Inclusive innovation and network entrepreneurship


Anil k Gupta

Inclusive Innovations help in overcoming  either one or more of the six factors that could exclude people from the benefit of their impact such as spatial, sectoral, seasonal or temporal, social, skill and structure of governance.  Some regions are ignored because they are remote or difficult to access or have low population density. Markets don’t flourish here due to limited purchasing power and high transaction costs.  Certain sectoral activities such as handloom, khadi, bamboo-based products and many other forest-based activities suffer from policy and institutional and demand constraints.  The seasonal or temporal factors refer to constraints like floods, drought, landslide, hailstorm, etc., which disrupt  supply chain, induce migration or cause other constraints in reaching the people.  The social exclusion is well-known phenomenon whether based on gender, caste or other disabilities or disadvantages.  The skill-based exclusion occurs when demand for certain skills goes down because of technological change or market conditions or other factors influencing consumers’/employers’ preference.   The structure of governance implies administrative system, procedures and several other rules or regulations or allocative criteria which make many poor people disentitled, ineligible or inadequate in availing of social goods and services.

Numerous innovations including digital platforms have been designed for reaching the unreached.  Even these platforms are generally accessible to people who have smart phones, computers and access to internet.  Millions of people having poor connectivity or having feature phone are excluded even from such platforms. 

Many social and economic enterprises are emerging which are overcome some of these constraints.   The challenge is to empower the enterprises through horizontal networking and institutional and skill support to ensure inclusive social development.  Some of the lessons of network entrepreneurship will be applicable even for other small enterprises that suffer from scale, scope or sustainability constraints. 

Social enterprises are defined here as initiatives which overcome exclusion of desired target group without recovering the cost of goods and services from them fully or partially.  Such enterprises mobilize social capital for improving the access of the disadvantaged target group to the necessary goods and services.  Social capital includes here support from friends, relatives, philanthropists, occasionally public policy provisions and using one’s own savings for social purpose.  Let us begin with the case of online education.  There are large number of paid online education platforms that provide quality content to those who can afford.  Even many public online education programme reach mainly  students having smart phone, internet and in some cases, laptop.  Several school teachers of government try to overcome this constraint by innovative pedagogies.  Ashokbhai in Gujarat partnered with several other teachers, studio owners and cable TV channel operators to provide education through cable TV.  They could reach more than 20000 students through the cable TV network. 

Balaji Jhadav from Maharastra use dconference call system to teach students who have only feature phones.  He also provided a phone number at which students could call for clarification or send a question through somebody who had access to whatsapp.  He has reached thousands of children in this manner. 

Chintan Patel used a very creative way of reaching class one and two children.  For such children, to sit near a phone is not easy.   He printed flex posters of alphabets and other interesting information and put that at milk collection centre and various other locations in the village.  Children could read these with a stick by moving the stick one by one on different letters or other contents.  It was fun and children did not have to continuously stay there.  They could study for some time, then play and then come back to study.  With the help of some contributions from friends who met the cost of printing these large size posters in different open access walls and other places. 

Ghanshyam bhai, Kutchh found that his village had a well distributed network of loud speakers. He took the permission from village council head to use the public address system for teaching children at a particular time.  Children will sit outside a verandah, listen to the broadcast, and study.  In all these examples, social innovation has been used for reaching the unreached in a sustainable manner.  The cost involved in these enterprises has been met by mobilizing donations and use of one’s own savings.  Children did not have to pay anything for this service. 

In each case, the teacher had to network with several other actors to make enterprise viable.  No one organization/entrepreneur will have all the resources necessary to achieve any specific  social or economic goal.  Network is the form of future enterprises. 

Covid19 has shown that under certain conditions, the supply chain gets disrupted and the local loop supply chain work in such conditions.  Distributed, diversified and decentralized supply chain will play more and more important role in future entrepreneurial growth.  Some of the key lessons that emerge from network approach for market-based entrepreneurship are:

Many small enterprises operating within a sector have non- substitutable products or services.  They can easily become franchisee of each other.  Eventually, they can develop a group catalogue whereby the customer gets access to each other’s goods and services.  The customer gets a wider choice and individual entrepreneurs may get commission on the sales of the product by other entrepreneurs.  With the satisfaction of the customer, the chance of the customers coming back increases.

 The second model is where entrepreneurs dealing with similar commodities, say women’s dresses in a market dedicated for the purpose, compete with each other till the customer enters the shop.  Once the customer enters and prefers variation on the available dresses of his/her choice, the shop keeper goes to the neighboring shop and brings the dress which may meet the customer’s preference.  In the process, the inventory of each of the competing shopkeeper has been pooled to satisfy the customer not just of a shop but of the whole market.   The competition and cooperation play in tandem. 

The third model described by Charles Perrow in a paper, “Small Firm Network” based on the cluster of automobile parts in south Italy.  Various entrepreneurs there used to bid for global orders of a size much beyond their manufacturing capacity.  When any one of them got an order, he would call other manufacturers and offer them an opportunity to jointly complete that order.  Till the order was completed, the other firms acted like a division of the lead entrepreneur.  Once the order was completed, they started competing with each other.  The cyclical model of cooperation and competition helped the region grow without making any one entrepreneur achieve a mega scale. 

During the industrial revolution in the mid 18th century, Lyon in France was a famous silk textile weaving centre.  The demand for silk fabric was very fashion conscious even at that time.  When the fabric made by one weaver was in great demand than the other weavers may not have as good demand.  These weavers also had an important goal of teaching their children the art of weaving.  But the custom was that no weaver will teach one’s own children.  The children were apprenticed to other weavers whose market may even be low at that time but in future may go up.  In the market place, these weavers competed but in learning space, they cooperated.  Here the competition and cooperation were taking place simultaneously but in different domain. 

Five friends who graduated from Machine Tool Training Institute, Bangalore set up individual companies manufacturing CNC machines, gear or other precision tool products.  But they had a common marketing company-micromatic machine tools.  The potential customer got a very wide range of machineries and tools which no individual entrepreneur would have been able to provide.  It helped them all grow as a network of private individual enterprises.

There are many more examples which show that cooperation through formal or informal network can do wonders for entrepreneurial growth provided the purpose is to meet the needs of a wide variety of customers who may not be able to access the offerings of each entrepreneur separately.  More distributed the demand is greater will be the need for network of enterprises to emerge.  Most grassroots innovators have only a few innovative products to sell. But by pooling sectoral innovations, they can offer much wider range of choices to the customer.  This is an important  lesson yet  to be learnt properly by most small entrepreneurs.


Visiting Faculty, IIM Ahmedabad & IIT Bombay and an independent thinker, activist for the cause of creative communities and individuals at grassroots, tech institutions and any other walk of life committed to make this world a more creative, compassionate and collaborative place