FAC ESSAY
Volume 18 Number 2
Everybody's Business
01 April 2005

Social entrepreneurs aren’t just in it for the bottom line—or out of a desire to ‘do good’. Pamela Hartigan sees them as the architects of a new social economy.

A social entrepreneur is what you get when you combine Richard Branson and Mother Teresa—a hybrid between business and social value creation.

Most governments, agencies and institutions are stuck in that fragmented world which divides the public and the private sector, the non-profit and for-profit sector, donors and their beneficiaries, and so on. Social entrepreneurs challenge that thinking.

Take Farouk Jiwa, for example. His forprofit social enterprise, Honey Care, introduced new beekeeping technology into Kenya. In partnership with NGOs, Honey Care supplies beekeepers with beehives, trains them in the new method and then buys the honey they produce. In four years, Honey Care has captured 27 per cent of the domestic honey market and has doubled the incomes of 2,500 beekeepers in extremely poor, subsistence-based rural communities in western Kenya.

Rodrigo Baggio had a dream where he saw the poorest children of Rio de Janeiro’s favelas using computers. Today, his Committee for the Democratization of Information Technology (CDI) has moved beyond Rio to 869 cities in 11 countries, by applying a franchise-partnership model. CDI works in close partnership with prisons and with community centres in Brazil’s poorest and most violent communities to teach computer literacy to the digitally excluded. The material used on its courses is chosen to stimulate awareness of citizens’ rights and responsibilities. CDI has certified over 80,000 students, 87 per cent of whom report that computer skills have transformed their opportunities for gainful and dignified employment.

Andrea and Barry Coleman met through their common passion—motorcycle racing. On a trip to Somalia, they were shocked at the number of vehicles, many of them new, that were rotting in car parks and streets. They realized that lack of mobility, particularly for local health professionals, hampers the prevention and eradication of disease in Africa.


They started Riders for Health (RfH) to offer an integrated system incorporating training in vehicle maintenance. RfH has demonstrated that, under this system, a properly managed vehicle costs 50 per cent less to run over a six-year period than an unmanaged vehicle. By using wellperforming motorcycles and other vehicles, health and other aid workers in seven African countries have increased their visits to remote communities by 300 per cent. For example, RfH believes that with each motorcycle it runs, 20,000 people receive primary health care each year.

Social entrepreneurs like these have a mission of transformational social change. They are practical about the limitations of market economics and persistent in finding ways to use markets to empower the poor. Most develop business models that allow the poor to have access to the technologies the rest of us take for granted—from information and health technology to ways of ensuring decent housing, clean water, access to energy, decent wages, relevant education and so forth.

Social entrepreneurs undertake both public and private sector functions simultaneously. On the one hand, they work with the people governments have been unable to reach effectively with basic public goods and services. On the other, they provide access to private goods and services where business has been discouraged by high risks and low profits. They are reshaping the architecture for building sustainable and peaceful societies.

When the Schwab Foundation started just over four years ago, social entrepreneurs told us that they needed three things: legitimacy for the work they do; credibility for the models they have created; and access to networking opportunities with leaders from other sectors, so as to increase the dissemination of their models and access capital and other critical resources.

In our trajectory, we have built a community of highly successful social entrepreneurs. They are faced with a number of challenges, springing from the fact that other sectors have not caught up with the field of social entrepreneurship.

First, few governments recognize social entrepreneurship as a legitimate field of endeavour. This means that social entrepreneurs are hampered by tax laws, burdensome regulations, arbitrary decisionmaking and other onerous requirements and practices. Instead, governments should be encouraging them through fiscal and legislative incentives.

The second challenge is to encourage businesses to discover the advantages of working in partnership with social entrepreneurs. From a financial perspective, social entrepreneurs, with their experience of bringing excluded groups into the marketplace, can help businesses reach untapped markets.

From the human resources perspective, support for social entrepreneurs can make companies more attractive to the top talent they wish to attract. The brightest and best today want more than impressive salaries and stock options. They want something that gives meaning to their work and their lives. Such support shows that companies care about more than the bottom line.

Finally, companies often relegate corporate social responsibility to separate corporate foundations running top-down programmes, while the corporation carries on business as usual. Working with social entrepreneurs should be part of the core business strategy of every company.

The third challenge relates to foundations and philanthropists. They are well placed to support social entrepreneurs, as they are free of the two forces that dominate the decisions of governments and business—the voting booth and the financial bottom line. But many foundations and philanthropists seem content to fund demonstration projects that they hope will produce dramatic results in 24 months, an impossible task. We don’t need more demonstration projects—we need support for scaling up successful social innovations. The wheel does not need to be reinvented, just adapted to new terrain.

Then there are multilateral and bilateral organizations. Over the last decade these have been criticized for failing to engage civil society and interest groups in consultations on their policies. Some institutions have responded by devoting time and energy to dialogue with non-state actors. But more needs to be done. These institutions have a vital and catalytic role in this interesting phase of new thinking and experimentation. They should make it a priority to spot and legitimize social entrepreneurs who have the capacity to imagine and the ability to implement.

There is little doubt that the exponential growth of the NGO sector around the world is an expression of the growth of democracy and hope. But there is a distinction to be made between social entrepreneurs and others who seek to do good through advocating a cause or through charitable giving. Social entrepreneurs are practical, tend to shun ideological positions and do not embrace charitable models that seek to alleviate suffering without effecting the necessary changes to restructure the world as we know it.

To what extent does the NGO sector understand and embrace social entrepreneurs as the innovators in the social sector? Can civil sector organizations that ‘do good’ become more entrepreneurial? How might organizations of the citizen sector embrace entrepreneurial mindsets, or seek to incorporate the transformational models catalyzed by social entrepreneurs?

The academic sector, too, presents a challenge for social entrepreneurship. The entrepreneurial mindset has been described as being committed and determined; ready to take leadership; obsessed with opportunity; tolerant of risk, creativity, ambiguity and uncertainty; self-reliant and able to adapt; and motivated to excel. How well are our schools instilling these characteristics?

Social entrepreneurs cannot do the critical work of social and economic transformation on their own. They need imaginative, compassionate and talented people from all sectors to help them live up to their promise.

Pamela Hartigan is Founding Managing Director and Member of the Board of the Schwab Foundation for Social Entrepreneurship. www.schwabfound.org


COMMENTS

Hi all!

Looks good! Very useful, good stuff. Good resources here. Thanks much!


G'night


rofovnifo rofovnifo, 03 July 2007

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