anaerobic bacteria that
had a very long shelf-life and released only pathogen-free water as output.
Therefore, the railways decided to replace CDTS with biodigesters to
prevent corrosion of rail tracks from faecal waste discharge.
OEM CORP through its railway network became aware of this devel-
opment. BTPL was founded and was one of the first three firms to get the
licence of manufacturing biodigester in 2012. OEM CORP was merged
with BTPL around the same time. It did six installations of bio-toilets in
Odisha. It bagged a Rs 15 million contract from the railways to supply
biodigesters. BTPL’s manufacturing plant became operational in the
period between 2012 and 2013. BTPL reduced the cost of manufactur-
ing biodigesters from Rs 50,000 to 25,000, and then to Rs 20,000. It
started catering to retail clients from 2013. In the financial year 2013–14,
it secured booked orders worth Rs 100 million. Its customer base
expanded to include several construction and manufacturing firms. Later,
it also worked with schools and environmentally conscious urban house-
holds to install biodigesters.
Its business model was to design and manufacture toilet shelter and
biodigester and produce the inoculum off-site. The three components
were then transferred to the site. The BTPL team supervisor recruited
local labour for installation. After installation, the bio-toilet was handed
over to the client.
Biodigesters have an obvious advantage in solving the issue of open
defecation in rural areas. The structural reasons for the issue of open
defecation are the paucity of potable water, sewage treatment facilities
and poor drainage. Biodigesters function with a little water and do not
require a drainage or sewage treatment facility because of its ability to
treat faecal waste at source. Understanding this, in 2014, BTPL worked
with an NGO to install 20 biodigester toilets in a small village. BTPL
was not able to retain its further because of lack of institutional
support.
As a small firm, profits were crucial for further expansion of BTPL.
Despite a mission‚ to reach to places where toilets are rare, serving the
rural market was a challenge because of lack of committed finance on one
side and a jittery flow of funds from the NGO. It faced other issues such
as loss of worker-days (because of funding), lack of availability of local
labour and poor communication with the locals. Policy too acted as a
deterrent as rural panchayats were explicitly directed to keep the toilets
for rural households affordable and within the allotted subsidy range of
Rs 7000. Because of these constraints, BTPL finally chose to work in
rural areas only on government contracts as it did in Odisha.
BTPL’s start-up capital expenditure was Rs 1.25 crore. Since its
inception, it has won several awards and accolades both nationally and
internationally. With a total of 75 employees and 3 manufacturing

units, it had done 1200 installations apart from the railways from 2013
to 2015. By 2015, it had reached the rate of 1300 installations for rail-
ways per day with a total production of 8 lakh litres of inoculum. Its
clientele ranged from the railways to academic institutes, NGOs, foun-
dations, non-profit organizations, infrastructure and construction com-
panies, government bodies, Indian companies and MNCs including
PSUs, MP/MLA Local Area Development Scheme, municipal corpora-
tions and residences.
Analysis
The following analysis aims to understand the relationship between risks
and the institutional environment of the two organizations at different
instances, the role of business model changes in managing risks, which busi-
ness model changes become successful and why, and identification of social
enterprise by locating both organizations on the organizational landscape.
Institutional Environment and Risks
The institutional environment kept on changing for PTEC because of

the populist policy measures at the local level, bureaucratic and investor
reluctance to subsidize or invest in new ideas and resistance by locals at
new power-plant locations. BTPL’s institutional environment relatively
was more stable except in the rural household segment. The main factors
for the changing institutional environment were inconsistent policy rec-
ommendations and lack of financial support. Table 5.2 presents the case
data coded by risk type.
Both organizations are at risk from the changing institutional envi-
ronment despite past success. Thus, it is evident that neither initial com-
mercial success with an innovative business model nor developing
short-term dynamic capabilities implies long-term sustainability for
organizations.
Motivation Behind Business Model Changes
The risks identified from the data show that both organizations faced a
relatively uncertain institutional environment. The two organizations
kept revising their business models to manage these risks and keep them-
selves sustainable. Table 5.3 identifies how business model changes adapt
to different categories of risk and other reasons behind the business model
changes at the two organizations.
PTEC began as an NGO and had to switch to being a private limited
company because of the expectation of higher income that would have
caused registration issues. Although it changed its business model, its
commitment is more towards stakeholders than shareholders. For BTPL,
the first changes occurred with the modification of activities when it
started manufacturing and selling biodigesters along with performing
the service component of the business it inherited from OEM CORP. The
Table 5.2 Disabling institutional environment and risk

Disabling institutional environment
Risk/uncertainty type PTEC BTPL
Political risk: risk Inconsistent policy: Inconsistent policy because
because of policy • Locations considered of
lacunae infeasible for GE • DRDO intimation to
earlier, grid government agencies:
electrified biodigester licensee
• PTEC had to move firms could be
out approached for
installation of
bio-toilets, individual
houses and social
projects (Nov, 2014)
• Cost-effectiveness
advised by SBM for
toilet installation in
rural households (Dec,
2014)
• Allotted subsidy for
Individual Household
Latrines in rural
areas—Rs 12,000
• Minimum cost of
bio-toilet—Rs 20,000
(continued)
Table 5.2 (continued)

Social risk: risk Partial social acceptance: Social acceptance:
because of lack of • Resistancefromlocals- • Local panchayat’s
social capital • expected risk of support important
cattle getting • BTPL an outsider
electrocuted from
distribution wires
• PTEC owned by
people outside
village community
Mismatch between
aspirations and reality:
• Customer/
beneficiaries
content with 6 hours
electricity in early
years
• GE in selective
locations
• Constant
comparison with
grid-electrified
neighbouring
villages
• Increasing
dissatisfaction
Financial risk: risk Lack of committed Lack of committed finance:
because of unstable finance: • Major bulk of start-up
financial support • Some investors left capital sourced from
because of personal funds
difference in vision because of lack of
• Difficulty finding investors
investors for solar
DC micro-grid
because of risks
associated with
• Untried new
business model
• Renewable energy
commercialization
(continued)

Bureaucratic risk: risk Slow release of subsidy by Subsidies’ allocation:
because of government agencies: • Swachh Bharat
unanticipated • Involvement of Mission (SBM)
difference in policies multiple agencies • Achieving modern
on paper and their with multiple chains solid waste
transition to of command management
complicated • Replication of • Creating an enabling
processes processes for each environment for
stage private sector
• Time-taking • Capital expenditure,
• Solar power operation and
generation maintenance
subsidized • Ground realities
• No subsidy granted • No subsidies directly
because of lack of to BTPL
clarity on ownership • Channelling of funds
of solar photo through local
voltaic panels panchayats or NGOs
mounted on • NGOs crowding out
roof-tops BTPL in funding
• Banking sector
• Red-tape
Inherent risk: risk The problem of storing
because of natural power:
factors like weather • Biomass power
generation raw
material weather
dependent
• Solar power
generation weather
dependent
Source: Authors’ own. PTEC, Power Tech Company; BTPL, Bio Toilet Private Ltd;
DRDO, Defence Research and Development Organization; SBM, Swachh Bharat
Mission
customer segment was extended to rural households but, because of

issues pointed out in Table 5.3, the customer/beneficiary segment was
dropped later. BTPL was always privately owned and aimed at profit
maximization but preferred to work in a sector that had positive social
externalities.
Table 5.3 Motivation behind business model changes

PTEC BTPL
Business
Business model model
changes Reasons changes Reasons
Ownership • To keep the • OEM CORP To redefine the
model earned + collected merged organization’s main
changed: TPF income model with BTPL activity
to PTEC • To manage
bureaucratic risk
Increasing the • To help empower • Extension • Construction or
stakeholders’ rural poor of manufacturing
direct according to PTEC customer ISO-certified firms
participation mission segment required to meet
• To inculcate trust beyond work condition
and manage social railways standards for
risk labour employed
• To distribute • DRDO
profits to announcement to
beneficiaries extend the lessee
companies’ scope
in segments
beyond railways
• Environmental
waste
management
Incense stick • Waste • Entry to • DRDO
production management from rural announcement
biomass power individual that biodigester
generation household licensee firms may
• Generate toilet be approached for
employment for segment installation of
local women and bio-toilets in
manage social risk individual houses
and social projects
(continued)

PTEC BTPL
Business
Business model model
changes Reasons changes Reasons
Solar DC • To keep earning • Choice to • No subsidies
micro-grid flow stable and move out directly to BTPL
manage political from the • Channelling of
risk rural funds through
• To increase net of individual local panchayats
beneficiaries household or NGOs
• Expectations of toilet • NGOs crowding
taking advantage segment out BTPL in
from the solar funding
mission • Cost-effectiveness
advised by SBM
for toilet
installation in
rural households
(Dec, 2014)
• Allotted subsidy
for Individual
Household
Latrines in rural
areas—Rs 12,000
• Minimum cost of
bio-toilet—Rs
20,000
• Dropping risky
customer segment
Hybrid model • Improve service
quality and
manage social risk
• Increased profits
to become
financially
self-reliant and
manage financial
and bureaucratic
risks
• Manage inherent
risk
Source: Authors’ own. PTEC, Power Tech Company; BTPL, Bio Toilet Private Ltd;
TPF, Triple-P Foundation; OEM, original equipment manufacturer; DRDO, Defence
Research and Development Organization; SBM, Swachh Bharat Mission
Comparison of Business Models
Table 5.4 uses certain parameters to make a comparison between BTPL

and PTEC. The two organizations, PTEC and BTPL, are similar in pro-
file. Both operate in the social sector to bridge infrastructure gaps. Both
are private for-profit organizations. Both are small with external finance
issues. Both organizations’ business models are in some ways dependent
on involving locals directly.
PTEC’s central value proposition is rooted in empowering the locals
who double up as its customers and beneficiaries as even in a dilemma, its
business model changes reflect the creation of value for its stakeholders.
Table 5.4 Comparison of business model changes

Parameters PTEC BTPL
Type of Private limited company Private limited company
organization
Vision Use energy to empower Sustainable sanitation for all
Mission Renewable energy Filling the infrastructure gap
• Reliability
• Affordability
Capabilities • Utilization of waste • Good service
developed • Service quality • Punctual delivery
• Management team • Prompt utilization of
• Flexibility resources
• Relationship with • Management team
locals
First years in earlier 2007 2008
avatar in same or
similar area
Social gap Energy/electricity Sanitation
addressed
Environmental focus Yes Yes
Monetization Customers pay Customers pay directly or some
other intermediary
organization pays
Subsidy element Yes No
Government No Yes
contracts
Local engagement Concentrated in a rural Little engagement as point of
region in India contact either NGOs or
government agencies who
give contracts
(continued)

Parameters PTEC BTPL
Empowerment Livelihood by employing Some livelihood opportunity
locals for locals
• Plant operation, Indirect impact: women
repair and empowerment
maintenance
• Incense stick
manufacturing
Creating skill by training
locals in
• Plant operation
• Managing business
Creating other local
business
• Local sourcing of
biomass and
building material
• Local shops selling
electrical
appliances
Boosting local
entrepreneurship
• Franchisees
Source: Authors’ own. PTEC, Power Tech Company; BTPL, Bio Toilet Private Ltd
It creates value for the communities and uses the value captured for scal-
ing up to further finance its social venture without creating another nega-
tive environmental externality. BTPL’s central value proposition is
primarily the capture of value through simultaneously creating value and
reducing negative environmental externalities in the social sector. PTEC’s
business model is about creating a sustainable solution to the problem by
empowering the locals in the short- and long-term. With the skills learnt,
the locals can have a better life independent of PTEC.
Therefore, though both social businesses and social enterprises are cen-
tred on targeting the bottom of the pyramid to generate value and address
a social gap through their business model, both are inherently different.
Social businesses aim for maximizing benefits of shareholders and stake-
holders. Social enterprises primarily aim at maximizing value creation for
stakeholders and thus aim at social empowerment and sustainable solu-
tions independent of the organization.
Conclusion
As already discussed, there is a need to segregate privately owned social
enterprises from other privately owned organizations working in the
social sector. This chapter does so by focussing on the disabling aspect of
institutional change, and subsequent business model changes made by
organizations. It analyses comparative case studies of two Indian
organizations engaged in the social sector to address infrastructure gaps
comparing their respective business models and business model changes.
The case studies first illustrate the uncertainties faced by each organiza-
tion at different points in time and identify the business risks associated
with the changing institutional environment. The chapter demonstrates
how social enterprises adapt their business model to remain sustainable,
illustrating that firms need to be responsive, flexible and amenable to
change. Although not all aspects of a business model need to be changed
simultaneously as a response to uncertainty in the institutional environ-
ment, it could so happen that over time, the business model that evolves
in entirely different from the one that the firm started out. Despite
changes, the chapter further demonstrates that social enterprises aim to
retain some features of their business models. These unique components
are value creation and empowerment that can be used to segregate pri-
vately owned social enterprises from privately owned social businesses.
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6
Circular Social Innovation: A New
Paradigm for India’s Sustainable
Development
Ashok Prasad and Mathew J. Manimala
Abstract Although there has been a growing focus on social innovations

and social enterprises in India over the past decade, the country’s high
economic growth based on the linear economic development model is
getting clouded by increasing environmental damage, resource scarcity
and, paradoxically, persistent poverty for a significant section of the pop-
ulation. Policy makers and businesses around the world are increasingly
looking towards the ‘circular economy model’, which aims to enable
effective flow of materials, energy, labour and information so that natural
and social capital can be rebuilt. This chapter examines the numerous
opportunities for social enterprises to contribute to the journey towards
a circular economy in India through the paradigm of ‘Circular Social
Innovation’ (CSI). It begins by delineating the scope and potential for
social enterprises in India by looking beyond the conventional ‘social
impact’ domains, given the spectrum of social and environmental chal-
lenges in India. Subsequently, it analyses in depth the role and i nterlinkages
A. Prasad (*)
Xavier Institute of Management & Entrepreneurship, Bengaluru, India
M. J. Manimala
IIM Bangalore, Bengaluru, India

https://doi.org/10.1007/978-3-319-74488-9_6
142 A. Prasad and M. J. Manimala
between social enterprises, social innovation and circular economy in the

context of sustainable development. Next, it proposes and defines CSI as
the new paradigm to address the challenges against sustainable develop-
ment by combining the forces of social innovation, social enterprises and
the circular economy. The distinguishing characteristics of this paradigm
are illustrated using suitable examples of CSI enterprises from diverse
sectors. In conclusion, it highlights the relevance of pursuing the CSI
paradigm, given the intensity and interwoven nature of sustainable devel-
opment challenges in emerging economies like India.
Introduction
With about 16% of the world’s population living on just 2.5% of the
global land area and having access to just about 4% of the global fresh
water resources (KPMG, 2010), India is indeed at a disadvantage vis-à-
vis other countries that are endowed with better land/water availability
per capita. India has the world’s largest number of people below poverty
line at 224 million (Express News Service, 2016) and the country has
been ranked a low 131 among 188 nations in the Human Development
Index 2015 rankings (Roche, 2017). About half of India’s population is
dependent on agriculture or other climate-sensitive sectors (Ministry of
Labour & Employment, Government of India, 2010), and hence the
country is vulnerable to sea level rise and extreme weather events and will
increasingly face threats to human health due to water shortage and food
scarcity (Magrin et al., 2007). In addition, it has been estimated that
about 12% of India’s land is flood-prone, whereas 68% is prone to
drought of varying intensities (UNDP, 2016).
In spite of such wide-ranging social and environmental challenges, the
Government of India is making limited social investments to address
them. A recent McKinsey Global Institute document titled ‘India’s Path
from Poverty to Empowerment’ suggests that 50% of the government’s
expenditure is required to provide basic water, sanitation and healthcare
services to the Indian population while the actual allocation is only about
20% (Gupta et al., 2014). Hence, the social enterprises in India do have
Circular Social Innovation: A New Paradigm for India’s… 143
a significant role to play in supplementing the government’s efforts.

Given this context, we begin by examining the theoretical perspectives on
the impact of social entrepreneurship and social innovation for sustain-
able development.
Social entrepreneurship has been a topic of academic discussions for
over two decades now. Leadbeater (1997, p. 3) pointed out that social
entrepreneurs create social value by “innovating new solutions to intrac-
table social problems” and set in motion “a virtuous circle of social capital
accumulation”. Dees (1998, p. 1) has explained the role of social entrepre-
neurship as synergizing an entrepreneurial mind-set and social activism
when he suggested that they operate by combining the “passion of a social
mission with an image of business-like discipline, innovation, and deter-
mination commonly associated with, for instance, the high-tech pioneers
of Silicon Valley”. The main difference between an entrepreneur and a
social entrepreneur is the latter’s focus on social mission and not just on the
prospect of a financial profit. Hence, the primary measure of success for a
social enterprise is not wealth creation but ‘mission-related social impact’,
although this is extremely difficult to measure (Dees, 1998). This pathway
and methodology to create this social impact have been outlined by
Witkamp, Royakkers and Raven (2011) as a new business model that
combines the social goal with a business mentality while the well-known
academic-turned-social entrepreneur Mohamed Yunus (2010) focuses on
the individual entrepreneur and suggests that such entrepreneurship
requires an individual with a social vision. One of the key elements of
social entrepreneurship is social innovation, which is defined by Mulgan,
Tucker, Ali and Sanders (2007, p. 8) in their seminal work published
under the auspices of the Skoll Centre for Social Entrepreneurship,
University of Oxford, as “innovative activities and services that are moti-
vated by the goal of meeting a social need and that are predominantly
developed and diffused through organisations whose primary purposes
are social”. The Stanford Social Innovation Review (SSIR) defined social
innovation as “the process of inventing, securing support for, and imple-
menting novel solutions to social needs and problems” (as quoted by Phills,
Deiglmeier, & Miller, 2008, p. 36). Hochgerner (as quoted in Howaldt &
Schwarz, 2010, p. 23) too has a definition in similar lines: “Social innova-
tions are new concepts and measures that are accepted by impacted
social groups and are applied to overcome social challenges”. These defini-
tions amply highlight the key aspects of social innovation which include the
primary goal of addressing a social need/problem, the application of new
concepts/methods and the acceptance/adoption of the new methods. Thus,
social innovation’s primary objective of solving a social problem differenti-
ates it from business innovation wherein the objective is business value cre-
ation or profit maximization. This is highlighted by Phills, Deiglmeier and
Miller (2008, p. 36) when they defined social innovation as “a novel solu-
tion to a social problem that is more effective, efficient, sustainable, or just
than existing solutions and for which the value created accrues primarily to
society as a whole rather than private individuals”. They suggest that social
innovation can emerge in places and from people outside of the scope of
social entrepreneurship, and it certainly requires an understanding of the
conditions that produce solutions to social problems.
Cunha, Benneworth and Oliveira (2011) summarize the key aspects of
social innovation by highlighting the following two distinct groups of
characteristics that underlie its definitions:
1. Long-term social value creation: Social innovation is concerned with

social justice for the society as a whole. It focuses on social value cre-
ation and community development through collaborative action to
deliver benefits over the long term.
2. Novel system-changing solutions: Social innovation leverages cross-
sectoral and cross-disciplinary insights to deliver novel solutions that
are system changing.
The key difference between social entrepreneurship and social innovation

is explained by Mulgan, Ali, Tucker and Sanders (2007, p. 45) in the fol-
lowing words: “Whilst social innovation certainly occurs through social
enterprise and social entrepreneurship, it also happens in many other
contexts. Conversely, although social entrepreneurship often involves
innovation, only a small minority of social entrepreneurs create new
models that can then be scaled up, and that process of scaling up often
involves governments and larger businesses”.
In a similar vein, Chalmers (2012) attempts to make a distinction
between the two concepts in terms of the differences in the research-
ers’ approach, stating that social entrepreneurship research focuses on
the individuals driving the social change and the new forms of orga-
nizational structure that blend commercial and social purpose,
whereas social innovation research prioritizes on the processes and
outcomes that lead to system change.
While social enterprises and social innovation play an active role
towards sustainable development, policy makers around the world are
increasingly looking towards the ‘circular economy model’ that aims to
enable effective flow and recycling of materials, energy, labour and infor-
mation so that natural and social capital can be rebuilt (Ellen MacArthur
Foundation, 2013). UN’s Sustainable Development Goals (SDGs; UN
SDSN, 2015) are expected to add further momentum to the efforts
towards creating such a circular economy.
ustainable Development and the Circular

S
Economy
The Ellen MacArthur Foundation (referred to henceforth as ‘the founda-
tion’), which has been an active champion of this emerging domain of
sustainable development through circular economy, mentions that the
circular economy is both regenerative and restorative and defines it as
follows: “A circular economy is one that is restorative and regenerative by
design and aims to keep products, components, and materials at their
highest utility and value at all times, distinguishing between technical
and biological cycles” (2015, p. 2). The foundation (2015) further
explains that the circular economy specifically focuses on two cycles—the
technical cycle that involves the management of the stocks of finite mate-
rials whereas the biological cycle encompasses the flows of renewable
materials. In the biocycle, biomass returns into the biosphere after prod-
uct use—either directly or in a cascade of consecutive use. The techno-
cycle contains inorganic products and materials such as metals and
plastics. These materials should stay in closed loops to ensure circular use
of non-renewable resources and to prevent potential pollution. The foun-
dation (2015) outlines the following three key principles of the circular
economy:
“Principle 1: Preserve and enhance natural capital by controlling finite

stocks and balancing renewable resource flows”.
“Principle 2: Optimise resource yields by circulating products, compo-
nents and materials at the highest utility at all times in both technical
and biological cycles”.
“Principle 3: Foster system effectiveness by revealing and designing out
negative externalities”.
According to Murray, Skene and Haynes (2017, p. 369), “The Circular

Economy is an economic model wherein planning, resourcing, procurement,
production and reprocessing are designed and managed, as both process and
output, to maximize ecosystem functioning and human well-being”.
In terms of enabling the circular economy, the foundation (2015) sug-
gests a set of six methods using the ‘RESOLVE’ framework—REgenerate,
Share, Optimise, Loop, Virtualise, Exchange. Although these six options
to enable the circular economy are indeed relevant, a more user-friendly
9Rs approach—Refuse, Reduce, Reuse, Repair, Refurbish, Remanufacture,
Repurpose, Recycle and Recover, which builds on the well-known 3Rs
(Reduce, Reuse and Recycle) has been proposed by Cramer (2014) for
the circular economy.
Some of the innovative ways of implementing these methods are illus-
trated in the case studies to be discussed in the subsequent sections of this
chapter. Adherence to these methods is the principal means to bring
about the circular economy, which aims to decouple productivity and
prosperity from resource consumption and refocus them on resource
conservation. The benefits to be derived from this change in orientation
are many, which are summarized under three sub-headings by the foun-
dation (2015). The triple bottom-line benefits of the circular economy as
identified by them are the following:
1. Economic benefits: Improved economic growth, substantial net mate-

rial cost savings, creation of employment opportunities and increased
innovation.
2. Environmental benefits: Reduced emissions and primary material con-
sumption, preserved and improved land productivity and a reduction
in negative externalities.
3. Social/Citizen benefits: Greater utility as a result of more choice, lower

prices and lower total cost of ownership.
Consolidating these three benefits into two levels (micro and macro),
Bartelmus (2013) clarifies that the circular economy approach is defined at
the micro level mainly as a model of production and consumption, whereas
at the macro level, it is defined as the implementation of the societal objec-
tive of sustainable development and includes broad notions of ecological,
economic and developmental (or social) sustainability. Sauve, Bernard and
Sloan (2016) suggest that the circular economy initiatives have the poten-
tial to bring better results (as compared to the linear economy) towards
sustainability and thus serve as a tool for sustainable development. They
highlight the complementary nature of sustainability and circular economy
and suggest that “sustainable development and circular economy are respec-
tively top-down and bottom-up approaches” (p. 54). Although sustainable
development outlines the broad intergenerational macro objectives, it stays
silent on the methods to ensure sustainability, and this is where the circular
economy becomes a complementary initiative as it comes with a set of tools
that may be used to work towards sustainability.
The synergies between the circular economy and sustainability have
been analysed recently by Geissdoerfer, Savaget, Bocken and Hultink
(2016). These authors suggest that both the concepts emphasize intra-
and inter-generational commitments motivated by environmental haz-
ards and highlight the growing need to explore alternate pathways for
development. Both seek the deployment of multi- or interdisciplinary
approaches to better integrate non-economic aspects into development
through improved system design and innovations for value creation. In
addition, these concepts view the cooperation between stakeholders as a
key imperative for the achievement of goals.
It is against this context that we propose social innovation as a princi-
pal enabler of circular economy and suggest that the holy nexus of sus-
tainable development and circular economy can survive and thrive only
under a paradigm of ‘Circular Social Innovation’ (CSI) by combining the
forces of social innovation, social enterprises and the circular economy.
The distinguishing characteristics of this paradigm are highlighted using
suitable examples of CSI social enterprises from diverse sectors such as

women’s hygiene (Eco Femme, which makes reusable fabric sanitary
pads), waste management (Waste Ventures India) and consumer prod-
ucts (HelpUsGreen, which makes a range of products from recycled
flowers).
CSI: A Paradigm for Sustainable Development

The multiplicity of sustainable development challenges and the rising
inequalities in India call for more intense efforts to search for innovative
models of value creation which can harness and coordinate cross-
stakeholder initiatives to alleviate the social and environmental challenges
that affect the marginalized people in both the urban and rural areas of
India. The authors would like to suggest the paradigm of ‘CSI’ as a key
pathway to enable sustainable development in developing economies like
India. Although social innovation is indeed very useful to address the social
problems, it is time to go beyond it and focus on CSIs in the developing
economies to address the sustainable development challenges that have
numerous interlinked economic, social and environmental issues. It would
therefore be appropriate to define CSI as follows: CSI seeks to enable sus-
tainable development through the societal/stakeholder adoption of innovative
activities and services that are restorative and regenerative by design, where the
primary goal is the broader social/environmental well-being rather than indi-
vidual/firm profits.
CSIs happen at the sweet spot where the principles of the circular
economy are implemented through a social innovation that is delivered
by a social enterprise as depicted in the figure below. CSIs are particularly
relevant to address the externalization of the social and environmental
costs by the linear economic models which add to the already existing
social and environmental challenges in the developing economies like
India. The paradigm of CSI has four key elements which highlight the
nature and relevance of this paradigm and differentiate it from other sim-
ilar terms currently being used in this domain.
Circular Social Innovaon: The Sweet Spot
Circular Economy Circular Social Innovaon
Social Social
Enterprise Innovaon
1. Sustainable development as the goal of CSI: By specifically emphasising

the goal as enabling sustainable development, CSI seeks to go beyond
the ‘social’ benefits that are normally associated with social innovations/
enterprises and include a series of benefits across different areas such as
economic, social and environmental. This is particularly relevant since
the challenges across these three domains are often interlinked, as
pointed out earlier. For instance, in the case of Waste Ventures, one of
the CSIs being discussed in this chapter, the benefits delivered include
income generation (economic), skill development/employment (social)
and reduction of waste reaching landfills (environmental). Similarly,
the team at Eco Femme works with women’s self-help groups for mak-
ing the cloth sanitary pads to empower them economically while mak-
ing a product that prevents the environmental damages of the disposable
pads and also educates the illiterate rural women on hygienic menstrual
practices to enable social development.
2. Regenerative and restorative activities: CSIs are regenerative and restor-
ative by design, which is a key element that differentiates them from
other social innovations. This regenerative/restorative nature of the
design implies the generation of the highest value and utility from
natural resources, components and products while minimizing the
accompanying damages. Thus, the CSI activity goes beyond just deliv-
ering a solution to a perceived social problem. In other words, while
an innovation can and should address the primary task of fulfilling the
social need, it should also focus on a restorative/regenerative design to
deliver a cross-section of benefits. The ‘trash-based economy’ instead
of the ‘cash-based activity’, as envisioned by Goonj, is a prime example

of this process of restoration and regeneration. They collect the used/
discarded clothing from the cities, restore them as required and
provide them to the needy villagers in their ‘Cloth for Work’
programmes in the rural areas, which help create roads, rejuvenate
water bodies and build schools, among other socially useful activities.
3. Innovations to promote circularity: Innovative options of processes and
services are used by CSI initiatives to implement circularity. This is in
sharp contrast to the linear economic models, which may also be fol-
lowed by many social innovations and enterprises. The founders of
Husk Power Systems overcame the challenges of rice husk not burning
easily due to its high silica content and wearing out of the conven-
tional biomass gasifiers by innovating on a customized, proprietary
design of gasification technology which could be built and maintained
locally without needing much technical expertise for its operations in
rural India. Similarly, HelpUsGreen has implemented their innovative
process of ‘flower-cycling’ to use discarded flowers (offered in temples
and mosques) to make a range of patented value-added products such
as incense sticks, bathing soaps and enriched compost.
4. Adoption by society/stakeholders as a key element of CSI: For CSI to be
effective, its new processes and methods have to gain substantial/wide-
spread acceptance by the stakeholders and the society at large so as to
maximize its contribution towards sustainable development. By specifi-
cally highlighting the context of stakeholders instead of the generalist
perspective of the society, CSI involves all the concerned groups who
have their ‘skin in the game’ and convinces them to participate in the
process through partnerships. For instance, Husk Power Systems, which
has setup decentralized electricity generation and distribution systems in
remote villages, had to work with the local community to make them
pay an initial deposit (besides the monthly payment) for the electricity
connection and also engage with the rice mill owners to obtain their
‘waste’ rice husk on a long-term arrangement at a reasonable price. Goonj
actively involves the local community members in their ‘Cloth for Work’
programme to identify the projects to be implemented, and in addition
the community members volunteer their labour/time for the actual
implementation of projects such as digging wells and road laying.
Thus, to sum up, it could be stated that there are several major differences
between CSI and other similar concepts such as ‘social entrepreneurship’
and ‘social innovation’. First, CSI seeks to deliver holistic sustainable
development to bring into focus the economic, environmental and social
aspects in an integrated manner, not as an incidental outcome or as an
afterthought of the process. Second, it specifically focuses on the restorative/
regenerative activities, which may not be a necessary characteristic of social
innovation/enterprises. Third, innovations to enable circularity are a key
element of such activities. And finally, societal/stakeholder adoption is a
sine qua non for its success. Circular Social Innovation—the three words
used in designating the new paradigm are indicative of what it is supposed
to do: innovations are provoked by the need for solving acutely felt social
problems, but the solutions should be such that we leave the planet’s natu-
ral resources as they were originally found by the human race, suggesting
a circularity extending backward beyond the current generation. Such
innovations are the need of the hour in the developing economies to break
through the extensively embedded economic, social, political and cultural
relationships which propagate the interests of the existing beneficiaries to
leave the marginalized on the fringes of development.
In the subsequent section, it is proposed to present a cross-section of
three Indian social enterprises which are already operating under the par-
adigm of CSI.
CSI in India: Three Illustrative Examples

Eco Femme
EcoFemme is a women-led social enterprise that was founded in 2010. Its

founders, Kathy Walkling and Jessamijn Miedema, came up with the
idea after experiencing first-hand the disposal difficulties associated with
menstrual products. This social venture seeks to create environmental
and social change to empower women through healthy, environmentally
sustainable and culturally responsive menstrual practices. It produces and
sells washable cloth pads and also provides menstrual health education
(Eco Femme, 2016).
According to a report by the market research firm AC Nielsen and the

non-profit organization Plan International (Moses, 2014), India has around
355 million women and young girls of menstruating age. But owing to
economic, social and religious compulsions, only 12% of them use sanitary
pads or alternatives. The others use old rags, dry leaves, sand, newspaper or
ash, and, in some cases, nothing at all, exposing themselves to infection.
Eco Femme has a three-pronged approach, combining an eco-friendly
and culturally adapted product, a hybrid business model and an educa-
tional programme to provide adolescent girls the knowledge, skills and
confidence to manage their periods in a healthy and dignified manner.
The pads are made by the women’s self-help group members, which sup-
ports their empowerment as well as livelihood.
Eco Femme’s pads are sold to middle- and upper-class women in India
and also in the international market, mostly in the United Kingdom, the
United States and the Netherlands. But to ensure that these pads are also
available to poor, rural women and girls, Eco Femme came up with the
‘Pad for Pad’ scheme which builds a donation into each internationally
sold pad (about Rs 80 per pad) that allows for cross-subsidization of Eco
Femme’s menstruation education programme and also funds menstrual
product kits with four free pads and a travel pouch for Indian girls in
rural schools (Reddy, 2015). The enterprise also got a Rs 3 million grant
from the United States Agency for International Development (USAID),
to help reach 10,000 girls in Tamil Nadu and other states over 2 years.
Although Indian women of earlier generations, particularly those in
the rural areas, have used cloth pads, Eco Femme’s pads differ in their
design—with wings and a leak-proof layer. They are more like a modern
sanitary napkin in appearance and function. The top layer has absorbent
flannel cotton and the absorbent core has six layers of flannel. The prod-
uct is washable and can be used multiple times as against the single-use
disposables which take more than 500 years to decompose and thereby
cause much more damage to the environment besides being much more
expensive per use. The organization does face significant challenges in
convincing the middle- and upper-class women about the benefits of
reusable pads, since the high-spending multinationals promote the dis-
posable sanitary napkins as the modern, convenient and hygienic
solution and try to reinforce the view that using cloth or reusable pad is
unhygienic. Eco Femme, therefore, works with women ambassadors

who are convinced about the benefits of reusable cloth pads for reasons
of benefits in the areas of health, environment and social inclusion and
are passionate about convincing other women about these benefits.
Moreover, they have made effective use of the new technologies to gain
access to and influence the educated and elite classes. Most of their cur-
rent sales are through online stores and their own website.
HelpUsGreen
India’s multi-billion-dollar religion industry generates an estimated 8 mil-

lion tonnes of floral waste every year. Flowers start out as sacred offerings
in the many temples and mosques of India but sadly soon find their way
into rivers and other water bodies, acting as toxic pollutants and wreaking
havoc on the delicate water ecosystem. Ankit Agarwal and Karan Rastogi
turned their attention to this issue when they observed piles of flowers at
a temple, which would eventually end their lives in the holy river Ganges.
They founded the social enterprise HelpUsGreen in 2015, to collect such
discarded flowers and recycle them into biofertilizer, incense and bathing
bars, among others. HelpUsGreen products are free from carcinogens,
coal and chemical-based fragrances. It also has a zero-carbon footprint,
which is achieved by giving attention to small details like using recycled
paper to create their product packaging. Their most popular product, the
‘Mitti’-brand vermicompost, is Ecocert-certified and its ingenious
17-ingredient recipe is in the process of getting patented. The enterprise
employs 127 women through self-help groups for its production process,
thus providing them a means of livelihood (Sanghani, 2016).
HelpUsGreen’s business model is predominantly export oriented,
with Germany and Switzerland being their principal importers for ver-
micompost. Their products are also available in the Indian market
through major e-commerce sites, but the domestic sector constitutes a
very small percentage of their sales, with the bulk of their revenue com-
ing from exports. The enterprise plans to set up a store in Milan and is
also aiming to enter other export markets such as Dubai and Turkey for
their incense.
HelpUsGreen is in the midst of rapid expansion to cope with the bur-

geoning demand for its Mitti-brand vermicompost, and to this end are
in the process of raising funds from venture capitalists, which would
enable them to scale up their operations, hire more manpower, set up an
additional production facility and also obtain the fair trade licence
(Bhushan, 2016).
Waste Ventures
Waste Ventures was founded in 2011 by Parag Gupta in the United States,
along with cofounders, Rob Whiting and Roshan Miranda, all of whom
were educated in US universities and were familiar with the latest tech-
nologies of waste management. In 2015, the company was shifted to
Hyderabad (India) under the name Waste Ventures India. Since then, this
social enterprise is moving India’s solid waste sector to a framework that is
both environmentally and financially sustainable while providing employ-
ment to the weaker sections of the society. Its vision is to change the para-
digm of ‘collect and dump’ garbage disposal practices in developing countries
into a commercially competitive model of environmentally sustainable solid
waste management system owned by waste pickers. Its mission is to triple
the waste pickers’ wages and provide them healthier working conditions
(Waste Ventures, 2014). It offers professional waste collection and process-
ing services to cities, households and corporate clients while enhancing the
income and improving the working conditions of waste pickers.
Started in 2013, Waste Ventures has averted more than 3000 tonnes of
waste from Indian dumpsites. Its services can be utilized by the municipal
administration, townships, businesses and individual households. It
works with about 18,000 households, several corporate campuses such as
Google, Flipkart and Infosys, and has partnerships with a number of
MNCs such as Coca Cola and Unilever to ensure that plastics and other
recyclable waste materials are channelized to a recycling facility. They have
built a model ‘zero-waste’ village at Gandipet (near Hyderabad), with a
decentralized composting centre, ensuring that less than 5% of the waste
from the village ends up in landfills. They are able to recycle more than
100 tonnes of waste materials every month, working with approximately
1000-plus waste pickers and have averted more than 950-plus tonnes of
carbon dioxide from the environment (Venugopal, 2016).
The company works towards creating a waste management system that
is self-sustainable and focused on earning revenue from selling the differ-
ent by-products of waste. The wet waste collected by the enterprise is com-
posted and the organic manure thus produced is sold to individuals and
organizations under the brand name ‘Sanjeevani’. Its Toter pick-up service
facilitates the door-to-door collection of dry waste from households, for
which payment is made through a transparent system of fixing the rates.
Identifying the Key Drivers for CSIs

The Indian social enterprise ecosystem has numerous actors, which include
a spectrum of educational institutions, fellowship providers, incubators,
impact investors, foundations and various other kinds of supporters. In
addition, there are other emerging support structures, which include tech-
nical support, network support and advocacy support.
Although the social enterprise ecosystem plays a very useful enabling
role by catalysing and supporting the process of CSI, such ecosystem
could be characterized as the external drivers of CSI. For the CSI initia-
tives to be effective, they should also have their internal drivers, some of
which are identified and discussed below. Such internal drivers arise
from the nature of the project and the stakeholders that inspire and
enliven the processes required for facilitating the on-ground implemen-
tation of CSIs.
A close examination of the impact of the four key building blocks of
the CSIs (identified in the previous section) on the strategies employed
by the social ventures (case studies discussed above) brings forth the fol-
lowing four key drivers and processes that enable CSIs in India:
1. Active/in-depth stakeholder engagement: Since societal/stakeholder

adoption of the circular innovation is a key building block of CSI,
almost all the cases/entrepreneurs analysed in this chapter had an
intense period of stakeholder engagement particularly during the
‘understand’ and ‘build’ phases of the social innovation journey.

This engagement brings forth multiple benefits, which include
understanding the key ‘material’ challenges that need to be
addressed, the building of trust with the stakeholders, handling
the implementation challenges and adaptation of the product/ser-
vice as required. For example, Husk Power Systems worked closely
with the community to gain a deeper understanding of the on-
ground implementation challenges and at the same time worked
with them to develop a viable revenue model and persuaded the
potential customers to make an initial deposit payment to confirm
their interest in availing the electricity supply. For Goonj, the com-
munity engagement is the fulcrum of the ‘Cloth for Work’ pro-
gramme in which the community members choose the project to
be implemented, agree to volunteer their time for a few weeks and
in some cases also provide the resources to build the community
infrastructure.
2. Two/multisided network benefits: The envisioning of the CSI in several
cases clearly indicates the ‘connecting of dots’ in terms of looking at
two or more distinct target groups/stakeholders who are involved in
the innovation and the delivery of a network benefit that synergizes
the priorities of these stakeholders. For instance, in the case of Goonj,
the surplus/discarded clothing of the urban dwellers was seen as a
resource to meet the requirements of the needy villagers. Similarly,
Waste Ventures, on the one hand, enabled the skill development of the
waste collectors and, on the other, offered their services to collect the
discarded waste from households to realize better value from it. And
Eco Femme with their ‘Pad for Pad’ scheme encourages the use of
their reusable cloth pad by the urban women who can afford to pay a
higher price and informs them that, for every pad purchased by them,
another pad would be given free of cost to the rural women who can-
not afford to purchase sanitary pads.
3. Innovative/value-added products/services: The core offering in the cross-
section of the CSIs analysed had specific value-enhancement mecha-
nisms which provided the ‘arbitrage’ for the enterprise. In the case of
HelpUsGreen, the discarded flowers, which otherwise caused
environmental pollution served the purpose of providing a nice fra-
grance as required for the incense sticks. Goonj has improvised to use
the discarded bits and pieces of cloth to create a quilt that would pro-
vide the much-needed warmth to the rural poor during the harsh win-
ters. Waste Ventures provides to households the service of doorstep
collection of recyclable waste at a specified time by leveraging technol-
ogy with an online booking for this collection service.
4. Innovations for cost control/management: Since the CSIs often target the
disadvantaged bottom-of-the-pyramid and under-served markets,
cost reduction/diminution is a very important part of their products/
services so as to enable the adoption of the innovation. For example,
in the case of Husk Power Systems, multiple innovations were imple-
mented to control costs and to fund their operations. These included
a locally fabricated gasifier unit, use of bamboo poles instead of steel
poles for electricity distribution and the use of low-cost circuit break-
ers to monitor the extent of electricity consumption instead of the
expensive electricity meters. In addition, they also sell ‘carbon credits’
for avoiding the use of fossil fuels in the production of electricity and
thus earn additional revenues. In a similar manner, Waste Ventures
generates revenue through the sales of ‘compost’ made from the
organic waste collected, which covers a part of their operational
expenses and enables them to pay fair wages to the waste collectors.
Conclusion
The paradigm of CSI seeks to integrate the key elements of social innova-
tions, social enterprises and the circular economy to address the wide
spectrum of interlinked social and environmental challenges in develop-
ing economies like India. As an example of these interwoven challenges,
it is relevant to consider the paradoxical linkages between hunger/malnu-
trition, forest/cropland degradation and inadequate water supply.
Increasing agricultural production to improve food availability for reduc-
ing hunger/malnutrition could lead to forest land degradation and deple-
tion of water resources, which would, in turn, adversely affect the lives of
vulnerable communities. Similarly, the challenges of education, energy
and air pollution are connected. Providing better access to electricity
could improve educational outcomes, but this might result in higher air
pollution if fossil fuels are used to generate electricity.
Given the wide spectrum of these challenges, their interwoven nature

and the large number of beneficiaries to be targeted in developing econo-
mies like India, the conventional linear economy social innovations may
not provide the most optimal solutions for sustainable development.
Moreover, the rapid industrialization and increased consumption by the
growing middle class in the emerging markets is creating resource scarcity
and increased environmental pollution. Hence, the need of the hour is to
provide innovative solutions to the sustainable development challenges,
which are restorative and regenerative as envisaged in the paradigm of
CSIs. This chapter has highlighted the specific social and environmental
challenges in India and outlined the framework of CSI while differentiat-
ing it from the concepts of social innovation, social enterprises and the
circular economy. The examples of CSIs already implemented across
domains such as, women’s empowerment, consumer products and waste
management provide useful insights into the on-ground application of
this concept.
The business model of each of these cases of CSIs is restorative and
regenerative by design; they leverage innovations to enable circularity and
have adopted and encouraged the stakeholders involved to address the
economic, environmental and social issues in an integrated manner for
the journey towards sustainable development, as envisioned by the UN’s
SDGs 2030. The 17 SDGs outlined by the UN provide the road map
ahead across various domains spanning the people, planet and prosperity
(UN SDSN, 2015). Although these 17 goals and the 169 specific targets
outlined by the UN for sustainable development seem too many, they are
indeed important goal posts ahead for humanity, considering the com-
plex interlinked nature of the challenges ahead.
While the examples in this chapter are all from India, it would be use-
ful to look at examples from other emerging and developed economies.
In addition, the key elements of this CSI business model framework
could be studied in detail. In particular, the design of a regenerative/
restorative business model and the methods used to enable their adoption
by the stakeholders could provide useful learning for future social
entrepreneurs.
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7
Social Entrepreneurship Through Micro-
Entrepreneurs of Self-Help Groups
Sangita Dutta Gupta and Susmita Chatterjee
Abstract Social entrepreneurship focuses on activities that make the

world a better place to live in. They address various social issues. One
such issue is rural development and eradication of poverty. One way to
achieve this is through self-help groups (SHGs). SHG is a practice mostly
studied in Indian context. SHG is a homogeneous group of people who
have come together with the intention of increasing their income and
improving their standard of living and status in the society. SHG is a tool
to eradicate poverty and encourage rural development. This study looks
into the journey of two women from two SHGs of West Bengal. One
SHG is located in a rural area and another in an urban area. SHGs helped
them in developing their enterprise. These two social entrepreneurs, in
turn, provided livelihood to many women in their localities. They have
been instrumental in providing other women in their localities with a
S. Dutta Gupta (*)

IFIM Business School, Bengaluru, India
e-mail: sangita.dg@ifimbschool.com
S. Chatterjee
Maharaja Manindra Chandra College, Kolkata, India

https://doi.org/10.1007/978-3-319-74488-9_7
162 S. Dutta Gupta and S. Chatterjee
decent income. The study found that these SHGs helped not only in the
eradication of poverty but also in the empowerment of women by pro-
viding them with income and social recognition.
Introduction
Our study looks at how the self-help groups (SHGs) are helping in the
emergence of social entrepreneurs. Social entrepreneurship is understood
as a process through which entrepreneurs follow a social mission (Baron,
2007) which can be expressed in terms of social change, social transfor-
mation or social value creation (Mair & Marti, 2004; Roberts & Woods,
2005). Social entrepreneurs are playing an important role in solving one
of the pressing challenges of rural India, that is, poverty. They are also
ensuring empowerment of women and their social inclusion. These enter-
prises are social enterprises which result in social inclusion of women.
In a large economy, it is not possible for a government alone to face
those challenges. Social entrepreneurs are the ones who often come up
with innovative solutions to social problems. Ashoka founded by Bill
Drayton in 1980 to provide seed funds to social entrepreneurs and
Grameen Bank set up by Professor Muhammad Yunus in 1976 for eradi-
cation of poverty and empowerment of women of Bangladesh are exam-
ples of social enterprises. Social entrepreneurs try to solve small local
problems, but most of the times the solutions have global relevance
(Santos, 2009).
An SHG as defined earlier is a group of people who come together
with the common objective of increasing their income and status in soci-
ety. It acts as a catalyst for bringing this section of society to the main-
stream. This group is a voluntary one formed on areas of common interest
so that they can think, organize and operate for their development. SHGs
have helped in the emergence of women social entrepreneurs. These
women social entrepreneurs helped in transforming the lives of other
women. They have empowered themselves and also helped in empower-
ing other women in their villages and take a stand against the evils of the
society such as dowry, alcoholism and illiteracy (Anand, 2002).
Social Entrepreneurship Through Micro-Entrepreneurs… 163
National Bank for Agriculture and Rural Development (NABARD) of

India started SHG–Bank Linkage programme on a pilot basis in the year
1992. The objective of the project was to give collateral-free loan to the
people living below poverty line. They could get loan without any project
as well. The money that the SHGs would receive could be used for lend-
ing among themselves. Overall, 10–20 members were allowed to form a
group, and they formed a group based on mutual trust. The members
develop their own corpus fund based on a small contribution from each
member on a monthly basis. The group gets credit to the tune of six times
the savings. This loan is given six to eight months after the formation of
the SHG. After the success of the pilot project, it was decided to scale up
the project.
SHGs were also formed under Swarnajayanti Gram Swarojgar Yojana
(SGSY). There is a difference between the NABARD project and the
SGSY project. In the latter case, the SHGs need to be formed by people
below the poverty line, which is not the case with NABARD. There is
also an interest on revolving fund in case of SGSY SHGs. Women who
are part of SHGs are also part of many economic activities such as mak-
ing agro-based products, livestock rearing, floriculture, handicrafts (zari,
kantha, shola, etc.), sericulture, dhoop making, mat making, maduli mak-
ing and bori making.
SHGs need to be nurtured so that there is active participation from all
members of the group. These social enterprises set up by the women need
proper guidance and training. Their products need to be marketed well.
Government and banks need to play an important role in nurturing the
SHGs. The members of SHGs should meet regularly and should main-
tain important documents such as cash book and minutes of their meet-
ings. To help the SHGs in proper functioning, Mahasangha, ‘Sangha’
and ‘Upasangha’ have been formed. SHGs form ‘Upasangha’ which, in
turn, forms ‘Sangha’ which is a cluster of SHGs. ‘Mahasangha’ is a federa-
tion of clusters. Upasangha has to ensure proper functioning of the
SHGs. They have to ensure that records are maintained properly and
meetings are held regularly. They also step in whenever there is any prob-
lem. Sangha is the link between banks and SHGs.
SHGs function on the basis of cooperative principles and provide a
forum for members to extend support to each other. It is considered as a
means of sustainable development. SHGs act as a catalyst to pull the people

below poverty line and initiate the process of social and financial inclusion.
One of the main benefits of SHGs is social recognition of women leading to
social inclusion and empowerment. It is important to note that the effec-
tiveness and future of SHGs depend on the role played by the women who
have been empowered by SHGs to take the movement forward. This study
looks into that aspect. The basic research question that the study is address-
ing is whether social entrepreneurs emerging from SHGs can be effective in
changing the lives of other women and generating income for them. The
study looks at how two social entrepreneurs have been able to transform
lives of other women by providing them with income and social recogni-
tion. The study was carried out at Kumra block of North 24 Parganas dis-
trict of West Bengal and in Kolkata municipality area of West Bengal. Two
social entrepreneurs were interviewed. Face-to-face interviews through sem-
istructured questionnaire were conducted with two social entrepreneurs on
their empowerment levels in three dimensions—economic, social and polit-
ical. They were asked about the help they received from SHGs in setting up
their own social enterprise. They were also asked how they were ensuring
income for other women in their locality through their enterprises. They
were asked to elaborate on the social inclusion aspect, especially, how setting
up of the social enterprise empowered them and what role they were playing
in empowering other women in their village. Handwritten notes were taken
during the interviews. They were transcribed right after the interviews.
Social entrepreneurs were identified through the personal network of the
authors. We opted for exploratory research. As suggested by Malhotra
(2010), exploratory research reveals certain values and emotions which are
absolutely necessary for this kind of study. The interview method is also
considered to be a superior technique compared with others (Gray, 2004).
This chapter is organized as follows. The next section looks at the lit-
erature on the SHGs in India and other countries and the role played by
them in women’s empowerment and ensuring economic independence
for them. We also include literature on social entrepreneurship in the
literature review section elaborating on various theories of social entre-
preneurship. The section that follows next looks at the role of two social
entrepreneurs and the role played by them in ensuring economic inde-
pendence of other women and their empowerment. The last section sum-
marizes the findings of the study and elaborates on policy implications.
Literature Review
There has been extensive research on the role of SHGs in the eradication
of poverty and economic upliftment of the people below poverty line.
The role of SHGs in the financial system has been studied extensively
(Basu & Srivastava, 2005; Shah, Rangu, & Shankar, 2007; Sinha, 2006).
Yunus (2004) showed through the Grameen Bank that collateral-free
loan has significant impact on the poor. A study by Basu and Srivastava
(2005) showed how the linkage between SHG and Bank was helpful in
reaching the poor. Pitt and Khandekar (1998) did their research in
Bangladesh and concluded how Grameen Bank and two other social
credit organizations of Bangladesh had an impact on labour supply,
schooling, household expenditures and assets.
There have been few studies on how SHGs played an important role in
empowering women and allowing them to take a stand against social
evils. A study by Deininger and Liu (2009) found that there is a signifi-
cant increase in the empowerment of women in the SHG members’
group. No such significant change is observed, however, for the members
of the control group. The study by Jaya S. Anand (2002) on the perfor-
mance of selected SHGs on the empowerment of women in Kerala
showed that the impact has been positive on the families of the members.
Several groups have become centres for initiating social action against
dowry practice, alcoholism, illiteracy and divorce. A study by Deshmukh-
Ranadive (2004) on the SHGs of Andhra Pradesh revealed that there has
been a positive economic outcome for the group members, and there is
value in using SHG as a conduit for poverty alleviation. A study by
Ghani, Mani and O’Connell (2013), using representative household-
level employment data, found that longer exposure to women public rep-
resentatives significantly increases women’s labour force participation.
The research found evidence of both direct channel (whereby women
public representatives allocate more employment to women in public
works) and indirect channels (whereby women leaders at the district level
facilitate/encourage greater female labour force participation through the
public goods they provide). Swain and Wallentin (2012) evaluated the
impact of economic and non-economic factors on women’s empower-
ment of SHGs. They estimated a structural equation model (SEM) and
corrected for ordinality in the data to account for the impact of the latent
factors on women’s empowerment. SEM results reveal that for the SHG
members, the economic factor is the most effective in empowering
women. Greater autonomy and social attitudes also contribute signifi-
cantly to women’s empowerment.
As pointed out earlier, our research studies the enterprises from the
point of view of social entrepreneurship. So literature on social entrepre-
neurship is discussed in detail below.
In European countries, the concept of social enterprise made its first
appearance in the early 1990s as a part of the third sector which is labelled
as ‘social economy’ (Evers & Laville, 2004). The first initiative of social
enterprise was from Italy and was closely linked with the cooperative
movement. In 1991, the Italian parliament formalized the concept and
passed a law creating a specific legal form for ‘social cooperatives’ and
from then these initiatives experienced an astonishing growth. The con-
cept of social enterprise, which includes social cooperatives as one model
among others, does not contend at all with the concept of social econ-
omy. It rather helps identify entrepreneurial dynamics which are at work
at the very heart of the third sector, within the various European socio-
economic contexts. Ashoka founded by Bill Drayton focuses on the ‘pub-
lic entrepreneurs’ who are able to bring about social innovation in various
fields, rather than on the forms of organization they might set up.
Foundations involved in ‘venture philanthropy’, such as the Schwab
Foundation and the Skoll Foundation, have contained the idea that social
innovation is essential for social entrepreneurship and have supported
social entrepreneurs. Dees and Anderson (2006) suggested to distinguish
the two major schools of thought: the first school of thought on social
enterprise refers to the use of commercial activities by non-profit organi-
zations in support of their mission, well known as ‘earned income school
of thought’, and the second major school, named the ‘social innovation’
school of thought, is followed by organizations such as Ashoka.
Muhammad Yunus promoted a concept known as the mission-driven
business approach. According to him, social business is a non-loss, non-
dividend company which addresses a social issue (Yunus, 2010).
Dees (1998) has proposed the best-known definition of social entrepre-
neur in the second school of thought. According to him, social entrepreneurs
play the role of a change agent to create and sustain social value. In France,
Portugal, Spain and Greece, these new legal forms were of the cooperative
type. Some other countries, such as Belgium, the United Kingdom and Italy
(with a second law passed in 2006), took open models of social enterprise,
which were diversified forms of the cooperative tradition. The French and
Italian legal forms could be characterized as ‘multi-stakeholder forms’ as they
bring different stakeholders to work together on a given social purpose proj-
ect. The Belgian law on ‘social purpose companies’ and the Italian law on
social enterprise define a label which spans the boundaries of all legal forms
and can be adopted by various types of organizations working with an
explicit social aim (Defourny & Nyssens, 2003).
Social entrepreneurship is defined as ‘entrepreneurial activity with an
embedded social purpose’ (Austin, Stevenson, & Wei-Skillern, 2006,
p. 1). According to Bornstein (2004), a social entrepreneur is a path
breaker with new ideas to solve real-world problems.
SHGs are entering into these new entrepreneurial dynamics. They are
trying to start businesses with the objective of wealth generation with a
social face. They are emerging as the ‘third sector’. These groups are enter-
ing into the market with continuous production and sometimes with
product innovations. The economic risk factor is also inherent in these
initiatives. Social entrepreneurs, who emerged from SHGs, involve both
paid and voluntary workers.
Social entrepreneurs may be involved in enterprise development and trad-
ing activities, but finance is a means to an end. Their core objective is to
create social value (Hartigan & Billimoria, 2005). SHGs function with the
objective of empowerment intertwining with the objective of the former.
mpirical Study: Eradication of Poverty

E
and Women Empowerment: The Role of Social
Entrepreneurs
This particular study is an inspiring story of two social entrepreneurs and
the role played by them in the economic empowerment and social inclu-
sion of other women in their group.
Shilpi Sarkar’s Story
For Shilpi Sarkar of Kumra district, the glass ceiling had to be shattered
as she was a housewife in a conservative rural family. Her entry into busi-
ness was traced out as an extension of her kitchen activities. Her husband
trained her after he returned home from Mumbai. He was working as a
craftsman and was trained in making handicrafts out of sand dust and
sand stones. He then wanted to start his own business, but lack of funds
was preventing him from starting his own enterprise. The so-called
housewife Shilpi entered with Asha (an SHG, formed by her). She availed
a loan of nearly INR 70,000 from Grameen Bank of Kumra district. She,
along with her husband, started their business, and she also got training
from her husband. She started the craft manufacturing business and
engaged two members from her group. The family with two children is
now in a solvent financial position. Marketing of the products is done by
her husband. Her products are available in retail markets of Habra
Barasat, New Barrackpore and Bongaon. Entrepreneurship is not a bed
of roses for her. Her participation in business was to complement her
family income. She is, however, not exempted from her family duties.
Her task has become more tedious and full of challenges. When asked to
visit the fairs organized by the government, she refused because of her
family obligations. So the system is still heavily masculine and hampers
the promotion of gender equality. Although there are hindrances, Shilpi
has been successful in changing her own life and the lives of her group
members. Shilpi and her group members are now in a position to take
decisions in their families, although they still have a long way before they
can achieve independence in the true sense. Nevertheless, a beginning has
been made.
Krishna Sarkar’s Inspiring Story
The ‘disease’ (as told by Krishna) of helping others was transmitted to her
from her father. The dilemma of ‘how to help them?’ had been troubling
her. Krishna knew she cannot afford any more to be the cat on the wall.
She was not prepared for the traditional way of thinking and to let her life
follow a route which was stagnant. Hailing from a conservative middle-

class family, Krishna did not have the ritualistic attitude of sticking to the
system. Her father, a medical officer and a hardworking man, had con-
tinuously worked for other people in their neighbourhood. Her mother
was a prudent social worker and was associated with several SHGs. She
supported her and ensured that the ends met even under trying condi-
tions. So the urge to help others was in her genes. She inherited it from
her family. The only child of the family, Krishna wanted financial libera-
tion for her family. A consistent good student in school with special incli-
nation towards co-curricular activities, Krishna’s amiable nature was liked
by all at school. Krishna was always inclined to pursue education along
with some vocational course. However, the strong family ties and
entrenched conservative outlook kept it at bay. Although most people
assured her that within six months she would be able to become self-
sufficient, the possibility of adding more financial burden on her parents
discouraged Krishna from taking any new step. The bonhomie character
and the adrenalin rush of the start-up appealed to the dormant adven-
turer in Krishna. But soon pressure started building up on the home
front for a more concrete career step. Without a mentor to guide her,
Krishna found herself looking for jobs. Getting a job was not difficult for
her. But in every job, irrespective of the position she started with, Krishna
would end up in a trainer or business development role. Despite being an
introvert, her sales skills were good and she could match herself with oth-
ers. It seemed that she changed into someone else when faced with a sales
issue or opportunity. Although she cherished the positions, at the end of
the day, she was always left wanting for something else. Krishna wanted
a change. After two to three years of such jobs, Krishna felt that she must
have proper training for doing her own business. As her mother was also
associated with several SHGs and knew various organizations that pro-
vide such trainings, Krishna contacted them. She soon got admission
into La Martiniere Seomp Society—an NGO in Kolkata, one of the pre-
mier institutes helping SHGs and providing different skill development
trainings.
She found that programme intriguing. She would spend days to make
herself perfect. She got the certificate. But she did not end the process of
being trained. She took training from Entrepreneurship Development
Institute and local tailoring institute as well. Then the day for which she
had been waiting and toiling finally seemed to have arrived. Krishna
formed ‘Pragatisonirbharghosti’ in 2010. The desire for making a differ-
ence through group formation was successful. She dreamed of a career
where she would enable other people to fight against odds. Krishna, a
very hardworking woman, found herself working long hours to arrange
works for her group members. But the job was making a difference to her.
She approached with this idea especially to women. Then seven women
of her area who were from distressed families took the initiative of joining
the SHG for income-earning purposes. The group specialized in the
manufacturing of ready-made garments, dolls, tie and dye products, jute
bags, decorative candles and so on. They expanded it to handicrafts, com-
puter embroidery and food items such as jam, jelly, pickles, sauce and
bori (a food item made of pulses).
Within two months of forming the group, she got a place in the Sham
Bazar area. Her cousin provided his two-storied house for her manufac-
turing business. His brother’s wife joined the group and was designated
as the president of the group. Her approach to work attracted the atten-
tion of both her group members and some political leaders and wealthy
people of the locality. All these motivated Krishna to give her best in her
work. She found the group getting recognition steadily. Diligently she
took up professional certifications in different areas of skill development.
Although she was pleased with the attention and appreciations received,
those were not enough to whet her passion for doing her own business.
Her mother by then took on the next obvious task of searching a suitable
match for her. The horoscope was circulated, photos were exchanged, but
Krishna was not comfortable with all these. She approached the local
Member of Legislative Assembly (MLA). The person expressed his inter-
est and helped the group with a place to sell their products. She got acco-
lades for her products. For a while, Krishna was pleased and happy with
her achievements. Krishna was not sure whether she could take a call
independent of her family’s wishes. During those hectic days, Krishna
also managed to help other women of her group. Few months passed in
indecisiveness and dissonance. She tried to restrain her mother from
making marriage arrangements. At this time, two things happened inde-
pendently, albeit simultaneously. The first one was Mamoni (a lawyer by
profession), who was aware of Krishna’s ambition, joining the group. Her
cousin provided two rooms in his house in Shampukur near Sham Bazar.
Though her sister-in-law opposed as she was afraid because of security
reasons, Krishna got the place for her first ‘bori’-making venture with
seven women in that locality. Krishna’s ambition was to make her own
brand. Krishna’s first move was self-financed as no bank gave her a loan.
She started her group by making bori with an initial capital of INR 3000.
In the beginning, there were seven members. They started with ‘Pragati
Bori’ (homemade product) and marketed the final product on their own
at various places such as the state court, district courts and banks and
made a profit of INR 4000. One-half of the profit was reinvested in their
next venture, which was manufacturing of coconut-based sweets and, at
that time, five more members joined her. They sold their products in vari-
ous places for INR 9000 and made a profit of INR 2500. Krishna had
also opened bank accounts and purchased LIC (life insurance) policies
for her group members. Now, after six years into their business, they are
focusing on ready-made garments named Pragati Garments and have
increased their capital amount to INR 25,000.
Krishna, a successful ‘private agent’, facilitates her group members to
fight against odds. The instance of Jaya, founder-member of the group, is
noteworthy. Jaya was completely devastated by the sudden demise of her
husband. She was left alone with two young children. She was cheated by
her family members and left helpless without any financial and moral
support. Krishna met her and asked her to join the group with an assur-
ance of some financial support to survive. Jaya was not that keen about
her intentions, but as there were no alternatives, she agreed. She started
with bori making and is now trained in embroidery and incense stick
making; her earning initially was nearly INR 5000. She was able to pro-
vide education to her children. She is now well established and has also
got back her husband’s house with legal support provided by one of the
group members. Krishna’s ‘Pragati Udyog’ made her financially strong
and put her on a socially identifiable platform.
Krishna’s story is a truly inspiring one. A small micro-entrepreneur like
her could change the lives of so many women she worked with. Such
outstanding individuals are often portrayed today as heroes of the mod-
ern times (Bornstein, 2004).
Discussion and Conclusion

SHGs play an important role in the empowerment of women through
economic independence and eradication of poverty. The main objective
of SHGs is empowerment of women and ensuring economic indepen-
dence for them. Social entrepreneurs who emerged through help from
SHGs have gained economic independence and social recognition.
Women are visiting banks, have bank accounts, have learned to put their
signatures and are participating in political meetings interacting with
outsiders. This was not the case before they joined SHGs.
Economic independence has made these women less dependent on
other members of the family. Even men realize the importance of SHGs.
Women are encouraged to attend meetings. They have become decision-
makers; they are taking decisions about their children’s education, mar-
riage and so on. SHGs have been able to achieve financial as well as social
inclusion. It has been found that all-women SHGs tend to do better
compared with mixed group ones. This study discussed the case studies of
two social entrepreneurs and the role played by them. The enterprises set
up by them help other women of their group in getting a decent income
which helps in social inclusion.
In a male-dominated society, it is not easy for a woman to establish her
own identity. Mobility is restricted in a village community. On the finan-
cial front, lack of support from both family and institutions is quite com-
mon. Because of restricted mobility, marketing problem arises. Women
are tied up heavily with family responsibilities. The family surroundings,
societal norms and low education lead to lack of self-confidence and apti-
tude for entrepreneurship. With passage of time and spread of education,
women have shifted to new economic activities. Women entrepreneurs
are believed to accept challenging roles to meet their personal needs and
become economically independent. A strong desire to do something pos-
itive is an inbuilt quality of entrepreneurial women, who are capable of
contributing values to both family and social life. Women, especially
those living in rural and peri-urban areas, continue to face major con-
straints such as poverty, lack of access to property, illiteracy and heavy
domestic duties. Given these constraints, women are coming forward to
make a difference to their own lives and that of others.
It can be seen that women are progressively building up self-confidence,

resulting in their increased access to financial support as well as greater
social recognition. Some women are still not showing interest in becom-
ing entrepreneurs because of their family reticence and social environ-
ment in which they have grown. The funds from government are not
really reaching the target group which they are sanctioned for. However,
there is an overall change in the mind-set of the society as well as family
members in supporting the children in becoming entrepreneurs.
Positive efforts from all areas are required in the development of
women entrepreneurs and their greater participation in the entrepreneur-
ial activities. The following measures are suggested to empower the
women to seize various opportunities and face challenges in business.
There should be a continuous attempt to inspire, encourage, motivate
and cooperate with women entrepreneurs. Programmes are needed on a
large scale with the intention of creating awareness among women about
the various areas to conduct business and to impart necessary skill sets to
them. Attempts should be made to enhance the standards of education of
women in general as well as making effective provisions for their training,
practical experience and personality development programmes, to
improve their overall personality standards. SHGs of women entrepre-
neurs should be provided with capital funds, to help them in the field of
industry, trade and commerce and to make them self-sufficient.
Social entrepreneurship emerging from self-help groups will create
opportunities to make profit and create wealth with balancing social
and economic obligations. The social ventures created by independent
members of an SHG will develop the institutions and infrastructure
needed for development and will be the catalyst of social and economic
development.
This chapter has policy implications. Social entrepreneurs emerging
from SHGs can be effective in eradication of poverty in people who are
at the bottom of the pyramid. This can be a model of development for
developing countries. Government will have to play an effective role in
nurturing these social entrepreneurs for overall development of the coun-
try. This study looks at how SHGs can be instrumental in developing
social entrepreneurs which has not been covered extensively in the exist-
ing literature. So this study will add value to the existing literature. The
study, however, suffers from one weakness. It is confined to only one state
of India. To develop this model further, other states of India need to be
included so that it becomes a model of development for developing
countries all over the world.
(Names of the protagonists have been changed to hide their identity.)
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8
Stimulated Innovation Cycle to Serve
the Poor: A Case of Mann Deshi Mahila
Group
Balram Bhushan
Abstract Innovation acts as a tool for capacity building. Social problems

do not occur in isolation; hence, a single innovation is not sufficient,
instead they require a combination of innovations. As these innovations
are directly related to survival needs of the poor, the lag time between
idea generation and innovation should be minimized. Considering mul-
tiple innovations of Mann Deshi Mahila Group (MDMG), this chapter
proposes a stimulated innovation cycle to serve the marginalized. The
chapter identifies two types of innovation, namely stratified innovation
and sequential innovation. Layered innovation connects two value chains,
and sequential innovations are interventions in the same value chain.
These two types of innovations are the precursors of each other, thereby
generating stimulated innovation cycle.
B. Bhushan (*)
XLRI, Jamshedpur, India
e-mail: fh12002@astra.xlri.ac.in

https://doi.org/10.1007/978-3-319-74488-9_8
178 B. Bhushan
Introduction
Social entrepreneurship challenges social issues by combining social
innovation and market orientation (Chell, Spence, Perrini, & Harris,
2016). The purpose of such social innovation is to create value, measured
at societal level (Santos, 2012). Although there is no consensus on mea-
surement of value creation (Mair & Sharma, 2012), it does not stop
social entrepreneurial process to unfold. During this process, externalities
emerge and social entrepreneurship thrives for positive externalities
(Santos, 2012). In addition, negative externalities should be minimized;
hence, a continuous intervention is needed. In other words, the continu-
ous intervention by social entrepreneurship organizations (SEO)
addresses the complexity of the social problems. Complex social prob-
lems may not have solutions and need resolutions because addressing one
social problem can increase the visibility of subsequent problems (Dorado
& Ventresca, 2013). In some cases, the recurring social problems further
increase the complexity, leading to sustained cycle of socio-economic
consequences (Hajek, Ventresca, Scriven, & Castro, 2011). Hence, there
is no defined end to the social problems and no ultimate test of the solu-
tions (Rittel & Webber, 1984). For example, capability building without
consideration of availability of job opportunities will only add to the
problems of the job aspirants. Under such enhanced aspirations, they
may not like to continue traditional work as well. Hence, capacity build-
ing without consideration of opportunity to utilize those capacities will
definitely bring a change in the society, but it will create much bigger
problems of unemployment, reduction in labour force for traditional
work, dissatisfaction among those who continue traditional work even
after enhancement in their capacity and so on. It means the complexity
of social problems demand systemic intervention (Dees & Anderson,
2003). This chapter is an attempt to decipher the mechanism through
which social innovations resolve social problems.
Complex social problems are basically linked to market failure and
belief system of the community. Market failure is one of the important
deterrent factors for business to start their operations (Mueller, Nazarkina,
Volkmann, & Blank, 2011). This is because of the fact that an opportunity
to start a business enterprise is equated to identifying a market for the same
Stimulated Innovation Cycle to Serve the Poor: A Case of Mann… 179
(McMullen, 2011). In case of social issues where no such market exists, the
inherent question is ‘where is the opportunity?’ (Glaeser & Scheinkman,
2000). The second aspect of the social problem is its deep root in the belief
system of the community (Gusfield, 1989). Institutional interventions by
the government are needed in such cases, but either governments are apa-
thetic to these issues or do not have enough resources to implement sys-
temic interventions. Under these circumstances, social entrepreneurship
emerged as an alternative. Although extant literature of social entrepre-
neurship discusses about the process of opportunity recognition to oppor-
tunity exploitation (Henry, 2015; VanSandt, Sud, & Marmé, 2009), no
attempt is made to see the cascading effect of opportunity and how social
entrepreneurship ensures systematization of their innovative practices.
Here, the author has attempted to develop a theoretical framework to
understand how innovations are generated and processed so as to ensure
success. With the help of the single case on Mann Deshi Mahila Group,
a stimulated innovation cycle is identified which ensures systemic inter-
vention to resolve social problems. Specifically, this chapter is divided
into three parts. The first part deals with sketching the outline of this
framework with the help of extant literature on social entrepreneurship
and hence identifying aggregate theoretical dimensions; the second part
identifies emerging theoretical constructs within these dimensions and
the third part links these constructs in the form of propositions.
ackling Social Problems Through Social

T
Entrepreneurship
After studying hundreds of successful and unsuccessful entrepreneurial
ventures, Sahlman (1996) proposed a framework to explain creation and
management of entrepreneurial ventures. This framework discusses about
four dynamic components of entrepreneurial process or venture: the peo-
ple, the external context, the deal and the opportunity (PCDO). Different
scholars used his work for different purposes. For example, building on
his framework, Zinger and LeBrasseur (2003) examined the interaction
between contexts, opportunity, people and deal by noting some specific
questions such as ‘Must this opportunity be exploited immediately?’ and
180 B. Bhushan
‘What are the most suitable milestones for assessing performance?’ Lee
(2015) extended the work to answer the ‘how’ of entrepreneurship.
Farmer and Kilpatrick (2009) used success of entrepreneurship as a lit-
mus test for rural health professionals. The framework is equally valid
and also used in the context of social entrepreneurship. More specifically,
Austin, Stevenson and Wei-Skillern (2006) used the framework to dif-
ferentiate social and commercial entrepreneurship. According to them,
under the enabling and constraining factors (context), actively engaged
players (people who contribute to the entrepreneurial process) invest in
scarce resources (opportunity) so as to exchange a bundle of values (deal).
Furthermore, social entrepreneurship addresses social problems by updat-
ing their vision continuously. Organizations practising social entrepre-
neurship device a cycle of action–vision, and hence every action helps to
redefine the vision of the organization (Duhl, 2000). Szymańska and
Jegers (2016) looked at the driving force of social mission in case of social
entrepreneurship with the lens of Sahlman (1996). But people differ in
their behaviour owing to their responsibilities and resources provided to
them (Dorado, 2006). Hence, with the help of data, this chapter tries to
see the variation among the people with respect to the same conceptual-
ized behaviour. Before examining the data, this chapter delves deep into
social entrepreneurship literature to create boundaries around aggregate
themes of people, context, deal and opportunity.
People
The literature on social entrepreneurship is divided into two groups as far

as actively engaged actors are concerned (Nicholls, 2010). One group of
scholars focuses on lone entrepreneurs and other believes in collective
action (Bacq & Janssen, 2011). According to the latter group, the process
of social entrepreneurship contains actively engaged players including the
founder (a heroic figure) and other contributing players including mem-
bers of the organization and community as well (collective nature).
Although the extant literature of social entrepreneurship sees heroism
and collectivism as distinct thoughts (Nicholls, 2010), both are equally
relevant for the success (Choi & Majumdar, 2014). Social entrepreneurs
are recognized as a rare breed (Dees, 1998), who strive for creating value
instead of capturing the same (Dees & Anderson, 2003). For entrepre-
neurs, there are three means defined as per theory of effectuation. These
are as follows: ‘who I am’, ‘what I know’ and ‘whom I know’. At the indi-
vidual level, ‘whom I know’ represents the social networks, and, at the
firm level, it represents organizational resources (Sarasvathy, 2001).
Hence, effectuation logic shapes the entrepreneurial opportunity where
individuals within and outside organization contribute. In other words,
individuals within and outside the organization engaged in ensuring the
effectuation logic of the entrepreneurs shape the entrepreneurial oppor-
tunity. Corner and Ho (2010) used effectuation theory and rational/eco-
nomic element to suggest that socially entrepreneurial opportunity is
shaped through integrated skills of the interconnected actors. This shap-
ing of social entrepreneurial opportunity takes place in four steps, namely
recognition, formation, evaluation and exploitation (Zahra, Newey, &
Li, 2014). Hence, this chapter examines ‘social entrepreneurial opportu-
nity’ next
Opportunity
Apart from the personal characteristics of people involved in the process

of social entrepreneurship, socially entrepreneurial opportunity is also a
differentiator from other phenomena (Mair & Marti, 2006). The oppor-
tunity recognition in case of social entrepreneurship should follow Pareto
criteria, that is, making at least one person better off without negatively
affecting utilities of all others (Zahra, Rawhouser, Bhawe, Neubaum, &
Hayton, 2008). This is ensured through social innovation involving con-
tributions from a large number of stakeholders so as to serve the society
as a whole (Kickul, Janssen-Selvadurai, & Griffiths, 2012). The idea of
social innovation is related to bringing a change in the society through a
process of continuous innovation for recognizing value creation activities
(Choi & Majumdar, 2014). Here, the focus of innovation is culture and
collective consciousness of different people being affected by the imple-
mentation of innovation. It is the result of contribution of actors crossing
all possible boundaries and resulting in new combinations of capabilities
at large (Phillips, Lee, Ghobadian, O’Regan, & James, 2015).
182 B. Bhushan
During opportunity formation, integrating the purpose of social entre-

preneurship (social and environmental concerns) and economic aspects
of the opportunity results in mobilization of resources and improved per-
formance leading to value creation by the process (Murphy & Coombes,
2009). These two aspects are governed by enabling and constraining fac-
tors which may be of dynamic or static nature. The constraining factors
create the boundary condition of the opportunity and the enablers propel
the opportunity towards value creation (Weerawardena & Mort, 2006).
Evaluation of such opportunity involves integrated thinking, prosocial
cost–benefit analysis and commitment to social cause by working together
(Miller, Grimes, McMullen, & Vogus, 2012). It means opportunities are
shaped by integration of feeling and rationality (Arend, 2013). The feel-
ing part is associated with psychic income gained by attempting to address
social problems and rationality ensures sustainability (Busenitz, Sharfman,
Townsend, & Harkins, 2016). Finally, opportunity is exploited with the
view of primary motive of social value and surplus generation in due
course of action (Seelos & Mair, 2005). Social entrepreneurship process
devises its own market orientation where the primary purpose is to serve
the basic needs and identify the contours to ensure survival (Seelos,
Ganly, & Mair, 2006). This surplus generation in the process of social
entrepreneurship is the equivalent of profit making in commercial entre-
preneurial process. At one end, this surplus ensures financial sustainabil-
ity and, at the other end, provides resources for cross-subsidy (Fowler,
2000).
Context
It is already noted that there are enabling and constraining factors which
shape the opportunities. Basically, constraining factors are not under
control of the actively engaged actors; instead, these factors direct the
action of such actors. One of the constraining factors is governmental
regulation. For example, in India, as per the regulation, main stream edu-
cation is open for for-profit enterprises and that limits any player to reap
the benefits of available opportunities. Here, caution must be considered
that government as a whole cannot be treated as a constraining factor as
there are government policies facilitating the process of social good

through social entrepreneurial organizations. For example, the
Government of India serves as one of the major funding agencies for
many non-governmental organizations (NGOs) such as Barefoot College
and Mann Deshi Mahila Group (MDMG). The case of Mann Deshi
Mahila Group is interesting to note here. This is a hybrid organization,
having non-profit Mann Deshi Foundation and for-profit Mann Deshi
Mahila Bank. Mann Deshi Foundation gets project-based funding from
government, domestic and international funding agencies, and Mann
Deshi Mahila Bank works under the regulation of the Reserve Bank of
India, the central bank of the country. For both units, the government
body acts as an enabler as well as a constraining factor. As an enabler, the
government body provides funding and other institutional support and
at the same time imposes compliance limiting the ability to shape the
opportunity as per dynamic needs. Another factor which could be con-
sidered in this category is the community itself. Every community has
certain social norms. These norms may become a hindrance in taking
specific actions which challenge the dominant norms of the community.
Alternatively, the community is also a supplier of resources including
human resources to financial resources for shaping the opportunity.
Deal
In this sequence, the final concept of PCDO model is ‘deal’. This chapter
is limited to ‘who gets what’ concept. The purpose of social entrepreneur-
ship is value creation which takes place at societal level (Santos, 2012).
Instead of shareholders’ orientation, the driving force of social entrepre-
neurship is stakeholders’ orientation, and the leader should communicate
the purpose, involvement and self-transcendence to others (Bacq, Hartog,
& Hoogendoorn, 2013). This portrays a sacrificial connotation of people
practising social entrepreneurship. But after getting engaged in the
process of social entrepreneurship, actively engaged actors are also getting
benefited. For example, social entrepreneurship includes for-profit ven-
tures which is also a typical case of monetary benefit going to actively
engaged people (Marshall, 2011). Apart from that, social income, hedonic
184 B. Bhushan
pleasure, sense of fulfilment, happiness, work–life balance and so on are

some of the non-monetary benefits (Dey & Lehner, 2016). Specifically,
these non-monetary benefits have major significance for the people
engaged in the process of social entrepreneurship because these are higher
order needs of people as far as Maslow’s need hierarchy is concerned.
Conclusively, with the lens of the PCDO model, founder, employ-
ees in the organization and members of community represent the peo-
ple. The context is related to government and the community for
which the process of social entrepreneurship is implemented. Deal rep-
resents the exchange between the actively engaged people and the
recipients. Here, the basic needs of recipients are served and actively
engaged people are compensated in terms of either monetary terms or
non-monetary terms: ‘psychic income’. The opportunity is recognized
through social innovation and processed through market orientation.
But how these concepts are connected is the research question taken
up by this chapter.
Empirical Setting and Method

To address the research question of how social innovations resolve social
problems, a case study on a hybrid organization is presented here. The
founders are Ashoka fellow, Schwab fellow and Yale fellow. Although the
organization is two decades old, its genesis goes back to the movement
started by Jai Prakash Narayan (henceforth JP movement) in the 1970s.
The main idea carried by the organization from the movement is to
develop the village through community empowerment. It was the vision
of the founder that young, middle-class, well-educated people should
move to villages and work there. So the founder moved to a village which
is neither her native place nor well known to her earlier. She mobilized
people and the organization was formed to serve a defined geographical
boundary called ‘Mann Desh’. This region includes ten districts of India.
To capture the ‘people’ aspect of PCDO model, people across the
organizational hierarchy were interviewed and relevant data were col-
lected through participant observation and archival sources.
Mann Deshi Foundation
Mann Deshi Foundation is a not-for-profit organization and has 109

employees. The organization provides various types of trainings to rural
women to start their own business. One of the innovative initiatives of
the organization is Mann Deshi MBA, a one-year contact programme
which is specifically designed for rural women entrepreneurs. Similarly,
the organization runs various short-term training ranging from a few
days to few months. All these programmes are aimed at imparting skills
relevant to start a business at the local level. Apart from skills training, the
foundation also helps in finding market and efficient ways of reaching to
the market. Recently, the organization has taken the initiative to establish
a Chamber of Commerce for rural women entrepreneurs. The aim of this
initiative was to provide mentoring and consultancy support to rural
women entrepreneurs so as to help them during challenging situations.
The foundation also works for younger generation. More specifically,
here the focus is to train school-going girls in athletics and inspire them
to take up sports, especially athletics, as a profession.
Mann Deshi Mahila Bank
This is a women’s (Mahila) bank where only women can become mem-
bers. It was realized that only training is not sufficient, but small financial
support was also required to start business even at the local level. Also,
women of the region were interested in saving money for their future,
but they were denied savings bank accounts in formal banking system
due to the meagre amount of their savings. This led to the genesis of this
bank, which provided an opportunity to save even Rs 5 ($0.07, taking
$1 = Rs 67). The bank also extends loans to their members to start busi-
ness. To avail a loan of Rs 20,000 ($299) or higher, some security and
their husband’s consent are required. Majority of the loans are very small,
and loan distribution and recovery happen through bank correspondents
at the marketplace so as to avoid any loss of productive time of the recipi-
ents. Most of the loan recipients also enjoy the support extended by the
foundation.
186 B. Bhushan
It is a sandwiched organizational process to ensure success of aspiring

women entrepreneurs of the community. As a first step, the foundation
provides skill-based training, then financial support is provided by the
bank followed by handholding done by the foundation.
Data Collection
Data collection was part of the larger assignment, and it took around two
months for complete data collection. During this period, the author
worked in the organization with people across the organizational units
(foundation and bank) and conducted interviews. Participant observa-
tion was also another method of data collection used during this period.
Along with these archival data, information from the organizational web-
site and other sources such as YouTube videos and newspaper reports
were collected.
In total, 21 interviews were conducted; of these, 5 were recipients, and
the remaining 16 were from within the organization. Interviews of recipi-
ents were used for the purpose of data triangulation, and only triangu-
lated information was included in theorization. People within the
organization represented different units and hierarchy. All recipients and
people within the organization have been associated with the organiza-
tion for more than three years. While selecting people, snowball sampling
was used. Multiple strategies were used so as to avoid loss of any informa-
tion as there is threat of getting information from only single network in
case of snowball sampling. First, the author worked for three weeks in the
organization so as to understand the organizational processes and also the
working styles of the people. During this period, the author communi-
cated the purpose of the research to different people, and after that he
interacted with one of the top management official so as to identify inter-
viewees. Second, after finishing each interview, the author also asked each
interviewee to suggest a few more names who have relevant experience in
the organization. Third, the author interviewed people coming from dif-
ferent work function in both units of the organization (the foundation
and the bank).
Except three, all interviews were audio recorded. In these three cases,
the interviewees were not comfortable with recording; hence, the author
decided not to record these interviews and maintained detailed notes of
the interviews. Interviews were conducted in the preferred language
(Hindi) of the interviewees. After that, all interviews were translated from
Hindi to English.
Data Analysis
The entire data collected through various means (interview, archival data,
participant observation, information collected through Internet) were
compiled into one document on a case-to-case basis. Then each of them
was analysed deeply through grounded theory coding method consider-
ing PCDO model. Here, people represent individuals across the organi-
zational units and hierarchy, context represents entities (government and
the community) generating enabling and constraining factors, deal pres-
ents transactional entities between people across the organization and
recipients and opportunity represents social innovation, integrated think-
ing, prosocial cost–benefit analysis, commitment to alleviating other’s
suffering and market orientation. Integrated thinking, prosocial cost–
benefit analysis and commitment to alleviate other’s suffering are not
theoretical categories but different manifestations of the same concept.
Similarly, market orientation and social innovation are broader theoreti-
cal categories. Depending on the data, proper theoretical categories were
developed keeping aggregate theoretical dimensions of PCDO the same.
This analysis helped to identify three focal actors, listed below:
Ms Chetna: the founder—involved in the bank as well as foundation

Ms Vanita: predominantly involved in the working of the foundation
Ms Sushma: predominantly involved in the working of the bank
Although these are the focal actors, inputs from other interviewees
were also incorporated so as to ensure focal nature of these actors. Analysis
of this kind generated first-order code which was considered for the next
step. In the second step, second-order concepts and appropriate aggregate
188 B. Bhushan
dimensions were identified. Here, deductive reasoning was adopted using

PCDO model. At this stage, constant comparison between data and the-
ory was maintained. PCDO model was revisited along with relevant lit-
erature on emerging themes. This helped to define emerging theoretical
categories and their positioning in extant literature. A detailed account of
definition and relevant theoretical inferences is listed in Table 8.1. In the
table, sequential innovation and stratified innovation are defined. These
are the two types of social innovations practised by the organization. It
means in both types of innovation, concerns of larger base of stakeholders
Table 8.1 Structural representation of data

PCDO
First-order code/definitions Theme model
The process of recognizing the purpose of Idealization People
taking action
Taking proactive measures to ensure the Driven
service to recipients participation
Connecting self with relevant others already Personal
working for social cause association
A combination of steps needed for successful Sequential Opportunity
implementation of single holistic innovation
innovation
A combination of innovations where deeper Stratified
intervention is incorporated innovation
Reaching recipients so as to understand Participatory
effect of intervention on their life evaluation
Considering multiple dimensions of Holistic
interventions, both positive and negative visualization
The process of negatively affecting the hope Marginalization Context
of targeted recipients
Due to norm or law, a complementary, Imposition
non-expected action undertaken
Recipients decision to spread the work of Moved
organization in same direction contribution
Keeping oneself engaged in the process due Proud Deal
to pride associated with working for the engagement
organization
Feeling happy due to the happiness of the Happiness
recipients transcendence
Realization that the person has been Emerging
evolved due to working in the self-image
organization.
Source: Author’s own
should be considered so as to qualify for the category described as sequen-

tial as well as stratified innovation. Similarly, driven participation is
defined for people working in the organization, that is, internal stake-
holders, whereas moved contribution is defined for recipients, that is, for
outside stakeholders. The data were shared with an independent researcher
who has deep knowledge of qualitative data analysis.
Triangulation is achieved through three means. First, an independent
researcher coded the entire set of data following a coding guide. In case
there were any differences between coding by the independent researcher
and the author, they were discussed and appropriate changes were incor-
porated. Second, analysed data were shared with the organization and
suggestions to improve the interpretation were sought so as to reflect the
reality. The changes were made after a discussion with the focal respon-
dents. Third, the work was presented multiple times to colleagues, and
their inputs were discussed. They brought their perspective to evaluate
emerging themes and help in shaping the final outcome. Table 8.1 repre-
sents the definitions of emerging themes under each of the component of
PCDO model.
First-Order Within-Level Analysis
In this section, narratives of people within and outside organization will

be presented. The categories are as follows: top-level management team
(focal actor—Ms Chetna), middle-level management team (focal actor—
Ms Sushma), implementation staff (focal actor—Ms Shahin) and recipi-
ent (focal actor—Ms Kalel). No effort is made to portray a normative
judgement of the researchers on the data; instead, data are used to develop
the theoretical categories identified in the earlier part of the chapter.
Ms Chetna, the Founder
Her involvement in the social sector started during the JP movement, the
time she was a student. After completing her education, she joined an
educational institution as a faculty, but the compelling need of people
motivated her to resign her job. She shifted to a village called ‘Mhaswad’
190 B. Bhushan
and married a farmer, who supported her initiative to establish an institu-

tion to serve the needs of rural women. Ms Chetna, famously known as
Bhabhi (sister-in-law) to the community, mobilized rural women, edu-
cated them and started the women’s cooperative bank, Mann Deshi
Mahila Bank. This was the first women’s cooperative bank in the country
recognized by the Reserve Bank of India. During her initial days, her
strategy was to identify pressing problems, mobilize women and reach
the decision-making authority along with these rural women. In this
manner, she was able to address a range of community needs, including
electricity, telephone connection, banks and so on. Table 8.2 presents the
evidences of emerging themes, drawn from her statement.
s Vanita: The CAO (Chief Administrative

M
Officer—Foundation)
Her involvement with the organization started in 2006 as a computer

officer, and presently she is working as the chief administrative officer
(CAO). She comes from a royal family where cultural values are respected
very much. At present, she plays a key role in all decision-making pro-
cesses of the foundation and also acts as a liaison between the foundation
and the bank. Table 8.3 presents the evidences of emerging themes,
drawn from her statement.
Ms Sushma: Chief Finance Officer, Bank
Ms Sushma was born and brought up in the metro city of Mumbai, and
it was her conscious decision to shift to a village and make a career there.
Hence, after marriage she shifted to her husband’s village. According to
her, she took the work in the organization lightly for the initial three
years. After three years, she came across an old woman who was aban-
doned by her children, and her story was so compelling that she realized
the importance of the work done by the organization towards women
empowerment. Presently, she is the person who takes care of reporting of
the bank to the regulatory body, the RBI. Table 8.4 presents the evi-
dences of emerging themes, drawn from her statement.
Table 8.2 Illustrative evidence from bank and foundation: Ms Chetna, the founder
First-order code Themes
‘His (Jai Prakash Narayan’s) uniqueness was that middle-class Idealization
people who joined (the movement) have to work in the
village. I always remember one teaching of Mahatma
Gandhi to see the extent of benefits reaching the last
person in whatever you are doing.’
‘Perhaps, I had a background of movement which brought Driven
me on this, if bank is not opening the account then we participation
will start women’s bank.’
‘She is very close to us, we call her Bhabhi (sister-in-law)’ Personal
(said a recipient) association
‘See, when bank opened, women started to come, they Sequential
started savings, taking loans, but the biggest issue of innovation
women was to start something. Then we thought why not
start this training school.’
‘Our core activity is women entrepreneurs and we have Stratified
expertise in that; we are made for that. Now, among the innovation
younger women it is sports, but in future it may become
our core.’
‘Women entrepreneurs do tell that they need (help) in Participatory
marketing and in making a contract. So they are learning evaluation
what they have to learn, not what you want to teach.’
‘They (recipients) think very simple and we propose complex Holistic
solution. These people are very simple, see problems with visualization
much simplicity. For example, when we planned to give
Micro ATM cards and women were told to remember PIN
(Personal Identification Number). But they can’t remember
the PIN hence refused to take the card. So, we identified
simpler solution.’
‘Bank refused to open her (a rural woman) account because Marginalization
of small size of savings.’
‘That if there is no institution then there is freedom. This Imposition
fact is there. If you establish an institution then your
freedom may be taken away.’
‘Wherever we work in community, if people are coming, Moved
people are taking the responsibility, then we will work.’ contribution
‘Pride comes; if I will be doing, I will be getting awards then Proud
this does not come. So when Mann Deshi women are engagement
getting these, then it comes.’
‘With village women, in them, in others, if something brings Happiness
special effect and that is visible then I am getting much transcendence
happiness out of that.’
‘You develop such patience sometimes, what you should not Emerging
accept, you accept them… So because of that you develop self-image
that patience. To develop the self, you do this.’
192 B. Bhushan
Table 8.3 Illustrative evidence from foundation: Ms Vanita, the CAO

‘They have the willingness but they can’t enjoy the benefits Idealization
of facilities because of lack of available…And my
background is not very different from other women. Still
they are becoming role model.’
‘I always feel positive vibes around me. Whenever I do some Driven
work, some positive and negative do happen, but I forget participation
negative and concentrate on positives only. In other
words, I never leave my efforts in the middle, put efforts
till last minute. I always put double efforts to achieve
success.’
‘I joined in June 2006. The reason behind joining is my Personal
husband Mr. Jay Kumar Shinde is the founding member of association
Mann Deshi.’
‘If you train 20, one will be transformed then she will Sequential
transform 150 other women. So like this we see linkage or innovation
the chain.’
‘Mann Deshi Foundation has no expertise to run cattle Stratified
camp, check dams. We have expertise to run the bank, we innovation
have business school, we took it forward, we have
expertise in that, running mobile bus, running radio-
station, but cattle camp is unique.’
‘Whenever we have to design a product for bank Participatory
(foundation also), we organize a meeting of our women evaluation
(recipients), our shareholders… and we think this as our
responsibility.’
‘And in Mann Deshi, it is there work to go deep, at the Holistic
grassroots, and do the work, as per the demand of the visualization
community… See the need and start the work, budget will
come.’
‘What was there 10 years ago, same prevail even today. It Marginalization
mean seven today many women say that they are not
getting support from their family.’
‘Every work is very important and again my nature is to give Imposition
same importance to smaller issue as bigger one; for me
smaller issues are equally important as bigger issues.’
‘Why we are working here is because the community is Moved
supporting us… Yes, it is there, wherever we operate, we contribution
get support from them. We are community driven
organization.’
(continued)

‘Few colleagues and employees do not have support of the Proud
family. This is disturbing their brain and so their heart gets engagement
diverted from work. I am lucky that I have support from
family. I give a lot of importance to my feelings, listen to
everyone but follow what I feel right. Continue working
with honesty.’
‘After doing these works, I get more satisfaction. Not Positivity
directly because my role is not at field but indirectly the transcendence
work is happening and from that welfare of women is
happening and I am reaching the women.’
‘Originally, Vanita is different and in office very different. Emerging
Why this is there because we can’t change people, changes self-image
will happen in ourselves then only I feel “we”.’
Table 8.4 Illustrative evidence from bank: Ms Sushma, the CFO

‘After graduating from Mumbai, I was getting a job there Idealization
but I had a wish to settle in village after marriage. I
committed that I will make my career in a village only.’
‘Our culture is somewhat disappearing...but that should not Driven
happen. I used to think about it and sometimes it does not participation
allow me sleep. If aspirations of next generation are
fulfilled on time then we can see the hapiness on their
face. We are taking pain for that.’
‘Sometimes, even Chetna ma’am says, hey how long will you Personal
sit? Do after coming tomorrow. This personal touch builds association
the whole family.’
‘Bank was there to give loan but what about pension Sequential
scheme. Then UTI said that with NGO it is possible. So we innovation
can go ahead with Foundation. They (clients) may be same
(of Mann Deshi Bank) but the agreement will be with
NGO.’
‘Now, from the side of Mann Deshi Foundation, nine check Stratified
dams for water storage are ready. And because of water innovation
storage practice agriculture is better now. And, we are
getting peace of mind while travelling because of green
surroundings.’
(continued)
194 B. Bhushan

‘In that also, so many meetings happened, so many Participatory
flexibility came and from the side of the requirement of evaluation
our women.’
‘After cattle camp, Chetna Mam has already announced that Holistic
organizing the cattle camp is not a final solution of visualization
drought. The final solution is to restore water.’
‘Why they (women client) used to come was their son and Marginalization
daughter-in-law were not taking care of their medication
and meals.’
‘UTI pension was not possible with bank because of Imposition
regulation. As per RBI, it is not allowed to open the
pension account.’
‘All people (of community) mean doing this (working) as if Moved
they are family. Together.’ contribution
‘The faith what they (recipients) have on us, we will not Proud
explain in wrong way, that attracts us towards them.’ engagement
‘We stay together … share so many happiness …in Mann Positivity
Taluka from 40 years, not for 40 years but for 60 years we transcendence
are fighting for water. But not even a single farmer has
committed suicide.’
‘If thousands of people know you, then it is very much Emerging
satisfactory for you. Our identity is known to them. They self-image
are showing us the identity.’
Cross-Unit Analysis
A cross-unit comparison is presented in Table 8.5. Here, different ways to

achieve the theoretical dimensions are presented with the help of actors
involved in both the foundation and the bank. Here, for the founder, the
idealization process evolved through her engagement with the move-
ment. For CAO, it evolved through her cultural background, and for
CFO it is her own aspiration shaping idealization to get engage with the
work of the organization.
Table 8.5 Cross-unit comparison

Cross-case analysis
Themes Ms Chetna Ms Vanita Ms Sushma
Idealization Movement driven Culture driven Self-driven
Driven Rooted in Rooted in Rooted in culture
participation movement spirituality
Personal Closeness to the Closeness to family Closeness with an
association family helping in member working organizational
the functioning in the member
of the organization
organization
Sequential Phasic in nature, Multiplicative in Transitive in nature,
innovation that is, nature, that is, that is, completion
completion of capability required
one triggers transfer so as to integrated steps,
others replicate the which are not
innovation possible without
common identity
Stratified Long-term Short-term Long-term
innovation intervention for intervention for intervention
different focal broader base of without recipient
recipients recipients segregation
Participatory Participation for Participation for Participation for
evaluation effectiveness genesis efficiency
Holistic Practicality-based Intervention-based Purpose-based
visualization visualization visualization visualization
Marginalization Class-based Gender-based Productivity-based
marginalization marginalization marginalization
Imposition Realized Self-imposition Regulation-based
imposition imposition
Moved Participation- Facilitation- Relation-oriented
contribution oriented oriented contribution
contribution contribution
Proud Successful Family based Trusting recipient
engagement recipient based based
Positivity Happiness Satisfaction Perseverance
transcendence
Emerging Increased Improved tactful Enhanced visibility
self-image tolerance dealing
196 B. Bhushan
Discussion
Figure 8.1 represents second-order coding where emerging themes are
connected based on evidences available from the data. In this figure, the
area outside the circle represents context. Stimulated innovation cycle
corresponds to phasic movement between sequential innovation and
stratified innovation. In other words, active players invest significant time
to optimize one value chain, and optimization of the same triggers the
need for other value chains of different levels.
According to the data, the process of social entrepreneurship occurs
under societal-level constructs drawing the boundary condition. These
constructs are marginalization, imposition and moved contribution.
Marginalization acts as a trigger whereas imposition of norms or law
imposed by the government causes people to feel a compelling need to
work against this marginalization which is further enhanced by availabil-
ity of support system around the people engaged in the process of social
entrepreneurship. All these are defined under the ‘context’ dimensions of
PCDO model and executing boundary defining role as shown in Fig. 8.1.
‘People’ dimension of PCDO model is captured through three emerg-
ing constructs, namely, ‘idealization’, ‘personal association’ and ‘driven
participation’. Basically, data reveal that proactiveness of people engaged
in social entrepreneurship is the outcome of either their relationship with
someone who is already engaged for social cause or their ideological ori-
entation. For example, in case of the founder, her proactiveness is due to
ideology of Mahatma Gandhi and Jai Prakash Narayan, but for CAO of
the foundation, ‘personal association’ was a driving force as her husband
was one of the founding members of the organization. In course of time,
she developed an ideological orientation for women empowerment,
which further strengthened her proactiveness in participation.
‘Opportunity’ dimension is captured by data through ‘stimulated
innovation cycle’ (an outcome of interconnectedness of sequential inno-
vation and stratified innovation), ‘holistic visualization’ and ‘participa-
tory evaluation’. Considering all possible dimensions of interventions
(holistic visualization) coupled with engaging possible stakeholders in the
process of evaluation (participatory evaluation) facilitates the stimulated
innovation cycle. It guides the decision-makers to select between
Marginalization
Idealization Personal Association

People
Driven Participation
Holistic Participatory
Visualization Evaluation
Sequential Innovation
Opportunity
Stimulated innovation cycle
Stratified Innovation
Emerging Proud Happiness

Deal
Self-image Engagement Transcendence
Imposition
Moved Contribution
Fig. 8.1 Representation of second-order coding scheme. Source: Author’s

own
strengthening some value chain through innovation (sequential innova-

tion) or penetrate deeper in the social issues and address new but more
pressing needs. For example, after opening the bank which promoted the
saving habit in rural women, the Mann Deshi Mahila Group (MDMG)
started training them in running their own business. The idea was gener-
ated during a conversation with a rural woman who wanted to learn how
to operate a mobile phone and use the same for efficient working. This is
198 B. Bhushan
an example of sequential innovation. In due course of time, the founder

realized that apart from stimulating entrepreneurial drive among women,
there is a need to promote education among young girls. Hence, the
organization started distributing cycles to rural young girls as schools are
located too far away, and lack of proper transportation was the biggest
challenge. Also, the organization started promoting games among school-
going population. The idea to distribute cycles was triggered by the idea
of Mahatma Gandhi ‘to reach out to the last person in the queue’ and
when a young girl reached the founder in search of work so that she can
earn money to purchase a bicycle. She wanted to continue her studies,
and the only possibility was getting a bicycle. This is an example of strati-
fied innovation, where the organization penetrated deep into the recipi-
ent community.
Finally, ‘deal’ dimension of PCDO model is captured here through
‘happiness transcendence’, ‘proud engagement’ and ‘emerging self-image’.
People across the organizational units are looking for happiness in the
happiness of the recipients. This happiness shapes engagement of people
in the process of social entrepreneurship with pride. Also, while working
on the opportunities, people observe the changes resulting in their own
image. In this way, these two, ‘happiness transcendence’ and ‘emerging
self-image’, together shape ‘proud engagement’ of people involved in the
process of social entrepreneurship.
Furthermore, emerging constructs representing all these dimensions are
connected with causal relationship. For instance, idealization helps people
to see all the possible dimensions of interventions. In case of the founder, it
was the ideology of Mahatma Gandhi and JP, and for the other two, it was
the ideology of women empowerment defined by the founder. Similarly, in
due course of time the range of personal association increases, and hence
people bring more and more related others for the purpose of evaluation of
opportunities. For example, the representative of bank started taking insights
from the community members during community meeting and that helped
to design better loan products. Hence, personal association facilitates par-
ticipatory evaluation. Also, driven participation promotes search behaviour
in people, helping them to design the shape of stimulated innovation cycle.
On the consistent note, ‘opportunity’ dimension’ is related to ‘deal’ dimen-
sion. As ‘stimulated innovation cycle’ helps people to penetrate deep into the
recipient community by integrating different value chains and also connect-

ing dots of the same value chain, these people are able to see the complete
impact. These impacts are reflected in terms of promoting positive externali-
ties and limiting negative externalities. For example, promoting positive
externality of empowering women was observed in terms of improved life-
style of family, and limiting negative externality was observed through
reduced domestic violence. These give a sense of pride, which facilitates
engagement of people involved in the process of social entrepreneurship. All
these discussions are summarized in Fig. 8.1.
Theoretical Contribution
This chapter started with an elaboration of the unique nature of social
issues and the role of social entrepreneurship in addressing them using
PCDO model. This leads to a research question of how things unfold dur-
ing this process. A case study method on a hybrid organization, Mann
Deshi Mahila Group revealed that there are two types of innovation prac-
tised by organizations involved in social entrepreneurship. First, sequential
innovations, innovations occurring at different steps of the same value
chain ensure successful implementation of interventions. Second, strati-
fied innovations take care of externalities by connecting different value
chains. These two types of innovations are the outcome of holistic visual-
ization to address the social issues. Both types of innovations are con-
nected with each other in such a way that one triggers the initiation of the
other resulting in a stimulated innovation cycle. The integration of
sequence of steps involved in multiple (social) value chain needs inputs as
well as active participation of the so-called beneficiaries. It means the
recipients are also active participants in the process. Hence, looking at the
nature of both types of innovations, they qualify to be called as social inno-
vations. As there is an integration of multiple value chains, the entire sys-
tem is termed here as stimulated innovation cycle. The addition of these
three concepts, sequential innovation, stratified innovation and stimulated
innovation cycle, will help in understanding the process of social entrepre-
neurship better where issues do not have the solution. This concept is dif-
ferent from bricolage, which is basically related to doing things with the
200 B. Bhushan
resources at hand. Here, resources are mobilized as per the need of the
community, where community is an active player and not just a passive
receiver. This is the first theoretical contribution of the chapter.
The second theoretical contribution of this chapter is to extend the
PCDO model of social entrepreneurship. Incorporation of five subcon-
cepts (social entrepreneurship, SEO, social entrepreneur, social innova-
tion and market orientation) of social entrepreneurship as defined by
Choi and Majumdar (2014) in PCDO model helped to empirically con-
nect these concepts. Putting in logical sequence as supported by empirical
data, personal association of an individual who has gone through ideal-
ization results in driven participation in stimulated innovation cycle. This
innovation is an attempt to address marginalization in overcoming the
imposition with the support of moved contribution. This stimulated
innovation cycle is an outcome of participatory evaluation of opportuni-
ties and holistic visualization. The active players in this process of stimu-
lated innovation cycle receive positivity from the recipients and hence
feel pride in contributing to the success of the marginalized recipients.
This process also brings about a change in the persona of the active play-
ers. All these belong to higher order needs in Maslow’s need hierarchy.
The third theoretical contribution of this chapter is bringing people
other than the founder in theorizing about social entrepreneurship.
Extant literature talks about both, the heroic nature of founder and the
collective nature of social enterprise (Bacq & Janssen, 2011). But focus at
individual level other than the founder is missing in the extant literature.
Also, literature divides the people into two categories: one who receives
and other who gives. Essentially, it is a reciprocal relationship. This chap-
ter attracts the attention of future research work to look at the people
across the hierarchy as emotions of the founder get communicated across
the organization which influences participation of other players as well
(Jennings, Edwards, Jennings, & Delbridge, 2015).
Practical Implication
This work helps understand the reason behind failure of many initiatives
by various NGOs working across the globe. The first reason could be
lack of ‘holistic visualization’ due to which they are not able to offer a
complete package for redressal of social problems. Second is the inability

to design and implement a stimulated innovation cycle. This leads to
several innovations in an isolated space so that the benefits of synergies
among them cannot be reaped. The third reason may be the absence of
participatory evaluation so that the innovation is imposed on the com-
munity leading to rejection or non-acceptance. Managers of such orga-
nization should pay attention to these steps to ensure successful resolution
of social problems.
Another managerial implication is looking at the ‘psychic payment’
offered by the organization. Managers of SEO should follow HR prac-
tices which will improve the visibility and delivery of ‘psychic payment’
so as to reduce the high attrition rate in the social sector.
Finally, top management should also consider ways to increase partici-
pation of recipients in different activities starting from conceptualization
of product/service to implementation. This will help them in winning
trust and also reducing the pressure of scarce resources.
Future Direction of Research

This research is based on a case study of single hybrid organization. To
ensure generalizability of the findings, quantitative research with the
help of survey method is required. To achieve this, researchers will need
appropriate measurement tools for concepts such as ‘holistic visualiza-
tion’, ‘stratified innovation’, ‘sequential innovation’ and ‘moved contri-
bution’. Second, it is also interesting to see how other forms of
organizations behave while addressing social issues. More specifically,
this work opens a new avenue to present comparative analysis of for-
profit, non-profit and hybrid organizations engaged in the process of
social entrepreneurship on people, context, deal and opportunity dimen-
sions of PCDO model. Finally, research also extends this work to com-
pare and contrast social entrepreneurship and commercial
entrepreneurship. As PCDO model is first presented for commercial
entrepreneurship and then extended to social entrepreneurship, efforts
are needed to find out appropriate substitute for commercial entrepre-
neurship so as to achieve intended purpose.
202 B. Bhushan
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9
Effectiveness of Impact-Investing
at the Base of the Pyramid: An Empirical
Study from India
Anirudh Agrawal
Abstract The availability of essential public goods like subsidized educa-

tion, health care, vocation training, sustainable development and inexpen-
sive microfinance, which are reliable and affordable, is one of the critical
challenges stalling the progress of the developing economies. These chal-
lenges are further aggravated at the base of the pyramid (BoP). Realizing
these critical issues, the impact investment has emerged as a new asset
class, which has bundled entrepreneurial passion with available scarce
resources to design and implement cost-effective, reliable and scalable
market solutions for the BoP creating essential public goods. The empiri-
cal context involves the use of case studies of impact-investing firms,
which have made a socio-economic difference in the lives of the rural and
semi-urban population lying at the BoP in India through impact invest-
ments in social enterprises. The analysis and findings reflect the key oper-
ating principles of favourable impact-investing in the business ventures at
A. Agrawal (*)
Copenhagen Business School, Copenhagen, Denmark

https://doi.org/10.1007/978-3-319-74488-9_9
208 A. Agrawal
the BoP. These include a focus on the affordability of services, innovation

and cost control, local engagement and stakeholder management, local
skills and capability building, dynamic leadership and scalability.
Introduction
This chapter explores how impact-investing is helping the base of the
pyramid (BoP) socio-economic strata in India and how it is increasing
the effectiveness of social enterprises in addressing the socio-economic
issues found in the BoP segment in India. The conclusions of this research
are based on the explorative study of three impact-investing firms invest-
ing in five major BoP challenges. The three impact-investing firms in this
study include the Lok Capital (LC), the Aavishkaar Fund (AF) and the
Upaya Social Venture (USV), and the five significant BoP challenges
included are education, finance, health care, sustainable development
and employment. In this study, we explore the effectiveness of impact-
investing at the institutional level, market level and societal level.
Social entrepreneurship is one of the emerging forms through which
many social issues can be addressed in a more financially and operation-
ally efficient way (Kabir, Hou, Akther, Wang, & Wang, 2012; Lucci,
2012; Yunus & Jolis, 1999; Yunus, Moingeon, & Lehmann-Ortega,
2010). Social enterprises in developing economies such as India address
social issues related to empowerment of women (Datta & Gailey, 2012),
lack of sustainability (Hockerts & Wüstenhagen, 2010) and social and
economic marginalization (Yunus et al., 2010) by creating socially inno-
vative commercially oriented solutions. For social enterprises to operate
and scale up, they require financial resources, mentorship, business and
social network and market acceptance (Bloom & Chatterji, 2009; Evans,
2013). Traditional financial firms such as banks, venture capital and pri-
vate equity investors do not consider social enterprises as financially via-
ble (Harji & Hebb, 2010). They find social enterprises as risky investment
options as they do not have an active market mission and their financial
success stories are unknown (Bugg-Levine & Emerson, 2011; Bugg-
Levine & Goldstein, 2009). Thus, there is a void with a demand by social
enterprises for capital that is empathetic towards their mission and
innovative approach (Bugg-Levine & Emerson, 2011; Bugg-Levine &
Effectiveness of Impact-Investing at the Base of the Pyramid… 209
Goldstein, 2009), as well as consumer movements that acknowledge

social enterprises (Hibbert, Hogg, & Quinn, 2002) but lack financial
resources to addresses this demand. To address this void, impact invest-
ment is fast emerging as the reliable funding source for social enterprises
(Hibbert et al., 2002). Impact-investing is a process of investing in firms
with the motivation to create social and financial returns. It involves
deploying capital with the motivation to create positive social impact,
foster sustainable development and, in some cases, ensure return on
investment (Hangl, 2014).
Currently, the promise of impact-investing is enormous. The pilot
studies conducted on the overall impact of impact-investing are encour-
aging. The majority of research on impact investment has evolved within
the umbrella of social entrepreneurship (Moore, Westley, & Nicholls,
2012), socially responsible investment (Taylor & Haigh, 2011) and effec-
tive and efficient philanthropy (Porter & Kramer, 1999). This research is
limited to the measurement of the ‘impact’ created by the impact invest-
ments, the effectiveness of impact investment (McHugh, Sinclair, Roy,
Huckfield, & Donaldson, 2013), competing logics within impact-
investing, BoP business models (Nicholls, 2010), types (Heinecke,
Achleitner, & Spiess-knafl, 2011) and the legitimacy of the field (Bugg-
Levine & Emerson, 2011). Several researchers argue that social mission is
explicit and central for impact investment organizations, but in practice,
the overall impact is not close to the claims by the proponents of impact-
investing (Miller & Wesley, 2010; Scholtens & Sievänen, 2013). The
BoP presents both a set of complex institutional, market and social prob-
lems and a set of entrepreneurial opportunities (Akula, 2009; Harjula,
2006; Mair, Martí, & Canly, 2007). This study is about exploring the
effectiveness of impact-investing at the BoP and exploring how much
promise impact-investing holds in creating social impact.
This research study is organized as follows: the section ‘Literature
Review’ will elaborate on the existing literature regarding BoP, business
models and impact-investing in India. The section ‘Research Methodology’
will explain the research design, sample selection and research methodol-
ogy. The next section ‘Findings from Data Analysis’ will present analysis
of the data, and the section ‘Discussion on the Effectiveness of
Impact-Investing’ will discuss the findings based on within and cross-case
analysis. Finally, the section “Conclusion” will conclude the study.
210 A. Agrawal
Literature Review
Bottom of the Pyramid
The BoP was rationalized in the mainstream academia mainly following

the works of Prahalad and Hart (Hart & Christensen, 2002; Prahalad,
2004; Prahalad & Hammond, 2002; Prahalad & Hart, 1999). The BoP
is the context to the market conditions, paying capability and institu-
tional environment. It is difficult to give an exact value for a given size,
segmentation and income levels that categorize BoP (Arnold & Valentin,
2013). However, researchers broadly consider BoP as a collective refer-
ence to 4 billion people living at the lowest income strata around the
world earning anywhere from US$1 to US$10 daily (Desa & Koch,
2014). The income threshold for this group is US$3000 per person per
year (as per year 2002 purchasing power parity (PPP) values), or roughly
US$8 per person per day (Gaertner & Ishikawa, 2014; Hammond,
Kramer, Katz, Tran, & Walker, 2007) (see Fig. 9.1).
Fig. 9.1 The economic pyramid source. Source: Arnold and Valentin (2013)
BoP Sector in India
The scope of this research involves the multicase-based study of the impact-
investing firms investing in the social enterprises that support the require-
ments of the BoP socio-economic in India. This chapter focuses on India
primarily because this developing country comprises a large number of the
population categorized as BoP (Haub & Sharma, 2010). As per the World
Bank (2010), 32.7% of the population in India earn below the interna-
tional poverty line of US$1.25 per day (2005 PPP), 68.7% earn less than
US$2 per day while roughly 85% earn less than US$8 per day. The majority
of the BoP population in India resides in semi-urban and rural areas. The
state welfare institutions have not matured enough to provide quality wel-
fare services to address the economic needs of these marginalized groups.
Both the economic and institutional factors make the study of BoP segment
in India pertinent for more generalizable implications (refer to Table 9.1).
Education
Education, skilling and employability are profound problems in the

Indian education system. Most of the graduates coming out of Indian
education system lack the relevant employability skills to get jobs (FICCI,
2015). Industries are affected as the current structure of the state-funded
education system does not prepare the skills needed to sustain the tradi-
tional cottage, small- and medium-scale industries. Formal education in
India is highly regulated. Over the past two decades, it has failed to
evolve, and the quality of education delivered at the BoP level has signifi-
cantly come down. The citizens in the BoP segment invest in their chil-
dren’s education. However, the quality is low and does not prepare for
jobs in the formal economy. The skills acquired through formal educa-
tion are not enough to get work in the formal sector while the people lose
precious time learning skills needed for the informal economy. The BoP
segment thinks that by providing formal education to their children, they
would be better off. However, the skills acquired through formal educa-
tion are not enough to get work in the informal sector as well. Lack of
formal education and vocational education creates the problem of unem-
ployment, which leads to social problems (refer to Table 9.1).
212 A. Agrawal
Table 9.1 Summary of the problems at the BoP segment of the society
BoP segment Institutional
problems problems Market problems Social problems
Education Lack of Public schools are A more extended
implementation of free but provide process of skilling;
RTE, lack of inferior quality of questionable
accreditation of service delivery; quality of
private education difficult for social government
programmes; entrepreneurs to education and
inflexible compete with training
curriculum; large public schools programmes; lack
gap in the funded by the of trust in the
organized government; lack solution; lack of
education of skilled awareness about
mandated by the teachers while education and
government and those available vocational
the requirements are expensive; education among
of the industry unwillingness to the poor; social
pay to private problems because
players of poor education
and skilling;
negative
externalities
because of poor
education; social
disparities
between the rich
and poor
Finance Political and Lack of public Lack of skill set to
government sector banks; finance high-risk
interference; high interest ventures; lack of
government-driven rates; lack of skill set for
rates instead of awareness; lack financing
market-driven of infrastructure ventures without
rates; uneven collateral; lack of
policies; skill set in
underregulated providing
microinsurance microinsurance;
sector lack of trust in the
solution;
unwillingness to
pay
(continued)

Health care Lack of health Expensive Lack of primary and
insurance system; technology; lack secondary
lack of law of awareness; healthcare
enforcement in competition from workers; training
case of clinical the public healthcare staff
errors; lack of healthcare takes a long time;
governmental system; lack of overregulated
support in market accreditation
healthcare sector standards; lack of system; lack of
in rural India trained staff trust in the
solution;
unwillingness to
pay
Sustainable Lack of government Expensive Slow adoption by
development investment in the technology and public; lack of
sector; lack of lack of awareness awareness about
action plan on about the pollution and
climate change; available climate change
Paris Climate deal, alternative among the public;
implementation of technologies; cost and volume
Carbon Credit, Paris Climate deal markets rather
Green Tribunal of as opportunity; than problem-
India guidelines Reducing driven market
Emissions from
Deforestation
and Degradation
(REDD)-plus
projects; Carbon
Credit projects;
Competition with
fossil fuels
(continued)
214 A. Agrawal

Employment Many regulations in Market failure of Migration to cities;
the organized traditional wage
sector while no industry; goods differentials; lack
regulation in the and handicrafts of opportunities;
unorganized produced by the lack of access to
sector; traditional markets; lack of
overregulation industry has very training; slow
decreases few buyers; lack adoption; lack of
employment and of access to the market-oriented
underregulation of markets for the innovation
unorganized sector rural workers and
leads to artisans
exploitation and
poor wages
Financial Inclusion
Financial inclusion is one of the goals under Millennium Development

Goals (MDGs). Financial inclusion is not just about having a bank
account but also about the ability to procure formal banking services
such as loans and insurances (CRISIL Inclusix, 2015). The report by
Crisil Inclusix finds that 60% of Indians have a bank account and 15%
have availed loans. These figures are well below the numbers in most
industrialized economies. Most of the bank accounts are dormant. The
formal banking system is highly regulated, which makes it harder for
banks to lend public money to non-bankable clients. The lending to BoP
segment has increased the stress on the public sector banks. Absence of
formal banking facilities to the poor at the BoP opens up the sector to
opportunists who exploit the gullible poor for their profit. These oppor-
tunists charge a collateral fee of the order of 10% a day to 100% a year.
It also makes the poor vulnerable to natural disasters and economic cycle
shocks. With the emergence of microfinance and fintech, the possibilities
of providing risk-free financial services to the poor has opened many
opportunities for social entrepreneurship all over the world including
India (refer to Table 9.1).
Health Care
Indian government spends considerably less on as a percentage of GDP

compared with many similar countries. Consequently, private health care in
India is growing, and most people are forced to visit private healthcare facili-
ties. The private healthcare system in India is not regulated and is very expen-
sive, leaving many people at the BoP vulnerable. The government spends
around US$247 per capita on health care, which is 20 times less than the
United States and 15 times less than Germany. The current demographic
trends suggest that the elderly population in India is expected to reach 360
million by 2020, and addressing this major segment is a significant policy
challenge. Lack of government spending in health care puts many people at
the BoP at both health risk and financial risk. Many families go bankrupt
because of the cost involved in seeking medical help. These problems are like
opportunities for social enterprises. They open many opportunities for inno-
vation and investment in the healthcare sector in India (refer to Table 9.1).
Environmental Management
Energy, drinking water and sanitation are essential public goods, but they
have significant externalities on environmental management. For an
emerging country like India with high gross domestic product (GDP)
and rising per capita incomes, the requirements for energy, drinking
water and sanitation are growing, which therefore are putting pressure on
existing resources. The lack of basic electricity, water and sanitation to the
poor is a socio-economic problem, and it is increasing with growing
demand. It is difficult to engage in democratic policy-oriented conversa-
tion if the people do not have access to essential services. The interna-
tional treaties on sustainable development and climate change have
nudged the government in adopting policies to encourage consumerism
in sustainable products and services. The government is very active in
diverting resources for better environmental management and by provid-
ing funds for green energy, drinking water and sanitation. The cost of
producing greener products and services far outweighs the benefits to the
customer. Because of the cost–benefit differential, there is a slow adap-
tion to greener products and services. These scenarios present many
216 A. Agrawal
opportunities for entrepreneurs to engage in social entrepreneurial activi-

ties addressing the problems of energy, water and sanitation (refer to
Table 9.1).
Employment
Paid employment helps increase the household income and leapfrogs

households from poverty. Paid employment calls for both fair wages for
the work and availability of the work itself. Over 90% of employment in
India is located in the unregulated sector. Almost all the employment in
the BoP sector is within the unregulated sector (informal economy).
There are many problems with the unregulated sector (GOI, 2010).
Overregulation of the labour sector has dichotomized the labour market
into organized labour and unorganized labour sectors. About 90% of the
total jobs are available in the unorganized sector, leaving many at the BoP
vulnerable to unfair labour practices. The unregulated sector disincentiv-
izes the small firms from taking measures encouraging fair wages and
working conditions. Finally, lack of unemployment and lack of produc-
tive life create both social and socio-philological problems such as lack of
self-confidence (refer to Table 9.1).
The BoP segment lacks access to formal market conditions for the ful-
filment of their basic needs such as food, energy, drinking water, health
care, sanitation, education, financial infrastructure and insurance. These
problems present a significant business opportunity for the organizations
to enter the BoP market using a differentiated business model and orga-
nizational mind-set. For this study, the focus is on those BoP sectors in
India that are mentioned in the MDGs (UN, 2012) and sustainable
development goals list. Consequently, this article focuses on five BoP sec-
tors, namely education, financial inclusion, unemployment, sustainable
development and health care (refer to Table 9.1).
Impact-Investing and BoP Sectors
The investment choice of the impact-investing firms focused on the BoP

social sector is driven by three factors. First, the BoP socio-economic
requirements are woven into the MDGs, which have a global focus,
attention and funding. The MDGs are global targets accepted by the
United Nations in a resolution passed by the General Assembly in 2000.
These comprise eight specific goals targeting the demand-supply gaps and
inefficiencies addressing the human rights, income levels, health, educa-
tion, energy, information and environmental issues (Seelos & Mair,
2005). Second, the lack of affordable access to the necessary service solu-
tions has adversely impacted the capacity of the BoP individuals to
improve their lifestyle and household income (Kalam & Singh, 2011).
Having access to these essential services increases the total transaction
costs of the poor. The unfortunate end up paying more for these services.
Third, people in the BoP segment spend most of their income on meet-
ing the basic needs of energy, water, health care, education and financial
obligations (Kalam & Singh, 2011). These drivers are the most signifi-
cant motivations for many impact-investing firms.
Entrepreneurship at the BoP level is full of structural, operational,
social, institutional and market complexities. The last dimension repre-
sents critical challenges faced by the organizations entering the BoP
(Shukla & Bairiganjan, 2011). The BoP customer profile poses challenge
to the organizations in terms of making market decisions based on the
unpredictable market dynamics such as income volatility, low savings due
to lack of access to formal financial infrastructure, diversity in languages
and literacy levels across regions, limited mobility and travel infrastruc-
ture and purchase decisions driven by social beliefs and frugal mind-set.
The BoP environment poses challenges in terms of low population den-
sity across geographies, lack of government interventions and policy sup-
port and scarcity of data sets related to BoP population characteristics.
The BoP infrastructure poses challenges regarding lack of necessary infra-
structure such as electricity, water, technology and roads, as well as lack
of complementary products and services, which can help expand the
market. Lack of basic public services creates barriers for entrepreneurial
activities. BoP sector faces high uncertainty, risks and challenges making
the people extremely vulnerable. They face enormous challenges due to
lack of necessary facilities such as the education, energy, water and sanita-
tion, affordable and accessible finance, health care and good wages. Socio-
economic development requires simultaneous use of many strategies and
policies. One strategy to address these socio-economic challenges is to use
impact-investment-funded social enterprises aimed at innovatively using
218 A. Agrawal
these challenges as opportunities. Impact-investing firms invest in inno-

vative social enterprises through high-risk equity capital to bring disrup-
tive social change and ensure certain financial returns. However, not
much is known, regarding impact created by impact investors. This study
explores the impact created at the institutional level, market level and
societal level.
The key indicator for success for the impact-investing firms is their
ability to create social and environmental impact, scale up social enter-
prises and ensure financial returns to their investors. To achieve these
objectives, the impact investors have to use innovative market research,
proper due diligence, impact investment, managing investee social enter-
prises, capturing economic and social value at the BoP and understand-
ing consumer behaviour and consumer value proposition and
socio-financial strategy. For the impact investment to be productive at
the BoP level, they have to address and eliminate the accessibility, afford-
ability, availability, awareness and product/service-quality mix constraints
that people at the BoP face (Kapoor & Goyal, 2013). This study explores
how impact-investing tries to address the issue of accessibility, affordabil-
ity and availability.
Firms must use innovative strategies, business models and joint ven-
tures to strategize their operations at the BoP such that profiteering from
the poor is avoided (Yunus et al., 2010). Products and services with inno-
vative business models that are tied to addressing the problems found in
the BoP segment are more likely to have social acceptance than those that
only focus on appropriating capital value from the BoP segment (Anirudh
& Sahasranamam, 2016). However, BoP is still seen as a market oppor-
tunity than a term representing a collection of social entrepreneurial
problems and social entrepreneurial opportunities. The innovative prod-
ucts and services created to address the BoP are more about capturing the
underlying capital than about providing services that help them socially
and economically (Garrette & Karnani, 2009; Karnani, 2009). Impact-
investing is considered a unique instrument in creating social impact
through investment and while doing good, ensuring above-market return
on investment (Hummels & de Leede, 2014; Milligan & Schöning,
2011). This article also explores how the impact-investing is capitalized
in ensuring social entrepreneurial mission achievement.
Research Methodology
This article uses comparative case study research design. The case study
methodology involves the use of one or more cases to create theoretical
constructs, propositions and midrange theory from case-based (within
and cross) empirical evidence (Eisenhardt, 1989). A multiorganization
case study design allows for an in-depth analysis across different contexts
and enables researchers to understand better the ‘how’ and ‘why’ on phe-
nomena (Yin, 2003). The tentative explanations found in a within-case
analysis can be tested across other cases, enhancing reliability and validity
of the conclusions drawn (Yin, 2003). The case study approach leads to
theory development using the in-depth insights of the empirical phe-
nomenon and its underlying context (Yin, 2003).
Data Collection
The case-based theory building research relies on theoretical sampling.

This implies that the cases are chosen for answering the research question,
theoretical fitment, providing enough variance, reliability and validity
and not merely for statistical fitment. In this study, the sample includes
impact-investing organizations investing in social enterprises that are
helping the people in five different BoP sectors. The critical attributes
about these impact investors are as follows:
1. Invested in more than ten social enterprises

2. Invest in social enterprises which have a well-defined earned income
statement
3. Different mandate and mission
The sampling approach for this research involved the iterative selection
of the for-profit impact-investing that targeted the BoP-focused social
enterprises. The data collection for this research involved collecting inputs
from the different primary and secondary sources. The secondary sources
of data included the company website and information available in the
public domain. After that, a case study was developed; this was followed
by primary data collection from multiple stakeholders including the
220 A. Agrawal
senior management team, operations team (sales team, nurses), custom-

ers (village households, patients) and field partners (regional rural banks,
suppliers). The sources of primary data collection included the field inter-
views and focus groups at conferences. This multilevel and multisource
data collection approach is necessary for ensuring the internal validity
and construct validity (Yin, 2003). The Table 9.2 summarizes the within
case data to be used for the empirical analysis.
Table 9.2 Detailed summaries of the cases

Upaya Social
Data/SIVs Lok Capital Aavishkar Fund Venture
Founded 2004 2001 2011
Type of Equity Equity Equity
investment
Stage Growth Early stage and Early stage
growth
Financial $50,000 to $2 $200,000 to $2 $10,000–$50,000
funding million million
Equity 10–40% 10–40% 10–40%
Impact Growth and Difficult to reach, Difficult to reach
capital-oriented marginalized marginalized
social business sections of India sections of India;
early-stage
investor
Number of 6 28 6
organizations
funded
Area of Focus more on Microfinance, WISE, social
operation social healthcare, food, inclusion, skill
innovation with education, development,
profitability: technology, sustainable
microfinance, employment, production
health care, agriculture
food, education,
technology,
employment,
agriculture
Types of services Fund investment Fund investment for Seed fund,
provided for impact, impact, business
management management mentoring
support, market support, market
research and research and
network support network support
(continued)

Upaya Social
Data/SIVs Lok Capital Aavishkar Fund Venture
Exit strategy Yes, and Yes, and successful Two failed
planned successful investments
Structure of the For-profit private Group of companies Non-profit firm
company equity firm and addressing the based out of the
non-profit market intermediary United States for
foundation requirements of fundraising,
social non-profit firm
entrepreneurship located in India
ecosystem in India for impact
investment
Type of team Founded by A sizeable Small team based
entrepreneur interdisciplinary in Seattle and
with experience team led by a social small
in private equity entrepreneur operational
and run by team led by
business established
graduates social
entrepreneur in
India
Key For-profit For-profit investors, Foundations
stakeholders: investors, High HNIs, development
(1) investors, Net worth financial
(2) Individuals institutions,
beneficiaries, (HNIs), foundations
(3) development
government financial
institutions,
foundations
Data sources Interview with Interview with Interview with
investors and investors and investors and
investee social investee social investee social
enterprises; enterprises; enterprises;
secondary data secondary data secondary data
sources: Twitter, sources: Twitter, sources: Twitter,
Facebook, Facebook, publically Facebook,
publically available publically
available information, news available
information, and published cases information,
news and news and
published cases published cases
222 A. Agrawal
Data Analysis
The analytical stage for this research involved undertaking the within-
case analysis, cross-case analysis and comparison with the extant litera-
ture in parallel to the iterative mode of data collection. The data in the
case reports were analysed through the coding process. This process
involved first-level reduction in the data analytically by comparing the
events/actions/interactions against each other for similarities/differences
thereby leading to conceptual labelling (Glaser & Strauss, 1967). The
findings of the analysis are presented in the next section.
Findings from Data Analysis

Regarding their investment strategy, AF, LC and USV were focused on
investing in social enterprises that were creating socially and economi-
cally innovative solutions for the BoP. Their investments were unique to
social enterprises that were providing innovation, affordable and high-
quality product/service to the BoP segment of the society. All the three
impact investors’ social mission was directed at creating scalable, sustain-
able social impact. Their investees focussed on providing products and
services at affordable prices leading to legitimizing social business models.
However, each of the impact investors chose a different strategy and dif-
ferent focus areas. Some of the key learnings from the data analysis are as
follows.
Education
All the impact investors from the cases are investing in the education sec-
tor. However, each impact investor has targeted a different segment of
beneficiaries. AF and LC due to their size and reach targeted multiple
segments in the rural schooling and adult skilling sector while USV tar-
geted unskilled adult labour sector. The investment motivations for both
AF and LC are improving the quality of education delivered at the
BoP. The USV invested in adult skilling and on improving their potential
to earn more capital through skilling (refer to Table 9.3).
Table 9.3 Summary of the cross-case analysis

Upaya Social
Lok Capital Aavishkar Fund Ventures
Number US$86 million; 23 Leader in impact Ten investments,
social enterprises; investment, two exits,
expert in the US$300 million US$200,000
microfinance sector Asset Under (early stage)
Management
(AUM), ticket
size: US$1 M
Education Everest Edusys: Butterfly Fields: Rozgar Mela:
innovative ways of enhancing skilling and
teaching science learning outcomes training rural
and mathematics in science and poor for better
mathematics for jobs and wages
primary and
secondary school
children; Karadi
Path Education:
English education
to children as well
as adults using
stories and role
plays
Finance Specialist in Pan-Indian N/A
microfinance investments in
services has the microfinance
invested in many sector; most of its
microfinance firms microfinance
with the motivation investee-
to help and scale organizations are
up rural in the process of
productivity; getting RBI
helped develop approval for small
specialized banking licence
microcredit and
microinsurance
products and
services for the BoP
segment;
Samutkarsh WS:
financial awareness;
Equitas MFI: varied
portfolio of
financial services
(continued)
224 A. Agrawal

Upaya Social
Healthcare Drishti for eye care Mera Doctor offers
at affordable price, primary
Auroville for healthcare advice
geriatric care; at affordable
Samutkarsh rates over the
Welfare Services in telephone,
treatment; Live through licenced
Well Institute for doctors; GV
care of the poor Meditech is a
Varanasi-based
healthcare
company that
runs a chain of
high-quality
secondary and
tertiary care
hospitals in and
around Varanasi;
Vaatsalya offers
good quality and
affordable health
services to
underserved
populations
through a chain
of semi-urban
and rural
hospitals
(continued)

Upaya Social
Sustainable Small to large solar EcoKargha:
development energy, small- engaging local
scale hydro artisans in
projects, wind producing
power project: Bhagalpuri silk
small and large; products using
Mela designs and ecofriendly
sources hand- methods; El
made products Rhino:
made from ecofriendly
sustainably household goods
sourced wood, made from
metal and textiles rhinoceros and
exclusively from elephant dung,
artisans in India; Pratha foods:
Mandala Apparels organic farming
is a manufacturer and employment
of fair trade, generation for
certified organic rural poor;
cotton garments; Pratha foods:
Servals organic farming
Automation and employment
offers affordable generation for
and energy- rural poor
efficient cooking
solutions for the
masses; saves up
to 30% kerosene;
Vana Vidyut Pvt.
Ltd (VVPL):
established India’s
first grid-
connected
biomass power
plant with
biomass feedstock
from regenerative
forest plantations
stoves
(continued)
226 A. Agrawal

Upaya Social
Employment Rural Shores: Through Krishi Star:
provides essential Aavishkaar increases
skill-based training investments: farmers’ income
and employs the 34,000 direct by branding and
rural villagers for jobs; 111,000 eliminating
BPO services direct livelihoods middlemen;
created; 7 million Karmantik:
indirect innovative
livelihoods footwear
created and 48 manufacturer
million impacted using rural poor;
through the Just rozgar: job
portfolio; Milk exchange for
Mantra: provides low-skill workers
fair price for
milk to rural
farmers
Institutional Impact
The observation shows that none of the impact investors was able to
influence the regulatory structure for education in India.
Market Impact
Hyppocampus, one of the investments of LC, was able to generate rev-

enue by delivering innovative education solutions to rural BoP segment.
This investment reached 21 villages around Karnataka. Similarly, Anant
Learning System is using technology to map skill gaps in 24 states of
India and provide customized training to the unemployed and getting
them jobs. However, they both were vulnerable to market competition
and reaching targets requires considerable investment in human
resources.
Societal Impact
All the three social enterprises were able to create significant social impact
through their investments. The investors created social impact by invest-
ing in ideas that provided quality education and promoting a level play-
ing field among the rich and the have-nots. Similarly, USV was able to
increase the earning potential of the rural poor through their skilling
programmes.
Finance
Out of the three, AF and LC were investing in the financial inclusion

sector. LC has gained a reputation in the financial inclusion sector. Most
of its AUM is locked with the microfinance social enterprises. Its invest-
ments related to financial inclusion have created tremendous market
impact. AF, due to its size and reach, can invest substantial capital in vari-
ous sectors including financial inclusion. One of the investee social enter-
prises, Equitas, has both AF and LC as investors. Equitas provides
microfinance-related services to BoP segment across India. Equitas has
also diversified into education and health care. The investee Equitas has
created a tremendous impact in addressing poverty (refer to Table 9.3).
LC because of its focused work on microfinance has gained a reputation.

Consequently, it has influenced think tanks and government bodies in
the financial inclusion sector. It and along with AF are playing a pivotal
role in reforming the financial inclusion sector in India and impacting
the BoP sector.
Market Impact
LC has exclusively focused on the microfinance sector. About 90% of its

portfolio is in the microfinance sector. Its focus and experience have
228 A. Agrawal
helped regain the legitimacy of microfinance post SKS microfinance cri-

ses in Andhra Pradesh in 2010. Both AF and LC have generated market
impact by providing easy access to financing and therefore increasing
microentrepreneurial activity at the BoP level.
Societal Impact
Access to capital helps small entrepreneurs manage working capital

quickly with little stress and plan for future actions with less risk. Many
of the investee microfinance social enterprises have diversified from small
credits to housing loans. These actions are aiding the BoP segment in get-
ting loans at fair rates. Like Grameen Bank, these impact investors
through their microfinance investments have created social value in the
BoP sector.
Health care
Healthcare services in India are under a significant crisis, and most of

these are beyond the reach of most citizens in India. The quality of health
care available at the government hospitals is very low while the private
health services are expensive. To address the needs of BoP healthcare seg-
ment, one needs innovation-driven business models. Impact-investing
has been at the forefront in investing in ideas that cater to healthcare
business models. Live Well institution, an LC investment and promoted
by the Aravind Eye Care group, provides quality elderly care service to
the elderly at affordable prices (refer to Table 9.3).
None of the impact investors or investee social enterprises was able to

create any significant impact at the policy level. Also, the health insurance
firms in India do not cover all the investee social enterprises. For some of
these healthcare firms to be covered by the health insurance firms in
India, they would require government intervention.
Market Impact
The investee healthcare social enterprises provide affordable healthcare

services to the BoP segment. They provide good healthcare service at a
competitive price (Esposito, Kapoor, & Goyal, 2012). The price at which
they provide the services put them vulnerable to the free healthcare ser-
vices by the publically funded hospitals.
Societal Impact
The population of elderly in India will increase as the life expectancy

increases. This shall put pressure on the resources to provide proper health
care. The Live Well Institute is one such example that attempts to bridge
the gap for healthcare services among the elderly in India.
Environmental Management
The rising deaths due to pollution and diminishing biodiversity have put
tremendous pressure on the already strained ecological capacity of India.
The Paris Climate deal and the increasing pollution in India have forced
the policy makers towards unprecedented actions. All the impact inves-
tors are inclined at investing in ideas for addressing the energy and envi-
ronment needs of India. The Paris commitment has called for more
significant intervention from the Government of India on subsidizing
solutions that mitigate greenhouse emissions.
In cases selected, AF and USV are the two funds, which have invested
in innovations addressing energy or environment or both. Their invest-
ments are aimed at bridging the market demand and institutional pres-
sures. Some of the most common investment is within the sectors of
renewable energy, organic farming and environmentally friendly fast-
moving consumables. AF investee Servals Automation sells energy-
efficient cooking stoves to the masses. This innovation not only addresses
the climate change issue but also is cost-efficient, innovative and improves
the health of women who are still dependent on primitive cooking
methods. Similarly, Vana Vidyut Private Limited has established India’s
230 A. Agrawal
first grid-connected biomass power plant with biomass feedstock from

regenerative forest plantations thus addressing both biodiversity issue and
climate change. USV investees Parvata food, Sahas waste management
and El Rhino are innovative social enterprises working towards mitiga-
tion of environmental degradation, preserving biodiversity and increas-
ing reusability (refer to Table 9.3).
The data do not show any impact of impact investors in India towards
market creation, regulation and institutional restructuring. The investees
involve various stakeholders while operationalizing their social enter-
prises; however, the impact back on the ecosystem or regulatory bodies is
not present in the data. However, the investees do take into account the
existing policies and policy-driven funding towards energy and
environment.
Market Impact
All the impact investors have invested in solutions that bridge the supply
side of the innovation and the demand side. The data do not show any
activities where the impact investors are engaged in market creation activ-
ities. AF has invested in innovations that provide basic utilities such as
clean cooking and greener electricity. USV has invested in innovations
that ensure biodiversity and environmental cleanliness. Furthermore,
they mentored investee social enterprises on how to get the produce to
the markets.
Societal Impact
Interestingly, one can observe a definite difference in the impact of AF

and USV. AF investments have created a platform where it provides bet-
ter cooking fuel, electricity and biodiversity, core elements around which
human civilization prospers. USV provides items that include job cre-
ation, healthier food and access to markets for selling produce. These
actions create social impact by increasing women’s productivity, access to

cleaner air and higher income from selling their local organic produce in
the markets.
Employment
All the impact-investing firms in the study are intensively engaging with
investee social enterprises in capacity-building of both the investees and
beneficiaries. Each of the impact investor’s motivation is to provide
employment to the poor and increase their household wages. Among the
three, USV has precisely defined their investment strategy around wage
increase and employment generation. They invest in social enterprises
that help in increasing the household wages. USV investee Justrozgar is a
marketplace for employees and employers. The firm bridges the skill gap
needed to get entry-level jobs in Indian cities. Another USV investee,
Anant Learning and Development, provides skill-based training to unem-
ployed youth to start necessary service firms that complement the rural
economy of villages in India. Rural Shoers, an LC investee, was able to
create measurable impact through their in-house training and placement
programmes. They trained rural poor in basic English language and IT
skills and placed them in various rural call centres. These jobs increased
the income of the rural poor and curtailed their migration to cities
increasing the social cohesion of the villages (refer to Table 9.3).
The data reveal that USV was able to get acknowledgement from
US-based policy makers for their work and learnings in India. However,
the data do not indicate any concrete impact on the policy makers in
India.
Market Impact
USV has been able to generate tremendous impact despite small capital
investment. It has developed expertise in investing in innovations that
232 A. Agrawal
increase the income of BoP households. Increased disposable income in

rural areas helps the growth of the rural markets.
Societal Impact
Once the BoP household income increases, their children can study in
schools, and the poor can plan and create assets for their future. The
impact reports from each of the impact investors indicate significant con-
tribution in increasing employment opportunities and wages for the BoP
segment. Increase in wages among the rural poor directly reduces their
migration to cities.
Discussion on the Effectiveness

of Impact-Investing
The institutional voids and risk of market failures in poor areas make it
difficult to operate a sustainable business. From the data, it is clear that
the impact-investing firms invest in riskier proposals that operate in even
riskier market environments. The impact investors look at specific prob-
lems that are motivated by the institutional voids, institutional policies
and funding avenues, global policy framework and social demand.
Following the data analysis from primary and secondary sources of data,
the Table 9.4 summarises the discussion on the effectiveness of impact-
investing at the BoP (see Table 9.4).
ulti-stakeholder Collaborations and Institutional

M
Impact
The impact-investing firms act like central agents and help in creating a
platform where different stakeholders interact, learn and seek resources
from each other. For example, waste management firm Nepra waste man-
agement (an investee of AF) transports city waste to incinerators in a
cost-effective manner. Traditionally, waste management is local govern-
ment territory; hence, private players working in this territory require
Table 9.4 Discussion on the effectiveness of impact-investing at the BoP segment

Upaya Social
Impact through institutional strategy
Institutional Focused on Collaboration with NA
change microfinance; the government
advised to create
governmental and institutional
international understanding for
institutions on social
microfinance; lack entrepreneurship
of impact on in India
other areas
Multi- Collaboration with Collaboration with Collaboration with
stakeholder NGOs, NGOs, NGOs,
collaboration international international international
donors, local and donors, local and donors,
national national foundations,
governments, governments, development
banks, banks, banks,
foundations, foundations, beneficiaries,
development development social enterprises,
banks, banks, local markets and
beneficiaries, beneficiaries, investee-
social enterprises social enterprises entrepreneurs
Impact through inter-organizational strategy
Affordability Investments in Collaboration for Collaboration for
strategy microfinance innovative innovative
products at low approaches to approaches to
interest rates; high-quality high-quality
healthcare service delivery at service delivery at
investments are affordable prices affordable prices
unique and
provide cost-
effective solutions
Cost control Focus on return on
and revenue investment to the
generation investors and
sustaining and
scaling social
ventures at the
same time
(continued)
234 A. Agrawal

Upaya Social
Mission drift Emphasis on Focus on both Emphasis on
profitability and return on mission drift,
scaling while investment and focus on wages
sustaining social welfare of the and job creation
mission beneficiaries through social
entrepreneurship
Co-creation Focus on reducing High level of initial Innovation around
and operational costs engagement from helping the
innovation of the investees development of beneficiaries
and increasing the social mission through higher
revenues of the full income
enterprise, generation and
influencing marketing
decision-making
by taking up
board positions
Capacity- Use of sector Focus on Sales strategy,
building knowledge in professional pricing strategy,
microfinance for management management
capacity-building, procedures such development and
lacking similar as financial and reporting of
knowhow in other impact reporting, impact
sectors focus on management
professional structure
management
procedures such as
financial and
impact reporting,
management
structure
Scaling Capital, rapid Large sums of Small capital, focus
expansion, price capital, rapid on innovation
of the product, expansion, price and uniqueness of
aggressive sales of the product, the idea for
aggressive sales scaling
(continued)

Upaya Social
Impact through firm-level strategy
Specialization Specializes in Largest impact Unique mission to
microfinance investor in India, increase the
sector diversified wages and
portfolio in employment at
microfinance, fair the BoP
trade like dairy
business and
water and
sanitation, lack of
expertise in any
particular sector
Investee Peer Sources based on Sources based on
sourcing and recommendation, annual business annual business
investment direct meetings, plan submission, plan submission,
strategy higher capital incubation centre, incubation centre,
allocation peer peer
recommendation, recommendation,
direct meetings, lower capital
higher capital allocation
allocation
intensive engagement with the government. Similarly, the microfinance

investees of LC and AF provide microloans to poor people. Microfinance
currently is a regulated practice, and it requires licensing from the gov-
ernment. Again, these microfinance firms have to engage with local gov-
ernment, banks, village leaders and NGOs to operate efficiently and
innovatively in areas where the institutional voids are high (Mair, Martí,
& Ventresca, 2012).
Investee social enterprises that are diversified, such as Drishti (an
investee of USV), maintain relations with local government bodies to co-
create solutions and ensure smooth operations, village-level leaders to
ensure social cohesion during operations, NGOs to understand the insti-
tutional gaps that can be filled by them and finally funding agencies to
fund their operations. The impact investors have the resources to create
236 A. Agrawal
networks between the investee social enterprises and external stakehold-

ers (local governments, investors, clients and customers). They provide
higher visibility to social enterprises. Such actions increase both the effec-
tiveness of the impact investors and the overall social impact created by
the investees.
Proposition 1a : The effectiveness of impact-investing firms is directly

proportional to their ability to forge multi-stakeholder collaborations.
Proposition 1b : The effectiveness of impact-investing firms is directly

proportional to their ability to draw on resources from multiple
sources.
At the institutional level, one critical observation is that the BoP seg-
ment is price sensitive. Consequently, most of the investments in the BoP
segment went to organizations that capitalized using the cost and the
volume strategy. Henceforth, it is difficult to differentiate between a
social enterprise serving the BoP and a for-profit enterprise serving the
poor with the same solution. Therefore, in the case of price-sensitive
Indian consumers, it is difficult for a social enterprise to compete and
differentiate themselves with a for-profit enterprise on similar price,
product and service. A consumer would not be able to differentiate
between a product from a social enterprise and a commercial enterprise.
This observation is important because when compared to the case of Big
Issue in the United Kingdom (Tracey & Jarvis, 2007), the consumer in
an advanced economy consciously paid a premium for the new paper to
create social change. In order for social enterprises to differentiate them-
selves, both the impact investors and social enterprises have to engage in
communication and marketing that differentiates their products and ser-
vices form those offered by for-profit enterprises.
Proposition 1c : The effectiveness of impact-investing is directly propor-

tional to societal knowledge about social entrepreneurship and impact
marketing.
F ocus Towards Affordability through Specialization

of Sector and Location
BoP segment is a price-sensitive one. Affordability and quality are impor-

tant considerations. All the investees of all the impact investors provide
services and sell products at a frugal price. Among the investees, the inno-
vation and drive for affordability are very high. LC focuses its investment
in microfinance, and USV has focused its investments on wage incre-
ment and employment of the poor. Specialization eliminates costs that
come with a lack of focus, lack of regional and sector knowledge. However,
specific sectors such as utilities compete with the government-regulated
prices. In such cases, the social enterprises have to ensure a higher quality
of services.
Proposition 2a : Impact-investing is effective when the investees provide

services and products within the affordability space.
Proposition 2b : The effectiveness of impact-investing is directly propor-

tional to the sector specialization of the impact investor.
F ocus on Cost Control and Revenue Generation While

Managing Mission Drift
One of the many functions of the impact investors is to ensure efficiency

of expenditure. In doing so, they continuously monitor investees and
nudge them towards cost efficiency and delivering on a promised social
mission. Mission drift becomes more apparent when all the decisions of
the firm and organizational structure are entirely driven by the pressures
from evolving market dynamics and financial bottom line. Mission drift
also leads to crises of legitimacy both for the investors and investees.
Proposition 3a : The effectiveness of impact-investing is directly propor-

tional to their ability to control expenditure and manage mission drift.
238 A. Agrawal
In case the investee business model is based on earned income, then

the impact investors’ engagement may ensure maximizing the revenue
generation. Engaging in fiduciary management activities, the investors
may participate in profiteering or the investee-firms may suffer from mis-
sion drift. In such a scenario, the impact investors may lose their ‘social’
legitimacy. LC, though successful in microfinance, has very little legiti-
macy in other sectors precisely because the returns are not as robust.
Proposition 3b : The effectiveness of impact-investing is inversely pro-

portional to their emphasis on revenue generation.
On the contrary, too much control by the impact investor may weaken
the social enterprise. One of the investees of USV left because the control
over the firm increased post investment leaving him with very little
authority to guide the enterprise and make decisions.
Proposition 3c : Effectiveness of impact-investing has a U-shaped rela-

tionship with the degree of control the impact investor exerts over its
investee.
apacity-Building Through Skilling, Training,

C
Employment and Wages
All the impact investors in the study have intensely collaborated with
their investees. Their focus was on capacity development, training and
skilling in order to create value and improve wages. For example, USV
invested in social enterprises whose primary mission was to convert rural
skills into handicraft in order to create rural jobs and employment. Their
mission was to increase the family household income by way of employ-
ment and fair wages. Capacity-building activities have a high impact on
the overall effectiveness of impact-investing.
Proposition 4 :Effectiveness of impact-investing is directly propositional

to their ability to share knowledge, develop capabilities and co-create
innovative BoP segment solutions with the investee social enterprises.
Organizational Development and Scaling
AF and LC investee Equitas started as a microfinance firm to provide

loans to microentrepreneurs. It has now evolved into a housing loan
microfinance firm. Justrozgar (USV investee) started as an idea to bridge
the gap between the unemployed youth and low-skill employment sector.
It later innovated into skilling sector and started providing basic skill-
based training to the unemployed youth.
Most of the investee social enterprises such as microfinance, healthcare
services and skill-based training institutes are people-oriented business
ventures and require highly skilled human resources to succeed in their
mission. Social enterprises, which successfully employ the best human
resources at a competitive cost, will sustain longer in the future. All these
actions require both capital and professional skill set which impact inves-
tors successfully provide.
Proposition 5 :Effectiveness of impact-investing is directly propositional

to their ability to foster organizational development and scaling.
perational Strategy from Sourcing the Best Investees

O
Towards Creating the Highest Social Impact
The fundamental difference between a regular investing or grant-giving

agency and impact-investing is the amount of knowledge, due diligence
and problem-solving skills they use in selecting an innovative social
enterprise. The impact investors source investees from various forums
(incubators, investors, government sources, word-of-mouth, grant-giv-
ing) and select their investments based on their mandate. All the impact
investors look at social problems solved, the impact created and the
potential for further scalability. All the investors have a different yet
closely matched method of selecting the best investees that satisfy their
mandate, give them confidence on investment and create social impact.
Proposition 6 : The effectiveness of impact-investing is directly propor-

tional to the quality of the investees selected.
240 A. Agrawal
onceptual Framework of Impact-Investing at the BoP

C
Segment in India
Figure 9.2 provides a framework on the effectiveness of impact-investing

in the BoP segment in India.
The effectiveness of impact investors lies in their ability to engage with
their investees to explore some of the best cost-effective and accessible
solutions to the BoP segment. Their ability to frequently engage and co-
create the solutions helps in scaling and developing their investee social
enterprise. It is their fiduciary duty to control for mission drift and nudge
their investees towards their mission for providing agreed-upon solutions
while staying prudent in expenses. However, too much control by inves-
tors on earning a return on investment rather than impact may lead to
mission drift and crises of legitimacy.
Conclusion
This article focused on the effectiveness of impact-investing in the BoP
segment by studying how the impact-investing interventions in the five
sectors, namely, education, energy and environment, health care, finan-
cial inclusion and employment, are bringing changes in the institutional,
Fig. 9.2 Effectiveness of impact-investing at the BoP segment. Source: Author’s

own
market and social environment in the BoP context. The research clearly
found that impact-investing has a measurable impact on the BoP seg-
ment across all the five sectors. This research holds an implication both
for the research community and the practitioner community as it brings
in the operational effectiveness of impact-investing at par with the for-
profit venture capital. For the research community, this chapter acts as a
deeper insight into the emerging impact-investing business models and
fundamental operating principles. For the practitioner community, this
chapter acts as a reference guide on the key essentials and steps to be
taken care of while studying impact-investing and BoP socio-economic
segment. The intent is to understand and bring forth the learning and
guiding principles, which act as a catalyst for the future researchers and
business ventures in the BoP socio-economic segment.
The firms targeting BoP socio-economic strata have repeatedly been
criticized for considering the poor as a market opportunity (Porter &
Kramer, 2011). Particularly in India, the book Fortune at the BoP by
C.K. Prahalad has legitimized corporate entrepreneurship seeking to
exploit the market opportunity at the BoP. Karnani, however, differs
from Prahalad’s approach in that he argues that for firms to derive legiti-
macy, they must develop and market products and services that help the
poor people socially and economically. Impact investors should act as
watchdogs, gatekeepers and legitimacy seekers by controlling for the mis-
sion drift and ensuring proper, cost-effective and socially relevant service
delivery at the BoP. The research suggests that for impact-investing to
create a significant impact, it needs to create markets, institutions and
models that are significantly different from standard venture capital based
business models.
Future Research
India lacks a proper legislation defining social enterprise and impact-
investing. It is crucial because social enterprises creating and selling prod-
ucts and services where for-profit businesses compete, the risk of market
failure may be higher. It can be mitigated if the government provides
subsidies, and the consumer understands and differentiates a social enter-
242 A. Agrawal
prise. It can only happen if the government defines both impact-investing

and social entrepreneurship. LC and AF, in particular, have addressed the
government policies on microfinance and social entrepreneurship signifi-
cantly. Future work needs to address the concerns of the government and
convince the government in having a transparent approach towards social
entrepreneurship and impact-investing.
This article certainly falls short on the source and intensity of data on
impact creation. It only discusses the impact data available in the annual
reports of the impact investors and some interviews. The author could
not find information from third parties to validate the claims mentioned
in the annual reports of these investors. The study uses only the well-
known cases, but for future studies, the researchers should study more
diverse cases including different contexts from around the world.
The study suggests engaging in exhaustive survey studies and
beneficiary-level studies to map the effectiveness of impact-investing. The
data show that there is lack of interaction between the government struc-
tures and impact-investing in India. It would be interesting to study and
develop hybrid models and platforms where the impact investors, the
government and the investee social enterprises can interact, collaborate
and co-create more scalable and sustainable solutions for more significant
social impact.
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Index1
A Aravind Eye hospital, xvi, 6, 9, 17,

Aavishkar fund, 220, 221, 223–226, 18, 228
233–235 Asha, 168
Accelerator, xii, xiii, xvii, xviii, 18, 109 Ashoka network, 6, 7, 10, 14, 53, 166
Acumen, xvii, 107, 111 Aurobindo, 17
Advocacy networks, 34, 35, 37, 43
Agriculture, viii, xv, xviii, 15, 20, 99,
107, 142, 193, 220 B
All India Spinners Association Balanced Scorecard (BSC), 101,
(AISA), 14 102
All India Village Industries Barefoot, ix, 15, 183
Association (AIVIA), 14 Basil, Paul, 11
Ambedkar University, ix Bharatiya Agro Industries
Annual Status of Education Report Foundation (BAIF), 15
(ASER), 33, 37, 42, 44, 45, Bhave, Vinoba, ix, 10, 14
48 Bio digester technology, 128, 129,
Application for Science and 131, 134
Technologies in Rural Areas Biomass gasifiers, 125, 127, 150
(ASTRA), 15 Bio-toilets, 121, 124, 128, 129, 131
1
Note: Page numbers followed by ‘n’ refer to notes.

https://doi.org/10.1007/978-3-319-74488-9
248 Index
British Council, xviii, 32, 49, 104, 109 Cross unit analysis, 194–195
Bureaucratic risk, 133–135 Culture, ix, 101, 103, 181, 193, 195
Business model, x, xvi, 18, 32, 54,
61, 100, 119–138, 143, 152,
153, 158, 209, 216, 218, 222, D
228, 238, 241 Deal, 49, 63, 67, 106, 113, 122,
179, 180, 183–184, 187, 198,
201, 229
C Democratization of innovation, 22, 23
Case based theory, 219 Denmark, 22
Case study, viii, 6, 7, 62, 63, 103, Department of Science and
120, 121, 123–130, 138, Technology (DST), 18
146, 155, 172, 184, 199, Drayton, Bill, 10, 14, 22, 24, 162, 166
201, 219
Caspian, 111
Centre for Civil Society (CCS), 33, E
35, 37, 38 Echoing Green Fellow, viii
Centre of Science for Villages (CSV), Economic pyramid, 210
15 Economics, viii
Changemakers, 53 Ecosystem for innovation, 17, 18,
Circular economy, xi, xvii, 142, 21, 110
145–148, 157, 158 Education, vii, viii, x, xi, xvii, xviii,
Circular social innovation, 141–158 10, 31–55, 62, 65–67, 76–78,
Civil society organization, 15, 24 81, 83, 86–89, 99, 151, 152,
Cloth for Work, 150, 156 157, 169, 171–173, 182, 189,
Collective consciousness, 181 198, 208, 211–214, 216, 217,
Competing goals, 147 222–227, 240
Context, viii, ix, x, xi, xii, xvi, xviii, Education research, 42–44
4–7, 11, 13–15, 17, 18, 21, Effectiveness, 35, 50, 51, 65, 146,
23, 43, 51, 52, 55, 61–63, 89, 164, 207–242
100–102, 104–106, 108, 109, Effectuation theory, 181
112, 113, 122, 142–144, 147, Ellen MacArthur Foundation, 145
150, 166, 179, 180, 182–184, Emotional intelligence, 61, 73–74, 80
187, 196, 201, 210, 219, 241, Empathy, x, xvii, 10, 65, 66, 81, 88,
242 208
Cooperative movement, xviii, 166 Employment, xv, 18, 127, 146, 149,
Corporate social responsibility 154, 165, 208, 214, 216, 226,
(CSR), 111, 123 231, 232, 237–240
Cottage, 211 Entrepreneurial opportunity, x, 60,
Cottage industry, 211 181, 209, 218
Index
249
Entrepreneurship, vii, xi, 7, 11, 23, 108, 113, 122, 126, 129–131,
24, 39, 60, 62, 64, 74, 77, 81, 133, 142, 143, 162, 168, 173,
87, 88, 180, 201, 217, 241 179, 182–184, 187, 196, 212,
Environment management, 154, 213, 215, 217, 227, 228, 232,
215–216, 229–230 233, 235, 236, 239, 241, 242
European, 5, 103, 166 Government schools, 32, 35, 37, 38,
42, 46, 48
Grassroots innovation, 17
F Grid-based electrification, 120
Finance, viii, xviii, 24, 37, 100, 102,
106, 110, 112, 129, 132, 136,
137, 167, 209, 212, 217, 223, H
227 Healthcare, xv, xviii, 142, 215, 224,
Financial inclusion, xii, 108, 164, 228, 229, 239
214, 216, 227, 240 Honey Bee Network, 16
Financial risk, 122, 132, 215 Household income, 216, 217, 232,
Fortune at the Bottom of the Pyramid, 238
The, xvi, 17 Human Development index, vii, 142
Foundations, 4, 7, 23, 130, 145, Hybridity, 32
146, 155, 166, 185–187, Hybrid organization, 32, 183, 184,
190–192, 194, 196, 221, 233 199, 201
Framework, 44–47, 54, 67–69, 72, 87,
89, 101–103, 107, 111, 146,
154, 158, 179, 180, 232, 240 I
Freedom of women, 15 IIM Ahmedabad, ix
Impact
assessment, 101, 103–114
G investing, xii, xiii, xviii, 207–242
Gandhian Roots, 13–16 investments, xvii, 11, 106, 108,
Gandhi, Mahatma, 10, 13–17, 24, 109, 111, 209, 216, 218, 240
191, 196, 198 investor, xii, 100, 105–108, 111,
Gender, xi, 40, 41, 66, 83, 168 113, 155, 218, 219, 222,
Gesellschaft fur Internationale 226–232, 235–242
Zusammenarbeit (GIZ), 106, Impact investing framework, 240
108 Impact Reporting and Investment
Global Impact Investing Ratings Standards (IRIS), 106–108
System (GIIRS), 106–108 Inclusive growth, 21
Government, vii, xii, xiii, xvi, xvii, xviii, Incubator, xviii, 12, 16, 18–20,
4, 16, 32, 35–39, 41, 42, 44, 46, 23–24, 50, 62, 109, 155, 239
48, 54, 62, 78, 89, 100, 102,
250 Index
India, vi, ix, xi, xii, xiii, xv, xvi, xvii, L

xviii, 3–25, 31–55, 60–63, 72, Legal, 32, 41, 53, 77, 166, 167, 171
76, 79, 87–89, 99–114, 120, Legatum Foundation, 108, 109
121, 123, 124, 141–158, Literature review, 63–69, 121–124,
162–164, 174, 182–184, 190, 164–167, 210–218
207–242 Lok Capital (LC), 208, 221,
India Learning Laboratories, 3–25 223–226, 233–235
Indian education system, 33, 38, Low fee private schools, 35, 38, 40,
211 46, 54
Indian Institute of Science, 15
Indian scholars, ix, xvi, xvii, 6, 32,
89, 179, 180 M
Indian welfare system, 211 Mann Deshi Mahila Bank, 183,
Infinite Vision, 17 185–186, 190
Information Communication Mann Deshi Mahila Group
Technologies (ICTs), 22 (MDMG), xi, 177–201
Innovations for cost control, 157, 208 Marginalization, 196, 200, 208
Institute of Rural Management Marketing, xvi, viii, 127, 168, 172, 236
Anand (IRMA), ix, xvi, 20 Markets, viii, x, xii, xvi, xvii, xviii,
Institutional environment, 119–138, 10–12, 14, 22–24, 34, 39–41,
210 47, 49, 54, 55, 107, 120, 129,
Institutional voids, ix, 232, 235 152, 153, 157, 158, 163, 167,
Integrated Rural Technology Centre 168, 178, 179, 182, 184, 185,
(IRTC), 15 187, 200, 207–210, 216–218,
Intellecap, 7, 8, 12, 61, 108, 110 226–232, 237, 241
International Finance Corporation Mentors, 12, 169, 230
(IFC), 106, 108 Michael and Susan Dell Foundation,
Interview data, 184, 186, 187, 242 111
Micro entrepreneurs, xiii, 110,
161–174
J Microfinance, ix, xvi, xviii, 214,
Jaipur rugs, 9 227, 228, 235, 237–239, 242
Jindal Centre for Social Innovation Micro-grid, 126
& Entrepreneurship, 33 Millennium development goals
Job creation, xiii, 230 (MDGs), 214, 216, 217
MIT, 16, 42
Model, ix–xii, xvi–xviii, 5, 12,
K 16–18, 22, 24, 32, 39–42, 44,
Knowledge in Civil Society (KICS), 24 47, 49, 52, 54, 61, 63–70,
Index
251
73–75, 81–89, 100, 106, P

119–138, 141–148, 150, PCDO model, 183, 184, 187–189,
152–154, 156, 158, 166, 167, 196, 198–201
173, 174, 183, 184, 187–189, Political risk, 131, 135
196, 198–201, 209, 216, 218, Portfolio Risk, Impact and
222, 228, 238, 241, 242 Sustainability Measurement
Moral obligation (MO), 61, 66, (PRISM), 107, 108
74–75, 81, 83, 84, 86, 87 Poverty, vii, xii, xv, 17, 21, 34, 40,
Multi-sided network benefits, 2 60, 62, 107, 109, 120, 142,
Mysore Resettlement and 162–165, 167–173, 211, 216,
Development Agency 227
(MYRADA), xii Prahalad, C. K., xvi, 17, 23, 210, 241
Primary education, vii, viii, xi, xvii
Professional Assistance for
N Development Action
Narain, Jai Prakash, ix (PRADAN), xii
NASSCOM, 18 Profit making, 32, 33, 39–41, 53,
National Association of Social 54, 182
Enterprises, 111 Profit maximizing, 123
National Bank for Agriculture and Public policies, viii, 22–24
Rural Development Public–private mix, 36–39
(NABARD), xii, 163 Public service delivery, 212
National Independent Schools
Alliance (NISA), 35
National Innovation Council (NIC), Q
22 Qualitative analysis, 189
Niiti Consulting, 111
Non-governmental organizations
(NGO), viii, 4, 9, 52, 102, R
111, 113, 121, 124, 129–131, Regenerative and restorative
169, 183, 200, 235 activities, 145, 149–151
Regulation, 44–47, 52, 54, 77, 182,
183, 230
O Risks, xviii, 23, 64, 106, 112, 121,
Odisha, 129 122, 130, 131, 138, 167, 208,
Opportunity recognition, 179, 181 214, 215, 217, 218, 228, 232,
Original equipment manufacturer 241
(OEM), 128, 131, 135
252 Index
S Social entrepreneurial intention, xvii,

Sarkar, Krishna, 168–171 60, 62, 64, 68–72, 74, 76–80,
Sarkar, Shilpi, 168 84, 85, 88, 89
Sarvodaya, 15, 16 Social entrepreneurial opportunity,
School education, 33, 34, 39, 47, 49 60, 181
Schwab fellow, 184 Social entrepreneurship, vii–xii,
Schwab Social Entrepreneur of the xv–xviii, 4–14, 17, 18, 21, 23,
Year, viii 24, 42, 60–69, 71, 76, 78, 79,
Self-efficacy (SEff), 61, 65–67, 72, 81, 87–89, 111, 122, 143,
73, 76–77, 81, 83, 84, 86–89 144, 151, 161–174, 178–184,
Self Employed Women’s Association 196, 198–201, 208, 209, 214,
(SEWA), ix, xvi, 15 236, 242
Self-help groups (SHGs), xi, xii, xvi, Social finance, viii, xviii, 53, 100,
xvii, xviii, 149, 152, 153, 106, 107, 112, 114, 137, 208,
161–174 209, 218
Sequential innovation, 188, Social impact, viii, x, xii, xiii, xvi,
196–199, 201 xvii, xviii, 11, 12, 32,
S3IDF, 110 100–107, 109, 112, 113, 141,
Skill development, 32, 49, 149, 156, 143, 209, 218, 222, 227, 231,
169, 170 236, 239, 242
Skoll Foundation, 166 Social impact assessment, 101–103,
Social added value evaluation 105, 107, 110, 113, 114
(SAVE), 101, 103 Social impact bond, xiii, xviii
Social business, xvi, 12, 60, 120, Social impact for local economies
121, 123, 137, 138, 166, 222 (SIMPLE), 101, 102
Social development, viii, 149 Social Impact Index (SII), 107, 108
Social enterprise, ix, xi, xii, xvi–xviii, 4, Social impact measurement, 100
5, 7, 9, 11–14, 16–20, 22–24, Social innovation, xi, xvii, 4, 6,
31–55, 61, 64, 65, 68, 76, 79, 10–18, 21–24, 62, 110, 122,
99–114, 119–138, 142–145, 141–158, 166, 178, 181, 184,
147, 148, 151, 153–155, 157, 187–189, 200
158, 162–164, 166, 167, 200, Social innovation spaces, 13, 24,
208, 209, 211, 215, 217–219, 222
222, 227–231, 235–242 Social movements
Social entrepreneur, viii, x, xvii, xviii, civil society, 4, 14, 15, 17, 24
6, 7, 9–14, 16, 18, 34, 36–39, entrepreneurial ecosystem, xiii,
41, 42, 46–48, 50, 51, 53–55, xviii, 11, 21
59–89, 104, 143, 144, 158, social innovation, xi, xvii, 4, 6, 7,
162, 164, 166–173, 180, 200 10–18, 21–24, 62, 110, 122,
Social entrepreneurial education, 61, 141–158, 166, 178, 181, 184,
65, 77, 78, 81, 83, 84, 86–89 187, 188, 199, 200
Index
253
Social return on investment (SROI), Trash-based economy, 149

102, 107, 111 Triple bottom-line, 102, 146
Social risk, 132, 134, 135 Trusteeship, 16
Social sector, 4, 108, 120, 122,
123, 136–138, 189, 201, 216
Social Venture Capitalists, 8 U
Solar PV, 126 Ultra-poor segment, viii
Stakeholder engagement, 155 Unemployment, 62, 178, 211,
Startup India Action Plan, 18, 25n1 216
Stimulated innovation cycle, United Kingdom (UK), xvii, 5, 22,
177–201 152, 167, 236
Stratified innovation, 188, 189, 196, United States Agency for
198, 199, 201 International Development
Structural equation model (SEM), (USAID), 106, 152
82, 85, 165, 166 Upaya Social Venture (USV), 208,
Sunshine Schools, 33, 37, 38 222, 227, 229–231, 235,
Sustainable Business Model, xvii 237–239
Sustainable development, xi, xii, xvi,
89, 141–158, 164, 208, 209,
215 V
Sustainable development goals Value-added products and services,
(SDGs), 145, 158, 216 150, 156–157
Sustainable finance, 100, 127, 154, Villgro, 7, 11, 12, 53
182, 208 Volunteer fellowship, 8
Swaraj, 14, 16
W
T Welfare state, 211
Tata Institute of Social Sciences, ix Willingness to pay, 212, 213
Tata Jagriti Yatra, 11 Women entrepreneurs, 172, 173,
Taxonomy, 100 185, 186
Technology-based incubators (TBIs),
12, 18–20, 49
Tensions, 33, 36–47, 49, 52 X
Thematic analysis, 36 XLRI, ix
Tools and Resources for Assessing
Social Impact, 110
Trans-Atlantic, 5 Y
Transparency, 33, 39, 41, 44–47, 52, Yale fellow, 184
54, 55, 106 Youth forums, 8

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EDITED BY

SOCIAL ENTREPRENEURSHIP AND

The Case of India

ISBN 978-3-319-74487-2 ISBN 978-3-319-74488-9 (eBook)

Library of Congress Control Number: 2018936908

© The Editor(s) (if applicable) and The Author(s) 2018

Printed on acid-free paper

India is a land of contrasts: while it is one of the fastest growing econo-

It is in this background that this volume aims to provide a more contex-

A large number of social entrepreneurial opportunities exist in socio-­

Provision of public goods through private for-profit social enterprises,

through the initiatives of a number of organizations such as Mysore

Overall, this book is a useful contribution to research literature on social

e­ ntrepreneurship in a country like India is enormous as there are large

Copenhagen Business School Anirudh Agrawal

Part I Theoretical Contextualization 1

1 Embedding Diversity in Social Entrepreneurial Research:

2 Education Conversations: Situating Social Enterprise

3 Factors Affecting Individual’s Intention to Become a Social

4 Why Worry About Your Impact? Rationale, Challenges

Part II Sustainable Business Models and Impact Investing 117

5 Towards a Better Understanding of Business Models

6 Circular Social Innovation: A New Paradigm for India’s

7 Social Entrepreneurship Through Micro-­Entrepreneurs

8 Stimulated Innovation Cycle to Serve the Poor: A Case

9 Effectiveness of Impact-Investing at the Base

Anirudh Agrawal is a PhD fellow at Copenhagen Business School and a visit-

Anil K. Bhat graduated in Mechanical Engineering in 1982 from REC (now

Balram Bhushan (Fellow in Management) is Assistant Professor of Human

Susmita Chatterjee is Assistant Professor in Economics and also a visiting pro-

Payal Kumar professor at BML Munjal Univeristy, has rich experience in

editor of a six-volume book series on Leadership and Followership (Palgrave

Mathew J. Manimala (Fellow-IIMA) has served as the director, XIME,

Ashok Prasad is the Cofounder of Clothes2Causes—a social enterprise, serves

C. Shambu Prasad is Senior Professor of Strategy, Public Policy and

Runa Sarkar is Professor of Economics at the Indian Institute of Management

Land—A Critical Resource for Infrastructure. She has authored Environment,

V. Joseph Satish is a PhD researcher in Science, Technology & Society Studies

Madhukar Shukla is Chairperson, Fr Arrupe Centre for Ecology &

Preeti Tiwari is a doctoral research candidate in the Department of

Deepika Chandra Verma is a final-year doctoral student in the Economics

Fig. 1.1 Social entrepreneurship ecosystem in India (as of 2013).

Table 1.1 National-level social entrepreneurship events in India

Table 9.4 Discussion on the effectiveness of impact-investing at the

Abstract The Indian social entrepreneurial ecosystem is acknowledged

© The Author(s) 2018 3

entrepreneurs. In this chapter, we suggest that social entrepreneurship in

 ngaging with the Concept of Social

 apturing the Social Entrepreneurship

The emerging picture of social entrepreneurship in India cannot be

Table 1.1 National-level social entrepreneurship events in India 2008–2015

social enterprises. In October 2010, an article titled ‘Is India Really a

 eclaiming Social Innovation for the Diverse

Social innovation has been described as being ‘practice-led where the

embedded within; the interaction between the social entrepreneur and

Using a venture capital investment model, RIN identified promising

business practices to become more effective is being increasingly ques-

 andhian Roots of the Social Innovation

movements (mobilization of people, dissent, negotiation, etc.) are useful

developed alternative institutions that would produce and train social

(IRTC), Mundur closely associated with the People’s Science Movement

Social Innovations and the Question of Scale

The current accounts of Aravind Eye Hospital tend to suggest that

A large number of social entrepreneurial opportunities exist in socio-

e ntrepreneurship in a country like India is enormous as there are large

Copenhagen Business School Anirudh Agrawal

Part I Theoretical Contextualization 1

1 Embedding Diversity in Social Entrepreneurial Research:

2 Education Conversations: Situating Social Enterprise

3 Factors Affecting Individual’s Intention to Become a Social

4 Why Worry About Your Impact? Rationale, Challenges

Part II Sustainable Business Models and Impact Investing 117

5 Towards a Better Understanding of Business Models

6 Circular Social Innovation: A New Paradigm for India’s

7 Social Entrepreneurship Through Micro-Entrepreneurs

8 Stimulated Innovation Cycle to Serve the Poor: A Case

9 Effectiveness of Impact-Investing at the Base

ngaging with the Concept of Social

apturing the Social Entrepreneurship

eclaiming Social Innovation for the Diverse

andhian Roots of the Social Innovation

Social Innovations and the Question of Scale

Startup India and Inclusive Innovation

Implications for Future Research

olicy Makers: Social Innovation as a Strategy

cademics: Social Innovation Not as Business

ocial Investors: Imagining Inclusive Strategies

ocial Incubators: Rework Mechanisms to Emphasize

opaque, intertwined, and complex sets of “new/non-traditional” non-

Tensions and Debates

Markets and Profit-Making in Education

Educational Research and Evidence

Transparency and Regulation

Prospects for Social ‘Edupreneurship’ in India

Social Entrepreneurship in India

e ntrepreneurship as a career choice. A sample of 183 students were used,