Incubating a Social Enterprise Ecosystem in India

Shrashtant Patara, Senior Vice President of the Development Alternatives (DA) Group and CEO of Technology & Action for Rural Advancement (TARA), addressed students at SOM in September 2018 on incubating a social enterprise ecosystem. DA Group is an India-based social enterprise with a mission of creating sustainable livelihoods through the design and dissemination of green technologies and jobs. TARA is the Group’s incubation arm.

Patara argued that creating enterprises at scale through a market mechanism helps communities change sustainably. He believes that supporting livelihoods in economically, socially, and environmentally conscious ways is key to creating a better world. The Development Alternatives Group innovates environmentally friendly solutions to social challenges and works with governments, local entrepreneurs, and civil society to implement them. DA Group’s three-pronged approach focuses on people, profit, and planet by developing empowered communities with access to dignified and viable income generation opportunities while living in a healthy environment.

To that end, DA Group places special emphasis on the use of technology. Its five-step “i-track” model of creating livelihoods is comprised of: innovation, incubation, implementation, influence, and impact. One example of this model being applied is mechanized brick-making technology. First, DA Group developed technology that reduces drudgery and uses fly-ash instead of soil. Then TARA, DA’s incubation arm, supported a cluster-based growth of enterprises that use this technology. The new brick-making technology saved 13,200 tons of coal and 42,000 tons of CO2 in 2014 alone, and TARA has since installed these brick-making plants at 100 locations across India.

This focus on sustainable and scalable impact is also reflected in DA Group’s organizational structure. The firm includes The Society for Development Alternatives, a non-profit focused on research and innovation, and TARA, the incubation arm that disseminates scalable technology. TARA is comprised of commercial entities such as TARAhub, which plans to operate multiple shopping avenues such as TARAbazaar, TARA Machines, and TARA Building Materials. The business model focuses on maximizing synergies to minimize costs, selling to local markets, manufacturing through economies of scale, and running multiple revenue streams.                        

Patara continued his talk by discussing the challenges faced when encouraging potential entrepreneurs to set up social enterprises. On average, in a village with 1,500 individuals, fourteen considered establishing a social enterprise and six followed through. Micro-enterprises create local jobs and can build resilient communities, but finding entrepreneurs can be difficult because of their limited access to opportunities and knowledge. Patara believes that innovation and nurturing local ecosystems are crucial aspects of any solution. Given India’s challenges with growing unemployment in the face of massive growth, DA Group and TARA tie jobs with entrepreneurship by helping entrepreneurs through providing technical expertise, connecting them to markets, and designing appropriate financing.                           

Through this approach to create social enterprises, TARA has helped set up 3,500 businesses. It also acts as a B2B organization that provides markets for others to use. For example, it has shared the roofing tile technology that it developed with organizations in Africa, South Asia, and South East Asia, among other regions. The impact created by this technology in India itself includes 800 million tiles already on roofs and numerous jobs generated.

While sharing impact figures, Patara also argued for the importance of “soft” initiatives such as mentorship and literacy programs for women to support effective change. For instance, micro-entrepreneurs frequently require guidance on which machines to buy. They also need constructive communities which encourage a mindset of entrepreneurship. To address this need, TARA aims to establish a digital platform which can service up to 30,000 entrepreneurs annually by 2022.

Organizations such as the DA Group are empowering communities, promoting entrepreneurship, and innovating sustainable and scalable solutions. While Patara believes that the DA Group has come a long way, he emphasized that lasting change will take time. The keys to accelerated change are changing mindsets and developing an environment that fosters micro-entrepreneurship, and these will require governments, private sector, and social organizations to collaborate carefully and persistently.

By Tanya Sharma
MBA ’20