The untapped seam of social enterprise

The untapped seam of social enterprise

Over the past two decades, the private sector has emerged as an active and influential partner in India’s economic growth. However, it remains by the sidelines in social and welfare sectors.

Private entrepreneurship in the social sector, or the social enterprise, has largely been confined to areas such as microfinance. Though many non-government agencies are involved in the social sector, their activities are mostly piecemeal and are supported with aid grants from various donors.

A vibrant market for services in the social sector requires both vendors with the expertise to supply the required products and services at affordable prices, and governments with the willingness to embrace such alternatives. Fortunately, there exists several opportunities for public-private partnerships (PPPs) in the social sector, many with the potential to significantly enhance the effectiveness of government activities.

Information technology applications can dramatically improve the quality of programme monitoring. Supervisory officials, a large workforce in all government departments, currently spend most of their time on inspections and meetings to collect and consolidate information. Web-enabled software applications, used with computers, tablets or even cellphones, can help cutting-edge functionaries enter data themselves. This would free supervisors from their data-collection chores and enable them to focus on quality and outcomes. Primary school and primary healthcare supervisors can deal with issues such as “learning outcome deficiencies" and help locate gaps in maternal and immunization interventions.

Another area with great potential is in e-governance initiatives involving internal work-flow automation software for government departments. Though there have been several initiatives over the last decade or so, they have mostly been piecemeal and local, which die with personnel transfers. Only standardized software, customized to suit specific local requirements, is scalable.

Internal departmental processes, especially those involving clearances, permissions, issuance of certificates, among others, can be easily standardized and computerized. Work-flow automation of the ante-natal, post-natal, and immunization activities of healthcare workers, using mobile phones, could significantly improve the monitoring of maternal and child health outcomes. Other areas with great potential include disease surveillance, attendance monitoring in schools and offices, tracking progress of small engineering works, among others.

It is no secret that many government programmes suffer from lack of outcome focus, implementation failures, and quality deficiencies. Private third-party monitoring of processes, quality and outcomes in social sectors such as education, healthcare, irrigation, delivery of statutory services, among others, can mitigate some of these problems. Once templates are created and successful examples are demonstrated, a massive market in such services can emerge in quick time.

Though government-run public mobilization and awareness programmes are generally staid and un-evocative, those by private agencies, while effective, are expensive. However, there is a huge potential for low-cost PPPs in areas such as mobilization of parent participation for school management committee meetings, capacity building of women self-help groups, among others. Private agencies could complement the government machinery by providing content, mobilization support, and trainings.

Solution exchanges—which make available software applications with their source codes, model tender and contract documents for procurement, provide an inventory of service providers, document best practices, and offer basic technical consultancy, among others—are a fertile area for PPPs.

As can be expected with any un-tested product or service, any government agency would be wary of its effectiveness and, therefore, unwilling to invest much in its development. Since entrepreneurs have higher risk appetite, it is appropriate that they bear most of the cost incurred in testing the product and perfecting it.

The government agency benefits by way of the possibility (not certainty) of a new product that enhances its functional efficiency at limited cost. The entrepreneur gains access to an invaluable platform that provides an opportunity to develop, test, and demonstrate a new product, and thereby get a head start in a market with huge commercial potential.

For example, since most e-governance applications currently in use are developed by programmers with limited involvement of the actual users, they are cumbersome, not user-friendly, and fail to capture the full diversity and complexity of processes. It is, therefore, no surprise that they become ineffectual in demanding dynamic field conditions.

Such partnerships require a paradigm shift in the way governments and society view the role of private sector in development. A few high-profile examples of failures with private participation in social sector have reinforced the perception of a private sector bent on exploiting the poor and benefiting from public resources. In the circumstances, government officials, at least those with the right intentions, will naturally be wary of initiating projects that, though functionally useful, will leave them open to accusations of having helped benefit private agencies.

Several practical considerations and the nascent nature of market in these sectors make standard price discovery mechanisms in contracting services ineffectual. Once the private partner passes a basic test of due diligence, departments could offer themselves as platforms for testing new products and services. If we are to make headway with PPPs in social sectors, this general perception of a rapacious private sector has to give way to one that accepts and welcomes a role for private enterprise in social development.

Gulzar Natarajan is a civil servant. These are his personal views.

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