Why should corporates engage with Technology Business Incubators (TBIs) for Corporate Social Responsibility (CSR)?

Countries today, are focused on establishing a strong economic, social, and environmental foundation to ensure holistic development of their economies, aligning with the Sustainable Development Goals advocated by the United Nations. Besides the policy makers, the collective responsibility percolates across every stakeholder of the community.  One such key stakeholder remains the businesses/corporate entities. Their contribution as job creators in fortifying the economy is indispensable. They are also obligated by law to contribute a percentage of their profits towards honouring their commitment towards societal and environmental enrichment.  To formalize this commitment of the entities, otherwise aiming at profit maximization, the Ministry of Corporate Affairs, Government of India, incorporated the Corporate Social Responsibility Policy under Section 135 of the Companies Act 2013.

The introduction of the “Companies (Corporate Social Responsibility Policy) Amendment Rules 2021” detailed a structure to the existing act requiring the corporates to identify objectives and implementation plans towards compliance with CSR obligations.   The Policy further reinforces accountability of the Board members in approving the CSR plans including execution of the plans at the ground-level.

Along with operational guidelines of implementation, Schedule VII of the CSR Act enlists the activities that would validly qualify as contribution under the Act.  Every corporate falling under the ambit of the CSR Act is required to formulate a policy defining the objectives of supporting such initiatives, followed by an implementation plan duly approved by the Board.  The CSR Act recommends various alternatives of fulfilling the CSR obligation.  This allows corporates to identify a suitable model encompassed under the Act by considering facets like the nature of their core businesses, sector, and geographical location.

Apart from adding impetus to sustainable development movement, the CSR policy has enabled the corporates to explore avenues that facilitate creation of a stronger business impact by encouraging innovations at grass root levels.  One such avenue being partnering with Technology Business Incubators (TBIs) (as also covered in the CSR Act). The growth of the startup eco-system in India, over the past few years, has introduced a new dimension to the landscape of CSR.  Traditionally, most corporates routed their corpus dedicated towards CSR funding via NGOs and such other implementing agencies.  However, the startup eco-system opened a fresh window of opportunity for the corporates. The pandemic presented startups with another opportunity to commercialise break through innovations to solve real life problems.  The innovations and solutions of these startups, have helped create a widespread societal impact, particularly in the domains of health, hygiene, education, environment etc. By collaborating with TBIs, the corporates directly bolster the startup eco-system and reinforce societal and environmental betterment at large.

Startups, today, are bereft of – surplus funds, adequate market-access, supply chain logistics and, a vision to identify and well-utilise the opportunities to commercialise their innovations. The deep pocketed, well-established, and experience-enriched corporates can play a vital role in bridging this gap.  The Technology Business Incubators (TBIs) supported by DST, BIRAC, MeitY and state government agencies likeMSInS , offer various incubation services to innovators developing products and solutions in technology, life sciences and such other domains.  These TBIs have created a robust eco-system to support the innovators in their transition from lab to markets.  In this journey, the TBIs act as a catalyst and facilitate the founders with requisite knowledge, skills & attitude, assisting them to be better placed to identify and meet the market demands.  The corporates are playing a pivotal role in this transformation journey, wherein they engage with the startups at strategic level by way of investment, collaboration or customer or service provider. Today most of the large corporates have drafted internal charters and policies focusing on startup engagement.  There have been many successfully executed engagements in the eco-system.

Such engagements have given the corporates confidence to pursue fulfilment of CSR obligations by partnering with TBIs as the implementing agencies hence refining their incubation and entrepreneurship centric activities thereby creating impact.  Some of the varied activities covered include – investing in startups by providing monetary support for infrastructure & labs for TBIs, funding other incubation related activities where in the startups remain the end beneficiaries. The CSR engagement opportunities with TBIs allow the corporates to:

• explore synergies which contribute to the innovation culture and R&D efforts through the startups
• access future innovations germinating in labs
• support the founders with their infrastructure, resources & network capital
• contribute to the social impact much early on, there by enhancing the success rates of disruptive innovations at lab stage.
• strengthen brand perception in the eco-system
• partner with the growth journey of the startup

As already established, the corporates do benefit from engaging with TBI’s;  In addition, the TBIs also gain immensely from such engagements.  While the eco-system significantly gains strength with corporate engagement, the funding opportunities for startups, infrastructure, labs or any other incubator activities gives a boost to the TBIs performance and sustainability. The TBIs impact is largely measured in terms of the number of startups supported and scaled, technologies commercialized, patents generated, jobs created etc.  The synergies of corporates & TBIs are a win-win situation for both the eco-systems.  However, efforts would need to be made by both the parties, to align policy, processes and mindset by creating champions to ensure the engagements work in a successful manner in the long run.