The need for an economic framework that leads to sustainable livelihoods reduces our carbon footprint and helps revive the health of our ecosystem. Instead of being just a ‘successful’ economy we need to move towards becoming a Green Economy ‘that creates decent employment opportunities – green jobs – and produces green products and services with equitable distribution and sustainable consumption, leading to regeneration of the environment’.

A step in that direction is the adoption and propagation of business ventures that deliver goods and services for sustainable living and create sustainable livelihoods, so that people can work their way out of poverty and contribute to a greener planet. These business ventures are referred to as ‘Social Enterprises’.

Social Enterprises (SEs) are being built around previously unnoticed opportunities in sectors such as conservation, renewable energy and clean transport. Investment in these areas serves the triple purpose of reviving the economy, regenerating the environment and setting development onto a more sustainable path. The idea of reorienting the entire concept of ‘economy’ as we know it has been spurred due to growing international concern about the economic roots of environmental destruction and to prevent large-scale unemployment.

Social Enterprises (SE) are characterised by the following unique functions:

Without the assurance of reliable energy, water, transport and waste collection, our communities would collapse; without successful healthcare, employment and housing services, the most vulnerable would be abandoned. Therefore, the delivery of public services is one of the most important matters facing us not only today – as we confront one of the most extreme economic situations for over the decades – but also far into the future. In difficult economic times, the effect that the quality of these services has on the general population cannot be underestimated.

Currently, private companies provide a significant proportion of our public services. They, however, operate for purely economic ends; their primary motivation is not to provide freedom, justice, collective security, clean air, or other social goods. SEs can fill the gap by providing the motivation, ingenuity and customer focus that successful private companies are good at – while avoiding the simplistic ‘one size fits all’ approaches that often characterise the public services provided either directly by governments or ‘vended out’ through private companies.

In order to provide public services, private companies depend on natural resources. Extraction, processing and transportation of these resources are energy intensive activities with a significant carbon footprint. Many natural resources are found in eco-fragile zones. Thus, apart from carbon emissions, these activities also cause environmental degradation, especially during extraction. Loss of forest cover, soil erosion and degradation, pollution of surface and groundwater are all common repercussions. Often termed as externalities, these aspects are neglected in conventional enterprises and companies.

SEs can make the products and services in a different way while reducing the externalities their production creates in the form of environmental or development side effects. SEs internalise the processes to improve efficiencies in terms of energy and resource use, thereby reducing the footprint of the product /service.

What are required are jobs that produce, at a minimum, the goods and services required to fulfil everyone’s basic needs. At the same time, these jobs generate the income and, therefore, the purchasing power necessary to give people access to these goods and services. Such jobs regenerate – rather than destroy – the environment and its resources. By providing people with income and some degree of financial security, they are an excellent means of empowering people within their communities.

Liberal stimulus packages for green growth cannot address the immense challenge of growing unemployment, unless the issues of the MSMEs, the informal sector in urban areas and the agricultural sector are all dealt with. In India, for example, where nearly 87 per cent of the workforce is employed in these sectors, Green Jobs must provide employment for the youth (who constitute 41.05 per cent of the total population). Global decision makers are now concerned about jobs that are environmentally sustainable and decent, which is a positive development.

Concerns have been raised that though SEs will provide opportunities for many small start-ups, their excellent growth potential may lead to early consolidation, making them highly vulnerable to large MNCs (which is undesirable from the point of view of job creation). So, traditional jobs should not be axed at the cost of new opportunities; rather, old jobs should be transformed from ‘brown’ to ‘green’.

SEs have developed from and within the social economy sector, which lies between the market and the Government and is often associated with concepts such as ‘third sector’ and ‘non-profit sector’. In fact, the distinctive organisational forms adopted by SEs depend on the existing legal frameworks, on the political economy of welfare provision and on the cultural and historical traditions of non-profit development in each country. As a result, SEs today include both new typologies of organisations and traditional third sector organisations re-fashioned by a new entrepreneurial dynamic. In this respect, the SE concept does not seek to replace concepts of the non-profit sector or social economy. Rather, it is intended to bridge these two concepts, by focusing on new entrepreneurial dynamics of civic initiatives that pursue social aims.

Some of the key ingredients in the SE propagation framework have been enumerated bellow.

Considering the state-of-the-art technology in big industries, high investments in technology will lead to relatively small gains in ‘greening’. However, in the SE sector, comparatively smaller investments can potentially contribute to big gains, both in terms of job creation and the quality of services delivered. Clearly, attention must be oriented towards technological development of the youth, small and medium towns, small farmers and SEs.

For technology to really benefit the stakeholders, as has been mentioned above, it will need decentralised management, value addition and dependence on local resources. The technology solutions will need to be packaged as complete solutions with hardware (equipment, production), software (know-how, etc.) as well as business models. Project situations and pilots are needed to demonstrate and incubate technological solutions, while a programmatic approach is needed for technology liberalisation. While the former is the space created by Governments and research funds, the latter can only come from actors in the market – primarily the private industry, who can invest in testing and incubating technology solutions for green growth on a large-scale across varied geographies.

SEs are able to seize entrepreneurial opportunities when financial products and services designed according to their demand are available to them. Financial inclusion empowers low income people and the marginalised sectors of the society to actively participate in the economy, which leads to increasing employment and decreasing poverty levels.

Levelling the access playing field is also necessary to create more opportunity, productivity, equitable economic growth and sustainable means of eradicating poverty.

SEs and rural markets will, therefore, need investments for market development and product promotion. There is a critical need for institutions that can make such investments.

In evolving the institutional framework to deliver products and services in a cost effective manner, it is necessary to mix the public and the private. ‘Green’ or ‘socially responsible’ investors also expect good returns on their investments, but are prepared to accept somewhat longer time lines and take lower dividends.

Clearly, in the early stages of development ventures, such financing is more likely to come from public agencies, development banks, green investors and philanthropic sources rather than from venture capitalists. Indeed, there is considerable justification for initial funding in the form of grants and donations, since the earning capacity in the establishment and the first phase can be very small. Nevertheless, given the potential size and voracious appetite of this market, venture capitalists with a little imagination and a futuristic view would find all the returns they wish by investing in it.

Policy vacuums usually make it very difficult for communities to establish SEs. This is particularly the case in economically marginalised communities that have limited access to financial capital and essential business expertise.

The Government of India has recognised the important role of entrepreneurs in the industrial development of the country, especially through the small scale industries (SSIs). Government incentives not only motivate entrepreneurs to set up SSIs, but also strengthen the entrepreneurial base in the economy.

At the national level, the Indian Government has made significant commitments in this direction. The Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) is an initiative that creates Green Jobs. Seventy per cent of the work is undertaken in the scheme relate to water conservation, water harvesting, restoration, renovation and de-silting of water bodies, drought proofing, plantation and afforestation. MGNREGS provides assured wage employment opportunities for 100 days in a year to one member of over 100 million rural households. Co-benefits of MGNREGS that have been reported include improvement in ground water levels, improved agricultural productivity including cropping intensity and livelihood diversification in rural areas.

A critical element in any effective strategy to deploy and nurture SEs and eventually to create large numbers of Green Jobs is the setting up of Network Enablers or supporting/enabling organisations that can provide integrated services and assistance as needed to make the local ventures profitable. Such a support organisation has to bring about profit for socially oriented motivations together in a seamless synthesis of services designed to help its client enterprises succeed in the marketplace. Network enablers are important in scaling up the delivery of solutions to development-related problems. They must be able to provide highly sophisticated services involving complex technology, financing, marketing and other support systems.

It is to be noted that though SEs and Green Economy have gained a great deal of prominence in international debates and have been selected as themes for the June 2012 UN Conference on Sustainable Development in Rio (Rio +20), many developing countries have referred to it as a potential ‘distraction’ from already agreed upon global commitments on sustainable development.

It is striking that despite the huge diversity of contexts represented by the dialogue countries, all of the dialogues have concluded with the belief that any new approach to economic development would only be meaningful and legitimate if it was built on a set of broad principles, viz., sustainable development, equity, resilience, accountability and citizen empowerment.

It is clear that we are on the verge of an exciting ‘green’ transformation of our economies. The key is to identify how we can make this transformation happen – as quickly and as efficiently as possible – in a manner that provides significantly higher and long- returns in terms of environmental and social benefits. q