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Social Entrepreneurship and Innovation

Lecture for the MSc Program on Innovation
by

Shuan Sadre Ghazi

on 13 May 2016

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Transcript of Social Entrepreneurship and Innovation

Social
Entrepreneurship
Shuan Sadre Ghazi



ghazi@merit.unu.edu
&
21 May 2012, Gothenburg
Bottom/Base of the Pyramid (BoP)
BoP Reality
It is costly to be poor!
Poverty Penalty
[Social] Entrepreneurs identify and fill the gaps
For-profit
Non-for-profit
Hybrid models
For benefit
Enhancing the competitiveness of a company while simultaneously advancing the economic and social conditions in the communities in which it operates.

Identifying
and
expanding
the connections between
societal
and
economic progress
.
Shared Value
Source: Nestle CSV Global Report
Social Entrepreneurship
"a process involving the innovative use and
combination of
resources
to pursue opportunities to
catalyze social change

and/or
address social needs
."
(Mair and Marti, 2006)
(Porter and Kraemer, 2011)
Example of Creating Shared Value
Nestlé

worked closely with the Indian farmers, investing in local infrastructure and transferring world-class technology to build a competitive milk supply chain.
Generated social benefits through improved health care, better education, and economic development.
Social Entrepreneurs vs. Established Firms
More agile in discovering opportunities compared to established firms. Can scale up and become self-sustaining faster than purely social programs.

"Real social entrepreneurship should be measured by its ability to create shared value, not just social benefit."
(Porter and Kraemer, 2011)
"Not all profi t is equal. Profits involving a social purpose represent a higher form of capitalism, one that creates a positive cycle of company and community prosperity."
Corporate Social Responsibility
vs.
Creating Shared Value
What is
Poverty?
Income?
Poverty trap
Access?
Infrastructure?
Freedom?
lack of
Choice?
Opportunity?
Drivers of Pro-poor Innovation
modes of partnership
Market opportunities
Sources of innovation
New
Global popolation growth
Pro-Poor
Innovation
BoP
Innovation
Reach
Development impact
Financial viability
Affordability
Accebility
Awareness
Acceptability
Private sector
Civil society
Public sector
What is pro-poor innovation
source: adapted from Mendoza & Thelen (2008)
(Mair and Seelos, 2006)
Pro-Poor Innovation System
Innovation at Bottom of the Pyramid
Social Entrepreneur
sees challenges and problems around her/him and set out to find solutions.

In contrast to entrepreneurs who measure the success of their business ideas primarily in economic terms, social entrepreneurs measure by the extent to which it brings about
positive change
.
Social enterprise is founded on the conviction that
business methods are useful for achieving social goals.
They see opportunities that others miss and improve systems, invent new approaches and create solutions to change society for the better.
examples of Social Entrepreneurs in Sweden:
http://www.sweden.se/eng/Home/Business/Ethics_and_Business/Reading/Playing-for-social-change/
http://www.sweden.se/eng/Home/Business/Ethics_and_Business/Reading/A-closer-look-at-social-entrepreneurship/
Playing for Change is a major Swedish initiative that seeks to promote social enterprise focusing on the right of children and young people to play. In 2009, it issued a call for creative and innovative social entrepreneurs around Sweden to come up with ways of making the world a better place.
Social Entrepreneurs often operate in the borderland between private enterprise, the public sector and voluntary work.
Social entrepreneurs seek to combine public benefit with commercial activity and profit interests.
Citizen sector
Fourth sector
Over the past two decades, the citizen sector has discovered what the business sector learned long ago: There is nothing as powerful as a new idea in the hands of a first-class entrepreneur. (source: http://www.Ashoka.org)
Source: Kim Alter, Virtue Venture LLC, 2004.
 Entrepreneurs are the change agents in the market

 They exploit an invention
 Produce something old in a new way
Create new markets serving traditional markets in new ways

Social entrepreneurs employ “entrepreneurial skills,” such as finding opportunities, inventing new approaches, securing and focusing resources, and managing risk in the service of creating a social value
.
Entrepreneurship has traditionally been seen as a way of creating wealth for the entrepreneur and for those who back his/her work.
The two most common forms:
(1) Creating a business or earned income that raises money to support the organization and advancing the mission

e.g Creating jobs for the
socially / physically disadvantaged

(2)

systems change :
Using resources in new ways to enhance social impact
e.g
Playing for Change
is a major Swedish initiative that seeks to promote social enterprise focusing on the right of children and young people to play.
Social Entrepreneurship
Funding for Social Entrepreneurs
Ashoka
http://www.ashoka.org/

SoCap
http://www.socialcapitalmarkets.net

Omidyar Network
http://www.omidyar.com/

Schwab Foundation
http://www.schwabfound.org

Skoll Foundation
http://www.skollfoundation.org
In what context did
Social Entrepreneurship grow?
How is Social Change created?
Government action

e.g the New Deal


Policy development

e.g Think tanks that laid the groundwork for current policies


Business development as economic tool

e.g Big business after World War II creating
the Western Middle Class

Social innovation to effect a better world

e.g Habitat for Humanity


Community organizing to create change
e.g Civil Rights Movement

How one conducts ones own life as a model of change
?
e.g Gandhi and the Dalai Lama inspiring action in others
source: Aubry, R., 2011, New Foundry Ventures
IDEAAS - Brazil
KickStart - Kenya & Tanzania
Duck Revolution - Japan
Waste Concern -Bangladesh
Kiva - U.S.A
Social Entrepreneurship
From around the world

Why social entrepreneurs bother?
Aravind, Eradicating Needless Blindness
"Social entrepreneurs are not content just to give a fish or teach how to fish. They will not rest until they have revolutionized the fishing industry."
Bill Drayton, CEO, chair and founder of Ashoka
Ashoka is the global association of the world’s leading social entrepreneurs—men and women with system changing solutions for the world’s most urgent social problems






Since 1981, Ashoka has elected over 1,800 leading social entrepreneurs as Ashoka Fellows, providing them with living stipends, professional support, and access to a global network of peers in more than 60 countries
Key Drivers of Social Entrepreneurship
Social issues
inadequately addressed by government
Need to raise
funds for charities
Changing public sector
budget cuts require new revenue streams
Growing demand for
corporate social responsibility
and
ethical entrepreneurship

Social entrepreneurship
New paradigm of social value creation
Reflects a dynamic revolution in the social sector and its importance is being increasingly recognised in the corporate sector
‘Social entrepreneurs recognize social problems and use traditional entrepreneurial principles
Complex challenges e.g. triple bottom line objectives

Summary
class discussion
Models of Social Entrepreneurship
We are all Peepoople
http://www.peepoople.com/information/partners-suppliers/
What
is Social Entrepreneurship?
Why
it matters?
How
is it done?
Combines
passion of social mission
with
entrepreneurial practices
that are usually associated with the private sector.
Implies a blurring of sector boundaries
Innovative non-for-profits
Social purpose business ventures
Entrepreneurial government organizations
Private
sector
Public
sector
Civil society
sector
Full transcript