The blog post I am writing today is to share the idea of business incubation and involvement of development sector in this, apparently, profit driven concept. The reason I tried to bring in this topic, is to highlight the social aspect and the overall social impact of business incubation, so that we can answer the questions, ‘why should a non-profit organization tap into this apparently seeming corporate and profit driven idea?or ‘what should be the objective of a non-profit entity to get involved in this area ’. So to get these answers we need to know what business incubation means and what purpose it serves?
‘Business Incubation’ the term itself is quite new in Bangladesh, though the concept appeared few decades ago. Initially it was generated and implemented in USA and Europe, in the early and mid 1980’s and gradually spread over the world. The concept emerged as an economic development tool and as a consequence, resulted in social development through empowering people. This is where I believe, the interest and the role of social entities, which runs with the objective of the betterment of society, lie.
Normally a business incubation program works with new companies, screens potential clients based on set selection criteria, provides comprehensive business assistance services, has on-site management that coordinates the delivery of services, graduates companies from the program and so on. Theprogram is designed to create a place for new companies to run in the market. In order to make this possible, it follows few steps to guide these potential but amateur business ideas and techniques. This eventually serves the overall community creating a healthy competition within the market. So the profit of promoting these new ideas and business does not remain accumulated within a closed arena rather the impact it creates is far extending.
Business incubation can have its different ways of selecting the group of clients it wants to work with and can even be designed for small businesses. The business can be tech based or in other sectors, such as renewable energy, sanitation, clear water etc, depending on the need of the community. NGOs here can play a great role by focusing on finding these needs and help facilitate these business incubators to tap into these sectors, even can play a role of a business incubator, if contains enough resourcesThe idea becomes similar to the concept of building social enterprises which actually works with the motto of maximizing benefits for its stakeholders. Here the NGOs need to create a mechanism to incubate ‘Social Enterprises’ or ‘Social Business’ in which BRAC has its expertise that contributes to social aspects andnot necessarily whichever is going to maximize the financial profit.
“Without partnerships one cannot bring about social change and going forward”, says Sir Fazle Hasan Abed. Business incubator is someone whose job is to introduce the newcomers in the market and facilitate necessary partnerships. This idea is reflected in many ways within the services that BRAC provides to its beneficiaries. In Solakaria, a group of fifteen women, who were the members of BRAC savings programs, took a loan of TK 6000 in order to get into paddy husking. They were divided into five teams each. The paddy had to be bought, transported to the homesteads by boat and then husked. BRAC kept close tabs on the work and the costs involved. By the end of seven months they had bought and processed an impressive total of TK 93000 worth of rice. They then repaid the principal and the interest of their loan amounts; the business gained sustainability. This is how a small business was promoted by providing necessary mentorship, monitoring and access to partnerships.
If we look at some of the success stories externally, the concept will become more clear to us. We have seen impacts like the increase in local jobs as well as fostering entrepreneurial climate, commercializing technology, diversifying local economies, building/accelerating local industry growth, retaining firms in community, encouraging minority or women entrepreneurship, generate revenue, identify potential spin-ins or spin-outs, generate benefits for sponsors, revitalize distressed neighborhood, move people from welfare to work and lots of other scopes we can find if we look for.
So being a part of a huge NGO like BRAC, contributing to the development sector for so many years, focusing on emerging ideas like business incubation can be a giant leap to empower people If we can figure out exactly how to do this, who should be the focused group and what kind of social change we expect out of this intervention, we can bring our beneficiaries one step closer to sustainable development.