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Social Enterprise – View of Markets for the Poor
D uring the current millennium, developing countries and emerging economies alike have been experiencing problems arising from non-fulfillment of the basic needs of the people; these are issues that are not being effectively dealt with by market mechanisms. It is not just about poverty and environment related problems; it is about economies breaking down around rising unemployment, runaway inflation, inequitable growth and poor access to basic services. These have become systemic problems that governments and society are unable to solve even though financial resources appear to be allocated for this purpose. Social enterprises aspire to explore and develop sustainable solutions for some of the sorely underserved needs.The market development strategy
currently deployed by social enterprises targets non-buying customers in
currently targeted segments. It also targets new customers in new
segments: new geographic segments, new demographic segments and new
institutional segments. A recent study on social enterprises by the
Centre for Social Innovation and Entrepreneurship at Indian Institute of
Technology, Madras highlights the broad
spectrum of initiatives that have been developed to provide sustainable
solutions. The significant categories and SE - Technology Solutions and Supply Chains in Agriculture (eFarm, Zameen); Dairy (Akash Ganga) and Green Building Materials (TARA Machines); - Delivery of Affordable Services for Healthcare (LifeSpring, EyeQ); Water and Sanitation (SarvaJal, TARAlife); Education (GyanShala, Indus Academy) and Energy (Servals, Selco); - Support Services to the Ecosystem of Social Enterprises in Training, Research and Advisory There is recent evidence of innovative market approaches that directly address the needs of the poor. ‘Making Markets Work for the Poor’ is an approach for engaging private sector to create wealth for the poor, strongly advocated by Urs Heierli, economist and development practitioner. Other researchers refer to this as an emerging market model of "Doing good by doing good business". The hypothesis gaining momentum is that if fashion designers, retailers and clients know who has produced their cotton, cloth, fruits or spices, this would provide an additional value to the finished products and overcome the common trap where raw material growers and processors are exploited. The dominant market successes observed are in the area of: - Transforming traditional sectors of carpet weaving (Jaipur Rugs), natural fiber based crafts (Industree) and marginal farmers (IDEI), and - Managing value chains for organic cotton (Helvetas) and organic spices (Peermade Development Society) Going forward, the social enterprise approach to market development does present a ‘scaling up’ opportunity and some hope for the poor in the globalising economy. q Dr. Arun Kumar
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that are leading the charge in market development include: