The value of the Not for Profit Sector in Mexico and its potential for Social Innovation

Long time ago I subscribed to the Centro Mexicano para Filantropia's
newsletter, which is a Mexican NGO that supports other NGO's to upscale
operations, staff and human capital. Two weeks ago I received a very
interesting one that surprised me very much. It was about the results of
the account of Non for Profit Organizations the Mexican government
included for the first time in history into the National Accounting
System.

The results are calculated based upon the 2008 economic census carried
out by the Mexican National Institute for Statistics and Geography. They
provide a very good panorama of the potential for social innovation a
country like Mexico has. Let's get to the facts.

The total number of Not for Profit Organizations in Mexico for 2008 was
40 089 with a gross production value equivalent to 23.9 billion dollars
a year, which represented the 1.96% of the country's GDP and its share
was bigger than what the whole agriculture sector produced during the
same period. From this amount, volunteer labor dollar value was about 2
billion dollars and was offered by close to 560 thousand people.

Among NFPO's 45.1% were dedicated to educational services while only
11.3% were in the health and social assistance sector.

To be honest I did not expect at all this sector could be that important
in a country like Mexico, and it made me wonder whether my impression
was biased or if there was something more about it.

After reflecting a little bit two questions remained to be answered: Is
it that what all this organizations were doing gets done in traditional
ways which oversee opportunities to use resources in more impact
effective ways or it is just that their work and efforts were not being
fairly recognized?

My intuition tells me that no matter what the answers to these questions
are, huge opportunities for social innovators and entrepreneurs are
still waiting to be found.

--
Ruben Fernandez <rfernand@andrew.cmu.edu>

Social enterprise and social innovation: Strategies for the next ten years

I read this paper and wanted to share it with the class. This paper gives a good review about social innovation, where it stands, and how will it shape up in coming years. This paper also focuses on the role of the government in social enterprise sector and how public policy should be formulated for this sector.

It talks about the basis of social enterprises. Their existence signifies the fact that market won't come up with the required innovative solutions. They are established to meet the needs in those areas that government services do not have the capacity to reach. States now prefer to fund those enterprises that can provide public goods and services in a more efficient way. Its also the realization that government finds it difficult to cater to the diverse needs of the population. Social enterprises are aware of these distinct needs and can give a more focused and a personalized solution to the people. Public services provided by the government are independent departments with no integration between these services. Social enterprises provide more integrated services. Services provided by the government, sometimes do not involve the people compared to social enterprises who measure their impact from the level of community involvement in their project.

In mid 1990s, the policy goals were more focused on how to increase the amount of social enterprises and social entrepreneurs. The paper states that as this field becomes more populated and complex, this policy goal is no longer sufficient. In coming years the focus needs to shift on what social enterprises can achieve together, measuring their impact more accurately.

Since policy goals initially placed importance on increasing the supply of social entrepreneurs, they were heavily influenced by the concept of venture capitalism to fund enterprises. In coming years, public policy would seek outcomes such as social impact and sustainability. The important question is that if public policy has the right tools to measure the impact of social enterprises. Governments need to formulate a public policy platform that provides the much needed connection between government enterprises and social enterprises. The focus should be more on increasing interaction between social enterprises and between social enterprises and public institutions that have the assets and networks to apply social innovation at scale.

The paper states the following ingredients for a social enterprise policy

1. Expanding the Giving Economy. This means facilitating and spreading the culture of giving and volunteerism among the populace. People should not only donate their money. They should also donate their time to the causes of social enterprises.
2. Strengthen Social Enterprise: By building large scale solutions that can inspire others to do the same.
3. Social Enterprise State: maintain social sector as the major supplier of services and use social enterprises strategically to bring innovation in public services.
4. Socially Responsible Business : The biggest impact of social innovation would be the change in how businesses and markets operate in the future.It will show how social responsibility can be a new source of competitive advantage and innovation for companies.

• Government funding in social enterprises that are considered too risky may set new standards in business practices.
• Government can also promote creation of new metrics for social value creation or damage which existing shareholders or investors can use to pressure companies to improve their social performance.
• Government can expand and improve the scope of social investment funds such as social impact bonds in UK.

Its a very good paper. I hope everyone spares their time to read it.

Here is the link

http://www.charlesleadbeater.net/cms/xstandard/social_enterprise_innovation.pdf

Public Policy to Encourage Social Innovation

In this blog, I'm going to write based on what I have learned from the class about how public policy can be created to foster social innovations. There are several factors that I think they are important for social innovations. First, the government need to clearly define the term "social innovation" for funding and tax purposes. According to our class definition, social ventures need to be relieved of tax burdens so that they can focus more on delivering social solutions. Therefore, the first goal of public policy should be directed at this tax issue in a way that does not create loopholes for exploitations.

Second, social innovations rely upon creative ideas and a trial-error basis. This is financially adventurous and risky in the business sense. Not many private investors would be comfortable with this level of risk tolerance that is embodied in the nature of social ventures. Therefore, the government can play a role in creating public agencies or foundations that focus on funding these kinds of adventurous innovations. Of course, clear criteria and standards have to be setup to avoid unnecessary waste of public funds. However, these funding filters cannot be too stringent and have to be relaxed enough to accomodate the trail-and-error nature of social innvoations.

Third, social innovators can benefit from the "public goods" of open-source type technology/idea sharing. Public policy can help in creating a framework for this kind of open-source innovations. Past failures can be learnt from. Parts that didn't work can be thrown out, and parts that could work can be recycled. Different teams can work together across time and space on resolving a specific issues. Best practices can be shared. This open-source problem might look simple, but it can be quite complicated, especially when it comes to patenting issue. Public policy should be engineered to address that early on.

Last but not least, the government can help in financing more research into the field of social innvoations. This is not funding ventures, but funding social researchers on the subject matter as a whole science. Questions can be what public policy/government interventions can foster social innovations from the grassroots level; what skills are needed as a pre-requisite for innovations; what types of incentive structures can promote the field and so on.

The field of social innovations deserve more attention from our governments (I'm speaking from the Cambodia context). Social innovators need more advocacy groups to lobby this to the decision-makers at the national level. To be successful, every stakeholder must be engaged, and the efforts must be coordinated.

Reaching the Real Bottom of the Pyramid.

An article from the Stanford social Innovation Review discusses the concerns of market based solutions that focus on targeting consumers at the bottom part of the social pyramid. Such ideas had been advocated in Prahalad’s book and writings on serving the poor profitably. Concern related to the potential success of such strategies is based on new thinking in the field of the endogenous growth models of new economic growth theories.

A research working paper article written by Jean-Louis Warnholz, investigates the validity behind the initial assumptions made about the amount of purchasing power commanded by the so-called dormant market of societies at the bottom of the pyramid. The finding of the article was that the assumptions of large amounts of monies commanded by BoP communities, was in fact based on flawed surveys on the distribution of income within less developed countries. Thus, attempts to penetrate these markets have not been successful.

An emerging alternative for reaching those at the BoP more meaningfully was covered in article published in the Economist on August 12 2010. The article discusses the hope by British and American Governments that partnerships with social entrepreneurs can help societies at the bottom of the bottom of the pyramid out of underdevelopment traps. The partnerships envisage crucial collaboration between civic society, the public sector and the private sector. A recent development has been based on providing social venture capital for improving education opportunities in less developed countries.

This raises the question, how can venture capital begin to develop a sustainable demand through creating employment for those at the bottom of the Pyramid?

Social Innovation development

This week's readings lead me to further reflections on developing and sustaining social innovations. It seems to me that the field is facing a number of challenges to growth: Firstly - Innovation development How to ensure a steady stream of social innovations? Currently it seems to be the lot of governments to do the heavy lifting of backing nascent developments. Secondly - how to grow innovations Or, perhaps, whether they should grow at all: the strength of some innovations is that they are local solutions to local problems. How does anyone know how to back winners? Thirdly - overcoming bureaucratic inertia The reality is that government activity is essential to grow innovations currently. Yet governments can be highly risk averse organisations If these are the challenges, the big picture context is one of governments looking to limit their exposure to social challenges, of the limit of resources. For example, it is a commonplace of policy discussions that health costs of most Australian states are expected to exceed their ability to pay the bills over the next few decades. These challenges have called forth some innovative administrative responses. For example, Mayor Bloomberg decided to bypass city administration entirely when he created the Centre for Economic Opportunity (which seemed to serve as the model for the Administration's Social Innovation Fund). It seems to me that the policy objective is to create an environment that can attract private capital to solve social problems, such as the highly innovative social impact bonds currently being trialled in the UK and Australia. However, the biggest challenge of all is surely going to be: how does one measure social change accurately enough to permit private capital enough information to measure it's return? Social Impact Bonds guarantee a return of 7 - 13% (approx). Whilst it is easy to identify a 0% return - i.e. no social change at all (for example, the UK example is a reduced recidivism trial. Where there is no reduction, the government will return 0% on the SIB), how would a capitalist know where their return sits. At 7%, or at 13%. Such information is highly likely to influence investment decisions. I presume the answer to such problems lies in skilled data analysis techniques such as linear programming and in empirical methods

Trends in developing social innovation in Australia

It transipres that there is quite a lot of development work going on in Australia, just a google search away. On the one hand, there are a number of NGO think tanks (or rather do tanks, with a focus on action): TACSI here in Adelaide, the Australian Social Innovator Exchange in Melbourne and the Centre for Social Impact at the UniversityofNSW. Hurrah! This means that there is quite a lot of debate and experimenation going on addressing issues of social innovation establishment and maintenance. As well as the NGO sector, federal and state goverments have various investments in this space, in the guise of grants and departments. The Australian Senate has referred the question of financing the not-for-profit (NFP) sector to a Senate Committee, which itself refers to a Productivity Commission report, focussing heavily on social impact bonds. WA and NSW in particular seem to be following the SA lead. The NSW government has made AU$25m available for a pilot scheme of social impact bonds. All of this, it seems to me, makes Australia an exciting laboratory for social innovation at the moment: I think we can expect some big learnings to emerge from all this activity. The starting point seems to involve picking up on UK ideas of social impact bonds (SIBs). The UNSW Centre for Social Impact believes that economic conditions are right in NSW to pilot SIBs:

• Incorporated not-for-profits have the legal structure to issue bonds to local markets, and the ability to 'wear' the risk of a venture.
• NFPs get to set their own outcome criteria, free of government contractual obligations.
• Government gets to divorce itself from service delivery.
• Government get to reward success through payment of a return, called a social return on investment.

There are myriad challenges to the success of these watershed initiatives. Perhaps the most basic is how to measure social return, how to measure success? In this context, the Young Foundation has some brilliant contributions to make, particularly with its Wellbeing and Resilience Measurement tool, which seeks to measure a community's innate strengths. An additional issue is how to find the right balance regarding risk? The Young Foundation points to a historic mismatch, where the agencies tasked with delivering a particular service, don't get to own the social outcome they deliver. It seems to me SIBs redress that particular imbalance. However, issues of financial risk remain, and the task facing the NSW trial at the moment is to find the right balance of risk between government, not-for-profit bond issuers and social innovators. It will be fascinating watching these experiments unfold over time.

New Times Demand New Ways of Learning

New Times Demand New Ways of Learning

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Recent research builds a powerful case against what used to be accepted "truths" about learning and technology. First, there is strong evidence that traditional models of learning, traditional definitions of technology effectiveness, and traditional models of the cost effectiveness of technology don't work. In place of these old assumptions, researchers are positing new ways of looking at learning that promote:

• engaged, meaningful learning and collaboration involving challenging and real-life tasks; and
• technology as a tool for learning, communication, and collaboration.

This section details the indicators that educators and policymakers can use to measure the effectiveness of technology in learning.

The traditional learning model is not relevant to real student needs

Today's workplaces and communities - and tomorrow's - have tougher requirements than ever before. They need citizens who can think critically and strategically to solve problems. These individuals must learn in a rapidly changing environment, and build knowledge taken from numerous sources and different perspectives. They must understand systems in diverse contexts, and collaborate locally and around the globe.

These attributes contrast sharply with the discrete, low-level skills, content, and assessment methods that traditional ways of learning favor. The new workplace requirements for learning are incompatible with instruction that assumes the teacher is the information giver and the student a passive recipient. The new requirements are at odds with testing programs that assess skills that are useful only in school.

The traditional mechanisms for evaluating the effectiveness of technology programs don't work

Traditionally, we have determined the effectiveness of a technology program vis-a-vis a "regular" program by comparing student outcomes on standardized tests. Numerous researchers, however, question the utility of this method. When the North Central Regional Education Laboratory (NCREL) surveyed experts about traditional models of technology effectiveness, respondents said:

• "Effectiveness is not a function of the technology, but rather of the learning environment and the capability to do things one could not do otherwise."
• "Technology in support of outmoded educational systems is counterproductive."
• "[The reliance on] standardized tests is ludicrous... Technology works in a school not because test scores increase, but because technology empowers new solutions."

Similarly, the typical way to determine a technology's cost effectiveness is to compare the costs of the technology-enhanced program against the costs of the traditional program. Some researchers decry this approach, pointing out that such cost analyses assume that we should continue teaching the same things, rather than change with changing times. Additionally, cost-effectiveness data could constrain development of innovative applications of technology.

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Why Keep Asking the Same Questions When They Are Not the Right Questions?

There are no definitive answers to questions about the effectiveness of technology in boosting student learning, student readiness for workforce skills, teacher productivity, and cost effectiveness. True, some examples of technology have shown strong and consistent positive results. But even powerful programs might show no effects due to myriad methodological flaws. It would be most unfortunate to reject these because standardized tests showed no significant differences. Instead, measures should evaluate individual technologies against specific learning, collaboration, and communication goals.

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Where do we go from here?

What we have learned from these reactions to traditional ways of learning and evaluating technology is that we must change the questions and the processes. Specifically, we must establish a clear vision of learning and goals for a school, district, or other unit. Without this vision, there can be no criteria for evaluating technology effectiveness or costs.

What is effective learning and how can it be measured?

Our framework builds upon a framework developed by Barbara Means of SRI International. Means identified seven variables that, when present in the classroom, indicate that effective teaching and learning are occurring.

These classroom variables are:

• children are engaged in authentic and multidisciplinary tasks
• assessments are based on students' performance of real tasks
• students participate in interactive modes of instruction
• students work collaboratively
• students are grouped heterogeneously
• the teacher is a facilitator in learning
• students learn through exploration

We took these variables and reorganized them into a set of eight categories of learning and instruction: vision of learning, tasks, assessment, instruction, learning context, grouping, teacher roles, and student roles. We then expanded the definitions of Means' variables with information from recent research on learning and instruction and added many new variables. In all, there are 26 variables or 26 indicators of engaged learning. ... (Article cited from http://www.netc.org/cdrom/plug_in/html/newtimes.htm).

---------------------------------------------

What's interesting about this article is the new shift from standardized assessments to a more collaborative focus of learning and the role of technology in helping students learn better. The question for further consideration is: Learning-aid technology is quite expensive, and cutting-edge techno-rich schools (like the CMU) are usually very unaffordable to the poor. Can we model cheaper tech with similiar functions and make them available to the poor?

Public Policy in Action: Sindh Devolved Social Services Program

Public Policy is becoming increasingly important to support Social Entrepreneurial Initiatives and providing critical funding for their growth. Many social organizations, who are achieving concrete results and impact, simply do not get the right environment and supplementary support from the public sector in order to grow and tackle social problems at a large scale. Recognizing this need the Government of Pakistan has established the Sindh Devolved Social Service Program (SDSSP) as an effort to create a favourable environment for the social sector growth.

Sindh is one of the poorest and least developed provinces of Pakistan. The low social indicators of the province are having a serious negative impact on the regional economy and political stability. In response, the provincial Government of Sindh has put a policy framework in the shape of the Sindh Devolved Social Services Program. The program, which is administered by the Provincial Department of Finance, supports greater involvement of community-based organizations (CBOs), nongovernment organizations (NGOs), and the private sector. The objectives of the program are:

1. Further administrative devolution of social services

2. Improve social sector financing and flow of funds

3. Promote participation, linkages, and public accountability

4. Rationalize services and set minimum standards

5. Encourage public-private partnership

For further information about the scope of work, reform process and ongoing activities please visit the following website:

http://www.sdssp.gov.pk/index.htm

The Sindh Devolved Social Services Program made me think about the following questions:

1. Provided the widespread corruption and lack of transparency in the government departments in Pakistan, will this program deliver?

2. What are the accountability and evaluation measures, if any?

3. Will other Provincial Governments follow suit? Especially in Baluchistan and Khyber Pakhtunkhwa, where social conditions are in dire straits.

4. Should the Federal Government recognize the need and establish a central policy framework to achieve the same objectives, as the SDSSP, at the countrywide level?

Micro Finance

Micro Finance

I found this video link interesting which
is about Micro Finance.

According to capitalizing  social ventures and providing fund to invest
in social activities one approach is micro finance which will provide a way for
cooperation between business, public and non profit organization. Its goal is helping
to get sustainable social change.

Social finance is a market based
approach which reduces the cost of capital for NGO's and increasing social factors.
It also provides access to capital, loans and credit which helps to gain basic
needs. This way benefits both parts by providing competitive rate of interest
to investors and helping social communities to access cheaper capital to help society.

 

Link: http://socialfinance.ca/what-is-social-finance



--
Bahar Forghani

Subjective Well Being and the Measurement of Social Value

On the article "Measuring Social Value" I found the next paragraph
"...most metrics assume that value is objective, and therefore
discoverable through analysis. Yet as most modern economists now agree,
value is not an objective fact."

It made think that the author was being quite harsh and unfair to social
entrepreneurs. Since the subjectivity approach is far from being widely
accepted among economists and in fact some of them are still being
"marginalized" by the mainstream economics school of thought.

In fact this approach is so new that economists haven't developed highly
sophisticated and articulated theoretical frameworks to address
subjectivity yet.

Nonetheless, some efforts have been done in recent years with very
interesting results that could be useful to measure the social value
derived from social investments.

Subjective Well Being is the name of an economic school of thought which
actually instead of making all kinds of theoretical and "scientific"
assumptions tries to deal directly with people's subjective perceptions
of value or as one review to the field states it:

"Subjective Well Being is able to capture's people actual experience in
a direct manner, while economic, social and environmental indicators do
so only indirectly"

However, what does SWB exactly means? well, the same review proposes the
next definition:

"SWB is a broad category of phenomena that includes people's emotional
responses, domain satisfactions, and global judgments of life
satisfaction"

How doest it relates to supply, demand, indicators and willingness to
pay?

Well the position of this school of thought is that consumers would know
better how their willingness to pay looks like than a bunch of math
savvy geeks with a bunch of equations, and the only way they can assess
it is by evaluating their own overall position with respect to their
aspirations and effective possibilities.

Of course this statements should be subjected to further analysis, but
maybe SWB economists and social entrepreneurs and activists could gain a
lot of insight by partnering in trying to find better ways to measure
social value.

If you want to learn more about SWB click an the link below:

http://internal.psychology.illinois.edu/~ediener/

--
Ruben Fernandez <rfernand@andrew.cmu.edu>

Tracking Social Return on Investment

The ability of entrepreneurs operating at the Bottom of the Pyramid to be leap from their current operating environment, which is weighed-down by the impact of the equilibrium of underdevelopment, requires the civic organizations that advocate the economic participation of these communities to be able to quantify and track the social return of investment achievable by potential funders. This necessitates the development of a social value metrics that is transparent and thus able to justify the sustainability of capital outlays to stakeholders of development funding. Thus, the social value metrics should guide the assessment of service innovations and investment decisions made by social venture capital market institutions (Mulgan: 2010).

Social impact tools are misaligned with standard market models for assessing value, as social benefits are public goods in their nature. Therefore, the non-rivalry component of public goods makes standard financial and economic accountability methods inappropriate for social value measurement. However, (Mulgan: 2010) suggests that “social value should be thought of as the product of the dynamic interaction between demand and supply in the evolution of markets for social value”. In light of what has been said about the effect of the concept of non-rivalry, Mulgan’s suggestion may be a challenging exploit without complete information on the impact of social actions.

In all fairness though, Mulgan does suggests that there should be cross sectoral collaboration in assessing and measuring the outcomes of resource allocations made in the interest of social benefit. Thus civic organizations should collaborate with government in terms of accessing important data depositories.

The Heritage Foundation (http://www.heritage.org) has developed an economic freedom index.

The index is constructed based on the conceptualization of what economic freedom is. The foundation defines economic freedom as “The fundamental right of every human to control his or her own labor and property... in an economically free society.” One of the indicators to their composite measures business freedom; “the ability to start, operate, and close a business that represents the overall burden of regulation as well as the efficiency of government in the regulatory process”. I should think, before discussing the how conflating the impact of the roles of accountability are for the performance reporting activity of civic organization, the priority should be measuring the access to economic participation. This should better inform whether, everyone is given the opportunity to be social entrepreneurs (Muhammad Yunus).

Dreams are Free: Students let’s make it happen!

Students are arguably in the best position to start a social venture. They
have incredible support from professors, access to unbelievable resources,
and can take on risk that others can't. Think about it... I for example in
the social innovations and enterprise class should take advantage of the
course. (I believe that is why I took this class).Learning the
fundamentals of starting a social innovation venture, how to position our
innovations and pitch our ideas to investors present an opportunity to
change our community and the world at large. And we need to make it
happen. How do we do that??Think big, dream big.
Coming from a third world country, I am deeply saddened by the situations
the masses are facing in their daily lives and I am sure majority of the
people would like to see change. I realize I cannot change the whole world
in a day but our ideas can steer the wheels in motion for a better
tomorrow. Many people are put off by social innovative ideas because they
are afraid of disappointment, but we are students need to trust
ourselves....we know more than we think we do. Besides, It's kind of fun
to do the impossible. Students need to change their mentality and allow
their minds to swim in pleasurable thoughts of reaching their dreams by
visualizing of them coming true. But it does not stop there either. These
dreams and ideas must spur us to take action. Ideas must work through the
brains and arms of good and brave men (and women) or they are no better
that just dreams.
SIFE students are changing the world by making a difference in their local
communities. They invent new futures for themselves and for others through
entrepreneurial educational outreach projects. SIFE challenges students to
take what they learn and apply their knowledge in real situations for the
benefit of all concerned. Better still, when it comes to planning for a
career after college these students are better prepared and qualified and
stand high chance of accessing the country's most successful executives
and entrepreneurs. And not to forget the satisfaction that comes with it;
the feel that you have made a positive difference in your community by
helping others to be or become more empowered citizens is just priceless.
Will dreaming big always make your wishes come true? No, maybe not
exactly, but I can pretty much guarantee that you'll get a lot closer
than if you squash thoughts of your dreams every time they surface. So, if
you are currently a student, I encourage you to make the most of your time
at your University trying to start a social venture. If your school
doesn't have any courses on social entrepreneurship, talk to your
professors and ask them why not.
"Only as high as I reach can I grow, only as far as I seek can I go, only
as deep as I look can I see, and only as much as I dream can I be."
Blog by Caroline Kiriga.

Crowd Funding- Meeting Capitalization Needs of the "Last Mile"

Social ventures face problems when it comes to raising enough capital to finance their viability or in most cases their sustainability over a long period of time. International donors and the government increasingly find it difficult to provide assistance to the far off rural communities, hence the "Last Mile" Problem. It has been a practice since the birth of civilization that people have mobilized as a community to fix problems in their surroundings by pooling their meagre resources.

Crowd Funding as a concept means collective cooperation by the community to pool resources to support a cause or an organization. In recent times it has been mostly through the Internet or social networks. One prime example being the political campaign of President Obama in 2008. He got $137 million in small donations for his election campaign.The same model is also being used to meet the capital needs of social enterprises. The main driver behind crowd funding is the common interest shared between people that motivates them to pay a monetary sum for its development.

Crowd funding has been the main idea behind formation of cooperatives in rural areas to solve the problems of the community. Around 1990s the state of Kerala in rural India was facing a acute water shortage. The villagers decided to take the matters in their own hands and started collecting funds for their own mini piped water dreams. There were only three water supply schemes run by the government . The villagers started their own private water supply scheme using private resources and funds. A cooperative was formed and members were charged a nominal membership fee. The more poor segments paid their membership fee in installments. The scheme was a huge success and was able to meet the water requirements of that village. This is a great example of what community intervention and cooperation can do where governments fail.

The main idea is to empower people to create that "first mile" capability in their communities through a crowd funding approach, instead of waiting for the government to bridge that "Last Mile" gap.

Some question that comes to mind are

1. How can crowd funding approach be used in rural communities to create microfinance and micro insurance cooperatives?
2. What role can technology play in promoting these crowd funding approaches in the rural areas, similar to what social networks support in more urban areas. Connectivity limitations in rural areas is one of the main challenges.

Links

• http://www.uwcc.wisc.edu/pdf/Staff%20Papers/Community-Based%20Health%20Cooperatives.pdf
• http://www.wsp.org/wsp/sites/wsp.org/files/publications/sa_pipe.pdf
• http://en.wikipedia.org/wiki/Crowd_funding

financing social innovations in developed country contexts

I experience a little unease when I consider this issue of financing social innovations. Innovations, of course, are geared to a double bottom line of social and economic return (and in some instances, a triple bottom line including environmental too). Obviously they lend themselves to market based solutions, hence the role of private capital at start up. It is possible to see massive market biases in concepts such as impact investment. In fact, many impact investors presume a particular kind of market: underdeveloped ones where it is possible to extract profit from a mass market shifting huge volumes of product at low cost, often in a developing country context. Whilst I respect any effort to improve social conditions for impoverished populations, I do not wish for social innovation to be defined solely in terms of bottom of pyramid economics. The pyramid that often dominates my thinking is Maslow's: http://www.businessballs.com/images/maslow_hierarchy_sm.gif. The outcomes that I want social innovation to strive for concern top of the pyramid problems like self actualisation and esteem. In my opinion, such concerns are the proper preserve of social innovators in developed country contexts, for decades of welfare state intervention has not improved these indicators (see other posts in this blog about disability and happiness), and they obviously don't lend themselves to base of the pyramid economics. Many argue that this problem represents government and market failure, hence my earlier discomfort. I suspect that this failure is extremely expensive. Yet how do social innovators in developed country contexts attract funding, given the inevitably smaller returns relative to the opportunities presented to investors in developing country contexts? The notion of social impact bonds is quite brilliant in this context (http://www.socialfinance.org.uk/). Whilst private investors bear the investment risk, if the innovation works (e.g. reducing recidivism rates in the UK), government guarantees a return on investment. The pay off for them is that previously intractable social problems are mitigated. I think it is possible that this model might offer my idea a funding source. Like recidivism, I am focussed on an intractable social problem. Across the anglophone world governments are worried about growing populations of people (especially working age men) moving onto disability support pensions, and then never moving off. In a context of increasing health and disability costs connected to an ageing society, this is a huge problem. In addition, I am concerned with some of the most extreme markers of disadvantage in Australia today, i.e. the presence of severe and profound disability. The Australian Bureau of Statistics measures the presence of severe and profound disability in the index of relative socio economic disadvantage, a census based product it publishes every 5 years (with the next edition due in 2013, I think). One of the major measures of severe and profound disability is difficulty accessing community, something my innovation hopes to improve by making it more rewarding.

• People who are more connected to community are having their top of the pyramid needs met.
• People whose sense of agency and self worth is satisfied make fewer demands on the government $.
• Governments can experience improvement in previously intractable social problems (like recidivism), and may experience savings where previously there has only been cost increases.

The Social Finance/Social Investment Bank phenomenon in the UK is quite brilliant in this area of innovation. Lacking an equivalent framework in Aus and the US, where do social innovators go to find institutional and private backers?

Poverty is not a disability

Shukla Bose is giving a TED talk on teaching slum children one-child at a time. It's amazing how much children can learn. A lot of people would just laugh and say these children can't learn. In my personal experience, I have been told to my face by a Barang (a foreign white guy) that Cambodian children, most of them poor, can't learn because they didn't have proper pre-natal care. There might be some truth in it, but I take it as a projection of his lack of competence to teach well. Through out my teaching experience, I have learned that they CAN learn. You just need to know how they learn things and adopt your teaching style accordingly.

This video is worth watching: http://www.ted.com/talks/shukla_bose_teaching_one_child_at_a_time.html

I agree with her. Quality comes first, and scale (quantity) can come later. However, I don't like her not-for-profit way of deliverying the service. I think it's too dependent on donors' funding and not self-sustaining. The question is: how can we make this a social venture model instead?

Innovation funding Innovation: The Social-Impact Bonds

There is no doubt about the funding gap that exists for social entrepreneurs. These entrepreneurs aim to develop a business that in addition of supporting a social mission also generates a financial return. Social enterprises at the early stages of their inception critically need financial backing to survive and grow. We can only see the full impact of these innovative businesses once they have passed their initial development phase and are in good financial health.

To face this challenge we need to think of creative financial tools to fill this funding gap. One such interesting innovation was the British social-impact bonds. This is a derivative tool tied to the performance of a social enterprise in a defined population. Private investors investing in this bond, channel money to a selected social organization. On the part of the social organization, this tool gives them long term capital to scale up their innovative model. On the part of the investors, financial returns are made by the public sector on the basis of improved social outcomes. If outcomes do not improve, then investors do not recover their investment. This can be measured by a suitable social performance metric.

A diagrammatical view of the Social Impact Bond working can be seen below.

This innovative financial instrument has many advantages, including:

1. Provision of long term capital for promising social innovative ideas.

2. Transfer of risk to private capital markets.

3. The use of public tax money only if the enterprise provides promised social benefits.

For more information please go to the link below:

Source:

http://www.socialfinance.org.uk/work/sibs

http://www.economist.com/node/16789766?story_id=16789766&CFID=145242723&CFTOKEN=80436283

To think about this innovation more objectively, let me propose the following questions:

1. There are many stakeholders involved in impacting a social problem. How can we identify a single entity or group of social businesses for the purpose of funding through this bond?

2. Will this innovative social bond attract enough profit seeking private investor’s money?

3. Can philanthropists be attracted to make a potentially profitable investment such as this?

4. What defines a good social metric? To what extent will we be able to measure the social impact?

blog week 4

Waste Management: A rising issue in Africa

Challenges

Waste management is a major challenge in developing countries such as
Kenya. This is a particular problem in rapidly growing urban centres like
Nairobi, the capital of Kenya which produces around 1'900 tonnes of waste
per day. Only 33% of this waste is collected for disposal at Nairobi's
only official dumpsite, Dandora. The rest is littered on hundreds of
illegal dumpsites, next to houses or burned eventually resulting in severe
health and environmental problems.
Watch: http://www.youtube.com/watch?v=dbzBz2XMSbY

Poor waste management practices, in particular, widespread dumping of
waste in water bodies and uncontrolled dumpsites, aggravates the problems
of generally low sanitation levels across Africa. Urbanization is on the
rise in Africa, and this trend is expected to continue in the future. The
inability of waste management to cope with urban growth in Africa (the
highest in the world) at 3.5 per cent annually is of great concern. This
is particularly urgent in slum areas, which constitute a big part of many
of the cities and towns in Africa.

Current approaches by the various stakeholders in waste management are
unsuccessful. The public sector cannot cope with the problem due to poor
planning and lack of finances. The private sector's existing approaches to
waste management are not able to treat waste as a valuable good. The
potential income from recycling and composting is lost. Consequently,
waste collection and disposal becomes unnecessarily expensive, which only
33% of Nairobi's citizens can afford. The Informal sector is unable to
take advantage of the value of waste. Waste pickers on dumpsites are only
able to recover a small fraction of recyclable waste. This is because
waste on dumpsites is mixed waste, i.e. organic waste not separated from
inorganic waste. Consequently, separated recyclable waste is contaminated
and has little economic value.

Innovation: TakaTaka Solutions.

"TakaTaka" is a Swahili word for Waste.
TakaTaka Solutions is a social enterprise that collects and recycles
waste. It aims to bring about social and environmental change through a
commercially viable business approach, in particular:
• Affordable waste collection services to all income areas
• Recycling and composting of up to 85% of collected waste
• Job creation in the informal sector
• A cleaner and healthier environment
TakaTaka solutions will achieve this by reusing as much waste as possible
using state of the art technology, while minimizing transport costs. It
will collect separated waste from its clients, i.e. organic waste
separated from inorganic waste. It will compost the organic waste to
organic fertilizers, which it will sell to Kenyan farmers. TakaTaka
Solutions will recover the recyclable waste (paper, plastic, glass and
metal) from the inorganic waste. The recyclable waste will be sold to
recycling industries. This will leave only 15% of residual waste for final
disposal.
TakaTaka Solutions will use two adapted business models, one for higher
income areas and one for lower income areas. In higher income areas,
TakaTaka Solutions will collect waste from clients and compost the organic
waste at its Composting Facility, while it recovers recyclable waste at
its Recyclable Waste Separation Facility.
In lower income areas, TakaTaka Solutions will partner with youth groups
who will collect waste who will sell the organic waste and the recovered
recyclable waste to TakaTaka Solutions. For this purpose, TakaTaka
Solutions will own and operate decentralized waste processing facilities,
called "TakaTaka Points". As the TakaTaka Points will be situated within
lower income areas, youth groups incur low transport costs. This enables
them to offer affordable waste collection services to the local community
at USD 1/household/month.

Taka Taka Solutions Won 2011 Dell Social Innovation Competition
Caroline Kiriga: blog submission (2) week: 4

Can tradition be innovative?

It's been weeks now that a thought is bothering me. Since I got to Adelaide, I am having the opportunity of listening to many different languages from all around the world. Some of them are so familiar to me that I can get some words and even get the general meaning of the conversation, some others I cannot distinguish the ending nor the beginning of words. However what fascinates me the most is the astonishing variety of rhythms and musicalities they have. That made made me ask to myself how did my own language sound like and how was it like to hear it without knowing the meaning of the words. Of course I will never know the answer, because I will never be able to hold that perspective and I find it really puzzling.

Nonetheless, this week readings shred some light on my quest, as I was really surprised that a very common informal financing scheme in my country was regarded as an innovation in another. I am talking about a group of people making little monthly payments in order to build a pool of resources that is allocated to a member of the group through a raffle. We, Mexicans, call it Tanda.

My grandmother used to organize two tandas a year, my mother used to participate in some her coworkers did, and my father organizes them in order to buy expensive medical equipment. This schemes are so popular that 16.9% of Mexicans over 18 use them as their principal source of financial resources, 4% more than the people of the same age that use formal banking, and among users, women use them more often. That made me guess this is all about learning to hear with other people's ears by getting familiar with their ways and then contrasting them with mine. Maybe if we are able to do that more frequently, we will be able to detect the gaps that have to be filled and turn a traditional solution into a very innovative one by changing its context, adapt it to make it acceptable and available for people that appreciate the world in different rhythms and musicalities. 

-- Ruben Fernandez <rfernand@andrew.cmu.edu>

Solar Powered Internet in Zambia

Solar Powered Internet in Zambia

 

Now days internet has an important role in people's life. It is truly a substitution for daily actions that we usually do like shopping, going to bank, reading news...instead we use online shopping, electronically bank access, online news. So our life highly depends on internet.

I found this article interesting because with a large impact of internet and new technologies on life, living without it is difficult. By providing access for poor countries they could benefit facilities that these new technologies provide.

In Chikanta, one of the villages in Zambia people do not access to electricity and they do not have any local newspaper or radio station so for a call residents have to walk miles away. Fortunately 6 months ago the British Charity Computer Aid installed solar powered internet hubs. "The panels on the roof feed power to the PC inside. To keep power consumption down, the other 10 screens in the hub are virtual desktops - sharing the computing power of the PC and the 128kbps sat link."

Now people can reach outside Chikanta even outside country and as chief of Chikanta said "It has transformed the village, We have our teachers who are now able to communicate with agricultural officers. Government officers who come to work here will be reporting directly from here to district headquarters which we were not able to do before."

But a considerable point is that users have to pay 518$ a month for satellite link which is high.

I have this question in mind that is there any other way to provide cheaper access for Chikanta's residents? Can government invest in such these projects to provide wider and cheaper internet for its people?

Link:

http://news.bbc.co.uk/2/hi/programmes/click_online/9346415.stm

--
Bahar Forghani

Australia, disability, venture development.

Disadvantage in Australia coheres in geography. My country's poorest post
codes are populated by people on subsistence incomes, living with high
levels of disability, living in single parent families, with low levels of
private car access, disconnected from the internet, (to name but a few
markers of disadvantage). It is an experience of isolation and exclusion.
It is as if the transformative flows of capital, goods, labor and
information identified in the McKinsey Corporation report ('What happens
next') deliver only downside risk to them.
I blogged on happiness in this space recently. I suppose I mean
resilience: people who feel that their higher order needs around agency,
autonomy and self determination are being met are more resilient. They are
happier. They are also more independent.
I believe that disadvantage in Australia and happiness/resilience are
disjointed phenomenon. Disadvantaged Australians don't get to enjoy the
benefits of resilience like the majority population.
I wish to create a social venture that will enable people with
disabilities to be more active in their communities, more present in their
communities. Agency is power in this context. Hopefully it is more
autonomy too. It might also lead to greater happiness.
I have the germ of an idea, shared with a great colleague, to develop a
mobile phone app, which utilizes gaming dynamics in real time to get
people with disabilities beyond their front doors and active in their
communities.
The immediate challenge for me is how to innovate strategically at the
base of my particular pyramid? The watchwords seem to be the four Ás':
affordability, acceptability, availability and awareness.
Well affordability is a confronting thing. People with disabilities live
on government benefits, typically budgeting from one week to the next.
Actually $ is not the only resource in scarce supply when you are
disabled. Cognition and concentration are also likely to be at a premium.
I suspect that the task here is to have the courage of my convictions and
trust that the product I wish to develop has a place in the market. If
people like it, they will direct their scarce resources to it.
Which leads me to acceptability. It is axiomatic that my product must be
dedicated to the needs of people with disability. I am heartened by the
fact that people with disabilities are great consumers of other digital
technologies. Also by the fact that the gaming technology I am considering
works on a powerfully reinforcing psychological schema: contingent reward.
This schema also plays out in areas such as gambling, which can prove to
be highly addictive. I suppose I would welcome some healthy addiction to
my product!!
Availability is a tougher challenge. I think the app technology works on
only the most recent mobile phone platforms (for example, Android 2.1, or
Froyo). I think I need to identify a distribution channel for my product,
which may even entail approaching mobile phone companies to see if I can
tap into their CSR programs.
Lastly awareness. I would like to build awareness of my product through a
demonstration program.
Anything you can tell me about how to build a social venture such as this
would be gratefully received!

Implementing Social Innovations for Development & Growth of BoP Ventures

The operating space of ventures of social enterprise has expanded its domain (Alboher: 2009 New York Times) from merely constituting social sector ventures, to also including the participation of for-profit businesses having ‘social mission’ as the core purpose of their existence. This interesting and emerging development introduces a greater scope for the integration and coordination of activities in the formal and social sector.

Thus, social entrepreneurs are afforded a window of opportunity to act on the implication behind removing the legal distinction between, the incorporation and registration of, the memorandums of association for profit companies and non-government not-for profit entities. The implication of this new development is, market orientated solutions for mobilizing capital in more formally established financial markets can thus be innovated for the purposes of funding capital formation and infrastructural developments targeted at the poorest regions of the world.

This development is based on developing a ‘social venture capital market’ for mobilizing capital from surplus agents to deficit agents pursuant to achieving a social mission. The volumes of capital which are mobilized create a far greater leveraging effect than traditional micro-financing institutions that operate at the Bottom of the Pyramid.

The Human Acumen Fund (http://www.acumenfund.org) is a non-profit social venture capital non-government agency which focuses on financing and consulting social enterprise ventures with the ethos ‘meeting urgent needs with patient capital’ (Case Study: Market Minded Development). Their social innovation is designing investment vehicles for small cap start ventures that cannot service debt under the terms of established merchant banks, as these ventures need patient financiers to grow. Social venture capital markets could therefore spark the next Greenback revolution in the history of usury and its impact on social change.

Enablers of Social Innovation & their Impact

In one the of the week three readings (Lehr: 2008), the article provides a two-by-two table in which the impact of product innovations on social and economic benefits, are determined by a composite of factors that collectively describe the feasibility of projects linked to social ventures. The composite of factors of feasibility, are compiled by Thomas Associates, and made up of the following components:

1. Financial
2. Technical,
3. Cultural,
4. Political and regulatory constraints.

In terms of the latter two factors listed in the composite, Ken Banks, who is the founder of Kiwanja.net which is in the business of developing IT solutions for NGO’s operating in less developed countries, advocates the importance of anthropology in driving socially innovative solutions for communities positioned at the Bottom of the Pyramid.

His position is informed by the belief that, if first world inventions are to be adapted and applied in innovative ways for resolving social problems within different contextual environments, the cultural relationships between countries where initial ideas are sourced and where they are to implemented need to be considered when formulating the design of the socially innovative solutions. Banks maintains that anthropologists should come to the mainstream of the “technology driven renaissance” of the information age, particularly when cultural contexts determine and create differences in how basic needs are satisfied within developing countries, as opposed to, the high spec and high utility product design paradigm of developed country product markets.

Banks truly makes one ponder on how an archaic subject like anthropology which once was central to colonialism, could now be the answer to freeing the most poor communities from underdevelopment.

Drivers of Social Innovation and Human-Centered Design Thinking

Social innovation creates a paradigm shift from the Jean Baptiste Say definition of entrepreneurship as follows:

1. It identifies a need for understanding the scope of social entrepreneurship and social enterprise
2. It requires an understanding of the processes within the socio-economic and environmental context of “bottom of the pyramid” market needs, and
3. It requires an actualization of the mechanisms of social innovation through endorsing and enhancing appropriate social institutions for making economic freedoms accessible to lower income communities and informal business.

Therefore, social innovations need to cultivate the conditions that are amenable to and foster the social institutions required for sustainable social innovation (Phills et al: 2008).

Taking the market based approach to poverty reduction requires “capitalist states” (Bisson et al: 2010) to create social institutions that enhance, collaborative ventures between for-profit businesses and NGO service support initiatives. More specifically, the public sector within developing countries need to create enabling legislation and regulatory policy for making informal markets more secure and stable investment alternatives for venture capitalists.

A research paper written by Gopal Joshi of ILO on “Policy and Regulatory Environment for Micro and Small Enterprises: Informality and Policy Alleviation”, studies the regulatory impediments in developing countries that make it difficult for businesses ventures in the informal market to access the mainstream economy. The importance of this paper to the subject of social innovation is that, social institutions that innovate business environments such that micro and small businesses are incentivized to participate in mainstream economies, allows the many households that are dependent on SME livelihoods to increase their welfare.

The ability of low income countries to become more independent and less reliant on donor funding to alleviate extreme hunger and poverty is of paramount importance. According to OECD projections, member states may not be able to sustain donor funding as their demographic patterns change, and their productivity is affected by aging population. Perhaps the age of mercantilism has arrived for emerging low income economies.

Frugal Innovation in Pakistan (Gas Fan)

Pakistan is currently facing a tremendous shortage of electricity. The demand has clearly outstripped the supply with no major investments in power generation in the foreseeable future by the government . Government has no option but to resort to frequent load-shedding. That means people spend majority of their day without electricity. Electricity per unit costs have also risen significantly due to the shortage of supply. That means higher costs for businesses and eventually price inflation for the end consumers.

Innovators are born in environments with harsh constraints. A man by the name of Waheed Babar has developed a Gas powered fan whose engine is built on the model of a steam engine. The fan can run on a flame as small as one on a candle stick. The fan can run for 4 hours for a gas cost of 1 Pakistani Rupee , which is approximately 1 cent in US dollar terms. This fan can easily provide relief to slum dwellers and majority of the rural population who do not have electricity in their houses. The government and the private sector is slowly waking up to the necessity of innovations like these in such dire conditions.

Here are the video links

http://www.youtube.com/watch?v=vBn-xCdr6aQ&feature=related

http://www.youtube.com/watch?v=XTeRI9nLIbc

blog week 4

Caroline Kiriga: Blog submission week 4

Sanitary towels: A Universal Human Right?

 

Here's a regular statistic, and then a shocking one: Every month, a large percentage of the world's adult population menstruates. But in emerging markets, that group can scarcely afford the protection. Many thousands are still forced to exit their daily lives and livelihoods during their monthly periods. Watch: http://www.youtube.com/watch?v=EKmt7PwYPCY

 

 

I am not sure that the execution of this video campaign is the most compelling but this strikes me as a totally underreported reality. This is a subject that I am personally very passionate about. Research has showed that many girls do not attend school because they could not afford to buy commercially made sanitary towels and 90% of the urban poor were improvising with unhealthy materials such as banana fibers grass leaves, old newspapers and pieces of cloth that did not provide reliable protection.

 

"Makapads" a project that was started by a Uganda professor Dr. Moses K. Musaazi of Makerere University faculty of technology in 2003 with funding support from the Rockefeller foundation, is making affordable sanitary pads from locally available materials and is keeping young girls from poor families in school all month all as well as generating local employment for many women, men and girls in Uganda. Makapads sell much more cheaply than imported sanitary pads.

 

This innovation is relevant because earlier research has found that many disadvantaged primary schoolgirls absent themselves during menstrual periods and those that attend do so under stigma and tension for fear of soiling themselves. The absenteeism leads to poor academic performance and subsequent dropping out of school by the girls. The Makapads project's primary objective is to retain young vulnerable girls in school instead of dropping out of because of absenteeism during their menstrual periods.

 

Makapads are 99% local materials and the main raw material is papyrus reeds, which is cut from the vast, abundant swamps and riverbanks all over the country.

Apart from producing safe, cheap sanitary towels the project has generated development of simple cottage machines which are locally manufactured and that use more than 95% local materials as well as providing employment and skill development to more women, girls and men.

 

 

She (Sustainable health Enterprises) campaign is another project whose mission is to improve the quality of life of women and girls in developing countries. Donations don't work long-term. Market-based approaches do, so why leave them just for the business world? Let's apply them to some of our biggest social problems in the world, especially in the health arena.

 

From a holistic policy perspective, marrying the education of girls and women with the provision of sanitary towels seems like the right move. This is a basic basic commodity and is integral to female development. Schools worldwide should support young women who might otherwise miss crucial elements of their education or career.  As we know, educating women and offering them a means to understand and regulate their fertility is a key component of economic progress in developing nations. "Protecting futures" has reached approximately 115,000 girls in 17 countries and is committed to reaching 1 million girls by 2012; So if you are a girl, mother, have a daughter, sister, a niece, a friend or know anyone that is female please let us join efforts to provide sanitary protection, sanitary facilities and puberty education to help vulnerable girls stay in school.

 Caroline Kiriga: Blog submission week 4 

 

blog week 3

Caroline Kiriga: Blog Week 3

 

Bringing 'Human-Centered Design' Forward

 

Human Centered Design is an approach that integrates multidisciplinary expertise towards enhancing human well being and empowering people. It leads to systems, machines, products, services and processes that are physically, perceptually, cognitively and emotionally intuitive to use. In other words HCD is based on the needs of people. It's an approach to problem solving that brings together generating, building, and testing to create more effective solutions.

Organizational groups such as IDEO (which is a design consultancy that creates impact through design)  have chronicled many times on  great ideas that easily fall through the cracks of well-intentioned projects to address poverty through human centered design in order to generate positive outcomes. IDEO's main aim is to spread human-centered design principles by working directly with a wide spectrum of players and a diverse set of project categories to address poverty alleviation and associated factors such as health, financial services, gender equity, water and sanitation, and agriculture.

Globally, progress is being made towards reaching the Millennium Development Goals (MDGs) on Water and Sanitation. However, in many cities the situation is getting worse. By 2030, it is expected that 60% of the world's population will live in urban areas and 180,000 people are added to the global urban population every day. Most reside in informal urban settlements and slums and face many problems, including inadequate water and sanitation. Many are constantly stressed about finding enough affordable and safe water. WSUP (Water and Sanitation for the Urban Poor) is a project that has helped improve access to clean water for impoverished people in African and Asian countries.

 

WSUP is currently prototyping sanitation products, services, and businesses for people living in poor urban communities to understand the nuances of delivering solutions that are both desirable and convenient for low-income people. The WSUP project in conjunction with other community organizations  has managed to improve access to clean water for more than 500,000 people living in slams. WSUP stresses that a key part of the process is working with partner organizations to understand their customers' needs and aspirations around clean water so as to drive behavior change.

 

There has been an increasing interest in social innovation and human-centered design within the social sector and designers are very enthusiastic to apply their skills to address challenges related to poverty.  IDEO  is working with nonprofits organizations, foundations, and social enterprises  that are focused on improving the life of low-income communities  e.g. through poverty eradication to address their toughest challenges.

Link to this article: Water and Sanitation for the urban poor.

blogs: week 2

Caroline Kiriga: Blog Week 2 submission.

 

 

 

How to Kill Poverty: Social Entrepreneurship???

 

 

What to do about global poverty evokes passionate and polarized views: at one extreme we just need financial aid; at the other billions have been thrown down a sinkhole over the last 50 years and accomplished almost nothing. How many charitable and financial aid organizations exist at present? I mean don't get me wrong…I am so grateful for charity. Literally billions of people especially those in developing countries benefit immensely from such organizations. But is this a solution to the ongoing problems that impoverished countries are facing today? The UN Summit set Global targets (Millennium Development Goals) to achieve eight anti-poverty goals by the year 2015. To many, this agenda may seem too ambitious. Whatever means being used to achieve this, we have to realize that after half a century of failure, foreign aid "should" no longer be the preferred tool for lifting the masses of Africa out of their economic prostration. It is time for the developing world to pull itself up by its own bootstraps.

 

Is entrepreneurship the answer?

 

 Entrepreneurship as a source of economic growth and a weapon against poverty especially in developing countries is greatly underappreciated.

Having grown up in a third World country, I know that Innovative thinking and alertness to opportunity is present in most societies. I have seen entrepreneual activities uplift the lives of millions of people. Many started with small beginnings and are now one of the most successful businesses in the country. Good example being a chain of supermarkets in Kenya called Nakumatt that sells almost anything and everything and despite a disastrous economy and other setbacks, Nakumatt's success has flourished and led to a new class of farms growing fruit and vegetables in Kenya. Clearly, the world lacks for opportunity not ability.

It is unfortunate that roadblocks such as beurocratic corruption, pollution of currency, inefficiency in resources, excessive taxation and unnecessary regulation have found their ways and means to kill entrepreneurship in developing countries.

 

Today millions of people eke out a living in very creative ways despite stifling bearocracies, elitist systems or despotic governments indicating that entrepreneurship is part of the human spirit and not just the exclusive preserve of those countries that have generated astronomical wealth. Entrepreneurship is the catalyst for economic growth. What works in defeating poverty? Entrepreneurship, transparency in government, low taxations, and light regulation.

 

Link to this article: Lessons from the poor: Triumph of the Entrepreneurial activities.

 

 

 

 

Hi Prof - I'm afraid I am having problems publishing my post this week.

Unfortunately, blogger keeps tellng me that there is an error in my url, but I just can't figure it out, I'm afraid.  My blog title this week is venture growth for disabilites innovation, and I was intending to tag it with Australia, disability, venture development.

Whilst I will try again tomorrow, would you mind publishing it if I find I can't again.

Thankyou so much!
Yours,
David.

Here is my post:

Disadvantage in Australia coheres in geography. My country's poorest post codes are populated by people on subsistence incomes, living with high levels of disability, living in single parent families, with low levels of private car access, disconnected from the internet, (to name but a few markers of disadvantage). It is an experience of isolation and exclusion. It is as if the transformative flows of capital, goods, labor and information identified in the McKinsey Corporation report ('What happens next') deliver only downside risk to them.
I blogged on happiness in this space recently. I suppose I mean resilience: people who feel that their higher order needs around agency, autonomy and self determination are being met are more resilient. They are happier. They are also more independent.
I believe that disadvantage in Australia and happiness/resilience are disjointed phenomenon. Disadvantaged Australians don't get to enjoy the benefits of resilience like the majority population.
I wish to create a social venture that will enable people with disabilities to be more active in their communities, more present in their communities. Agency is power in this context. Hopefully it is more autonomy too. It might also lead to greater happiness.
I have the germ of an idea, shared with a great colleague, to develop a mobile phone app, which utilizes gaming dynamics in real time to get people with disabilities beyond their front doors and active in their communities.
The immediate challenge for me is how to innovate strategically at the base of my particular pyramid? The watchwords seem to be the four Ás': affordability, acceptability, availability and awareness.
Well affordability is a confronting thing. People with disabilities live on government benefits, typically budgeting from one week to the next. Actually $ is not the only resource in scarce supply when you are disabled. Cognition and concentration are also likely to be at a premium.
I suspect that the task here is to have the courage of my convictions and trust that the product I wish to develop has a place in the market. If people like it, they will direct their scarce resources to it.
Which leads me to acceptability. It is axiomatic that my product must be dedicated to the needs of people with disability. I am heartened by the fact that people with disabilities are great consumers of other digital technologies. Also by the fact that the gaming technology I am considering works on a powerfully reinforcing psychological schema: contingent reward. This schema also plays out in areas such as gambling, which can prove to be highly addictive. I suppose I would welcome some healthy addiction to my product!!
Availability is a tougher challenge. I think the app technology works on only the most recent mobile phone platforms (for example, Android 2.1, or Froyo). I think I need to identify a distribution channel for my product, which may even entail approaching mobile phone companies to see if I can tap into their CSR programs.
Lastly awareness. I would like to build awareness of my product through a demonstration program.
Anything you can tell me about how to build a social venture such as this would be gratefully received!