Social entrepreneurship to fade out by next decade

Chennai:

Social entrepreneurship, an inclusive business model well suited to address the needs of the poor by combining social objective with efficiencies of private enterprise, will vanish by next decade as it won’t be able to cope up with the pressure from funding agencies and venture capitalists to generate quick returns, warn experts.

Speaking at a plenary session of  UNCONVENTION forum, Laura A Parkin, chief executive officer of the National Entrepreneurship Network, said that from 10 years from now there won’t be any social enterprise and the entities who survive will become non-profit organizations.

Interestingly, with the US and European markets hit by economic meltdown, experts predict there will be a huge demand in the emerging market. “But nobody know how to tap these markets,” says Laura, whose NEN is India’s largest and vibrant entrepreneurial community.

“We can’t export the same business models from West into the eco system of emerging economies,” she warned.

Harish Hande, managing director of SELCO Solar Private Limited and a pioneer in rural solar electrification for below poverty line families, feels concurs with Laura and said that the biggest problems with the management schools is they fail to understand the economics of India population and try to implement western models which results in failure.

Ruing the fact that social entreprenuership has been monopolized by English speaking natives and there is no room for non-English speakers, he said these investors are not in touch with the reality and lack the thinking on how to develop the eco-system for the poor.

Hitting out at MBA graduates, he said their focus is only on selling sustainable products but they fail to create sustainable infrastructure.

Laura also highlighted the need to have get the younger generation into the sphere and figure out a business model. Citing a survey done by her network, she said since the last four years the growth in social entrepreneurship has been negligible until recently where more interest has been shown towards it.

Gavin McGillivray, head of the department of new private sector department and Department for International Development (DFID), said social entrepreneurship is not fulfilling its potential as investors are not willing to invest. “Social investment sector is amateurish and professional investor needs to understand there is a potential there,” he said.

Meanwhile, some of the entrepreneurs blamed the investors for failure of some businesses. “A social enterprise can’t make profits immediately. As it reaches out to the poorest of poor, it will take time as the buiness is build brick by brick. But the investors pressure on enterprises to deliver the results soon, ends in the failure of business,” an entrepreneur added.