social entrepreneurship

The last few days, during the IISc centenary conference, I have been hearing a lot about the need for entrepreneurship, innovation, sustained growth, new models for business and development etc. touted as "India's need of the hour". But that got me thinking. Is the time right for social start-ups. My take is that it is not. Let me state my reasons....

The need
I doubt if the government can solve all the social issues in the country, at least, not on its own. Because of the sheer size and diversity in types of the problems that India is facing. I am of the opinion that local issues are best solved by local people. And that social start-ups or innovations in a local sense is the way out. We, as a nation, are poised in a rather unstable position today. It is not all high and rosy, I some how do not share the mindless optimism for India's future. We could ruin it all if we fail to act. And the best way to act is, I feel, to enable the citizenry to do what it need to do to solve issues. From the way the Indian leaders speak, I somehow get the feeling that they 'hope' that India will succeed on auto-pilot, which is a pretty bad idea to have.

My intuition is that having local systems of high efficiencies of service delivery will be more effective and efficient than nation-wide programs because the diversity that India is leads to the Indian problems also inhering the diverse nature. Nation wide policies are good but implementation tailored to local needs is better.

So why not?
In the following I am speaking of social actors trying to make money while doing good, and may /may not apply directly to social non-profit ngo's.

What is the key requirement for flourishing of social start-ups -- There has to be a system / procedures in place that are start-up friendly. Right now the social sectors like education, health etc. are heavily regulated. I am not calling for removing all regulations, but some of the regulations does not make much sense. The length of the bureaucratic red tape to be traversed to get the venture off the ground signifies considerable corruption. This leads to the logic that whose who go about these ventures might have a different agenda than social good or most efficient delivery of service. The point being -- "You regulate too much, you are regulating the good guy out and the bad guy in". The people who are starting the social ventures in an over regulated system may not be the best people for the job. But those who have enough resources / system leverage. And this might not be the best of outcomes. I agree that there are still good guys out there who run organisations for the social good, having surmounted the red tape. But most of the people run out of steam after some time of wrestling with the red tape.

We as a culture is risk averse. Which prevents us from trying innovation in starting up. But I think that a streamlined system will reduce the perceived risk of failure and encourage innovative actions in social space. Again a case for streamlined system.

Though I have during the course of this post referred frequently to less regulations an "innovation friendly" system might not necessarily have that. It could be--
0) Rules should make logical sense. Do not have rules just to harass.
1) Rules are fair and specifically stated.
2) Rules are the same for all actors..... and so on.

This is where bureaucracy comes in. From my scant dealings and more so from the tales of others, I think that Indian bureaucracy is a big ugly monster. Fighting the monster is not easy for the small guy who wants to try something new, bureaucratic inertia is just too much. It is one of the most inefficient systems in existence. And India cannot hope to have a grass-roots level small-scale systems of high efficiencies unless there is reform in the bureaucracy because it is the bureaucracy that has to act as enablers in letting people act. This is the single most likely point of failure for India as a nation (my gut feel); equal in disaster value to failure of political leadership. In a dreamy idealistic state I may even go so far as to say that bureaucracy should be given lee-way to innovate in service delivery models etc. (But definitely not in today's corrupt system). Bureaucracy will play a major role in either making India or breaking it.

At the stage of "maturity" that the bureaucratic systems are in, it is no wonder that almost all the de-regulation measures come down to the bureaucracy as god's writ, usually from some high echelon's of power like Prime Minister's office. And not as self-initiated. In the interim, while the bureaucracy grows up (which I hope it does) we want political leadership with vision and the guts to take a fresh look at policy.

People will start innovating and inventing new business models to solve their problems, but right now neither is there an awareness of possibilities nor a conducive environment to do so. As people become more aware of the possibilities, they will start demanding streamlining of the system. But can we wait for the natural order to stabilize, will it be too late by then, will we miss making a difference to the millions that comes and goes before we get our act together, what a waste of time and more so of human potential.

It was a pretty longish post.... Let me know what you think, my thoughts could be faulty, so let us think together....