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By Pratik Dattani
February 20 2013

South Asia faces many social and economic challenges. Many of these, if left unaddressed in our generation, will haemorrhage future social, cultural, intellectual and of course economic progress.

In India, there are several well-known social entrepreneurs and schemes to tackle social issue on a large scale – the influential economics blog Marginal Revolution called the Aadhar scheme’s welfare delivery model “the most important economic policy in the world”; Shanvac produced India’s first Hepatitus B vaccine , for £2 rather than £30 elsewhere; and Aravind Healthcare’s cataract survey costs £25 instead of £2,000 in Britain and the US.

But I think in Pakistan, the challenge, and the need for social entrepreneurs, are greater.

And this is because of undeniable social trends. When 55% of Pakistanis are illiterate, when among women this rate is closer to 75% and when a similar number are not enrolled in primary school, this serves to highlight the huge challenges that will result.

Kalsoom Lakhani, Founder of Invest2Innovate (i2i), a social impact intermediary, says: “We help social entrepreneurs who have passion and ability, but not the resources, to start their own businesses. It is a necessary step for growing and scaling viable businesses in the Pakistani market.”

Intermediaries like Kalsoom, who provide invaluable support to help the entrepreneurs grow and innovate, are vital in a country with big deficiencies in literacy and business skills. But there is a real lack of an ecosystem or infrastructure in Pakistan that can help alleviate social issues on a coordinated, national scale.

My colleagues and I spent many months looking at how to create an ecosystem in Pakistan that can encourage social entrepreneurs to come up with innovative market-based solutions to pressing social problems.

We launched our results in a breakthrough research report in London on 7th February, with the help of the Higher Education Commission of Pakistan, British Pakistan Foundation, Ashoka, Unltd and others. The launch was attended by over 100 private bankers, investors, NGOs and others with an interest in developing Pakistan.

The social enterprise landscape in Pakistan is nascent but growing.  From diverse sectors ranging from dairy farms to educational hubs to micro drip irrigation, early-stage enterprises have the potential of achieving hybrid financial return and social impact.

Crucially though, funding for small enterprises should meet the specific needs of the entrepreneur from financing at the start-up stage, to later on when the enterprise needs growth equity.  Social entrepreneurs need financial, but also intensive non-financial support such as mentoring, implementation guidance, and skills training development.  Such support mechanisms, combined with strong policy frameworks, can help create a long-term, self-sustaining ecosystem.

Successful incubator models already exist in some of Pakistan’s premier business schools and other independent incubators, such as the Pasha Social Innovation Fund and Women’s Business Incubation Centre, work with entrepreneurs across demographic segments in both rural and urban areas.

In the Northern Areas of Pakistan where honey is one of the main agricultural commodities, Hashoo Foundation’s Honeybee Project provided women beekeepers with beehives, as well as the associated training programmes to transfer this specialised skill-set to the wider community.

We think there are specific roles that investors, entrepreneurs and policymakers can play to make the social innovation movement in Pakistan more dynamic.

First, investors can support the growth of high-potential social enterprises by placing initial seed funding in business school incubators across a predefined growth cycle. According to Sarah Hashwani, Chair of the Hashoo Foundation, the enterprises that are incubated within these hubs can become “investor ready” more rapidly, and capital can be directed more effectively.

Second, Pakistan’s social entrepreneurs can pitch for non-financial resources to fill employee skills gaps in their enterprises.  Examples include business development services and mentoring, alongside access to networks and markets. Often, the most important factor for success is not funding, but mentoring.

Third, policymakers need to take an interest in supporting incubator hubs for social enterprises in Pakistan.  We suggested the formation of a ‘Social Innovation Coalition’, which would bring together stakeholder dialogue, a social investment fund, an innovation lab and cross-border entrepreneurship modelling.

By leveraging public private partnerships, as well as alliances with government units such as the Pakistan Innovation Board and the Competitiveness Support Fund, multiple players can be aligned to drive social innovation forward in Pakistan.

According to Dr Iman Bibars, Regional Director of Ashoka Arab World, “Creating awareness for the potential of entrepreneurship amongst policy makers, relevant institutions and the public at large is essential to help establish an enabling environment that social entrepreneurs can flourish in.”

On a macro level, the investment in human talent and institutions will raise both investor confidence and entrepreneurial confidence in the country.  By changing mind-sets through incubator hubs, education, mentoring and training programmes, a strong enabling ecosystem for social entrepreneurship can be created in Pakistan.

Pratik Dattani is Managing Director at Economic Policy Group (EPG).  EPG is an economic and strategy consulting firm that offers economic and regulatory policy advice and social investment impact analysis that focusses on India and Pakistan. He also runs a large India-focussed not-for-profit organisation.

 Originally published by EPG

Photo by Berehulak_Getty

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