Keywords

Social Entrepreneurship, Social Value Creation, Capability Approach, Central Social Capabilities.

Introduction

The emergence of the Humanization of business is an important new development in the business world over the previous two decades. The Humanization of business aims to make business more concerned about its impact on society and positive societal development as a whole (Lurie, 2004). Terms such as social value, social value creation, social enterprise, inclusive, caring and conscious capitalism and corporate social responsibility (CSR) have come to the forefront. Businesses are making deliberate efforts to create a positive social impact through their routine activities.

A social enterprise is described as a business that generates social value. Means social value creation is one of the necessary conditions for social entrepreneurship. The objective of social value creation guides all operations of a social enterprise. Consequently, it is imperative to have a thorough understanding of the concept of social value and the process of social value creation.

Many researchers (Alvord et al, 2004; Landry, 2004; Light, 2006; Phills Jr et al., 2008) have talked about “Social problem” and “addressing social needs” while describing social value creation. (Caulier-Grice et al., 2012; Mair & Martí, 2006; Mulgan et al., 2007; Murray et al., 2010) But these fail to address what “social value creation” is? Moreover, there is a dilemma as to which problem is to be treated as a “social problem” and which is to be considered as a “social issue” (Phills Jr et al., 2008).

It has been posited that human well-being is the first step to understanding what social value is and how social value is created. Many approaches such as “Psychological approach” (Follet & Ianko, 2015) “Need-based and Motivational approach” (Clark, 2005; Sirgy, 1986; Pol & Ville, 2009; Caulier-Grice et al., 2012) and “Capability approach in social innovation” (Mulgan, 2012) further goes on to say that social innovation is an evolutionary change in which circumstances play a crucial role.

This paper attempts to investigate how the capability approach can empirically examine social value and social value creation. The research aims to find answers for the following queries: application of capability approach as a social value creation framework, its role in achieving the social mission, the capabilities developed and dispersed by cases (eKutir and its associate ventures) drawn in this research.

The following is the overall structure of the paper; First part of the study discusses the concept of social value and social value creation. It is followed by a discussion on the capability approach and operationalization of it (review of literature) in different areas. In the next section, the research methodology is discussed in detail. After that, selected case studies are analysed to find answers to research queries. The final section explains the findings and conclusion of this research.

Concept of “Social Value” and “Social Value Creation”

Social value is generally understood as the value that accrues as a result of improving the well- being of individuals, groups and society (Stevens et al., 2015). For a social enterprise, it is the primary objective (Austin et al., 2006). Diochon & Anderson (2011) argued that social value comes ahead of economic value in the case of social enterprises, while for commercial or traditional enterprises, social value is delivered as a by-product of economic value (Trivedi & Stokols, 2011)

Auerswald (2009) suggests well-being as a means to approach social value creation. His idea is based on the interpersonal comparison of well-being, keeping individual subjectivity in mind while evaluating value. Well-being is often used to describe the quality of life or ’a good life’ (Dodge et al., 2013; Follet & Ianko, 2015). It isn’t easy to quantify it as this is entirely subjective and depends on the individual’s perspective, priorities and the context in which they evaluate their well-being. It is important to mention that personal perception is of greater importance than external valuations.

Pol & Ville (2009) presented the concept of ‘micro and macro’ quality of life. At the macro level, “quality of life” means availability of all necessary capabilities for a healthy life (e.g. clean air, clean water, suitable shelter, and better education) and the “quantity of life” is represented by the longevity of all these basic capabilities. The valuation of ‘good life’ or ‘well-being’ is a subjective valuation that depends on persons positive and negative experiences they went through (Gillett-swan & Sargeant, 2014). The definition is given on the Social Value Portal also support the idea:

“Social Value serves as an umbrella term for these broader effects, and organizations which make a conscious effort to ensure that these effects are positive and can be seen as adding social value by contributing to the long-term well-being and resilience of individuals, communities and society in general.”

Social value creation is achieving planned positive social change or creating social impact through solving societal issues. These ‘social impact’ or outcomes included enhanced awareness, empowered stakeholders, developing and delivering socio-economic advantages to stakeholders, positively changing the lives of the stakeholders, and changing their perception, attitudes, behavior, and norms.

Mulgan (2010) describes the individual perspective of social value as “all-inclusive non- financial impacts of any programs, schemes, projects, enterprise, and organization, exclusively on the human well-being, communities and the environment”. He stresses that assuming ‘social value’ is objective, static, and fixed will hinders a reliable social value valuation. Therefore, a “subjective, flexible and adjustable” approach is needed to understand how individuals perceive and appraise well-being. In such a situation, the capability approach is deemed the most suitable for exploring, evaluating, or measuring something very subjective and contextual issues like social value and social value creation.

The Capability Approach

Nobel laureate economist Amartya Sen is seen as the father of the capability approach (CA). According to the CA, it is better to judge development, equality and justice based on human capabilities rather than matrices such as income/wealth, resources, essential goods, and preferential happiness/satisfaction. Human capabilities are defined as “what people are effectively able to do and be”, implying “the positive freedom people enjoy regarding beings and doings” (Alkire, 2005). Sen (1992) called these “beings and doings” as “functioning’s”. These functioning are makes life valuable in the true sense.

According to (Sen, 1992), the expansion of capabilities is the best explanation for development. Sen’s perspective is that capabilities and functioning’s help in understanding all aspects of the quality of life. Functioning’s indicates the actual or current state of individuals (Sen, 1993); e.g. better health status, earning level, happiness and nutrients etc. But the functioning’s of an individual or a family is the partial indicators of well-being or living standard. (Sen, 1993) proposes that to have a thorough understanding of human well-being, one must consider the person’s capabilities. Sen defined capabilities as “possible available functioning’s to an individual and positive freedom to choose among them.” The freedom here means various options available to an individual in a given set of circumstances, not only for basic human well-being but for social justice too. This freedom can be positive or negative. When a person can do what exactly he/she wants to do is positive freedom, on the other hand, when an individual has all the possible choices. Still, due to certain external constraints, he/she cannot exercise these choices is referred to as negative freedom. So the negative freedom prevents that person from achieving the functioning’s. Sen further addressed the concern of freedom as:

“The freedom to lead different types of life is reflected in the person’s capability set. The capability of a person depends on a variety of factors, including personal characteristics and social arrangements” Sen (1993)

Sen emphasized the positive side of freedom and tried to relate the concept of capabilities to the empowerment of beneficiaries (Jasek-rysdahl, 2001). Further, (Martin, 2007) emphasized that capabilities can be crucial in fostering economic growth while playing a constitutive role in human well-being.

The dilemma now shifts to which capability is essential and how and when it matters. Sen was against having one standardized and well-defined list of the capabilities, arguing that the choice of a capability depends on objective and context, and this selection should be that individual’s free choice (Robeyns, 2003).

Nussbaum (2003) posited that Sen’s capability approach, although a well-developed normative framework, but was ambiguous in defining the ‘capabilities’ and needed to streamline a list of capabilities; and envisioned ‘capabilities’ as ten “central human capabilities” that seek to quantify the subjective concepts of human well-being.

It is a wider concept encompassing numerous domains ranging from life to cognition and thoughts, health, including emotional health, and many more (Sen, 1992; Clark, 2005; Robeyns, 2006). It is now generally agreed that the capability approach can be applied as a framework in the context of poverty, well-being, ‘good life’ and social justice or inequality (Ziegler, 2010).

Literature Review

Operationalization of the Capability Approach

According to (Robeyns, 2005), the capability approach is a systematic theoretical framework for measuring and evaluating human well-being and social structures, formulating policies, and advocating social transformation. It is often applied in development studies, public policies and welfare economics. It could be applied to assess different dimensions of human well-being. Besides, it enables the formulation and implementation of plans and strategies. (Robeyns, 2003) even applied the capabilities approach for conceptualizing and measuring gender inequality in western society. On balance, it must be said that (Rawls, 1999) declared the capability approach as “an unworkable idea”, and even Sen admits that “there are some doubts about the empirical application of this richer and complex procedure”. Nevertheless, it implies that while CA is not a perfect concept, a thoughtful selection of capabilities can lead to more useful results.

The selection of the capabilities is made on the following five criteria’s; a) explicit formulation, b) methodological justification, c) sensitivity to context, d) different level of generality and, e) exhaustion and no reduction. A list of 14 capabilities (Table 1) is developed, used and endorsed. (Yujuico, 2008) has taken a list of the central capabilities proposed by (Nussbaum, 2003) as the base for evaluating different dimensions related to social entrepreneurship. The framework explains how the capability approach can enhance well-being by prioritizing beings or doings instead of having (Basu & Luis, 2011).

Table 1 Lists of Capabilities Endorsed by Different Authors and Present Paper
Sr. No.	Swedish approach (1987)	Alkire and Black (1997)	Nussbaum (1995,2000,2003)	Weaver, R.L. (2019)	This paper
1	Mortality	Life	Life	Health	Education, and training
2	Physical and mental health and healthcare use.	Knowledge and appreciation of beauty	Bodily Health	Mental/ Emotional health	Health including mental and emotional health
3	Employment and working hours	Work and play	Bodily integrity	Safety and abuse	Financial security/regular income
4	Working conditions	Friendship	Senses imagination and thoughts	Education	Safety against physical, mental and social harassment
5	Economic resources	Self-integration	Emotions	Life planning/ Decision making	Planning and decision making
6	Education and resources	Coherent self-determination	Practical reason	Property ownership	Recognition, respect and dignified life
7	Housing Conditions	Transcendence	Affiliation	Employment training	Family, social and cultural conservation
8	Political resources	Other species	Other species	Social issues and inclusion	Friendship and brotherhood
9	Leisure and recreation	-------	Play	Discrimination issues	Community Leaders
10	-------	-------	Control over one’s environment	Interaction with nature	Participative ecosystem
11	-------	-------	-------	Political participation	Resourcefulness
12	-------	-------	-------	Independent/ Creative expression	Equal Opportunity
13	-------	-------	-------	Recreation or entertainment	Collaboration
14	-------	-------	-------	-------	Mobility or growth opportunity
15					Environment-friendly practices
16					Customised solutions and recommendation
17					Risk Mitigation
18					Ease of doing business

Dalkilic & Vadeboncoeur (2016) have developed a theoretical and operational model for inclusive education that incorporates a relational inclusion model with the Capability Approach. The model involves students, educators, and parents in proactive behaviors that identify uniqueness over weaknesses and foster effort to improve the capacities of specially able children in an accommodating environment. They have even attempted to determine the scope and limitations of the capability approach applied in conceptualizing and assessing human well-being. An ontological inquiry is conducted to understand the contribution of the capability approach to human well-being. Singh & Inbanathan (2018) applied the capabilities approach to understanding the beneficiaries’ well-being at two stages. First, well-being is considered in terms of resource availability, which necessitates concentrating on the capabilities acquired by social enterprise intervention. Second, the value of the beneficiary’s perspective to optimize the capacities and freedom to pursue the kinds of lives they value actively is considered. (Kato et al., 2018) explored the capability approach as a potential solution to measuring and communicating social value.

Weaver (2017) the central capabilities are explored with proxy measurements for each capability and related data sources mentioned in the literature. Shortlisted a sample of 34 articles for understanding the empirical deployment of the capability approach and analyzed the data from seven critical aspects: a) research focus, b) capabilities and functioning’s, c) unit of analysis, d) methodology, e) statistical techniques used, f) country category, g) findings. The findings suggest the following three use of the capability approach in scientific research; i) assessment of individuals well-being, ii) identification of fundamental needs, iii) determination of capability dispersion. Weaver (2019) extended his work with a sample of 115 social enterprises from the USA to examine the social value created by social enterprises. A broad list of thirteen “central social capabilities” (Table 1) is available. The list is developed on four themes of core human needs. The author introduced the terms “social capability” and ‘social functioning’s’ concerning human capability and functioning’s. Singh & Inbanathan (2018) the capability approach is applied to understand the beneficiaries’ well-being at two stages. First, considering their well-being in terms of the availability of resources. Second, the beneficiary’s perspective’s value is to optimize the capability and freedom to lead the kind of life they value actively. Vézina et al. (2019) have conducted a longitudinal (single case) qualitative study to understand the administration of social innovation in the market based social organization from the dynamic capabilities perspective.

It can be seen that the bulk of the existing research has focused on developing a conceptual framework based on the capability approach, and many of these frameworks are based on secondary data. However, it has also been observed that different scholars have examined the application of the capability approach through different methodologies in different contexts and locations and sectors such as education, gender inequality, human well-being, etc. This context plays a very crucial role in the applicability and effectiveness of the capability approach. Therefore, this paper aims to explore the capability approach in the context (strategic tool) of another country (India) and a different sector (agriculture).

Objectives of the study

A systematic study is needed to explore how Indian social enterprises create social value by applying the capability approach. It is essential to consider the social value creator’s perspective on the fitment of the capability approach in social value creation. The objectives of the study are:

1. To study the application of the capability approach in creating social value.

2. To identify the capabilities developed and dispersed by social enterprises included in the study.

3. To develop the capability approach as a framework for social change.

Research Methodology

The present study is qualitative research with primary data and an exploratory research design. Qualitative studies are mainly oriented towards the development, elaboration, or verification of the theory. Theory development/generation takes place when the design of the investigation yields systematic and testable research hypotheses. When exiting a preliminary model or theory guide, the research design is referred to as theory elaboration (Lee et al., 1999). Fisher & Aguinis (2017) defined theory elaboration based on the idea of (Lee et al., 1999) as follows;

“The process of conceptualizing and executing empirical research using pre-existing conceptual ideas or a preliminary model as a basis for developing new theoretical insights by contrasting, specifying, or structuring theoretical constructs and relations to account for and explain empirical observations.”

The theory elaboration approach is applied to examine the applicability of the capability approach in social value creation by social entrepreneurs in India.

Sampling Design

The sampling design of the study is theoretical and purposive. The social enterprises that can provide rich and meaningful information are included in study. Theoretical sampling plays a crucial role in theory elaboration. Theoretical sampling was used to gather additional information and validate novel concepts and themes. It allows the researchers’ freedom to ascertain different aspects of the phenomenon under research (Charmaz, 2015).

Considering the suggestions from (Meyskens et al., 2010), the study is focused on one country (India) with four case studies (eKutir, One Acre Venture, Svadha, Bloom International AG). eKutir is an organization with four subsidiaries and joint ventures; therefore, it represents multiple cases in itself. Selecting eKutir for the present study is evident because eKutir is India’s first B Corp organization, and the founder is an Ashoka fellow. Ashoka’s selection process of fellowship is exhaustive and highly comprehensive. They consider only the social entrepreneurs who have made a significant social impact through innovative models.

Data Collection

The data has been collected from both primary and secondary sources keeping in mind the complexity and context of the subject (Gummesson, 2006). In addition, semi-structured in- depth interviews have been conducted to have the social entrepreneur’s perspectives on social value creation and the adaptability of the capability approach in the social value creation process. To understand the general background and initial journey of the enterprises’, interviews of the founder of eKutir Mr KC Mishra, 19:46 minutes and Executive Director at eKutir Mr Suvanker Mishra, 26:51 minutes 2017 (Potdar, 2017) available on the public domain were transcribed and analyzed.

The third particular in-depth interview with Mr Suvanker (Executive Director at eKutir and CEO at Bloom AG Tech) has been conducted on the digital platform using google meet due to the Covid-19 crises, which lasted for 56:50 minutes. The interview was more of a “conversation with a purpose” approach where very detailed answers were recorded for each question. Other than this few specific aspects after the initial analysis were discussed on a phone call as well.

Secondary data is collected from the websites and various reports of these social enterprises, news articles and content from interviews of key persons available in the public domain.

A few telephonic interactions were also done with micro-entrepreneurs and farmers (direct beneficiaries) working with eKutir and its associates to understand their perspectives and strengthen the research findings.

Data Analysis

Theory elaboration involves an in-depth empirical investigation, employing an inductive approach. Gioia methodology of analyzing qualitative data is opted for the current research. Gioia methodology is chosen for two reasons; it fully satisfies the rigorous standards of qualitative data analysis. It has a well-defined process flow that allows the researcher to refine data systematically without compromising its quality and credibility (Adamsson & Tahir, 2015). It is also helpful as it enhances qualitative robustness by arranging data into the first order and second-order categories to present in a more organized form (Corley & Hamilton, 2014). NVivo 1.2 software is preferred over manual and other software because it helps is managing and arranging qualitative data analysis with its brilliant features.

In the first phase of analysis, primary elements were identified using open coding derived from the theoretical framework, suggestions from literature and the author’s understanding. Axial coding was done in the second phase, and primary elements were grouped based on common features. A list of the capabilities developed and dispersed for social value creation emerged in this stage of analysis. In the final phase of analysis, selective coding is done. The capabilities were further clubbed based on similarities to figuring out the core of the data, which led to establishing five aggregate themes.

Social Enterprises Developing Capabilities and Creating Social Value

CASE 1. eKutir

eKutir (the first B Corp-certified organization in India) is a Bhubaneswar based for-profit social enterprise group founded in 2009 by Mr Krishna Mishra with the mission to eliminate rural poverty of smallholder farmers by providing economically sustainable solutions based on technology and community engagement. With its innovative interventions in agriculture, food & nutrition, and enterprise development, eKutir is working to grow farmers’ economic, social, and human capital. It has converted the traditional exploitative and fragmented agricultural structure into a collaborative soil-to-shelf model Figure 1.

Working Model of eKutir

eKutir provides smallholder farmers access to information, investment, inputs, markets, and everything to help them succeed as independent agro-entrepreneurs. The unique smart farming engine combines soil analysis, climate statistics, market forecasts and crop DNA at one Platform. It allows farmers to estimate the expected return on investment for each crop in that particular area. Then they are supported with timely best practices throughout the crop cycle.

The organisation trained the micro-entrepreneurs and equipped them with a suite of low-cost mobile applications to provide services to the last mile. The farmers, who are not comfortable, operating a smartphone, are helped by these trained micro-entrepreneurs. These entrepreneurs act as connecting points for every single stakeholder in the agro value chain.

This holistic and highly personalised approach results in increased employment generation, increase in income, and productivity with a cost reduction. eKutir has disrupted the conventional food supply chain by eliminating intermediaries that empower farmers. eKutir has its operation in four nations (India, Bangladesh, Cambodia, and Nepal) through 600 plus Micro-entrepreneurs, involved in 74000 plus households and 139400 plus beneficiaries. To understand the process and strategies of social value creation or impact creation, let us go through the journey of eKutir.

The Journey of eKutir

In 2009, it started by addressing smallholder farmers involved in subsistence agriculture within Odisha (India). The farmers could not identify the reason for low productivity and increased cost of farming and maintain low liquidity even after trying hard. These farmers were applying nutrients to their crops based on the poor economic behavior of more begets more. The principle of “if I apply more nutrients, I’ll be able to generate a higher yield” was in practice. Without understanding the need for, what kind of nutrients does soil have? What is it that is missing? What can I do? That knowledge was missing. Either there was no soil testing, or if it had then delayed results (more than 20 days) were there.

The time lag between soil testing and results was exactly the pain point. Thus eKutir came with a technology-driven change-making proposition for farmers to provide intelligent, customisable and specifically time-bound decision support. eKutir, with their partner Grameen Intel Social Business (GISB), came up with a “soil” nutrient management tool called mrittika (means soil in local dialect). Which made these farmers capable of testing the soil at low cost and quick test results (less than 30 minutes?) Moreover, the software helped them to know what locally available fertiliser they should apply. When should they apply? And in what quantity they should apply? Furthermore, soil testing is happening in the village itself.

The positive results with this technological intervention helped eKutir to earn the trust of the farmers. With the help of the correct information and advice, the farmers could double the production on the same land. Sadananda Taladhi (farmer) said:

“I used to get twenty quintals of tomatoes per acre. But now I get around 50 quintals. I have more than doubled my yield and income. Thanks to eKutir.”

The next problem was most of the farmers were not comfortable in handling the digital platform. So in the second phase, eKutir trained (2weeks of training) some progressive farmers to addressing the needs of the farmers around them with the help of eKutir and its IT-enabled platform, which costs them Approximately 300 USD and maintenance charges of 120 USD for every subsequent year. These micro-entrepreneurs were working as agents of eKutir and getting paid by farmers for their services, which created employment opportunities. With the validation of the micro-entrepreneur led model, eKutir expanded its geographical reach and beneficiaries base. Clusters of farmers were created and provided with an opportunity to interact and raise collective requirements, which helped them cut costs. In 2012 with experiences, eKutir, with its partner GISB, launched a seed selection tool named ‘Ankur’. It helps in the selection of seeds based on the local environment, crop type, and season.

In the next phase, eKutir partnered with BoP Connect Social Venture and developed the Farmer Portfolio Management Tool (FPMT) with three different components

1. FPMT- ME and My Land,

2. FPMT-Agri Advisory and

3. FPMT-Marketing Management.

The farmers were getting solutions to their problems from soil testing, seed selection, all inputs required (fertiliser & pesticides) to the marketing of their products. They are producing as per the demand from the market. In the next phase in 2013, after creating clusters of farmers growing a variety of hybrid vegetables across three districts of Odisha. MGM Agri-Ventures Private Limited joined eKutir and developed a mechanism to supply door-to-door fresh vegetables through ‘veggie entrepreneurs’ and introduced another online portal called ‘VeggieKart’. In 2014 eKutir launched a wholly-owned subsidiary company called One Acre Venture (OAV).

CASE 2. One Acre Venture (OAV)

OAV started in 2014 as a for-profit social enterprise, is operating across the farm-to-food value chain. It is promoting some constructive modifications in lifestyles and consumption habits of people. OAV is helping people in preventing diseases caused by inappropriate lifestyles and controls the severity of the problem by providing the right food product, prepared from neighbourhood cultivated produce, sourced from smallholder farmers. OAV is operating on a system of “demand-based production, processing, and distribution.” With the help of its specific behavioural change programs for its target customers, they are increasing the consumption of their products. A network of Nutri-Entrepreneurs has been developed by OAV to help the smallholder farmers by ICT based advisory support for crop inputs and for producing nutrient-rich food crops (OAV, n.d.).

Working Model of OAV

OAV is working on a demand-based model. OAV organises awareness sessions for its target consumers, e.g., pregnant and lactating women (Pratidhi). These sessions are helpful to consumers in recipes, dietary planning, and peer relationships, assisting them in making the diet adjustments and incentivising them in consuming more. People struggling with lifestyle diseases such as hypertension, obesity, diabetes are advised to prepare and follow a proper diet plan; they are also supplied with precise vegetables and food items and assistance from a dietician. By doing this, OAV is creating demand for the smallholder farmers in their network Figure 2.

On the other hand, its network of Nutri- Entrepreneur helps smallholder farmers cultivate the right mix of crops in a particular season. It provides demand related information to the farmers well in advance. Then these agri-procures are processed and sold to the target consumer (Customer Suffering from lifestyle diseases) through the channel partners like ‘VeggieKart’ Hospitals, Grocery shops, supermarkets and, online. OAV operates in three states (Odisha and in partnership in Bihar and Maharashtra), impacting the lives of 44010 plus farmers in 1818 villages with the involvement of 66 Nutri- entrepreneurs guiding the smallholder farmers with batter crop mix pattern throughout the year.

In 2016 eKutir became India’s first company to be certified as B Corp for its remarkable contribution to job creation, prosperity, and livelihood for people at BoP (bottom of the pyramid) with the highest standard (performance, transparency and accountability) in providing solutions to social and environmental issues.

CASE 3. Svadha

Svadha (2016) is another initiative in association with the World Toilet Organisation (Singapore based NGO) for establishing an organized market in the area of water, sanitation and hygiene (WASH), especially for the rural market. Another vertical added to their online tools named “SaniMark” to manage household hygiene information. It is a platform to address the issues and simplify the sanitation value chain. With this programmed, women are exposed to business opportunities because a woman can connect more efficiently to the other rural women when it is water, sanitation and hygiene. As a result, women feel empowered with knowledge and some extra income (Sarin, 2019).

“The vision was to create a sustainable sanitation ecosystem using IT that empowers micro-entrepreneurs to provide quality products and services to customers” Mr Krishna Mishra (founder eKutir).

“There is a high impact of Svadha on women and girls because they were the ones who were exposed when they used to go out into the fields or open areas to do their businesses. There were very serious cases of harassment and molestation of womenfolk when they are going out in the open. Women were not treated the way they should, […] We wanted to fight, but not from activism or a not for profit standpoint, but from an enterprise-driven standpoint to build that social impact” Suvanker Mishra (CEO Bloom).

Svadha operates directly with suppliers to ensure high-quality products at reasonable prices for its customers. With more than 300 micro-entrepreneurs, Svadha has substantially impacted 80000 plus beneficiaries, around 20000 toilet packages in Odisha and Maharashtra in India. The best part is Svadha is a woman managed venture working primarily with women.

CASE 4. Blooom International AG Pvt. Ltd

In the year, 2018 eKutir and Fairtrasa (MNC from the Netherlands) launched a joint venture named Bloom International AG, with the mission of achieving global food security, inclusive market and healthy ecosystem by focusing on democratizing the future of farming. Bloom is an AgTech platform with a robust algorithm that provides farmers with recommendations about what to grow according to climate conditions, soil DNA, and market demands. Bloom offers a comprehensive solution for smallholder farmers to help them thrive as agro-entrepreneurs (Krishak, 2020).

Working Model of Blooom

Bloom is offering the following separate modules to assist farmers at different stages (eKutir, 2019) Figure 3.

1. The Pre-harvest module includes Soil analysis, risk assessment, sources of quality seeds and other sustainable inputs, recommendations with predictive analysis and advice for best practices.

2. The post-harvest module includes connecting the producers with local, regional markets and exports through dedicated channels. In addition, it helps in managing marketing logistics for smallholders.

3. Risk assessment and access to finance with the analysis of data available related to farm (soil DNA, climate), farmers (yield and transaction history), and market (demand and price of the particular crop) Bloom provides information to lenders and insurers to extend financial services to the farmers. The platform also offers best-fit advice based on ROI forecast, and suggest actionable risk mitigation strategy.

4. Online market this platform also connects farmers to local and regional markets. They can list their produce before harvesting and harvest according to daily demand, which reduces wastage.

5. Access to the global market with its connections in the international market provides an opportunity to the farmers who meet export standards; they can export through the Blooom channels.

Bloom is designed for sustainable systematic change in the agriculture sector. A few of the changes witnessed are increased income of farmers and micro-entrepreneurs through the inclusive market, reduced food wastage, improved food security, and improved ecosystem health through environment-friendly smart farming. Bloom platform is accessible for women; they are becoming Bloom entrepreneurs and leading rural groups and communities, a true example of women empowerment. The technological intervention makes farming more attractive for young educated people. As a result, rural to urban migration was also decreased.

Analysis

This research entails an in-depth empirical investigation employing an inductive approach. For understanding the role of the capability approach while forming strategies for creating social value. The operations of these social enterprises observed in the study have been understood and analyzed in the following section:

Strategies Formation for Social Value Creation

Empathy with the people a social enterprise aims and is going to serve is imperative. Identifying the pain points and developing suitable solutions is not possible without empathy and an on- ground understanding of the realities of operation. For example, eKutir benefits from its founder’s experiences while working with NABARD (National Bank for Agriculture and Rural Development). Suvanker Mishra (Executive Director) said:

“We wanted to address this situation without getting into the whole complexity of addressing the entire value chain in one shot. [….] So for us, the lowest hanging fruit that we identified was the over application in terms of nutrients and fertilizers […] that too without knowing what the requirement is?”

A very systematic design thinking process was followed to create a lean methodology of quickly identifying the pain point and addressing it to make a pathway to success for both beneficiaries and the organization itself. Thus, the mantra at eKutir is to establish design thinking as a critical process in understanding the pain point or root cause of pain/ problem and develop the sufferer’s capabilities to get rid/ out of that pain. The key elements are a clear understanding of what the customers lack, rapid prototyping, and serving customers as quickly as possible while optimizing and iterating optimisation.

For addressing diverse problems, collaboration is effective, where partners’ expertise can be used efficiently to develop more capabilities so that the people associated with it can live a better life. This is why eKutir has established joint ventures with different organisations for handling different sets of social issues. eKutir has created a second line of micro-entrepreneurs working as agencies to positively impact and develop the capabilities or value for maximum possible farmers and their families. A young micro-entrepreneur (owner of a Farmer Producer Organizations, FPO) associated with Bloom expressed his experience:

“I am into this business for quite a long time, but before connecting with Bloom, I was serving farmers with my limited knowledge, which was not that effective. Now, after two years of association with Bloom, my knowledge is expanded, and it is based on some relevant information, and I can serve farmers with problem-specific solutions. […] I am proud to share that I manage 1400 plus farmers on my own with regular support from Bloom. With this, my income has also increased significantly” (Satyaban Pardhan, Bloom Entrepreneur).

Several such stories tell about the social value and impact these organizations have created through developing capabilities over the period. For us, social value creation is:

“Essentially giving an opportunity to the less opportune to find pathways to create better livelihoods for themselves. And it is only the opportunity that distinguishes one from another on how they build the livelihoods for themselves. […] And the opportunity is defined differently across the different segments of farmers and farming communities we deal with”(Suvanker Mishra CEO).

While talking about strategy for creating more impact and the social value, Mishra mentioned how he said to his father (founder) while strategizing for the WASH programed under Svadha that:

“We should get a woman entrepreneur at the helm of this company. So that she could relate more to the stories of the woman folk who actually faced this challenge and culturally may not be able to share with the menfolk when they go down to the field and bring that value that we wanted to create as eKutir, through this woman entrepreneur to impact the woman-led households up in the rural communities.”

The involvement of women entrepreneurs is one of the key reasons behind the success of Svadha. It has helped it in expanding its customer base and has contributed to the success of the venture.

To understand the different types of capabilities developed and dispersed by eKutir and its associates in the last ten years. The data from primary and secondary sources is analyzed and coded.

In the first phase, open coding is done by going through word by word of all the documents in the theoretical framework of the capability approach. Total 46 types (Appendix 1) of elements have been identified. Results of primary coding reveal the wide range of activities these social enterprises perform in making people capable of adding value to their lives.

In the second phase of analysis (axial coding), the elements identified in open coding were combined based on some commonalities. This analysis gave a comprehensive list of eighteen types of capabilities directly developed and dispersed in creating social value. While developing this list, a four-step methodology was undertaken, and the lists of capabilities presented by other scholars (Table 1) are also considered.

In the final analysis phase, selective coding is done with these 18 capabilities, and Figure 4 themes have emerged.

These capabilities are categorised as:

Results

After thorough analysis of qualitative data collected from both primary and secondary sources it is found that eKutir and its associates are creating social value through developing some capabilities in their beneficiaries. To have a deep understanding how their each intervention is making their beneficiaries capable in handling their day to day problems and make their life valuable. Following is the brief description of capabilities developed by the Indian leading social enterprise eKutir and its associates:

The Capabilities Developed and Dispersed by the eKutir and Associates

Intellectual capabilities: In this study the concept of ‘Intellectual & Cognitive capability’ refers to an individual’s ability to think, understand, be creative, differentiate and decide, plan and control etc. By enhancing the IC they are enhancing the well-being of their beneficiaries.

Education and training: Knowing and understanding soil management mechanisms and handling the digital platforms for solving the problems related to farming. Global exposure makes these farmers up-to-date regarding the latest happenings in the industry.

Planning and decision-making: Being able to get all relevant information well in advance allows farmers to think, plan, and make decisions related to crops and progress.

Customized solutions and recommendations: Being able to be heard individually. Moreover, getting access to personalised solutions and recommendations for particular problems. Tailor-made solutions are usually more effective.

Physical Capabilities

Physical capabilities in this study refer to capabilities related to bodily prowess, health including mental health. Strength, flexibility, mobility and endurance are some of the physical capabilities. Endurance is a component of what is referred to as basic physical capabilities and serves as the foundation for fitness and health. It includes capabilities related to bodily health, mental and emotional health and safety against harassment.

Health including mental and emotional health: Being able to lead a healthy life with the healthy lifestyle-related recommendation, access to fresh drinking water, sanitation and hygiene. Working with experts typically gives a sense of relief from unnecessary stress.

Safety against physical, mental and social harassment: Being able to work in a safe, secure environment free from any type of harassment. Farmers get access to world- class Agri Equipment and inputs that reduce the chances of accidents during farming; knowing many things well in advance helps relieve stress, and regular and increased income gives a sense of social security.

Economic Capabilities

Economic capabilities refer here as the blend of knowledge, mindset, abilities, and self-efficacy required to ensure regular income, make and implement financial management decisions suitable to an individual’s situation in a particular context (Stuart, 2013). It includes capabilities to protect and advance the economic aspects of stakeholders.

Financial security/regular income: Securing a regular and increased income by producing demand-based products, decreasing the cost of Agri inputs and eliminating market intermediaries.

Resourcefulness: Being able to resolve all sorts of farming issues with guidance, learning, and experiences allow farmers to cut costs, increase productivity, and as a result, generate better income; all in all making them more resourceful and thus able to grasp more opportunities.

Risk Mitigation: Being able to sense the risk well in advance and preparing to mitigate it and minimise the loss. Advance knowledge of demand, market price and other relevant information make farming comparably less risky.

Social Capabilities

Social capability refers to developing an individual into a creative and confident citizen with a sense of self-worth, individuality and identity that enables people to handle their sentimental, psychological, religious, and physiological well-being while maintaining a feeling of positivity and optimism in their lives. It assists people in developing and maintaining strong social relationships and makes them responsible as a member of the family, community and society. It includes capabilities related to protecting and advancing social aspects beneficiaries.

Recognition, respect and dignified life: Being recognized by friends, relatives and society, association with India’s first BCorp organization makes farmers feel proud and can help them lead a more dignified life.

Family, social and cultural conservation: Finding employment at native places helps in decreasing migration from rural to urban areas; the added benefit is that people remain attached to their roots, family, culture and society.

Friendship and brotherhood: Being able to share valuable learnings with peers promotes a culture of friendship and brotherhood. Farmers do not treat each other as compotators; instead, they work in collaboration and help each other.

Community leadership: Being able to lead the community. For example, Micro- entrepreneur Satyaban Pardhan leads a network of 1400 farmers on his own, which gives him better earnings and respect.

Equal opportunity: Being able to get treated equally. Women leaders are empowering other women. Youth engagement through IT intervention makes farming attractive and provides them with an opportunity to realise and utilise their skills fully.

Collaboration: Smallholder farmers get exploited at every level because of the small size of their operations. Individually they do not possess the bargaining power and thus lose out on scale economies. Collaboration gives them the ability to bargain like big industrial farmers.

Mobility or growth opportunity: Identifying growth opportunities aims to improve the social and cultural status of individuals and the community.

Environmental Capabilities

Environmental capabilities are described as the ability to support a certain activity and operation without negatively impacting the ecological and social environment. It includes capabilities to protect the environment and create a healthy ecosystem. It emphasizes making beneficiaries/stakeholders environmental conscious and developing the feeling of coexistence which are generally overlooked in traditional entrepreneurship

Environment-friendly practices: Knowing the nutrient requirements before applying fertilisers and pesticides to control any damage to soil and crop helps farmers adopt environment-friendly practices, which are suitable for the farmers, the consumers, and society.

Participative ecosystem: Conductive ecosystem is an essential requirement to grow, so farmers and other beneficiaries feel protected and grow without fear.

Ease of doing business: Making things easy. With proper guidance and support, it becomes easier for people to start new ventures within their industry.

After observing the working of eKutir and its associates, it can be said that these enterprises keep their operations simple and focus on those problems that their beneficiaries cannot easily solve on their own. Inability to deal with problems is a major pain point and a significant cause of suffering. Social entrepreneurs, through innovative solutions, are making their beneficiaries capable, and help them having a meaningful life, which ultimately results in social value creation.

Discussion

It is very encouraging to see social enterprises having humanitarian aspects while doing business specifically for people at the bottom of the pyramid (BoP) as stated by (Lurie, 2004). These organisations are solving pressing social problems with innovative solutions. They understand that for sustainability, they need to engage with communities and create social and economic values.

The analysis of data allows us to describe the operations of eKutir and associates and helps us understand the application of the capability approach in social value creation. These enterprises identify and address the ‘pain points, (incapability) develop sustainable solutions to make beneficiaries (capabilities) coping with their challenges. It is observed that eKutir and its associates are developing a comprehensive list of central social capabilities as suggested by (Weaver, 2019)

Sen’s perspectives on capabilities and functioning’s are the basis of the quality of life, wherein (Sen, 1993) argues that the freedom of choice should ultimately remain with the individual. The CEO of eKutir and the organization recommend various solutions to the farmers; however, it is left to the farmers to implement the solution.

The question that arises is-Which capability is important? It is a debatable question. After observing lists of the capabilities (Table1) proposed by different authors (Swedish, 1987; Alkire & Black, 1997; Nussbaum, 1995; Weaver, 2019) in different timeframes and with diverse perspectives, the critical capability may change with time and context. In the present study, farmers lacked relevant information and knowledge about nutrient management, market prices and demand-supply gaps. Educating and training these farmers has led to capability development and social value creation. Once the farmers could handle nutrient management, they were looking for developing capabilities in other spheres of life. It is an opportunity for these enterprises to develop and disperse the lacking capabilities and creating social and economic values for society. The founder of eKutir was mentioning that around 80% of the social sector market is still untapped.

eKutir has shown that by keeping the beneficiaries at the center of strategy, the complete value chain in the agriculture sector is positively changed. Its platforms provide smart-on-time and contextualised decisions support on a subscription for a minimal fee. eKutir unites critical industry players with their ecosystem, leveraging their core competencies to ensure self- sustainability and create maximum impact.

Although eKutir provides technology-based solutions, they keep the beneficiaries at the core of their strategies and solutions, empowering its customers and making them capable. They started with addressing one issue (nutrient management), and today they are dealing with several problems related to agriculture, marketing, health and hygiene etc. eKutir began to with the lowest hanging fruit at first, and now they are creating a positive impact in the lives of people worldwide.

“The goal is very simple and ambitious. How might I be able to positively impact 500 million people across the globe, which is half a billion? By reaching out to 100 million farmers across the globe. And for us, we know the pathways of how to reach ten a million farmers, but it is that ten to one hundred million is what keeps me sleepless in the night” (Suvanker Mishra CEO).

Keeping the plans understandable and straightforward to the ultimate users, allowing them to be heard and make them capable is the mantra behind the impactful positive social change eKutir associates can create.

Limitations

This paper has tried to explore the situation in the Indian context with a very small sample. Since India is known as the most diverse country for its geographic, ethnic and cultural diversity, the social problems in such a diverse country will also be very diverse. Therefore, to develop a model acceptable and applicable throughout the country, it is crucial to have a representative sample. It is presumed that case studies from diverse parts of the country and covering different sectors with the grounded approach may bring exciting findings and add more value to this area of knowledge.

Practical Implication

The capability approach model can help budding social entrepreneurs implement their ideas and develop social enterprises. It can also help the existing social enterprises in grow and expand. Additionally, it can work as a tool kit for researchers, academicians, impact investors, and accelerators to comprehend how social enterprises are creating social value. Social entrepreneurs may use it as guide to develop a product or service that develops one or more capabilities in their stakeholders. Impact investors may decide, using this framework and guidance, to which companies to invest in.

Conclusion

By investigating the application of the capability approach to understanding social value creation, the present study demonstrates the variety of initiatives a social enterprise may introduce to make their beneficiaries capable and address social problems. The study intends to illustrate the application of the capability approach as a social value creation strategy. The capability approach framework makes the process of social value creation simple and smooth by focusing on developing capabilities in their beneficiaries in response to social problems.

Finally, it can be concluded that the results of the study are very much in line with the literature and support the arguments given about the applicability of the capability approach in human well-being or social value creation by social entrepreneurs. The capability approach plays a crucial role in creating social value. The words of Maimonides, “Give a man a fish, and you feed him for a day; teach a man to fish, and you feed him for a lifetime”, fits here, yes similarly, a capability once developed will help that individual for a lifetime.

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Received: 26-Dec-2022, Manuscript No. AMSJ-22-13044; Editor assigned: 27-Dec-2022, PreQC No. AMSJ-22-13044(PQ); Reviewed: 12-Jan-2023, QC No. AMSJ-22-13044; Revised: 23-Feb-2023, Manuscript No. AMSJ-22-13044(R); Published: 24-Mar-2023