Incubators need to look at enterprises through the prism of sustainability and environmental impact
Nurturing eco-inclusive enterprises is pivotal to overcoming the current environmental and social challenges in developing nations such as India. Eco-inclusive enterprises are the emerging companies that work towards social and ecological change along with integrating green technologies and climate-smart business models. Against this backdrop, a thematic session - Entrepreneurial Solutions for the Challenges of Climate Change -- was organised by TERI at the World Sustainable Development Summit (WSDS 2020).
The session helped shine a spotlight on social enterprises and introduced two examples – Daily Dump and Aikya Organics. Daily Dump created India's first home composter in 2006 and is keeping 60,000 kilos of organic waste daily out of landfills with no added cost to the government. Daily Dump has focused on changing mindset of people and has grown gradually over the years, as a bootstrapped firm. It has created participation through design and innovation. Aikya promotes zero budget nature farming. Some of its activities are training women farmers in low-cost input and natural farming techniques, installing seed and tool banks and solar-powered processing and packaging facilities. Aikya Organics is increasing the affordability and availability of organic produce by shortening the value chain.
At the session, Mr. Rainer Agster, Director of Private Sector Cooperation, Adelphi, Germany and Director of Operations at SEED, said eco-inclusive entrepreneurship is one of the key solutions towards climate change mitigation. Mr. Shrashtant Patara, Senior Vice President, Development Alternatives, talked about his company's approach to their business, wherein they are converting their consumers into producers, leading to a decentralised ecosystem. He highlighted the import of small scale, decentralised and eco-inclusive enterprises towards climate change mitigation, instead of just focusing on large organisations. One of the key challenges mentioned by him for eco-inclusive entrepreneurs was their inability to connect with macro/meso markets and a sustained customer base. Eco-inclusive start-ups also struggle to gather investor and incubator interest, as the yardstick for gauging start-ups lacks inclusivity, and tilts heavily in favour of technology start-ups. The potential of enterprises is ascertained based on their business models and potential profitability and socio-ecological impact doesn't find a place in the discourse. Taking a critical look at the current start-up ecosystem, Mr. Patara said, "While looking at start-ups, we need to look beyond just the person and the business models and gauge their potential impact on sustainability and environment. Currently the innovation incubation paradigm is dominant and eco-inclusive start-ups sometimes do not fit into the narrative. This needs to change."
While it is important to shift the focus in the current start-up discourse, better government support is required for eco-inclusive startups to thrive. Ms. Poonam Bir Kasturi, Founder, Daily Dump, too, reaffirmed it as she highlighted the systemic issues that act as roadblocks for eco-inclusive enterprises. She said the government departments catered to these kinds of start-ups work in silos, with a lack of cohesion and inter-operability, which is a major hinderance. Mr. Jitendra Yadav, Founder, Aikya Organics concurred with Ms. Kasturi and spoke about the current start-up culture and its lack of inclusivity for eco-inclusive firms, as it is focused on technology and not on the social aspect. He added that eco-inclusive enterprises see less acceptance from traditional incubators and are usually directed to avail grants, that are usually not feasible for for-profit firms. So fledgling eco-inclusive start-ups do not have support during their first two-three years and leads to a high failure rate. He also highlighted the systemic issues in government support and said government financing might be available, but its allocation is faulty, especially in terms of how and where it is being utilised. According to him, the incubation ecosystem, needs to shift its focus from being ‘USP' driven to ‘replicability' driven, for better impact.
Dr. Malini Balakrishnan, Senior fellow, TERI, concluded the discussion by adding that incubation and innovation in India are getting the spotlight. However, the social enterprises work differently, which is not considered currently. In social enterprises the ecological impact comes first and the business next. Conventionally though it's the other way around, especially for technology driven, for profit start-up culture. According to her another key challenge for such start-ups is scale and access to the market as a lot of the eco-inclusive enterprises start with good ideas, but need support/nurturing in term of finance, market linkages and business models, to make them sustainable.