Designing A Policy Ecosystem Solution to Address Regulatory Challenges of Social Entrepreneurship in India

Abstract

Social entrepreneurship is many things to different people. At its core, it is about addressing social issues via usinesses that seek to innovate and experiment with processes, and in the journey, create value for their local communities and ecologies. This dissertation is an exploration of this journey from a regulatory perspective. It asks why someone chooses to become a social entrepreneur, how they operate their business, ow they measure their impact, and what regulatory challenges they experience as part of these processes. In India and across the world, there is no regulatory framework for social entrepreneurship at a national level. Curiously, primary research has not been deployed to identify the challenges that emerge from this regulatory gap. This is where this dissertation differs. It starts by exploring what social entrepreneurship and social impact are. By centering this analysis on the concepts of social value creation and organisation identity, this research shows that social entrepreneurship addresses systemic challenges via business models. The next section, using literature review, primary data (interviews), and case-studies based on primary data, identifies, analyses, and contextualises the regulatory challenges of social entrepreneurship in India. In this pursuit, interviews were conducted with five social entrepreneurs across rural and urban geographies in India, and diverse operational models, and five practitioners (incubators, consultants, and researchers), in the social entrepreneurship sector. Thematic analysis of the interviews with the five social entrepreneurs reveals the following challenges: (a) High costs of regulatory compliance; (b) Inconsistent regulations to promote entrepreneurship; (c) Difficulties accessing capital and finance; (d) Ambiguities due to no certification system for social enterprises; (e) Mismatch between impact measurement frameworks and local realities; (f) Exclusion from mainstream entrepreneurship schemes due to lack of capacity in government to understand what social entrepreneurship is. Essentially, the primary challenge that emerges is insufficient state capacity to not only understand what social entrepreneurship at a grassroots level is, but also the complex regulations that central and state governments create that do not benefit grassroots organisations. Finally, the observations from the interviews of social entrepreneurs and practitioners in this sector are decoded via thematic analysis, and using the power-interest-influence matrix, a stakeholder analysis is conducted. This helps in the identification of the precise stakeholders that are part of the social entrepreneurship ecosystem in India, and discusses the role they can play to alleviate the identified regulatory challenges. By bridging the theory of social value creation to the empirical evidence from primary data, this dissertation offers policy recommendations to operationalise the policy ecosystem for social entrepreneurship in India.