Dr. Paroma Bhattacharya is the Head of Social Innovation at LSE Generate, the entrepreneurship centre of the London School of Economics and Political Science (LSE). Her research explores, among other topics, the acceleration of early-stage social venture teams and social business model innovation in emerging economies.
Social businesses are mission-driven ventures that balance purpose and profit. They are created to tackle societal or environmental challenges, and are driven by a theory of change – an approach that outlines how an intervention is expected to lead to long term impact outcomes.
Prior to joining academia, Bhattacharya worked as a business and leadership coach for start-up social entrepreneurs and as a social innovation consultant. She later became a post-doctoral researcher at the LSE Firoz Lalji Institute for Africa and the LSE Social Innovation Lab for Human Flourishing, and a full time teaching faculty member for the LSE’s Master’s in Social Innovation and Entrepreneurship Programme in 2021. In 2023, she also joined LSE Generate. With a background spanning academia and practice, Bhattacharya’s research and work spans across more than 15 years and several countries, including India, UK, Denmark, Sri Lanka, Kenya, Sierra Leone, South Africa, Rwanda and USA.
Promoting innovation and start-ups is a common topic in European policy. How does a university entrepreneurship hub like LSE Generate support for nascent businesses?
At LSE Generate, we support LSE students, alumni and staff at every stage of their entrepreneurial journey, We receive projects and ventures in various stages: from individuals that need to test an idea to entrepreneurs who want to raise money; from someone who wants to build an initiative from scratch to people who have started already and need some support later on in their journey.
We run a year-long cycle of financial and non-financial entrepreneurship support initiatives – from funding competitions and business clinics to capacity building programmes and thematic workshops and events. While we are sector agnostic, we aim to support purpose-driven businesses that contribute towards one or more of the United Nations Sustainable Development Goals. Now after seven years of running LSE Generate, we have also started running thematic verticals clusters to better support specific groups of founders that form a big part of our community, such as clusters related to female founders, race equity and disability and neurodiversity, and verticals related to sustainability, AI, food and beverages and mental well-being. Our work extends beyond the UK – we have 22 international alumni-led chapters across the world. We also work with values-aligned academic and industry partners globally to support entrepreneurial capacity building and ecosystem building, beyond LSE networks.
In your experience, what are the most important elements that make a difference in impactful social innovation initiatives?
For impact focused ventures, a key element is the problem-solution fit. Social entrepreneurs must be motivated by the problem they want to address and should design a solution that appropriately fits the problem to create the intended impact. I always tell my students – Marry the problem, not the solution. A social innovator often demonstrates a strong passion for addressing a specific social or environmental problem and has a deep understanding about the root causes of the problem they want to address. Firmly grounded in this evidence-based understanding of the problem, they then find an appropriate solution and are willing to adjust, experiment and adapt it to best serve the problem. Another critical aspect for entrepreneurs is the ability to mobilize and capitalize on key resources available – from financial and human capital to intellectual and social capital– and combining these resources in a way that allows them to build long-term and financially sustainable solutions. The capacity for relationship building with a range of diverse stakeholders – from shareholders to community beneficiaries – is also very important.
A crucial challenge for innovation is the ability to sustain and later scale the initiatives. What characteristics of an initiative can help make it more viable?
Social entrepreneurs must think long term from the very start of their entrepreneurial journey. It is important to start with the end-goal in mind, develop the theory of change that will be the foundation of the organization and know what the venture’s end-game is, in terms of social impact. And then you build the intermediate steps, the long, middle and short-term objectives, to plan ahead, but also to evaluate whether you are on the right path. You need to regularly check whether you are meeting your goals and if there has been any mission drift – to avoid decisions that clash with the mission. Recognizing these tensions and risks and changing the course to stay aligned to the social and business mission of the organization is important.
Secondly, different pathways to scale become more or less relevant depending on the goal and model of the organization. For example, scaling can involve expanding the geographical context or having a new customer base or striving for policy change, depending on the goal of the initiative. Systemic change is a long-term scale goal, and it takes time to create change at that level and requires a multi-pronged and multi-stakeholder approach. One organization cannot do everything alone, so social entrepreneurs need to collaborate with others working towards similar goals to create systems-level change.
With such an emphasis on innovation globally, what are the current conditions like for social innovation? Where do you see opportunities and shortfalls?
I am currently more focused on the UK, Indian and African ecosystems, and in general, I see that there is an uptake in funding available for social innovation and entrepreneurship globally. This of course includes the different types of funders in the ecosystem. You have impact investors, venture philanthropists, foundations and corporations with innovation arms and many other types of actors. Universities are also a great source of financial and non-financial support for entrepreneurs and are an encouraging and safe space to test out ideas.
However, there are areas where funding is not sufficient. For instance, female founders are still vastly under-funded. I recently co-authored a policy report focused on women entrepreneurs in the UK and in that report, we highlighted a 2024 survey from the British Business Bank which shows that only 2.8% of UK equity deals goes to female funders [For more details on the report, see here]. This is UK-specific data, and does not include grants, for instance, but from experience, we see that it would be comparable in other contexts.
Similarly academic research shows that male founders often receive questions from investors about strategy and long-term perspectives, while females are questioned more frequently about risks, and the questions are often focused more on prevention rather than promotion. We also see the consequence of career breaks for women: the ‘motherhood penalty’. It often manifests as an unconscious bias, but it does have very adverse effects on the growth trajectories of female entrepreneurs.
What advice would you give to those who want to pursue a career in or start a path towards social innovation?
The most important thing is to know what you are passionate about, as you enter this space–your North Star–the issue that you are driven by. For many people, it is not necessarily only one thing, the North Star can be the intersection of one or two themes. This driving force is often connected to their lived experience, but for all social innovators, it’s important to have the end impact goal for their careers in mind. Think of it as creating and iterating a personal theory of change – identifying pathways that social innovators will pursue over the course of their careers to reach their end goal. Social innovators often change paths throughout the years, with the aim to reach the same end goal. You can be on the career pathway of a social entrepreneur, social intrapreneur, ecosystem enabler or community leader. You can also go back and forth between pathways over time, driven by your North Star. Having a clear idea of the end goal allows you to shift through different pathways while pursuing your long-term career objectives. These reflections draw from my lived experience as a social entrepreneurship educator and startup coach, as well as, from one of my current research projects that focuses on the career trajectories of social innovators. I look forward to sharing the academic findings and practical recommendations from this project later next year.