Giving social entrepreneurship a fair go

What have we learned from our immersion with social entrepreneurs, reviewing their personal stories, accomplishments, frustrations and challenges?

We have learned that even the most outstanding social entrepreneurs, such as Yunus and Ela Bhatt, have three major interrelated needs: legitimacy-credibility, opportunities for networking among themselves and with others who can mobilise support for their initiatives, and financial and/or in-kind resources.

Credibility comes from sticking to what society has as established as accepted fields of work and practice. But social entrepreneurs tend to defy traditional practice. They don’t fit into the charity mold because they believe hand-outs simply generate more dependency and disempowerment. And they don’t fit the business model because their bottom line is social value creation.

Gisèle Yitamben from Cameroon founded ASAFE based on her belief that African women could develop into successful business entrepreneurs if provided training and development support, alternative financing and access to e-commerce. All we hear about Africa has to do with malaria, HIV-AIDS and corrupt governments. So you can imagine the level of scepticism that Gisèle met as she persisted. ASAFE today supports thousands of women entrepreneurs in Cameroon, Guinea, Benin, Chad and the Democratic Republic of Congo. ASAFE is actively engaged with technology companies and business incubators to help African entrepreneurs overcome the digital divide. With 3,000 paying members, it is connecting successful entrepreneurs to one another and to larger markets.

Takao Furuno is a Japanese farmer with a different problem common to outstanding social entrepreneurs. Furuno, committed to environmental sustainability, came upon an ancient practice in Asian rice farming: releasing ducklings in rice paddies to remove weeds. By perfecting and spreading this technique since 1988, today over 75,000 small rice farmers throughout Asia have taken up his method. Rice yields from farmers using Furuno's method are almost twice that of conventional plots in the same area, and "duck rice" is sold at 20-30 per cent higher than chemically-grown rice. But in the past thirty years, the annual growth of chemical fertilizer use on Asian rice has been from 3-40 times faster than the growth of rice yields. To stem this tide, Furuno does not need money. He needs legitimacy and access to networks that will support his uphill battle against enormous vested interests and power that lie with the agro-industrial complex and governments they support.

What are we as a Foundation doing to respond to the need even the most outstanding social entrepreneurs have for networking opportunities, legitimacy and resources?

First of all, we are trying to clarify what constitutes social entrepreneurship. The problem of definition is a very real one. Most frequently, it is equated with charity. I suspect Australian social entrepreneurs face the social entrepreneur-as-charity misrepresentation continuously. The false dichotomy between those who work in the social arena and those who work in the financial arena will continue as long as the legal structures and mentality exist dividing what is "profitable" and "what is not" … what type of work gets a tax break and what does not. Anyone who has worked in both the financial and social worlds knows that every financial investment has social ramifications, and vice versa.

Interestingly, social entrepreneurs need to be supported as they interface with their counterparts in the business world, particularly in the area of communications. Take for example the specific instance where Fabio Rosa, one of our Schwab entrepreneurs, met at the Forum’s meeting with the CEOs of the seven biggest energy companies in the world. What an opportunity! Rosa has developed a scalable system to provide affordable solar energy to poor people who currently spend $8 to $15 a month on non-renewable fuels for lighting. His model allows investors to recoup their investment in five to ten years. This target market encompasses most of the two billion people in the world who still lack electricity and who, by burning fossil fuels, contribute significantly to global warming. Rosa's challenge was to convey to the energy CEOs that they should work with him.

How? One way could be Rosa asks for help by appealing to fears such as terrorism, environmental degradation, etc., or principles such as - we can't continue to neglect such as the fact that one third of the planet is being left out of development, etc.

Another approach could go like this: Rosa explains to the CEOs something like "This is the largest untapped energy market on the planet. You guys need alternative distribution systems to reach these people. And I can show you how to reach them.!" As business people, the CEOs know that if they want to reach a new market they need new distribution mechanisms. Now the discussion is all about: What is the value proposition? What is the win-win deal? It's a totally different conversation than asking for a hand out, and more hold more promise in initiating a working partnership.

We in the Foundation are strategically placed to assume a brokering role, strengthening the business-social bridge. Our Founder and President is the same man who 30 years ago founded and presides over the World Economic Forum. We want to use our leverage to attract the notice of governments and business people so that the scalable solutions of social entrepreneurs can be replicated, improved and expanded, so that their practical insights can be incorporated into government policy and business initiatives.

I'd like to conclude with a few messages.