Start-ups and Innovations which have a Social impact in India

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The session on “Start ups and innovations with a Social Impact in India” aims at involving the Diaspora with the impact invest movement in India. Social impact investing drives entrepreneurs to build self-sustaining systems to serve a wide array of population and provide returns (both social and capital) on such investments. Today, India is considered a fertile ground for (social) impact investing due to the enormous size of its demography and unfulfilled demands for social and economic services. The reduced public investment in priority sectors like primary education, health, housing, water and sanitation etc. has allowed growth of private entrepreneurial space. The large development gaps in various sectors call for innovative and unorthodox solutions which can be addressed by Start-ups.

Start-ups are one of the most powerful growth engines in an economy, creating value for customers, generating innovations and disruptive technologies, creating jobs, both directly and indirectly and add to its vitality as a whole by opening up the entrepreneurial space for all entrants. A central feature in this ‘start-up movement’ is greater involvement of our youth. There is need for a strategy to unleash the potential of youth to provide meaningful opportunities for their participation in the start-up system. This will help the nation reap benefits of a favourable demographic transition currently underway. It will also help provide direct and effective intervention to uplift the quality of life among millions of marginalized citizens.

The ability to deliver benefits on a large scale is the wellspring of impact investment’s appeal. With over 50 active impact investors and a cumulative investment of $4.1 billion since 2010 in more than 350 enterprises, India has emerged as one of the largest impact investment destinations in the world. A McKinsey Research report presented at the MEA-Impact Investor’s Council (IIC) organized “Prabhav 2016” in Delhi from 17-18 Nov 2016, revealed that (social) impact investing in India has the potential to grow from $1 billion in 2015 to $ 6-8 billion by 2025.

It is also important to identify and address challenges faced by Start-ups especially in the social impact sector:

  • Mentorship/Guidance: An important factor behind failures and slow growth of some organizations is the lack of quality mentorship, especially in terms of industry knowledge/support.
  • Funding/Capital Deficiencies: Government and private sector investors have set aside funds through investment channels but they are not available for all forms of business. The biggest problem for such organizations has been to attract investors and gain their trust with regard to their mode of operations
  • Lack of understanding on risk-return tradeoffs, fund performance, social impact measurement etc.

The Ministry of External Affairs as part of its efforts to give impact start ups a platform to showcase their solutions to Diaspora organized a national search to identify India’s Top 25 Social Innovations. The nation-wide search was conducted with the support of Atal Innovation Mission, Niti Aayog. The objective of the contest was to identify a pool of social impact innovators that developed or are developing commercially feasible solutions to the socio-economic problems of India.

The key focus sectors for the National Contest on Social Innovation were Clean-tech, Education, Health, Housing, Public Transport, Skill development and Livelihood, Waste management, Water and Sanitation and Women empowerment. The top 25 social innovations showcased in PBD 2017 are representative of all regions of the country, age-groups, sectors, and gender. The exhibition by these top-social innovators offers an excellent opportunity for the Indian diaspora (those who represent Angel Investors and Private Equity interests) to connect and interact with these social innovators and associate themselves with the social entrepreneurship movement in the country.

The Plenary Session at the Youth PBD will focus on engaging the Indian Diaspora with impact start-up ventures in the country, and explore the possibilities of encouraging Diaspora investments in impact start-ups.

The key areas of discussion would include the following:

  • Providing the right eco-system to nurture the talent and transform creativity into marketable innovation.
  • Participation of Indian diaspora to cater to the funding requirements, mentoring and collaboration with start-ups.

Possibility of creating a social impact bond in which the Diaspora could invest