India is now a great place for high-tech start-ups [1]. A bullish consumer market means exciting new opportunities for entrepreneurs. But not all fledgling high-tech enterprises in India are fixated on encouraging hyper-consumption and serving the entertainment needs of a growing middle class. Some have a much different orientation and claim to operate from a heightened sense of social conscience, if you will. They are engaged in what may be termed as digital social entrepreneurship (DSE) – the entrepreneurial work of social ventures whose business models rely primarily on digital technologies. This group of entrepreneurs swear by mainstream business school lexicon, but paradoxically profit maximization is not their aim. Rather, they are driven by the desire to do social good and the power and reach of digital technologies is central to their quest. Working with PhD students and colleagues I have been fortunate to have got the opportunity to study some fascinating and inspiring cases of DSE in India [2, 3, 4]. These organizations are working to address seemingly intractable and complex problems such as financial exclusion, limited access to quality health care and outward migration from rural areas. Our ongoing research projects illuminate several interesting dimensions of the DSE phenomenon in India.
Background and entrepreneurial motivation
In many respects, DSE in India owes a lot to the dramatic growth of the Indian information technology (IT) industry since the mid-1990s. The technological capabilities underpinning most cases of DSE can be traced back to a founder’s distinguished stint in the IT industry. From a motivational standpoint, we find that DSE typically originates from the founders’ quest for a higher purpose in life and their profound sense of empathy with those that seem to have reaped little or no gains from globalization. Perhaps unsurprisingly given their IT background, such entrepreneurs have a ‘digital core’ in their ventures.
Digital infrastructure in India is rapidly outpacing the institutional infrastructure. Thus, despite possessing superb and advanced digital capabilities the goals of DSE often needs to be recalibrated and rearticulated to align with the interests of a bewildering array of formidable state and non-state actors. All things being equal the ability to orchestrate non-market strategies can become the single most determining factor for success. Thus the prospects of DSE, at least in the foreseeable future, seem to hinge on the skilful entrepreneurial navigation of the non-digital elements.
Juxtaposition of commerce and conscience can lead to conflicts. Hybrid business models are known to create ideological rifts within senior management teams: ‘Should we take money from investor A when we know they don’t invest to generate social impact? Will such an investment compromise our social mission?’
It can also become increasingly difficult to retain the commitment of an otherwise competent workforce to a grand social mission and they may turn to more lucrative jobs elsewhere in the market. In this sense, ‘social’ encoding and imprinting can be a particularly precarious achievement in many cases of DSE.
Developmental impacts of DSE
Documenting ‘impact’ needs patience and creativity. It is also not always clear what impact means in the DSE context. Should we be looking purely at economic impacts? In analysing impacts, how do we account for improved life-chances of beneficiaries? There is an urgent need for longitudinal field research, which will serve to both showcase outcomes of DSE as well as convince potential investors that their money will be put to good use.
A closing thought: Since society prefers altruistic performances to commercial ones, many digital entrepreneurs may retrospectively overstate their original intended commitment to social good (e.g. Facebook?). After all, stories often become grander and morally righteous in their retelling! However, before dismissing such performances as lacking credibility it is worth remembering that all entrepreneurship will (through job creation) almost certainly have a positive social and developmental impact [5]. This insight should not threaten the idea of DSE, but should help us better understand its limits and trajectories.
[1] https://www.weforum.org/agenda/2016/10/india-startup-boom-in-charts/
[2] Sandeep, M.S. and Ravishankar, M.N. (2013) The other India – Emergence of rural sourcing, Professional Outsourcing, Spring(12), pp.14-20.
[3] Sandeep, M.S. and Ravishankar, M.N. (in press) Sociocultural transitions and developmental impacts in the digital economy of impact sourcing, Information Systems Journal, DOI: 10.1111/isj.12149
[4] Masiero, S. and Ravishankar, M.N. (2017) Digital technologies and pro-poor finance in India. In The Proceedings of the Aston India Centre for Applied Research Conference, Birmingham, UK. Winner of the Best Paper Award for Innovative Research.
Development Implications of Digital Economies (DIODE) Strategic Research Network 