Ashutosh Tiwari is the head of WaterAid in Nepal, and is an adviser to the Surya Nepal Social Entrepreneurship Award. He is a co-founder of 16,000-member strong Entrepreneurs for Nepal, and was honored by World Economic Forum as a Young Global Leader. In an interview with Siromani Dhungana of New Business Age, he shared his idea of social businesses. Excerpts: Social entrepreneurship has a continuum of definitions. Some define it more as limited to the not-for-profit sector whereas some define it as businesses doing philanthropy and CSR. How do you define the term social entrepreneurship?
As a matter of practice, social entrepreneurship is not something new. Someone running a Newari guthi in a sustainable way – i.e. by creating value for all stakeholders and producing a social benefit –could arguably be called a social entrepreneur. As a matter of theory, however, social entrepreneurship is relatively new. At least in the way it is being taught at business schools, the field is still ‘live’, for definitions, approaches and frameworks for measuring and reporting results are being firmed up.
A for-profit entrepreneur produces goods and services. In the process, she generates indirect benefits to the society in the form of job creation and tax revenues. The aim here is to maximize private profits. In contrast, a social entrepreneur aims to maximize direct social benefits. She does so by seizing opportunities to address social problems that fall beyond the traditional divides among the public sector, the for-profit sector and the non-profit sector.
Let me give you an example. We all know that more than 200,000 young Nepali students fail their School Leaving Examinations (SLC) every year. Seeing this problem, the question a social entrepreneur asks is: Where do these people go? The market does not want them. The public sector does not know what to do with them. Non-profits are not of much help either. Meantime, 200,000 young people are there as wasted human resources. Surely, that is too high a cost for our society to bear, year after year?
And so, a social entrepreneur steps in with solutions to this unaddressed problem. She may start an entity that not only tutors the failed students so that they can pass the exams next time around but also gives them marketable skills so that they can go get jobs. She looks for ways to make her entity financially viable. When she achieves measurable success (i.e. impact) through her students’ success, she may wish to replicate her work, by finding a way to scale it up by opening up branches in other parts of Nepal, thereby serving thousands more SLC-failed students. What started out as unaddressed social problem is now an addressable with iterated solutions. This is one example of social entrepreneurship in action.
The entity’s legal registration may be for-profit or non-profit, but the social entrepreneur’s approach could borrow techniques and skills from all three sectors: the impact thinking of the non-profits, the efficiency of the for-profits, and the scale of the public sector.
What about businesses targeted at those at the bottom of social ladder – so called bottom billions as CK Prahalad puts it?
Those who do non-profit work on behalf of the poor know that the poor value two things like everyone else. The first is dignity. And the second is ownership. Prahlad’s contribution was to help us see the poor not as passively dependent recipients of charity, but as active, discerning and paying customers who like goods and services that come with choices in their nearest bazaar. Prahlad further argued that such hitherto unreached customers numbered in billions – a huge market for any business.
One result of this insight was that the multinationals such as Unilever, P&G and others went to find such customers, assessed their demands, and then started selling them goods and services via appropriate distribution channels which used even NGOs, women’s groups, and so on.
What do you think are the barriers to making a difference as a social entrepreneur at the moment?
There are several barriers. The first one is the size of the ambition. Most social entrepreneurs I meet in Nepal do not think in terms of growing their work beyond what they can control in one place. As such, they keep their ventures small and local, which is actually a big loss for the wider society.
Second, most are so possessive of what they have started that they end up saying no to investors’ money which could actually help them scale up their ventures. Third, most think of themselves as NGOs. As such, they are happy to accept donations and grants, and hardly ever think in terms of finding ways to generate revenues to keep their ventures growing. And fourth, there is a severe shortage of experienced or credible mentors who can advise social entrepreneurs to take the right but unfamiliar steps that can give the ventures a big boost.
Still, I see these barriers as by-products of growing pains, which will be reduced as awareness, skills, networks, capacities and knowledge develop and disperse in the sector in coming times.
How do you see the likely scenario of social entrepreneurship in Nepal in five to ten years’ time?
In Nepal, we already see that the lines between the non-profits and the for-profits are starting to blur when it comes to social entrepreneurial work. Right now, the two agenda-setting questions are: What societal or cross-sector problems are these social entrepreneurs addressing? And what sort of innovations have they brought forth to address those problems?
In coming years, as social entrepreneurship as a sector matures in Nepal, in addition to the above-mentioned issues, there will be a lot more hard-nosed emphasis on originality, impact measurement, replication and scale, and financial viability. Besides, as more people find out about and engage in social entrepreneurship, there will be networks, communities of experts, mentors, investors, evaluators and domain-specific clusters in, say, water, education, health and so forth. All these will likely be connected to trans-national networks, resources and financiers that work with social entrepreneurs from around the world.
What would be your advice for aspirant social entrepreneurs who want to contribute to the society via social entrepreneurship?
In no particular order, I would give them the following pieces of advice. First, do understand that doing social entrepreneurship is usually very hard and often lonely. Unless you are sure of what you really, really want to do, get some traditional job experiences at the beginning of your career so that you are able to build appropriate networks, understand work cultures, see how targets are set, how performance is evaluated, how results are measured and know enough people who can help you line up some financing when you start out on your own.
Do not go into social entrepreneurship to make a lot of money (which you won’t) but to address a social problem that you find too hard to ignore and that keeps you awake at night. Do not be rigid and dogmatic in your approaches but be willing to test, re-test and iterate on what you do. Study the measurement tools of well-run NGOs, learn from for-profits with regard to how to generate cash flows, observe how the government uses its enormous size to provide (or not provide) public services, and see whether you can combine the elements of these sectors to do your work in a manner that gives both the impact and the revenue to pay the bills.
The concept of shared value is one of the main logics behind social entrepreneurship. Could you please tell us a bit about the role of social entrepreneurship with regard to shared valued creation?
The concept of shared value gained wider currency after Michael Porter wrote about it in Harvard Business Review in 2011. The premise is that it is time to re-imagine capitalism, to change the way markets usually function to create only narrow economic benefits for its shareholders. To make this change, Porter argues that businesses should find ways to work together with its stakeholders to enlarge the size of the pie which will include both the economic and the social gains.
A classic example is of a coffee conglomerate working hand-in-hand with small-farmers -- advising them on matters related to weather, water, fertilizers, relevant agricultural knowledge, market access, and so on. The result of this sort of collaborative, shared-value approach, argues Porter, creates not only economic gains for both the conglomerate and the farmers, but also social gains in terms of the farmers’ raising their incomes by up to 300% which will then have spillover benefits for the farmers to keep their kids healthy and going to school. Social entrepreneurs, by definition, create social benefits. But Porter expects them to create shared value as well by finding ways to work together with wider stakeholders. In my example above, if the social entrepreneur ties up with an employment agency or with willing companies to successfully place the formerly SLC-failed students into various jobs, she will likely have created a shared value.
What was the inspiration behind your involvement in social entrepreneurship in Nepal?
I am not an entrepreneur yet. But throughout my career, I have remained a friend of entrepreneurs. I started my career in Nepal by working as an assistant to social activists who spear-headed the kamaiya andolan, the movement to emancipate about 200,000 Tharu agricultural bonded labourers from years of debt-bondage in far western Nepal.
That movement was successful, and my immersive experience in it convinced me that the enterprising poor must find ways to run their own small or micro-businesses to be the masters of their own fate. I then became small-business adviser at GiZ in Kathmandu, and then at the International Finance Corporation in Dhaka. I worked closely with more than 70 small-scale entrepreneurs. In 2008, I started the Entrepreneurs for Nepal, through which we ran services for entrepreneurs, and which is now credited with the starting of an eco-system for entrepreneurs to do their work in Nepal.
Since 2010, I have been a judge and advisor to Surya Nepal Asha Social Entrepreneurship Award. Through this work, I have had the privilege to judge more than 200 entries. So, in summation, you could say that through a combination of luck, effort, career paths, networks and work, I’ve long been a professional whom social and for-profit entrepreneurs in Nepal seem to trust.
