A collection of resources providing an introduction to social innovation and enterprise for budding social innovators, future investors and enablers of their efforts, policy makers, and anyone else interested in learning more about the novel ways that some of the world's most pressing problems are being addressed.
What people call charity is not giving them money. It is a decent way for them to earn a living. This is the ending of Leila Chirayath Janah' s speech in TEDx Silicon Valley event in 12/12/09.
I was inspired by her speech and efforts in Samasource, "a nonprofit that provide high-quality content moderation, data entry, and other outsourcing services to clients including LikedIn, Intuit, and the US State Department."
"Samasource's San Francisco-based sales and delivery teams work with clients to move large data projects to a proprietary online work distribution system, the SamaHub. Dedicated, full-time workers around the world access the SamaHub from delivery centers monitored by Samasource staff. Samasource account managers and QA professionals ensure quality, accuracy, and turnaround times."
Samasource divide their project into Micro work for the youth, women and refugees in 9 countries which including Dadaab, Kenya, etc.
This materials refers us a new approach to social innovation except micro finance, micro insurance, we can also have micro work! This is such a good example of how microwork works to improve the underserved population. More important, it is a sustainable way giving them "money" with dignity.
My question for this social enterprise as well as for this week's lecture is: how to ensure the quality of micro work. Will it be costly in the producing process?
I left my Public Finance class today thinking about how good management transcends political boundaries. Examining data and deducing an innovative solution that maximizes benefits and minimizes externalities presumably will lead to workable solutions regardless of party registration.
After I thought this, I then thought to myself, "Self, government by experts didn't work particularly well in the former U.S.S.R." The sheer amount of data available about any particular issue is too much for one expert or even a team of experts to handle.
The premise of democracy is that "none of us is as dumb as all of us," and when it comes to innovation in policy and technology, the Internet making this statement truer than ever. Decentralized efforts to solve intractable problems gave us the Internet itself and the decoded genome. And now collective wisdom is helping new social ventures to get off the ground through Kickstarter and Kiva. Other crowdsourcing efforts like Ushahidi and Rhiza Labs FracTracker are working to channel our collective consciousness directly into scalable solutions.
As the New York Times wrote today, these solutions don't come from the left or the right. They come from the collective center.
My question to you is: Do ideological mindsets promote, or stifle innovation? And why is it that a ton of people who know just a little continually come up with better solutions than a few people who know a lot?
Interest rates. The assigned readings as well as the video we saw on Muhammad Yunus really gave us no information about what rates the borrowers were charged. We know that the loans are for relatively small amounts of money, but what kind of return are the lenders getting? In theory, a bank/lender that is dispensing and managing 1,000 loans of $100 each will have considerably more overhead than a bank/lender of one $100,000 loan. 1,000 loans, regardless of their amount, would just require more work than one loan (CGAP explains this in greater detail). So how does this manifest itself?
In short, microfinance institutions (MFIs) have high interest rates. According to CGAP (Consultative Group to Assist the Poor), the average MFI interest rate was around 28 percent in 2006. Muhammad Yunus Grameen Bank lists their interest rate for all loans at 16 percent. While these rates seem high compared to what we're used to encountering for loans in the U.S., they are a reflection of the added overhead costs with microlending. Moreover, CGAP says that MFI loans have interest rates that are lower than both consumer and credit card rates in the borrowers' countries. The loan rates are also considerably less than local, informal money lenders. Many sources say these lenders charge borrowers upwards of 300 percent. So, given the alternatives, the interest rates on MFI loans seem to be entirely fair and reasonable for the borrowers in those markets. But has anyone been able to lower those overhead costs and effectively "frugal engineer" the microlending process?
In researching this topic I came across a lending organization called Kiva (Raymar also mentioned them in his last post). My initial impression from their website, as well as this Frontline piece, was that donors make contributions through the website that become microloans for the borrowers. Once the loan is repaid, the donors get their money back with no interest. I presumed that Kiva would then either charge a small "finder's fee" or use other donations to cover their business expenses. This model would conceivably be able to lower the costs of microlending. However, in reality Kiva acts as more of a go-between.
Here is how Kiva's loan process actually works (explained here on their website). A local MFI, or Field Partner, loans the money to the borrower first and the funds from Kiva are given to the lender later. This money only covers the principal amount. Since the MFIs are still responsible for administering the loan (e.g. collecting payments), they are able to charge interest on the principal amount. Kiva's Field Partners appear to charge rates to the borrowers that are comparable to those in their countries (each Field Partner's link lists the interest rate at the bottom of their page). In this sense, the funds from Kiva act more as collateral than a direct loan. The risk of lending is then spread out over the Kiva donors instead of being assumed by the MFI. Some of the Field Partner's reflect this reduction in risk by charging the borrowers lower interest rates or offering interest refunds once the loan has been repaid. So while they are not creating a dramatic shift in the microlending process, Kiva is able to expand and, in some instances, improve the service.
Even though the MFIs are charging interest rates that are lower than the local alternatives, I still wonder what could be done to bring down the costs. Will it happen because of a technological innovation? If mainstream financial institutions enter the microlending market, will they lower the costs? Will the rates be lowered by some combination of the two? Or are the rates already more than fair?
Thinking about social innovations that serve as creative solutions to social problems, this week’s topic, I came across this social innovator featured in a TED Talks. (Video link above.) While working in India, Jane Chen saw the need for incubators for premature babies that are portable, sterilized, and low-cost. In this video, Chen describes how 4 million premature babies die each year. Moreover, babies that are able to survive a premature birth, often unfortunately develop long-term health problems as a result of fighting hypothermia, negatively affecting organ development and growth, because their parents lacked access to an incubator.
Chen describes the tactics that desperate parents implement in order to keep their babies alive and healthy, including putting hot water bottles around their babies and placing the babies under light bulbs. The social innovative spirit is there, but the solutions are not optimal, and in this case also potentially dangerous.
This product will not only save lives, but also reduce population growth; families will have fewer children as the likelihood of survival of each child increases. The multiple social impacts makes this a particularly important innovation.
Being in the field and encountering the absence of incubators enabled Chen and her team to identify the need first hand and realize that they were able to develop a simple and effective solution. The necessity to be in the field to understand the needs is critical in this process, and I believe a limiting factor we face today in fighting poverty as the isolation of many impoverished nations and communities.
Connecting this product to our readings for this week, I realized that by definition, social innovations have a triple bottom line as the value created accrues to our society; both to individuals directly impacted which transfers to the community at large. When people are able have access to basic necessities and therefore live a higher quality of life at the most basic levels, all society benefits. In the same way that this product will potentially reduce population growth in India, in addition to saving the life of a baby and enabling them to have a more healthy life, what other innovations have a similar impact on multiple fronts?
This story highlights the need to develop localized solutions. This video also reminded me that despite my indoctrination as an American that more is better, over-engineering is in fact not always better, and frugal engineering holds great possibilities.
In addition to frugal engineering, what other ways of common and broad scale thinking must we (as Americans) transform in order to be more effective social innovators?
“To achieve divergent thinking, it is important to have a diverse group of people involved in the process.” This quote from one of our assigned readings last week, Design Thinking for Social Innovation, especially highlights the need for a community of problem solvers. In the past, usual problems have been solved with usual solutions; however, our world now faces so many complex problems that it is impossible to use our usual methods of resolution. So what are some unusual methods? Leveraging the power of social media and web 3.0!
Over the past 30-40 years, the world wide web has evolved through three various stages: web 1.0 was mainly person to person; web 2.0 connected the individual to a community; and now web 3.0 is facilitating community to community interactions. I will admit that I am a latecomer to the social media scene; however, there are so many valuable uses of social media, beyond having the ability to tell the world that I made homemade chicken soup for dinner last night! As Brown and Wyatt referenced in the Design article, a company calledInnoCentive has mobilized an online community of creative minds to help solve some of the world’s most important problems (FYI: for cash rewards!). Social media enables a diverse group of people to bring their knowledge and backgrounds in solving these unusual problems, hence divergent thinking. While social media may have started as fun and games, it certainly seems like web 3.0 may stir the social innovation pot over the next decade. How have you seen social media enable innovation?
While checking my twitter account, I landed on Search for the Obvious, a website powered by The Acumen Fund. Similar to InnoCentive (but without the cash reward), Search for the Obvious aims to engage creative thinkers in solving a specific challenge. The website first encourages users to upload photos of products or services that have helped better the world and/or have helped millions of people. As we discussed in our first class, many of these innovations seem so obvious. The website then allows users to create the next obvious solution. The current challenge is finding an obvious solution for basic sanitation (Any ideas?).
Speaking of obvious solutions, how would you characterize social media? Whether or not you are part of the social media craze, it is happening, and there is much good that can come from communities engaging with communities. Essentially, social media is a channel for virtual human-centric design. I wonder how Bruce Hanington and his Design of Social Impact students are incorporating social media in their design processes...
I saw this exhibit in Chicago on MASSIVE Change years ago. It was fascinating! I think the projects show the importance (and elegance) of creativity and design to social innovation. The exhibit explored the ways in which design could improve human welfare. Many of the projects/systems/products would serve the BOP population described in the articles we read for this week. In particular, I recall seeing portable, low cost water filters and transportation methods that would create enormous, positive change: women who otherwise spent hours and hours a day hauling water from remote sources to their villages would have time to pursue other productive endeavors.
As the sidebar says, “Instead of structuring our project around professional design disciplines, like graphic design and industrial design, we looked at design from the perspective of the citizen.” The Massive Change approach fits in with the notion of frugal engineering described in the Sehgal article: maximize value to the customer while minimizing nonessential costs. After all, in order to truly provide value to the customer, the designer must see what the customer wants and needs. While the BOP population has not formerly been a traditional “customer,” it is indeed a critical population of customers and often times has unique needs.
If you want to change something, what is the first thing you need to do? Create a strategy for achieving that change. Then, you need people to support your change so that your ideas are not trapped in your mind forever. How can you identify people in all parts of the world that would support your cause and actually back it through funding and/or action?
Enter…The Point: make something happen, a social and consumer activism site launched in November 2007. What makes thepoint.com different from other activism sites, such as change.org or kiva.org? While money can be donated to causes on thepoint.com, the mechanism that spurs this donation is different. With other websites, people donate money as soon as they see a cause they are willing to support. With thepoint.com, a member creates a campaign, and participants pledge to take action only when enough other people have pledged to do the same. If this “tipping point” is reached, members agree to boycott a product, donate money to a particular cause, or take some form of civil action. While money is not involved in all of the situations, in those where it is, credit cards will only be charged for donations in the event that the terms are met.
Some highlighted objectives/causes on the website and their related terms and conditions include:
1.Objective: Get a major magazine to publish an issue without airbrushing or photoshopping the models in any of the features or the cover. TERMS: If this objective is met, then buy at least two copies of the magazine. (to show the demand for images “real women”)
2.Objective: Raise money for an AIDS orphanage in India. Provide basic needs, housing, and volunteer support. Terms: If we reach at least $1,000, then we will give money to: Peace Children Care Home, India.
The idea behind thepoint.com is simple: strength in numbers. It allows people to achieve change that would be difficult to spark alone. To support a campaign on this website represents a step further from “liking” a cause on Facebook. While I agree that awareness is an essential first step, it is hardly ever sufficient in creating large-scale change. With regards to thepoint.com, some actual action does follow when the tipping point is reached. Thus, some sort of compact is maintained and carried out, paving the way for real change.
From the above discussion, the creator of thepoint.com, Andrew Mason, can be seen as a social entrepreneur, and his website can be seen as a social innovation. Both Mason and thepoint.com bring people together in an innovative (novel, significantly better than what exists today, and sustainable) way to indirectly further all sorts of causes to further the mission of generating social value. A few points, however, complicate this assignment of labels:
1.Not all of the campaigns and fundraisers on the website enhance the wellbeing of the population. Is this problematic? Is it sufficient that the majority of the efforts on the website do? Does mixing these two categories of initiatives devalue those in the category of “greater overall good”?
2.Will the possible addition of advertisements to generate revenue affect the social value of thepoint.com?
3.Will requiring members to pay a certain amount in order to create a campaign or initiative detract from the overall social value of the website?
As a holder of a BS in Electrical Engineering, I was pleased that three of this week’s readings focused largely on engineering and product development and how social entrepreneurs are utilizing it to solve social issues.
“Products for the other 3 billion,” “Design Thinking,” and “The Importance of Frugal Engineering,” each highlighted how understanding the customer and focusing on low-cost methods and inputs can lead to the successful and profitable creation of products and services fit for solving key issues of the developing world.
Rather than rehash the arguments stated in those articles, the aim of this post is to focus on additional readings that can provide additional information to students interesting in learning more about these areas.
In addition to reading the aforementioned information, interested parties may benefit from attending the upcoming TechBridgeWorld Conference hosted here at CMU on November 11. The conference will focus on the TechBridgeWorld research group’s work developing products and solutions for the world’s developing community.
Indeed, design thinking, frugal engineering, and more largely, social innovation is a large part of the group’s focus. Thus attending the event will be beneficial to both students interested in design thinking and/or frugal engineering and to the entire Foundation of Social Innovation and Enterprise class. Those interested can find more information here: http://www.techbridgeworld.org/Interactive2010/
Crowdsourcing. Wikipedia (a sort of product of crowdsourcing), defines the term as "the act of outsourcing tasks, traditionally performed by an employee or contractor, to a large group of people or community (a crowd), through an open call." The term is used to describe a trend of leveraging the creativeness/innovation of the collaborative masses. Its a process used by Institute for Human Centered Design to attract social innovators through competition. But there are those like Dan Woods of Forbes.com, who don't hold much faith in the collective intelligence of the crowd.
In his article "The Myth of Crowdsourcing," Woods agrues "there is no crowd in crowdsourcing. There are only virtuosos, usually uniquely talented... from their fervent brains spring new ideas... the crowd solves nothing, creates nothing." There may be some merit to his ranting, for he later assersts his frustration with the trendy phrase is that the "misplaced faith in the crowd is a blow the the image of the heroic inventor. We need to nurture and fund inventors and give them time to explore, play and fail. A false idea of the crowd reduces the motivation for this investment, with the supposition that companies can tap the minds of inventors on the cheap."
In the end Woods hits a criticial node with me. In the world of Social Innovation it's true that 1 plus 1 is greater than 2, as professed by Tim Zak of ISI, but what is the net gain of the 'crowd' versus the 'virtuoso'?
What people call charity is not giving them money. It is a decent way for them to earn a living. This is the ending of Leila Chirayath Janah' s speech in TEDx Silicon Valley event in 12/12/09. 
