How Social Innovation is Transforming Indian Entrepreneurship

Discover how social innovation has shaped Indian entrepreneurship, driving impact through sustainable models. Learn about pioneers like Amul and SELCO, the current landscape, and future opportunities in social enterprises.

Introduction

It is little known and understood that a lot of the foundations of Indian entrepreneurship are built on the back of the drive and ambition of companies that pioneered social innovation. Social innovation that combines philanthropy with innovative solutions—as a sector has long been misunderstood. 

There have scarcely been as large and spread out as those in the global social innovation landscape, but nonetheless, some of the strongest companies we know today have once been involved with it on a grassroots level. Think of companies like Amul and SELCO. 

From creating sustainable economic models to empowering local communities, social innovation has been at the heart of many transformational stories in the country.

Amul’s cooperative model revolutionized the dairy industry, ensuring financial security for millions of farmers, while SELCO, a social enterprise involved in sustainable energy has provided affordable and sustainable energy solutions to underserved communities, proving that profitability and social impact can go hand in hand. These pioneers laid the groundwork for a new generation of entrepreneurs who are now driving change across multiple sectors.

This subject was the context for our latest episode of Upstart by WeWork Labs. Arvind Radhakrishnan, Head of WeWork Labs, sat down with Manoj Kumar, Founder of Social Alpha, to break down the evolution of social innovation and a whole lot more.

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Current landscape of Social Innovation

Social innovation as it stands is at an inflection point in India. Entrepreneurs in this segment are now thinking about their initiatives a lot more closely with a focus on sustainability, scalability, and impact. The growing interest from both private investors and government initiatives has further fueled the momentum of social entrepreneurship in the country. “At Social Alpha, our work is to address market failures and make social entrepreneurship sexy enough for mainstream investors and ecosystem players to get involved in it.”

This is primarily because investing in companies involved in social entrepreneurship is very different from traditional investments. “As you incubate high risk startups like medical devices or solutions for agriculture… you will see lack of capital. The government is still the biggest investors in social entrepreneurship.” 

There are a number of initiatives from the government that have been launched to support startups. Like for instance Launched by BIRAC under the Department of Biotechnology, this program aims to promote innovative solutions addressing societal issues, particularly in healthcare. It provides financial and technical support to startups at the proof of concept stage, offering grants up to ₹50 lakhs for a duration of 18 to 24 months, depending on the project's stage.

That being said, the startup ecosystem has witnessed a surge in ventures that are integrating technology with social good, addressing issues such as healthcare access, financial inclusion, and clean energy. India is home to an estimated 20 lakh (2 million) social enterprises, reflecting a robust growth trajectory in this sector. Approximately 23% of startups fall within the social impact segment, spanning diverse sectors such as healthcare, education, agriculture, and green technology.

The rise of incubators, accelerators, and impact investment funds tailored for social enterprises indicates a maturing landscape where ideas are not only encouraged but also provided the necessary resources to scale effectively.

Additionally, corporate social responsibility (CSR) initiatives from major Indian and multinational companies have created a nurturing environment for social enterprises to thrive. Watch Arvind and Mohit talk about the subject here.

India's Global Position in Social Innovation

On the global stage, India has emerged as a leader in social innovation, driven by its unique ability to create frugal, scalable, and impactful solutions for large populations. Indian entrepreneurs have pioneered models that are being studied and replicated worldwide, especially in developing economies facing similar socio-economic challenges.

That being said, there are still some areas which haven’t been solved with tech. “Are we solving for small and marginal farmers…85% of farmers have less than 5 acre of land,” argues Manoj Kumar. “Mainstream startup innovation is not yet ready for that… if you are say for instance an entrepreneur building a singular device that screens for cancer it is unlikely that a VC with a ten year close-ended fund working for 2% management and 20% carry is going to take the risk of investing in your company.”

This is where, Manoj says, a player like Social Alpha might step in. “So we recognised that there is a need to build a new category of capital and build an ecosystem around that for founders who want to solve problems related to society, people, and planet.” Social Alpha’s track record thus far proves its a successful model that works—till date the platform has supported over 350 startups, awarded more than 120 catalytic grants, and made over 100 seed investments.

Social Alpha is also one of the players attempting to solve the lack of funding gap. According to one report by Nasscom, social innovators often struggle to secure equity funding, especially in the early stages of their projects. Investors typically demand quick and substantial returns, which many social innovations cannot guarantee due to their long-term focus on societal impact rather than immediate profitability.

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India's expertise in financial inclusion, demonstrated through initiatives like the Unified Payments Interface (UPI) and microfinance institutions, has set an example globally emphasises ont tech that can be made available for all. In renewable energy, companies like SELCO and Husk Power Systems have showcased how decentralized, affordable clean energy solutions can empower rural populations.

Manoj Kumar argues that in some cases, social entrepreneurship can even create new jobs and markets. Like for instance in the case of waste management. This segment alone is expected to reach $18.40 billion by 2030, at a CAGR of 6.1% during the forecast period (2025-2030), according to Mordor Intelligence. As a result, there are at least 1,411 startups registered under DPIIT with waste management as a focus. “Creating entrepreneurship in these areas for social good is the new form of activism,” notes Manoj. 

Watch Manoj talk about the subject here.

Opportunities for Growth in Social Innovation

Despite its progress, social innovation in India still has vast untapped potential. Several opportunities exist for scaling solutions and creating long-term impact:

Technology Integration: Leveraging artificial intelligence, blockchain, and the Internet of Things (IoT) can enhance transparency, efficiency, and effectiveness in sectors like agriculture, education, and public health.

Access to Capital: While impact investing is on the rise, more structured funding avenues, such as blended finance and social bonds, could significantly benefit social enterprises.

Policy and Regulatory Support: Simplifying regulatory processes and offering tax incentives for social startups can encourage more entrepreneurs to enter the space.

Cross-Sector Collaboration: Partnerships between governments, private corporations, and non-profits can lead to sustainable business models with far-reaching benefits.

Case Studies and Success Stories

Several Indian enterprises have successfully leveraged social innovation to drive meaningful change.

Amul: Established as a cooperative model, Amul revolutionized India's dairy industry by empowering farmers and ensuring fair pricing. Today, it stands as a global benchmark in cooperative success.

SELCO: Focused on sustainable energy, SELCO provides solar power solutions to underserved communities, demonstrating how renewable energy can be both impactful and financially viable.

Araku Coffee: A unique social enterprise, Araku Coffee works with tribal farmers to improve livelihoods while promoting organic, high-quality coffee in international markets.

Goonj: Through its innovative approach to urban waste management and rural development, Goonj has transformed the way resources are distributed to marginalized communities.

Conclusion

The future of social innovation in India is bright, with a growing ecosystem that supports impactful entrepreneurship. By addressing existing challenges and seizing opportunities, India can continue to be a global leader in social innovation, setting benchmarks for sustainable and inclusive growth.

India's diverse socio-economic landscape presents both obstacles and opportunities for social entrepreneurs. Key sectors such as healthcare, education, financial inclusion, and environmental sustainability are witnessing transformative changes through technology-driven solutions and innovative business models. Startups leveraging artificial intelligence, blockchain, and IoT are revolutionizing service delivery, making social impact scalable and cost-effective.

Government policies such as Startup India, Digital India, and Atal Innovation Mission are further fueling this momentum, providing necessary funding, mentorship, and regulatory support. Additionally, collaborations between corporations, NGOs, and academic institutions are enhancing knowledge-sharing and fostering a culture of social entrepreneurship.