Calling Social Entrepreneurs: Do You Have the Right Ecosystem to Innovate and Scale Up?

Posted on 04 April 2010

By Lakshmi Iyer

Most of us interested in solving humanitarian or development issues get excited about the term ‘social innovation’ – i.e. finding new, sustainable models to achieve high social impact.

But are we paying attention to what drives innovation? Why is it that new ideas that solve age-old problems usually come from specific geographical areas? In the context of reverse innovation, what can be done to promote social entrepreneurs locally? Finally, thinking one step after innovation, what can be done to scale up those innovative solutions to social challenges?

On March 25, the NGOs & Development study group at the Hauser Center held a discussion on ‘Leveraging Social Entrepreneurship for Development: Strategies to Promote Innovation and Leadership’, led by Nishith Acharya, Executive Director of the Deshpande Foundation, who discussed exactly this.

The Deshpande Foundation recognized the importance of having the right “ecosystem” to develop innovative and scalable social enterprises.  “Why do you think areas such as Austin, Texas or Boston have been a ground for entrepreneurs who create innovative solutions to social challenges? The answer is the vibrant and innovative “ecosystem”. The ecosystem is what helps you to test the idea, grow and succeed. It is critical to nurture entrepreneurship,” said Mr. Acharya.

The Deshpande Foundation decided to create a favorable ecosystem in a small semi-rural area of Hubli, Karnataka in India to encourage social entrepreneurs and social innovators. The foundation does this by funding new initiatives and organizations in a unique venture philanthropy model, which spreads its investments across many organizations, hoping that a few (for example, 3-5 out of 80) become successful, replicable and scalable models with significant social impact. Some of the essential inputs that the Foundation provides for this ecosystem are: financial capital for new ideas for social change, strategy and leadership training for entrepreneurs, talent development and encouraging local volunteerism, management training to development professionals, training for non-development professionals, social media training for NGOs and international interest in local development issues by facilitating involvement of international volunteers. The key goal of creating an ecosystem is to create a momentum so innovation is self-propelling.

Three of its best investments are: Akshaya Patra, which is the world’s largest NGO-run school lunch program in India; the Public Health Foundation of India (PHFI) which addresses the limited institutional capacity in India for strengthening training, research and policy development in public health and the United Way of India to encourage philanthropy amongst Indians and global citizens for causes in India. The remaining bulk of investments are of course essential to improvement of local social conditions, however, they do not guarantee large scale impact that an Akshya Patra or PHFI does.

“Innovation works in a context” and I could not agree more with the philosophy of the Deshpande Foundation in being a catalyst to support and promote NGOs and international development. However, with limited resources in the capital market, and burgeoning social problems, I think it is time for the foundation to leverage already existing metrics for high impact entrepreneurship before it makes numerous social investments, or at least, create its own definition of high impact entrepreneurship to avoid old mistakes in social investments. 

Lakshmi Iyer is a first-year Masters in Public Policy candidate at the Harvard Kennedy School.