The author is Founder of Aspire Circle & Aspire Impact, was Inaugural CEO of The Global Steering Group for Impact Investment (2017-20) and Founding CEO of India’s Impact Investors Council (2014-2017)More From The Author >>
Catalysing Impact Entrepreneurship: The Case For Global Support System
In this quest, connecting Indian impact-focused entrepreneurs, innovators, investors, incubators and accelerators to the world is critical. This can turbocharge the rise of India’s next generation of startups to the top of the global league tables
Even as humanity is experiencing and partaking in the fruits of the fourth industrial revolution underway today, substantial sections of societies in different parts of the world are still deprived of the most basic means required for survival as human beings. That more than 820 million1 people still go to bed hungry on this planet every day underlines the crying need for alternative models of development and indeed economic and business practices. And hunger is just one of many. A roof over one’s head, good health and well-being, access to quality education, clean water, and sanitation, affordable and clean energy, and the opportunity to live in a clean environment are some of the other essentials which are still a distant luxuries for many people in this world. This is particularly true for a still-developing economy such as India.
While governments as well as industry and private sector organizations are doing their bit, a tribe of new-age impact entrepreneurs has emerged in India in recent years as elsewhere in the rest of the world. Helped along by an array of incubators and accelerators, these impact entrepreneurs are coming up with solutions that seek to address long-persisting social and environmental challenges while developing sustainable businesses at the same time. In effect, they are on the path to indeed creating impact economies of the future, dominated by new, impact enterprises. Together, they can create an impact ecosystem that will give Indian startups a chance to be the impact unicorns of tomorrow. Narayan Health in Healthcare, Fabindia in Sustainable Fashions, Jain Irrigation in Agri, Ramki Enviro in Waste Mgnmnt and numerous small finance banks like Equitas & AU are already Impact unicorns. In this quest, connecting Indian impact-focused entrepreneurs, innovators, investors, incubators & accelerators to the world is critical. This can turbocharge the rise of India’s next-generation EdTech, HealthTech, FinTech, CleanTech, AgTech, and FemTech startups to the top of global league tables and in the process deliver greater social, environmental, and economic justice to our planet and its people!
According to NASSCOM’s 2020 report, India had 520+ incubators and accelerators, 42% were set up the previous five years. 63% of these were outside tier 1 cities. They were expected to grow to 630 by 2025. The Indian entrepreneurial ecosystem, as per NASSCOM, is expected to be home to 100,000 startups and 100 unicorns by 2025. In another estimate from TiE-Delhi in 2020, total number of startups in India was expected to grow from 40,000 in 2020 to 60,000 in 2025. A joint research by Aspire Circle and Impact Hub in 2021, both prominent impact movement leaders,2 showed that 87% of the 54 surveyed incubators and accelerators focused on social or environmental impact and 30% of ventures supported by these incubators and accelerators could be classified as impact enterprises.
There are over 2 million social enterprises in India3. According to Bertelsmann4, the Government of India is encouraging enterprises in 7 impact sectors through enabling policies, budgetary allocations, schemes, programs and indirect incentives: Pradhan Mantri Fasal Bima Yojana and Prime Minister Krishi Sinchayee Yojana in agriculture; the National Energy Policy 2017 for clean energy; the New Education Policy for education; Solid Waste Management Rules (SWM) 2016 for water and sanitation; and the new Health Policy, Digital India, Start-up India, and Stand-up India schemes, among others. However, given the somewhat nascent and the still evolving nature of the Indian impact movement, the Indian impact entrepreneurs would need support from a global ecosystem of impact to succeed.
The Aspire-Impact Hub research further cites the lack of access to investors and markets besides the absence of a standard benchmark for performance measurement being primarily responsible for holding back the impact accelerators and incubators in India. Lack of structured programs and access to training and mentoring as well as scarcity of talent have been some of the other reasons advanced by the same research. A British Council report surveying social enterprises in India published in 2016 raised similar concerns with access to finance being the largest barrier for social enterprises. While 57% of the social enterprises cited lack of access to capital (debt/equity) as a key constraint, 50% had cited lack of grant funding and 33% cash flow as constraints. Shortage of adequate managerial and technical personnel was said to be another roadblock on their paths to success.5
The Aspire-Impact Hub research identified eight recommendations for catalyzing these SDG-focused, social or environmental impact seeking enterprises. They will help Indian incubators and accelerators to work with global facilitators to design holistic programs, establish peer-to-peer learning networks, promote early-stage impact investments, prioritize gender-lens, streamline impact measurement, sharpen impact design & innovation, leverage corporate partnerships and partner Government for scale and support. In a time and age when technology is also becoming an inevitable part and parcel of implementing impact projects, one of the biggest advantages of networking with a global ecosystem builders such as Aspire-Impact Hub is that Indian impact entrepreneurs can also get access to latest technologies and processes not present in their own country, share knowledge as well as imbibe best practices from their global counterparts. With 24,000+ global entrepreneurs and innovators as members of Impact Hub across 107 locations in 63 countries, this is a massive networking opportunity. In a remarkable feat, under the aegis of this global impact movement champion, as many as 12,000 new businesses have been founded since 2012 with 1460 new ventures having been created in 2020 alone despite the headwinds from Covid-19. That 90% of entrepreneurs in the network address one or more of UN’s SDGs underlines their commitment as a global citizen. And most importantly, a whopping 45 percent of global impact ventures attribute their success to the support programs of Impact Hub.
India has made rapid progress in the global start-up country rankings and is now at ranked #17 in the world. The World Bank upgraded its “Doing Business” score, supported by a growing entrepreneurial spirit throughout the country. Bangalore is now almost a Top-10 start-up city (11th in the world) followed by New Delhi (18th), Mumbai (29th), Chennai (74th) and Hyderabad (75th)6. What was more promising was that India ranked fifth in terms of ease of access to investment funding and eighth for grant funding7.Therefore, this is just the right moment for India’s impact entrepreneurs to give ‘global wings to their dreams’. Joining the global forces for impact change-makers would not only create transformative impact for the societies they seek to serve but also for India’s impact economy.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house
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