Role of government for growth of social entrepreneurship in country

Encouraging Social Innovation

Creating an enabling environment for social entrepreneurial initiatives;
Rewarding initiatives for their performance;
Scaling initiatives success; and
Producing knowledge that enhances social entrepreneurs efforts.
Miscellaneous:
Encouraging Social Innovation
For any entrepreneur, the start-up period of an organization is critical. In
the private sector, one-third of new employer establishments do not survive
the first two years, and more than half fail in the first four years. For social
entrepreneurs, launching a new initiative can be just as challenging. To help
social entrepreneurs endure the trials of the start-up phase, several foundations,
most prominently Echoing Green and Ashoka, provide support specifically
for early organizational development. In addition, various academic
programs sponsor competitions and awards to encourage social innovation
and the founding of new initiatives. According to Surdna Foundation
Director Edward Skloot, government, too, has an important role to play in
what he calls acting as a seedbed for innovation government encouraged social
innovation by providing seed funds to support social-entrepreneurial initiatives in
their start-up phases.
For ex.in india

Creating an Enabling Environment

government can create an enabling environment for social entrepreneurs in a
variety of waysmost prominently by removing barriers, lending credibility, and
supporting collaboration. The examples discussed below show how government
has succeeded in supporting social entrepreneurs through these practices.
At times, existing practices and systems present barriers to addressing
a social problem with an innovative and entrepreneurial approach In some cases,
existing laws can constitute barriers to implementing new ideas .For several
successful social entrepreneurs, government officials have helped them create an
enabling environment simply by drawing attention and ultimately lending
credibility to their causes. For New Leaders for New Schools, local governments
have created an enabling environment by helping to convene internal leaders and
community stakeholders to support the initiative when it enters a new city. Both to
ensure public, private, and community support and because the New Leaders
financial model requires ongoing private sector funding, interested municipalities
must convene external community leaders for fundraising and other types of
community support.




Rewarding Performance
Another powerful way government can support the work of social entrepreneurs
is by rewarding their performance through government financial support. As
Howard Husock, director of the Manhattan Institutes Social
Entrepreneurship Initiative, points out, Social entrepreneurs want access
to reliable sources of financing that recognize performance.108 Four of the
organizations in the interview pool have received government support in the
form of performance-based rewards, through funding and purchasing. These
rewards, in turn, have further enabled these organizations to leverage public
and private resources and develop solutions.
When social entrepreneurs innovations begin to catch on, government
can recognize their positive results and reward their performance by
institutionalizing funding.
When social entrepreneurs produce and sell socially beneficial goods or
services, another way government rewards performance is through purchasing
their products.

Scaling Success

Often, the best reward for successful performance in social entrepreneurship
is having the chance to scale success. Expanding the reach of a proven
solution in a situation of market failure is often critical if the solution is to
be truly transformative. While for-profit companies can use an initial public
offering (IPO) to secure the funds for the huge initial investment that scaling
requires, there is no equivalent available to social entrepreneurswho, even
if they have developed a low-profit model, rarely operate within traditional
profit margins to scale, let alone go public. As a result, in interviews, government
often came up as the equivalent of an IPO that could help social entrepreneurs
scale their approaches.

Producing Knowledge

Innovation most often requires making use of reliable information that can
help to answer such questions as: What is the target social problem? How
many people are affected? Are current or past activities effective in making
changes? For this reason, successful social entrepreneurship is often
closely associated with what Gregory Dees calls market-like feedback
mechanisms.113 Government often plays a critical role as a resource and partner
for producing knowledge that helps identify the problems, document the
solutions, and compare various interventions against standards for success.
Government specifically provides research data, establishes critical standards,
and produces or funds evaluations that provide critical information for those
working toward solving social problems.
Government data are important not only for problem identification but
also for setting standards and gauging success. New Leaders uses government
data as a central measure of program success.

Miscellaneous:

A comprehensive government approach to entrepreneurship and SMEs
would provide for a full coordination of activities of numerous Governmental
institutions (chambers of commerce, employment bureaus, etc.) and NGOs dealing
with entrepreneurship and SMEs. With no pretension of defining the role of
government in supporting entrepreneurship and SMEs, we believe that apart from
designing a comprehensive entrepreneurship and SMEs strategy, the development
of national SME support institutions and networks is one of key condition for
success. There are no doubts that governments should create different types of
support institutions:
(a) To provide information on regulations, standards, taxation, customs duties,
marketing issues;
(b) To advise on business planning, marketing and accountancy, quality control
and assurance;
(c) To create incubator units providing the space and infrastructure for business
beginners and innovative companies, and helping them to solve technological
problems, and to search for know-how and promote innovation; and
(d) To help in looking for partners, in order to stimulate entrepreneurship and
improve the business environment for small enterprise.
(a) Training : Basic training differs from product to product but will necessary
involve sharpening of entrepreneurial skills. Need based technical training is
provided by the Govt. & State Govt. technical Institutions. There are a number of
Government organizations as well as NGOs who conduct EDPs and MDPs. These
EDPs and MDPs and are conducted by MSME's, NIESBUD, NSIC, IIE, NISIET,
Entrepreneurship Development Institutes and other state government
developmental agencies.
(b) Marketing Assistance: There are Governmental and non-governmental
Specialized agencies which provide marketing assistance. Besides promotion of
MSME products through exhibitions, NSIC directly market the MSME
produce in the domestic and overseas market. NSIC also manages a single point
registration scheme for manufacturers for Govt. purchase. Units registered
under this scheme get the benefits of free tender documents and exemption from
earnest money deposit and performance guarantee.
(c) Promotional Schemes : Government accords the highest preference to
development of MSME by framing and implementing suitable policies and
promotional schemes. Besides providing developed land and sheds to the
entrepreneurs on actual cost basis with appropriate infrastructure, special schemes
have been designed for specific purposes like quality up gradation, common
facilities, entrepreneurship development and consultancy services at nominal
charges.



For ex.Government of India has been executing the incentive scheme for providing
reimbursement of charges for acquiring ISO 9000 certification to the extent of 75%
of the cost subject to a maximum of Rs. 75,000/- in each case. ISO 9000 is a
mechanism to facilitate adoption of consistent management practices and
production technique as decided by the entrepreneur himself.

(d) Concession on Excise Duty : MSME units with a turnover of Rs. 1 crore or
less per year have been exempted from payment of Excise Duty. Moreover there is
a general scheme of excise exemption for MSME brought out by the Ministry of
Finance which covers most of the items. Under this, units having turnover of less
than Rs. 3 crore are eligible for concessional rate of Excise Duty. Moreover, there
is an exemption from Excise Duty for MSME units producing branded goods in
rural areas
(e) Credit Facility to MSME : Credit to micro, small and medium scale sector
has been covered under priority sector lending by banks. Small Industries
Development Bank of India (SIDBI) has been established as the apex institution
for financing the MSME. Specific schemes have been designed for implementation
through SIDBI, SFCs, Scheduled Banks, SIDCs and NSIC etc. Loans upto Rs.
5 lakhs are made available by the banks without insisting on collaterals. Further
Credit Guarantee Fund for micro, small and medium enterprises has been set
up to provide guarantee for loans to MSME up to Rs. 25 lakhs extended by
Commercial Banks and some Regional Rural Bank.
(f) Policies and Schemes for Promotion of MSME Implemented by State
Governments
All the State Governments provide technical and other support services to small
units through their Directorates of Industries, and District Industries Centers.
Although the details of the scheme vary from state to state, the following are the
common areas of support.
(i) Development and management of industrial estates
(ii) Suspension/deferment of Sales Tax
(iii) Power subsidies
(iv) Capital investment subsidies for new units set up in a
particular district
(v) Seed Capital/Margin Money Assistance Scheme
(vi) Priority in allotment of power connection, water
connection.
(vii) Consultancy and technical support
Government of India runs a scheme for giving National Awards to micro, small
and medium scale entrepreneurs providing quality products in 11 selected industry
groups of consumer interest. The winners are given trophy, certificate and a cash
price of Rs. 25000/- each.
urial Initiatives