A [BC] Lab Working Paper 1.0 September 2017 Blending Capitals … · 2020-05-22 · regenerative capitalism, and newly conceived models from academics focused on ecological economics

A[BC]LabWorkingPaper1.0

September2017

BlendingCapitalsforPeace

AnApproachtoPeaceinColombiaThroughBlendedFinance&TheBlockchain

DavidClemmons,LucLapointe&ChristopherGeorgen

BlendingCapitalsforPeaceAnApproachtoPeaceinColombiaThroughBlendedFinance&TheBlockchain


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TableofContentsACRONYMS,TERMS&ABBREVIATIONS.......................................................................................................4

LISTOFFIGURES&SCHEMATICS...................................................................................................................6

EXECUTIVESUMMARY.......................................................................................................................................7

SETTINGTHECONTEXT...................................................................................................................................10QUESTIONS&FURTHERINQUIRY…................................................................................................................12

ENABLINGENVIRONMENTCHALLENGES...................................................................................................13CHALLENGESTOFINANCINGPEACEINCOLOMBIA.............................................................................................14HUMANCAPITALANDSOCIALCAPITAL:UNIVERSALCHALLENGES........................................................................15FAMILISMVSBRIDGINGSOCIALCAPITAL:THELATINAMERICANHURDLE.............................................................17QUESTIONS&FURTHERINQUIRY…................................................................................................................19

BLENDINGCAPITALS&BLENDEDFINANCE.............................................................................................20WHATISBLENDEDFINANCE?.......................................................................................................................20HOWMIGHTWEENVISIONBLENDEDFINANCEINCOLOMBIA?..........................................................................21WHATISBLENDINGCAPITALS?.....................................................................................................................22ADDITIONALFRAMEWORKSTOCONSIDER.......................................................................................................25THEBLENDINGCAPITALSCONTINUUMFRAMEWORK........................................................................................26QUESTIONS&FURTHERINQUIRY…................................................................................................................29

THESDGS&BLENDINGCAPITALS:ABEGINNING...................................................................................30

TECHNOLOGY:DLT,AI,ANDAUTHENTICATION.....................................................................................32BLOCKCHAIN:GIVINGBRIDGINGSOCIALCAPITALFINTECHRELEVANCE................................................................33ARTIFICIALINTELLIGENCEANDPEACETECH......................................................................................................34AUTHENTICATION.......................................................................................................................................35QUESTIONS&FURTHERINQUIRY…................................................................................................................36

AWARENESSCAPITAL:THERISEOFMIXOLOGISTS...............................................................................37MIXOLOGISTS:THEBLENDINGCAPITALSSPECIALISTS........................................................................................39QUESTIONS&FURTHERINQUIRY…................................................................................................................40

THEBLENDINGCAPITALSARCHITECTURE..............................................................................................42CAPITAL-SPECIFIC&MULTI-CAPITALPARTNERSHIPS.........................................................................................43SPECIALNOTEONTOURISM.........................................................................................................................45ADVISORYGROUP,TOOLS,ANDMEDIA..........................................................................................................46SIMULTANEOUS&PARALLELINTEGRATION.....................................................................................................47QUESTIONS&FURTHERINQUIRY…................................................................................................................47

THEMSMEPRE-PIPELINEECOSYSTEM:BLENDINGCAPITALS&THETOPLPROTOCOL............48



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THEBLOCKCHAIN-ENABLEDMSMEPRE-PIPELINEINCOLOMBIA........................................................................48THETOPLPROTOCOL:ALTERINGTHEENABLINGENVIRONMENT.........................................................................51QUESTIONS&FURTHERINQUIRY…................................................................................................................51

ROADMAP:BLENDINGCAPITALSFORPEACE...........................................................................................53

CONCLUDINGTHOUGHTS...............................................................................................................................54

ABOUTTHEAUTHORS.....................................................................................................................................56

APPENDIXA:FOUNDINGPARTNERS...........................................................................................................58

APPENDIXB:CONCEPTNOTE–THEBLENDINGCAPITALSLABORATORY[BC]LAB..................59



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Acronyms,Terms&AbbreviationsAAAA–AddisAbabaActionAgenda

AML–Anti-MoneyLaundering

AI–ArtificialIntelligence

CBO–CommunityBasedOrganization

CCF–CommunityCapitalsFramework

CSA–CommunitySupportedAgriculture

CTF–Counter-TerroristFinancing

DLT–DistributedLedgerTechnology

DRM–DomesticResourcesMobilization

EDT–EgoDevelopmentTheory

ELN–EjercitoLiberacionNacional(NationalLiberationArmy)

FARC–FuerzasArmadasRevolucionariasdeColombia

FCS–Fragile&Conflict-affectedSituations

FSPs–FinancialServiceProviders

G7–GroupofSeven

G20–GroupofTwenty

GIIN–GlobalImpactInvestingNetwork

Glocal–Global+Local

GRI–GlobalReportingInitiative

ICAS–InstituteofCharteredAccountantsofScotland

ICOs–InitialCoinOfferings

IFC–InternationalFinanceCorporation

IFFs–IllicitFinancialFlows



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IIRC–InternationalIntegratedReportingCouncil

IPO–InitialPublicOffering

LDCs–LeastDevelopedCountries

MIC–Middle-IncomeCountry

Mixologist–BlendingCapitalsSpecialist

MSMEs–Micro-,Small-,&Medium-sizedEnterprises

ODA–OfficialDevelopmentAssistance

OECD–OrganizationforEconomicCo-operationandDevelopment

PCZs–Post-ConflictZones

SARs–SuspiciousActivityReports

SDGs–SustainableDevelopmentGoals

SMEs–Small-&Medium-sizedEnterprises

UN–UnitedNations

UNGC–UnitedNationsGlobalCompact

VR–VirtualReality

WBCSD–WorldBusinessCouncilforSustainableDevelopment

WEF–WorldEconomicForum



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ListofFigures&SchematicsFigure1:EnablingEnvironmentChallenges..........................................................................................13

Figure2:MSMEBlendingCapitalsRoadMap.........................................................................................18

Figure3:BlendingFinanceEcosystemforColombia.............................................................................21

Figure4:TheIntegrated<IR>Framework,IIRC....................................................................................22

Figure5:EightFormsofCapital-PermacultureFinance,AppleseedPermaculture..............................23

Figure6:MetaCapitalsFramework,MetaIntegral®Associates............................................................24

Figure7:Bebbington'sMulti-CapitalsFramework................................................................................25

Figure8:OmidyarReturnsContinuumFramework..............................................................................26

Figure9:TheBlendingCapitalsContinuumFramework......................................................................27

Figure10:TheSDGs&BlendingCapitals...............................................................................................30

Figure11:BlendedFinance,SDGs,Capitals,andROI............................................................................31

Figure12:TheSpiralEffect,SusanneCook-Greuter..............................................................................37

Figure13:SpiralingUp&SpiralingDown:TheBoom-BustCyclesofCopperMining........................38

Figure14:TheMultipleRolesofMixologists.........................................................................................40

Figure15:Challenges&Opportunities:ARecap...................................................................................41

Figure16:TheBlendingCapitalsEcosystem..........................................................................................42

Figure17:Floras’CommunityCapitalsFramework................................................................................43

Figure18:MSMEPre-PipelineEcosystem..............................................................................................50

Figure19:ThreeFeaturesoftheTOPLBlockchain,AlteringtheEnablingEnvironment...................52



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ExecutiveSummary“Tokeeptheplanetinhabitablewemustnowaimnotonlyforourownhumanwell-beingbutalsothewell-beingofthewholesystemofwhichweareapart.Thisaimwillmeanfindingwaysofmeetingourneedsthatareinlinewiththreeprinciples:first,thatthemeetingofanyoneneeddoesnotcompromisethemeetingofanyotherneed;second,thatthemeetingofanyoneperson’sneedsdoesnotcompromisethemeetingofanyotherperson’sneeds;andthird,thatthemeetingofhumanneedsingeneraldoes not compromise any of the attributes of the world—such as a functioningbiosphere—thatenableourneedstobemet.”1

Colombiaenduredacivilwarformorethanfivedecades,witnessingthedeathofroughlyaquarterofamillionofitscitizensandthedisplacementofanadditionalfivemillion.Thepromiseoflastingpeaceinthispost-conflictenvironmenthingesonthestrengtheningofrurallivelihoodsinthosepartsof Colombiamost affected by the violence. That strengthening, in turn, is contingent on towhatdegree the public, private, and social sectors (domestically and internationally) can mobilizeresourcesandefforts tomitigate theriskof thereturnofviolence throughmaximizing thesocio-economic,environmental,andwellnesspotentialofruralcommunitiesinfragileandconflict-affectedsituations(FCS)–ataskthatheretoforehasbeennotablyuntenable.

FurtherexacerbatingthechallengeoffinancingentrepreneurialeffortsintheseregionsofColombiaareinvestors’concernsregardingfundsbeingdivertedintoillicitfinancialflows(IFFs).IFFsinrural,post-conflict zones potentially include: corrupted officials, money-laundering, illicit agriculturalcultivation & drug production, the drug cartels and gangs overseeing these operations, and/orterrorist groups such as the National Liberation Army [Ejercito Liberacion Nacional (ELN)]. Theobstaclestothefinancialenablingenvironmentarenumerousandcomplex,andintensifytheriskuncertaintythatimpedesinvestmentflows.Nevertheless,therearereasonstobeoptimistic.

Asafirstcandidateforoptimism,whentheSustainableDevelopmentGoals(SDGs)werelaidoutin2015attheUNGeneralAssemblyMeeting,thereweretwoitems,inparticular,thatspokedirectlytoColombia’ssituation:

Goal #16: Peace, Justice, and Strong Institutions – Promote peaceful and inclusivesocieties for sustainabledevelopment,provideaccess to justice for all andbuildeffective,accountableandinclusiveinstitutionsatalllevels.

Goal#17:PartnershipsfortheGoals–“Tosuccessfully implementthe2030AgendaforSustainableDevelopment,wemustswiftlymovefromcommitmentstoaction.Todothat,we

1Tibbs,H.(2011).AReturnToTheValueOfBeingHuman.InD.Pinchbeck&K.Jordan(Eds.)WhatComesAfterMoney?:EssaysfromRealitySandwichonTransformingCurrencyandCommunity(201-224).



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need strong, inclusive and integrated partnerships at all levels.” Former UN Secretary-GeneralBanKi-moon

In essence, the nations of theworld have agreed on a set of elements, in this case -- sustainabledevelopment, peaceful and inclusive societies, and partnerships – to generate more sustainablecommunitiesandlivelihoodsforallpeople.ThroughSDGs#16&#17,theUNhas,ineffect,extendedaglobalinvitationtoinvestinpeaceinordertorealizesustainabledevelopment.

“If the SDGs are to succeed, they must promote an inclusive approach to growth, and mobilizeinnovative sources of financing while phasing out investment in unsustainable activities in allcountries.”2Thesewordsseguetoasecondreasonforoptimism:BlendedFinance.Thisinnovativeapproachtofinancialmobilizationisopeningemergingmarketstotheinflowofprivateinvestmentsvia the strategic integration of both official development assistance (ODA) and philanthropicassistance.Ineffect,multiplestreamsoffinancing,consciously“blended,”supportthede-riskingoftheoverallinvestmentlandscape.

Although it is not explicitly stated by Stafford-Smith, et al.3, it may be argued that “phasing outinvestmentinunsustainableactivities”refers,inpart,toeliminatingIFFs–amajorimpedimenttotheenablingenvironmentinColombia.Doubtless,thisriskmitigationmustunfoldconcurrentlytoinsuretheviabilityofBlendedFinance.Un-crossable“red-lines”willbeinstitutedbyODAsourcesunwillingtoinadvertentlyearmarkfundsforterrorism.Theenablingenvironment,therefore,willrelyheavilyonthetechnologicaladvancementsofrecentyears:artificialintelligence,blockchain,andthe authentication& verification of individual and collective identities. Human progress in theseareasclearlyprovidesreasonstobeoptimistic.

Multi-capital frameworks are another reason for optimism.Early on, capitalism recognized threecapitals – financial, produced (manufactured), and human – as integral to its success, with theremainingsetofcapitalsrelegatedtothecategoryof“externalities”bybusinessesandaccountantsalike (see, for example, the explanation of the “$200 hamburger”4). New frameworks, however,emphasize the inclusionof these “external” capitals, aiming to engage all sectors inmeasuring&reportingthelevelofcapitalsutilizedintheiroperationsandtheirresultingdirect&indirectimpactson thenetglobalcapital stocks.EffortssuchasReporting3.0, theworkof theCapital Instituteonregenerative capitalism, and newly conceived models from academics focused on ecologicaleconomicsalldeliverinsightsintoaburgeoningsetofmulti-capitalframeworks.

A final reason for optimism involves the growth& development of our understanding of a post-modern capital, what we will refer to as “awareness capital.” Neuroscientist Andrew Newberg,

2Stafford-Smith,M.,Griggs,D.,Gaffney,O.,Ullah,F.,Reyers,B.Kanie,N.,Stigson,B.,Shrivastava,P.,Leach,M.,andO’Connell,D.(2016).Integration:thekeytoimplementingtheSustainableDevelopmentGoals,SustainabilityScienceandImplementingtheSustainableDevelopmentGoals,(p.1-9).3Ibid.4Patel,R.(2010)TheValueofNothing:HowtoReshapeMarketSocietyandRedefineDemocracy.Picador.



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directorofresearchatThomasJeffersonUniversityHospital’sMarcusInstituteofIntegrativeHealth,and his colleague Mark Robert Waldman have recently published their “Spectrum of HumanAwareness,”whichspeaksspecificallytochangesinthehumanbrainthataccompanyincreasesinawarenesscapital.Theirresearchfindingsmatchwellwiththepastcentury’sdiscussionofhumandevelopmentaltheorybysuchfiguresasPiaget,Maslow,Kegan,Gardner,Cook-Greuter,andWilber,amongahostofothers.AccordingtoNewbergandWaldman,theemergenceofthecapacitytoalterourawarenessspeaksspecificallytochangesinthefrontal&parietallobesinthebrain,aswellasthethalamus,thelatterofwhich“helpsustobuildrealitymodelsoftheworld.”5Awarenesscapital,itisposited,willassistinestablishingafoundationfromwhichintegrativeapproachesto“blendingcapitals”canbedesignedandimplementedinordertofosterpeaceinColombia.

WhatfollowsisanexplorationofhowpeaceandsustainabledevelopmentmaymanifestinsomeofthemostvulnerableruralcommunitiesinColombia–thoseinthepost-conflictzones–intheformofdirect& indirectsupportof theadvancementofentrepreneurialventuresthroughpublic,private,and civil society partnerships. This journey takes us on a review of themore recent, promisingadvances in collective, integrative thinking - - neuroscience & human developmental theory,blockchain&distributedledgertechnology(DLT),mobiletagging,artificialintelligence,integratedreporting, impact investing, blended finance, andblending capitals.With these relatively nascenttechnologiesatourdisposal,humanityhasanopportunitytoreframeanoldadage:Ittakesaplanettoraiseavillage.

5Newberg,A.andWaldman,M.R.(2016).HowEnlightenmentChangesYourBrain:TheNewScienceofTransformation.NewYork,USA,PenguinBooks.



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SettingtheContextInthespiritoftheAddisAbabaActionAgenda(AAAA)tomobilizepublicfinance;tosetappropriateframeworkstounlockprivate finance, tradeopportunitiesandtechnologicaldevelopment;andtoalign the international financial, monetary and trading system with economic, social andenvironmental priorities,we are putting forward the need for a local approach to BlendedFinance in Colombia: “Blending Capitals for Peace.” Rooted in the Financing for Developmentprocess, ecological economics, regenerative capitalism, integrated thinking & reporting, andblockchain technology, thisholistic approachentailsbothdomestic actions anda commitment tocreateaninternationalenablingenvironmentthatsupports,inthiscase,thenationaleffortsforpeaceinthepost-conflictzonesofColombiathroughentrepreneurialresilience,innovation,andexpansion.

At their2013summit, theG7nationsdeclared impact investinganationalpriority.Eachof thosecountrieshassubsequentlysetupaNationalAdvisoryBoardtopromotepolicynationwide.Banks,privatewealthmanagers,andinstitutionalinvestorsaredevelopingdepartmentsof“socialfinance,”“socialinvestment,”and“impactinvestment.”Over300documentedfundsinvestinbusinessesthatprovideasocialreturn.The2017Global ImpactInvestingNetwork(GIIN)AnnualImpactInvestorSurveyreportedimpactinvestmentsvaluedat$114billionUSDcurrentlyundermanagementby208respondentstoitssurvey.6Withanunprecedented$40trillionpoisedtomoveinter-generationallyfrom“babyboomers”to“Millennials”worldwide7,thepoolofimpactinvestmentdollarsislikelytogrowsubstantiallyinthecomingdecades.8

Inspiteofthismaturingfinancialflowintoimpactinvesting,accesstofinancingremainsoneofthemostsignificantconstraintsforthesurvival,growth,andproductivityofmicro-,small-,andmedium-sizedenterprises(MSMEs),especially inemergingmarkets.TheG20countries,indevelopingtheirGlobalPartnershipforFinancialInclusion,madesmall-andmedium-sizedenterprise(SME)financeoneoftheircoreworkstreams.Realizingthebenefitstoemployment,innovation,andtheprovisionof many key goods and services depends on including SMEs, not individuals only, in countries’financialinclusionstrategies.

This“creditgap”resultsfrombothdemand-andsupply-sideproblems.ManySMEsarereluctanttoseek,orcannotaccess,creditdueto:1)thereamsoffinancialdocumentation,littleabilitytomanagefunds,andcollateralrequirementsforobtainingaloan;2)highcostsandinterestrates;and3)multi-

6Mudaliar,A.,Schiff,H.,Bass,R.,andDithrich,H.(2017).2017AnnualImpactInvestorSurvey.GlobalImpactInvestingNetwork,p.1-62.7Havens,J.J.,andSchervish,P.(2003).Whythe$41TrillionWealthTransferisstillvalid:AReviewofChallengesandQuestions.TheJournalofGiftPlanning,7(1),pp.11-15,47-50.8“SustainableSignals:NewDatafromtheIndividualInvestor,”MorganStanleyInsituteforSustainableInvesting,August2017.(https://www.morganstanley.com/pub/content/dam/msdotcom/ideas/sustainable-signals/pdf/Sustainable_Signals_Whitepaper.pdf)



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weekdecisiontimeframes.Onthesupplyside,theproblems,asWood,etal.9pointout,arenumerous:1)legal&regulatoryconcerns,2)difficultiesidentifyingsuitabletargetsforfinancing,3)theneedfortechnicalassistance,4)hightransaction&duediligencecosts,5)political&currencyrisks,and6)theilliquidityoftheSMEequitymarket.

Then, there is the enormous disconnect between financial investment and investment in human,natural,cultural,wellness,andsocialcapitals.TheWorldBusinessCouncilonSustainableDevelopment(WBCSD)describesthedilemmathus:

“Despitegrowingawareness,thereislittleconsensusonhowcompaniescanassessthevalueoftheseintangibleassets.ThismeansthatmostCEOs,investorsandotherkeydecision-makersareoperatingwithoutessentialinformationabouttheseassetstomakesoundbusinessdecisions.Inmanycasesthisleadstoundervaluingcompanyassetsandthebenefitstheyreceiveandconsequently,under-investmentinthesocialcapitalonwhichtheydepend.Putsimply,youdon’tvaluewhatyoudon’tvalue.”10

Investorsandcompanyexecutivesalikeareknowntosay:“It’sallaboutthepeople.”However,thefocus of the sector supporting entrepreneurs, to-date, could be described as being “all about themoney.”11 As a specific example, in eight highly publicized reports related to impact investingreleasedoverthepastthreeyears12, therewereover3,041termsreferencingfinancialcapital forenterprises,butonly106referencestohumancapital.13

Insummation,thereisanabundanceofready-to-be-investedfinancialcapital;yet,thereisaslateofbarriers to investment. Additionally, there is a lack of apprehension of the full array of relevantcapitalstockscontributingto,andresultingfrom,entrepreneurialoperations;consequently,thereisa considerable dearth in the valuation of those capitals traditionally deemed “external” or“intangible.” The preponderance of investors (all wielding their financial capital), therefore, isseeking a return of financial capital, to the exclusion of a host of other, equallyworthy capitals.Arguably, this “CapitalAwarenessDivide”servesas theunderlyingobstacle to large-scaleprivateinvestmentinMSME’s,especiallyinfragile&conflict-affectedsituations(FCSs),andthestilllarger

9Wood,D.,Pratt,C.,andHoff,B.(2006).InvestingintheBackboneofEmergingMarkets.BostonCollegeCenterforCorporateCitizenship’sInstituteforResponsibleInvestment,WorkingPaper,p.1-12.10Cerri,K.,andVeglio,F.(2016).BuildingtheSocialCapitalProtocol:Insightsintoemployment,skillsandsafety.WorldBusinessCouncilforSustainableDevelopment,p.1-29.11Baird,R.,andDesjardins,S.(2015).Showmewhatyoucando:DiagnosingtheHumanCapitalChallengeforSocialEntrepreneursandExploringEmergingSolutions.ShellFoundation.p.1-49.12Theeightindustryreportsreviewedforthiswere:(1)“ImpactInvesting2.0”,(2)“PrimingthePump”,(3)BridgingthePioneerGap,(4)FromBlueprinttoScale,(5)BeyondthePioneerGap,(6)“EmergingMarkets,EmergingModels”,(7)JPMorgan/GIINannualinvestorsurveyand(8)theGIIN2013report.13Thetermsrelatedtofinancialcapitalwere:“money”,“cash”,“funds”,“assets”,“investing”,“funding”,“investment”,“debt”,“equity”,“venturecapital”,“finance”,“financing”,and“bank”.Thetermsrelatedtohumancapitalincluded:“humanresources”,“humancapital”,“HR”,“employee”,“employer”,“salary”,“team”,“companyculture,”“retention”,“recruitment”,“recruiter”,“interview”and“hiring”.



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categoryofSDG’srepresentingthebroadercollectiveofglobalcapitalstocks.Impactinvestingmayprovidesomeminor“relief”asaninvestmentvehicleforinvestorscommittedtomulti-capitalROI;nevertheless,aslongasthisdivideremains,MSMEinvestmentwillbemarkedlyimpaired.

Questions&FurtherInquiry…WhataretheimplicationsofmorefinancialresourcesseekinginvestmentopportunitiesinColombia,especiallyinrural,post-conflictcommunities?

The growth in funding for agriculture iswell-documented;with efforts underway on theAfricancontinenttodirectfundsintofragile&conflict-affectedsituations(FCSs)bytheInternationalFinanceCorporation(IFC)andotheractors,arewelikelytoseesimilarinitiativesinColombiaasthepeaceprocesscontinuestounfold?

Withincreasingemphasisondevelopingprotocolsforquantitativelymeasuringsocial,human,andother non-financial capitals by theWBCSD and similar organizations in the context of corporatereporting,canweanticipateashiftintheinvestmentoffinancialcapitaltointegratewiththeseothercapitals?

Ifthechanginglandscapeofmeasuringnon-financialcapitalsdoesnotaltertheapproachtofinancialinvestment,cantheprospectofpeaceinColombia,andthecorrespondingneedforbothnon-financialandfinancialinvestmentinordertoachievethisgoal,providesufficientimpetustodoso?



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EnablingEnvironmentChallenges

Figure1:EnablingEnvironmentChallenges

“InthesouthernextremitiesoftheCaucaValley,Colombia, it iscommonlythoughtthat themaleplantationworkers can increase theiroutput, andhence theirwage,throughenteringintoasecretcontractwiththedevil.However,thelocalpeasants,nomatterhowneedytheymaybe,nevermakesuchacontractwhenworkingtheirownplotsorthoseoftheirpeasantneighborsforwages…Analysisofthesebeliefsinthesocialandhistoricalcontextindicatesthatthelowerclasses’implicitunderstandingof thenewmodeofproduction is inherently critical andantagonistic and that theaxiomaticbasisofthisantagonismrestsontheirconsciousoppositionof‘usevalues’to‘exchangevalues’–theoppositionofthesatisfactionofnaturalwants,ontheoneside,tothelimitlesssearchforprofitsandcapitalaccumulationontheother.”14

BringinginvestmenttoruralcommunitiesandentrepreneursinColombiaisindeedasizeablehurdle.Socio-cultural & ideational challenges, such as those mentioned by Taussig (above) in 1977,representbutasliverofthebroadermontage.Numerousquestionsprevail,especiallyregardingthe“financial fitness”of thenationalgovernment,presencingarealityof thecoolingofgrowth in thecountryandrisingbudgetdeficits.Thepeaceaccordhasbeenviewedasconciliatory--unsettling14Taussig,M.(1977).TheGenesisofCapitalismamongstaSouthAmericanPeasantry:Devil’sLaborandtheBaptismofMoney.ComparativeStudiesinSocietyandHistory.19(2),130–155.



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[and, in some cases, infuriating] those who have been impacted by FARC (Fuerzas ArmadasRevolucionariasdeColombia)rebels.And, theruralcommunitiesmost-in-needofcapital infusionare also those where gangs and other violent factions have taken residence in the vacuum ofeconomicopportunity.

Colombian investment is additionally thwarted by concerns regarding money-laundering,corruption,organizedcrime,drugproduction,andterrorism.SourcesofODAinvestmentarehighlyreticenttoinvestmoniesthatcouldeasilybedivertedtosupporttheseillicitactivities.TheU.S.warondrugsprovesequallydisruptive,asnumerousruralcommunitiesseekingeconomicopportunityareincloseproximitytothefrontlinesofthisbattle.

ChallengestoFinancingPeaceinColombiaDiscussionsandactiononfinancingpeaceinColombiaandothercountriesnormallyrevolvearoundthetraditionaluseofODAin thecontextofa limiteddefinitionof“countryownership.”ColombiaranksasaMiddleIncomeCountry(MIC),however,whichwillalsosoonbecomeamemberoftheOrganizationforEconomicCo-operationandDevelopment(OECD).Inthecontextofattributionanduse of ODA to Least Developed Countries (LDCs), Colombia is ill-advised to attempt to build asuccessfully-fundedpeacestrategyaroundanalreadyglobally-decliningpoolofODAresources.Thismeans a transition to Domestic Resources Mobilization (DRM) and leveraging global privatefinancinginstead.Unsurprisingly,thereareahostofchallengeswhicharisefromthisshift.

Additionally, the global economic conditions and regional situation are not favorable to supportColombia’seconomicandsocialdevelopment.Dependingprincipallyonoilandmining,Colombia’sopportunitytoraisefundstosupporta15-yearpeaceprocessisnotpositive.Arecentfiscalreformhasproducedlittlenewincometohelppayforthepeaceprocess.Abilitytoimplementfurtherfiscalreform is less thanpromisingasColombia countsona smallMiddleClass, ahighly taxedprivatesector,andamajorityofcitizensgeneratinguntaxedincome.

Furtherchallengesincludeless-than-adequateconstructionofhomes,condominiums,schools,andotherinfrastructuretoconfronttheincreasingprecipitationincertainpartsofthecountry.Housingthathasariseninareaswhichwereonceconsidered“safe”arefallingpreytorockslidesandflashfloods,aswasevidencedinMocoa,Colombia,earlierin2017,when300+individualsperished.And,with3,208kilometersofcoastline, roughly2000miles,Colombia is ill-suited toaddresssea-levelrise, corresponding displaced communities (potentially exacerbating conflict), and otherimplications,includingdiseaseandpotentialdepletionofcleanwatersuppliesthataccompanyglobalclimatechange.

DuringarecentWorldBankForumonFinancingPeace,“theneedforbetterfinancingsolutionstotacklethechallengesof fragility,conflictandviolence,acrossadiversegroupof low-andmiddle-incomecountries,wasthefocusofthishigh-leveldiscussion.Howtoworkwiththeprivatesectorandscaleupinnovativeapproacheswerekeythemes.Inrecentyears,theworldhaswitnessedan



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‘expansionofthefootprintofcrisis,’accordingtoWorldBankCEO,KristalinaGeorgieva.Whatisneededistobringprivatefinanceandtradetoplaceswhereitwouldnormallynotgo:‘Ifyoubringdowntheriskforprivateinvestors,themoneywillflow,’shesaid.”15

SimilartothecurrentdiscussionsontheSDGs, themeansof implementationandfinancingof thepeace process are rarely discussedmutuallywhich leavesmajor gaps and creates conditions forfurtherfragmentationandduplicationofefforts.

HumanCapitalandSocialCapital:UniversalChallengesInthethirdquarterof2015,RossBaird(VillageCapital)andSimonDesjardins(ShellFoundation)inkedareportfortheShellFoundationentitled“Showmewhatyoucando.”IntheopeningtotheResearchFindingssectionofthereport,BairdandDesjardinswrote:

“Among the surveyed entrepreneurs, two issues stoodout above the rest asmostdifficult: access to finance, andaccess tohumancapital. Logistics rankedadistantthird.AsErnestJuraofCollabmed16,ahealthcarestart-upinNairobi,stated,‘Myfirstconcernisrevenue,andthentalent.’ Inlate2014,AccionVentureLabsurveyed35financialinclusionCEOsgloballyandfoundthat‘talent’wasidentifiedasatopissuefacingtheirorganizations,andthesinglemostimportantissueforthempersonally.Even more recently, in a mid-2015 survey done by Bain & Company for AccionVenture Lab, ‘human resources’ was identified most frequently as the biggestorganizationalneed(ina tiewith ‘sales/marketing’) inaseriesof interviewsofC-Suitemanagersacross21enterprises.”17

Whilefinancingiscitedasthegreatestchallengeforsocialentrepreneurs,astheShellFoundationbears out in its report, attracting talent is proving almost as equally challenging. (Talent, in ouropinion, is best considered in the context of not only human capital, but also social, cultural,intellectual,wellness,andawarenesscapitals;although,thiswasnotthefocusoftheShellFoundationreport.)Thereportfurtherdetailstheuseoftwoleadingsourcingmethodsfortalent–referralsandpersonalconnections,at56%and53%respectively–asthemostcommonlyusedmeansofdrawinghumancapitaltotheenterprise,outrankingthethirdsourcingmethod–socialnetworks,at23%-byamorethan2-to-1ratio.18

Notably, the two leading sourcingmethods are forms of “bonding” social capital, or “close ties,”whereas,thereisastrongbodyofresearchthatsuggeststhatonlyincombinationwith“bridging”

15WorldBankLive(2017).FinancingforPeace:InnovationstoTackleFragility.(http://live.worldbank.org/financing-for-peace).16Collabmedaimstoimprovepatientcarebycreatingsolutionsthateffectivelyandefficientlymanagehealthcareinformation.17Baird,R.,andDesjardins,S.(2015)Showmewhatyoucando:DiagnosingtheHumanCapitalChallengeforSocialEntrepreneursandExploringEmergingSolutions.ShellFoundation.p.16.18Ibid.p.19.



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social capital, i.e., “the strength of weak ties”19 are we likely to see the most robust, successfuloutcomes,especiallyinthecaseofnascententrepreneurship.20Yet,thevastmajorityofinitiativesthatsupportentrepreneursarefocusedonprovidingsomeformoffinancialcapitalor,asDavidsson& Honig discovered, governmental “programs specifically targeted to promote certainentrepreneurial activities.”21Theemphasison training, technical assistance, andeducation, albeitvaluableinthecontextofhumancapital,doesnotholdasmuchvaluetoearlystageventuresastheexpansion of social capital, “bonding” and “bridging,” but particularly “bridging.” Bonding socialcapital refers to networks consisting of individualswho are similar to one another in importantrespects;whilebridgingsocialcapitalreferstonetworkswhichincludeindividualswhoareunlikeoneanotherinmanyofthosesamerespects.22Bondingandbridgingsocialcapital,accordingtotheprevailingresearch,appeartohaveameasurableimpactonanentrepreneur’sabilitytoattractbothfinancialandhumancapital.

These thoughts stem directly from Flora& Flora (1993)who pointed out, a decade prior to theformulation of their Community Capitals Framework (2004), that there are three aspects to“Entrepreneurial Social Infrastructure”: symbolic diversity, resourcemobilization, and quality oflinkages23inthecontextofruralcommunities.“Symbolicdiversityisacollectiveorcommunity-levelorientation toward inclusiveness rather than exclusiveness,” they wrote; whereas, resourcemobilizationreliesonthe“willingness”ofresidentstofinanciallyinvestintheircollectivequalityoflife;andqualityofnetworksisrelianton:1)diversity,2)“laterallearning”(horizontalnetworking)and3)“vertical”networking“toprivateandpublicresourcesoutsidethecommunity.”24

Onyx & Bullen (2000) provide additional insights on bonding and bridging social capital. TheyundertookastudyinAustraliainwhichtheymeasuredsocialcapitalacrossfivecommunities.Fromtheresultsofthestudytheyconcluded,inpart:

“Thispatternseemstosuggestthatruralcommunitiesgenerateconsiderablebondingsocialcapital,characterizedbystrongmutualsupportwithinthelocallevelandhighlevelsofparticipationincommunitylife.However,suchsupportislikelytobelimitedtoinsidersandmaynotbeextendedtominoritygroupswithinthelocalareaorthoseoutside thearea.On theotherhand,urbanareasmaybe characterizedbygreatertoleranceandindividualinitiativewithinthesocialsetting,suggestingweakerties,or

19Granoveter,M.(1973).Thestrengthofweakties.AmericanJournalofSociology(78),p.1360-1380.20Davidsson,P.andHonig,B.(2003).Theroleofsocialandhumancapitalamongnascententrepreneurs.JournalofBusinessVenturing18(3),p.301-331.21Ibid.p.30122Geys,B.andMurdoch,Z.(2010).Measuringthe‘Bridging’versus‘Bonding’NatureofSocialNetworks:AProposalforintegratingExistingMeasures.Sociology,44(3),p.523-540.23Flora,C.B.,andFlora,J.L.(1993)EntrepreneurialSocialInfrastructure:ANecessaryIngredient.AnnalsoftheAmericanAcademyofPoliticalandSocialScience,(529)p.48-58.24Ibid.p.51-57.



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bridgingsocialcapital.”25

InthecontextofColombia,thedistinctionbetweenbondingandbridgingsocialcapitalisindeedrelevantwhenweconsidertheenablingenvironmentandthechallengestherein.

FamilismvsBridgingSocialCapital:TheLatinAmericanHurdleFrancisFukuyamalaysoutthedramaticstruggleofMSMEinvestmentinLatinAmericaasamajoroutgrowthof“familism,”orbondingsocialcapital,andthesubsequentlackofbridgingsocialcapital,ortrustinverticalnetworks,thataccompaniesit.Hewrote:

“Whileitisdifficulttoquantifycultureasanendinitself,thefunctionalityofcultureineconomictermsismuchmoremeasurable.Notallnormsandvalues,andhencenotallcultures,areequallyequippedtofostereconomicgrowth.Ortoputitineconomicsjargon,notallsocietieshaveequalstocksofsocialcapital…

Business life in most of Latin America remains, in other words, familistic: thestrongestandmostreliablebondsoftrustareamongfamilymembers,orelseamongrelativelysmallcirclesofclosepersonalfriends.Socialcapital,thus,residesprimarilyinkinshipnetworks, and inmanyrespects suchnetworksconstitutean importantsocial asset. Nevertheless, as Edward Banfield explainedmore than 40 years ago,“Familism also constitutes a liability, since it denotes a lack of trust amongstrangers.”26

Fukuyama further explains that the lack of trust associated with familism limits the economicexpansion of enterprises and foments lack of transparency, consequently deterring externalinvestment and partnership. Perhaps even more insidious, familism contributes to politicalcorruption,asfamilymembersareoftenpromotedintotheranksofgovernmentwithoutobjectiverecognitionthattheseindividualsmaybefarfromqualified.

Given the prevalence of familism in Latin America, the underlying assumption is that allentrepreneurswill have at least some level of bonding social capital, or “horizontal networking”inherently available to them: What nascent entrepreneur in even the most remote regions ofColombiawillhavefailedtoacquireclosefamilyrelationshipsandclosefriendsbythetimes/heisplanningtolaunchaventure?Granted,theanswertothisquestionmaybe“none,”buthavethesenascententrepreneursreceivedanyguidanceoutsideofaverytightly-wovencontingentoffamilyandfriends?Cantheyviablyaccess“laterallearning”throughthesehorizontalnetworks?Willtheyhaveaccesstoanintimate,yetsomewhatdiversified,supportingcastfortheirenterprise?

25Onyx,J.andBullen,P.(2000).MeasuringSocialCapitalinFiveCommunities.JournalofAppliedBehavioralScience36(1),p.23-42.26Fukuyama,F.(2002).SocialCapitalandDevelopment:TheComingAgenda.SAISReview,13(1),23–37.



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If theanswer toanyof thesequestions is “no,”wecanreadily infer thatwithout theconcomitantvertical networks of bridging social capital, these early stage ventures will be hard-pressed toprogress. Inpost-conflictzones inColombia, thescarcityofbridgingsocialcapital --attributed, inpart,toacorrespondingnegativeinfluenceofculturalcapital,i.e.,familism--combinedwiththelevelof isolationand lackof trust formanyof these impactedcommunities, isanticipated todistinctlyexceedthatofnon-conflict-zoneruralcommunities.

Thus,whatarearguablythetwomostimportantdeterminantsofentrepreneurialsuccess–bondingandbridging social capital - areovershadowedby:1) anabundanceof strategies to access funds(financial capital), with far fewer approaches to delivering greater technical knowledge (humancapital),2)familism–theconstraintsofabondingsocialcapital-centriccultureinLatinAmerica,and3) the dearth ofbridging social capital in these contexts. The general consensus, at least amongacademics,pointstothestrengthofbridgingandbondingsocialcapital,incombination.Ifthefocusofinvestmentstrategiesis,firstandforemost,limitedtofinancialcapital,ashastypicallybeenthecase,itisanticipatedthatMSME-directedinvestmentinpost-conflictzoneswillvastlyunderperformincomparisontoothermarkets.Whereas,bysettingprioritytodirectinginitialcapitalinfusionasbonding andbridging social capital; followed by human (awareness&wellness), and [collective]knowledgecapitals;andsubsequently, financial(blendedfinance),built(physical infrastructure&Fintech/Peacetechinfrastructure),andpoliticalandculturalcapitals,wemayprovidethebasisforamorerobustmodelforMSMEsuccess(Figure2).

Figure2:MSMEBlendingCapitalsRoadMap



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Questions&FurtherInquiry…WhatgeneralassumptionsabouttheEnablingEnvironmentwillproveproblematicindetermininghowtoengagebridging&bondingsocialcapitalaswellashumanandknowledgecapitalinsupportofentrepreneursinpost-conflictzones(PCZ’s)?

WhatcanwedotoexpandourunderstandingoftheenablingenvironmentchallengesinPCZsinColombia?

Ifhuman&socialcapitalstocksaresignificantlysuppressedinPCZs,resultinginbothatalentgapandatrustgap,canthesebeaddressedsimultaneously?

HowwillFamilismimpactthedevelopmentofbridgingsocialcapitalinruralcommunities?Whatstepsmaybetakentoaddressthischallengewithoutimpactingthebondingsocialcapitalandbeseenasculturalinsensitivityonthepartofvisitors?



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BlendingCapitals&BlendedFinanceWhatisBlendedFinance?InSeptember2015, theOrganization forEconomicCo-operation&Development (OECD)and theWorldEconomicForum(WEF)releasedapaperentitled“AHow-ToGuideforBlendedFinance.”IntheopeningsalvooftheExecutiveSummary(p.4)theauthorswrote:

“BlendedFinanceisanapproachtodevelopmentfinancethatemploysthe‘strategicuseof development finance and philanthropic funds to mobilize private capital flows toemergingandfrontiermarkets’andischaracterizedbythreecharacteristics:

- Leverage: Use of development finance and philanthropic funds to attract privatecapital.

- Impact:Investmentsthatdrivesocial,environmental,andeconomicprogress.- Returns: Returns for private investors in line with market expectation based on

perceivedrisk.”

AttherecentFinancingforDevelopmentForuminNewYork(May2017),BlendedFinancewasagainmentionedasoneofthemostpromisingmechanismstohelpfinancetheneedsandopportunitiesassociatedwith the SDGs. The OECD, the UN, and theWEF are some of the international bodiescontinuingtoworkoncompilinginformationonBlendedFinanceinitiativesglobally.

To date, the results of Blended Finance have been mixed, as the first prototypes have featureddifferent methodologies among stakeholders resulting in an inability to compare findings andinsights insupportof theentire field. In2016,however, theEuropeanUnion(EU) introducedtheEuropean InvestmentPlan(EIP)and is in theprocessof rollingoutwhathasbeenreferred toas“Blending2.0”27TheEIP’soverallaimistopromotesustainableprivateinvestmentswithaviewtotackling some of the root causes of migration in Africa and the EU Neighbourhood. “Its mainambition,”write SanBilal and Sebastian Große-Puppendahl, “is to provide a coherent integratedframework and approach to the EU’s external investment support; a ‘one-stop-shop’, whichcontributestotheglobalarchitectureforlong-termsustainabledevelopment.”28Whatisevidentinthe description of the EIP is that designers of the framework have taken into consideration themultiplestakeholders,theneedfornon-financialcapitalinvestments,andthesignificanceofsharingandlearningacrossprojects,approaches,andimplementation–atransitionalupshift,indeed.

27Bilal,S.andGroße-Puppendahl,S.(2016).Blending2.0:Towardsnew(EuropeanExternal)InvestmentPlans,EuropeanCentreforDevelopmentPolicyManagement(ECDPM)(p.1-31).(http://www.ecdpm.org/dp207)retrieved29June2017.

28Ibid.p.vii



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HowMightWeEnvisionBlendedFinanceinColombia?Recognizing that Blended Finance is meant, first and foremost, to mobilize large-scale privateinvestmentbyleveragingdevelopmentfinanceandphilanthropicfundstomitigaterisk,itappearsthat there is room to expand the field of supporting investments to enhance risk mitigation,particularlyattheincubationphaseofanenterprise.Inthecontextofapost-conflictColombia,forexample,weproposethatthepotentiallyexpandedlandscapeofBlendedFinance–the“BlendingFinanceEcosystem”-mightlooksimilartoFigure3.NotethatintheBlendingFinanceEcosystemthethree elements of Blended Finance expand to eight, inclusively: 1) Enterprise Philanthropy, 2)Institutional Investors, 3) Loans, 4) Crowdfunding, 5) Personal Financing, 6) Impact Investing, 7)Grants,and8)theBlockchain.

Initially, financial investments may come in the form of small-scale Personal Financing – directinvestment from family, friends, and/or strong social contacts (results ofbonding social capital).Crowdfunding(resultsofbridgingsocialcapital)–onlineplatform(s)and“offline”traveler’s-directedphilanthropy–couldextendthelifeofearlystageenterprises,subsequentlyattractingMicrofinanceand possibly Loans from angel investors. Such investmentswould likely precede a fully-enabledBlended Finance Strategy; however, they may prove invaluable to the overall success of aneconomicallyandsociallyfragile,post-conflictenvironment.

Figure3:BlendingFinanceEcosystemforColombia

Peace,andtheprospectofcontinuingpeace,inacountrythathasbeenravagedbycivilwar(anditsdirect&indirectimpactsforahalf-century),arecompellinginvestmentappealstothosewhoare“notinitforthemoney.”Tappingresourcesthatarenottypicallyconsideredinthetriuneresourcepoolofdevelopmentfinance,philanthropicfunds,andprivateinvestmentmaywellresultinsubstantivelyde-risking theMSME-enabling environment in Colombia. Further, itmay open new, “traditional”



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BlendedFinanceinvestmentoptionsforrenewableenergyandinfrastructureprojects,asexamples,incommunitiesthatfeaturebuddingMSMEcollectivesofinvestees.

Figure4:TheIntegrated<IR>Framework,IIRC

WhatisBlendingCapitals?In partnership with Impact2030, TheBC.lab in Colombia has recently coined the term “BlendingCapitals”asakeystrategyforfinancingthepeaceconsolidationprocessinColombiaandSDG#16.(“SomeestimatesplacetheadditionalgovernmentspendingneededtoimplementtheaccordashighasUS$44bnoverthenextdecade.”29)BlendingCapitalsfocusesonintegratingnon-financialcapitalsin support of attracting sustainable blended finance. Over the past three years, we have beeninvestigating the social & human capital shortfalls, and other non-financial challenges inimplementing a Blending Capitals strategy to help finance the peace consolidation process inColombia.Basedoncurrentresearchandinformationavailableonthetopic,aswellasinterviewswithstakeholdersandotherinterestedparties,ourworkinColombiastronglysuggeststhatBlending

29“Apathtopeacethroughinclusion,”TheEconomistIntelligenceUnitLimited,commissionedbytheFordFoundation,May2017,p.2



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Capitals insupportofBlendedFinance isavalidapproach tosupplementingbothMSMEsandthepeaceprocess,simultaneously,inthecountry.

Theemphasisontheinclusionofnon-financialcapitalsspeaks,inpart,totheglobaleffortofchangingthenatureofcorporatereporting,markedlyimpactedintheaftermathofthe2008GlobalEconomicMeltdown.TheGlobalReportingInitiative,theInternationalIntegratedReportingCouncil(IIRC)andReporting3.0haveallplayedaroleinraisingourawarenessofnon-financialcapitalsandwhattheyrepresentintermsofsustainability,regeneration,andhuman&ecosystemthrivingacrosstheplanet.

InDecember 2013, the IIRC published the Integrated Reporting <IR> Framework, identifying fiveadditionalcapitalstothatoffinancial-1)social&relationship,2)natural,3)human,4)intellectual,and 5) manufactured – as integral to the value creation (preservation, and/or diminution) ofcompanies(Figure4).Asofthiswriting,morethan1500companiesworldwidehaveadoptedthe<IR>Framework.

Figure5:EightFormsofCapital-PermacultureFinance,AppleseedPermaculture

WhentheReporting3.0Platformwaslaunchedin2012byBSDConsulting(in2016itbecameanot-for-profitentity–Reporting3.0)thefocuswasoncreatingaglobalapproachtocorporatereportingthatwould “spur a regenerative, green and inclusive global economy.” In one of itsmost recentpublications–“Blueprint1:Reporting,”leadauthorRalphThurmwrites:



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“Theexistingeconomicsystemdesignhassofarnotenabledtheemergenceoftruesustainability,butinsteadactivelyactsagainstagreen,inclusive&openeconomybyneglectingtheneedstoa)servethewell-beingofeveryglobalcitizen;b)workwithinthecyclesofnature;andc)alignfinancialsystemstoservethegoalsofaregenerativeand distributive real economy… future value creation requires significanttransformation at the individual business model (micro), industry (meso) andeconomicsystem(macro)levels.”30

In broader terms, since enteringMillennium 3.0AD,we havewitnessed the emergence ofmulti-capitalframeworkssuchas:theCommunityCapitalsFramework,theFinancialPermaculture’sEightFormsofCapital (Figure5), theThriveabilityMulti-CapitalOperatingSystem, and theMetaCapitalFramework (Figure 6), each featuring a slightly-altered selection of capitals to that of the <IR>Framework,withcorrespondingdefinitionspertainingtothedifferentcapitals.

Figure6:MetaCapitalsFramework,MetaIntegral®Associates

TheThriveability framework, forexample,mirrorspreciselythe<IR>Framework,yet itseparatessocialcapitalfromrelationshipcapital–identifyingthelatterofthesecapitalsasthemostimportantcapitalofall.TheCommunityCapitalsFramework(CCF),ontheotherhand,recognizesthetwoformsofsocialcapital–bondingandbridging–whichparallelthe<IR>Framework’ssocial&relationship30Thurm,R.(2017).Blueprint1:Reporting–Aprinciples-basedapproachtoreportingservingagreen,inclusive&openeconomy.Reporting3.0PlatformBlueprintSeries2016/2017,p.10.



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capital, while adding cultural and political capitals.31 The MetaCapitals Framework (Figure 6)incorporates the<IR>Framework capitals, adding:1)psychological, 2)health, 3) cultural, and4)spiritualcapitals.

AdditionalFrameworkstoConsiderWhatotherframeworkshaveinfluencedourthinkingonhowtoapproachblendingcapitalsforpeacein Colombia? Our proposed framework is based in part on Anthony Bebbington’s framework32(Figure7),whicharguesthatouranalysesofrurallivelihoodsneedtounderstandthemintermsof:

(a) People’saccessto,atminimum, fivetypesof capital asset, inaddition tofinancialcapital;

(b) Thewaysinwhichtheycombineandtransform those assets in thebuildingof livelihoodsthatas faraspossible meet their material andtheirexperientialneeds;

(c) Thewaysinwhichpeopleareabletoexpand their asset bases throughengagingwith other actors throughrelationshipsgovernedbythelogicsofthestate,marketandcivilsociety;and

(d) Theways inwhich they are able todeploy and enhance theircapabilitiesbothtomakelivingmoremeaningful and to change thedominant rules and relationshipsgoverning the ways, in whichresourcesarecontrolled,distributedand transformed in society.Particular attention is paid to theimportance of social capital as anassetthroughwhichpeopleareableto widen their access to resourcesandotheractors.33

31Emery,M.,Fey,S.,andFlora,C.(2006).UsingCommunityCapitalstoDevelopAssetsforPositiveCommunityChange.CDPractice(13),p.1-19.32Bebbington,A.(1999).Capitalsandcapabilities:Aframeworkforanalysingpeasantviability,rurallivelihoodsandpovertyintheAndes.Publications,InternationalInstituteforEnvironmentandDevelopment,(p.1-54).33Ibid.p.1

Figure7:Bebbington'sMulti-CapitalsFramework



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TheworkoftheOmidyarNetworkhasdeliveredanadditionalframeworkthathaslikewiseshapedourthinking.ParallelingtheBlendedFinanceframework,theOmidyarNetworkhasidentifiedthreecategories of impact investing – “Grant,” “Subcommercial,” and “Commercial” - to simulatephilanthropic investment, ODA, and private investment respectively. In “Across the ReturnsContinuum,”34 Bannick, et al., presented the Omidyar Network’s Returns Continuum framework(Figure8)thatguidestheorganization’sapproachtoimpactinvestmentreturns.Theauthorsaskavery simple question: “Under what conditions should an investor accept a risk-adjusted below-marketreturninexchangeforanopportunitytoachievesocialimpact?”Theframeworkthatguidestheiranswertothisquestionistheresultofadecade’sworthofsocialimpactinvestingexperience.

Figure8:OmidyarReturnsContinuumFramework

TheBlendingCapitalsContinuumFrameworkIntegratingBebbington’swork,the<IR>FrameworkandtheOmidyarReturnsContinuumFramework,alongwithothers,TheBC.labhascraftedaBlendingCapitalsContinuumFramework (Figure9). Inaddition to the approach of impact investment in classes A-C, as portrayed by the Omidyarframework, this new framework takes into consideration Class D and Class E level investments.Movingfromthefarrightsideofthecontinuum,ClassEfeaturestwocategoriesofcapitalinvestment:E1&E2.ClassD,likewisefeaturestwocategories:D1&D2.Let’sreviewthisframeworkmoreclosely.

34Bannick,M.,Goldman,P.,Kubzansky,M.andSaltuk,Y.(2016).AcrosstheReturnsContinuum,StanfordSocialInnovationReview,(https://ssir.org/articles/entry/across_the_returns_continuum),accessed29June2017.



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ThethreeinvestmentstreamsofBlendedFinance–philanthropic,ODA,andprivate–aretypicallyengagedininvestinginClassesA-C.ClassesD&Eareusuallyuntouched,astheyfalloutsideoftheparameters of large-scale investment, quite often deemed too risky. In identifying Class D & Eofferings,wearerecognizingthatthereisaneed,especiallyintheruralcommunitiesofColombia,toassistentrepreneursintheearlieststagesofventureincubation–werefertothisastheBlendingCapitals [BC]Pre-Pipeline Incubator (see later section for a full description). The BCPre-PipelineIncubator is designed to integrate non-financial capitals in the development of a venture and itsideologicalframework,amulti-capitalframeworknoless,movingforward.Fosteringthegrowth&developmentofventureswithamulti-capitalframeworkfrominceptionstrengthenstheobjectivesofReporting3.0,asanexample,andalsoalignsventureswiththeSDGs.Additionally,theIncubatorservesasacooperativestructureinwhichacollectiveofventurescanbenefitfromthebonding&bridgingsocialcapitalthataccruesfromhousingPre-Pipelineprojectswithinthesamecontext.

The inclusion of additional actors and capitalsmay, in turn, support the development of amorerobust Class C, and subsequent Class B and Class A investment opportunities. Although there isoverlapof“financialcapital”withtheOmidyarFramework,ourdiscussiononClassesA-Cthatfollowswill focuson the integrationof the remaining capitals as complementary to financial investment.Readers,therefore,areencouragedtoreview“AcrosstheReturnsContinuum”tofullyapprehendthefinancialandsocialreturnsimplicationsoftheOmidyarFramework.

Figure9:TheBlendingCapitalsContinuumFramework

BeginningwithClassEofferings,E2–the“Risk&CapitalAssessment”–representsasocial,human,andknowledgecapitalinvestment;anydirectfinancialinfusiontotheentrepreneuratthisstagewill



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comefromPersonalFinancing(friends,family,andclosesocialties).E2isdesignatedasaphasetoassessthemulti-capitalassetsavailabletoaselectentrepreneuraswellasthecapitalrisksassociatedwithaproposedventure.Whatnatural, social& relationship,human, cultural, andmanufacturedcapitalsareavailabletotheentrepreneur?Arethesecapitalstockssufficienttosupporttheproposedbusinessventure?Ifnot,whatadditionstocertaincapitalscouldeasethecapitaldeficiency?Therearemanyquestionstobeansweredaspartofthisassessment.

If theRisk & Capital Assessment proves to be at a satisfactory level of viability for the proposedventure, the entrepreneur will move to Class E1, the “Human Capital Match,” at which time anadditionofhuman&knowledgecapitalwillbeintroducedtofurtherassisttheincubationprocess.Thiscapital“investment”mayflowfromdomesticand/orinternationalsources.Itmaycomeintheformofassistinganentrepreneurindevelopingabusinessplan,marketing&communicationsplan,and/or awebsite, etc. Assistancemay be remote, person-to-person, or a combination. Again, theemphasisisonnon-financialcapitalinvestment.

AdvancementtoClassD2,“BlendingCapitalStage,”introducesafull-fledgedblendingofcapitalstoinsurethecontinuedsuccessoftheventure.Thecapitalrisks&deficienciesdiscoveredduringtheRisk&CapitalAssessment(E2)becomethefocalpointoftheprojectincubation.Inthisphasetheentrepreneur and her/his team ofmulti-capital “investors” (these partners from E1will remaincriticalrelationshipsatthispoint)willbegintoaddresstheserisksanddevelopclearstrategiesforadvancing capital stocks, particularly among the human, social & relationship, natural, andmanufactured capitals. Concurrently, this data will aggregate with corresponding data fromengagements with other entrepreneurs to inform the overarching enabling environment – theIncubator,inessence,becomesalearninglaboratoryfortheentirecollective.

ClassD1,“BusinessImpactIntegration,”speakstotheintroductionofthe<IR>Frameworkandtheconsiderations of the impacts of a given enterprise on community capital stocks. Building valuecreationintotheearlystage“DNA”oftheenterpriseensuresthatoncetheventurereachesClassCstatus(andpossiblybeyond)thatacomprehensiveandintegratedapproachtodoingbusinesshasbeenassimilatedthroughouttheentireenterprise.Sustainability,itisenvisioned,willbeseenacrossallcapitals,withpeaceholdingaprominentplaceinthebusinessmandala.

Although financial capitalwilldoubtlessbe increasinglyemphasized foraventureas it continuescoursingthroughitspost-Incubatorarc(aspossibleClassC,B,or,ultimately,A-levelinvestments),theBlendingCapitalsapproachwillcontinuetoassignequalconsiderationtotheremainingcapitalstockswithnochangeincommitmentlevel.Asthishastypicallynotbeenthecase,additionaleffortwillbefocusedonsupportingentrepreneurstointegratethecapitalsintotheiroperations’modelsinasimilarfashiontothatsuggestedbyReporting3.0andtheIIRC.Thisisbynomeansmeanttodiminishthecontributionoffinancialcapital;itis,however,reaffirmingtheongoingvalueofseedingventuresinpost-conflictzonesthatarenotonlyrootedinthemutli-capitalframework,butarealsooperatingwiththegoalofaugmentingcapitalstocksforfuturegenerationsofentrepreneurs.



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Questions&FurtherInquiry…Whatarethepotentialdrawbacksofblendingnon-financialcapitalspriortoengagingfinancialcapitalinvestment?

Howwellwilltheflowofnon-financialcapitalsintoruralcommunitiesbereceived?Arecommunitieslikelyto“trust”thismorethanmoney?

Howwilltheculturalcapitalofvisitorsintersectwiththeculturalcapitalofruralcommunities?Will“use-in-exchange”(likelymoretypicalintheculturesofvisitors)createfrictionwith“use-in-value”(themoreprevalentcultureofruralresidents)?

Howwillfinancialcapital-orientedinvestorsrespondtotheBlendingCapitalsContinuum?Willthisprovetocreate“cultural”tensionfortraditionalfinanciers?

Howwillblendedfinanceinvestorsrespondtotheinvestmentofnon-financialcapitals?Willthisprovecontentious,amenable,acombinationofboth?

Byblendingcapitalscanweencourageanewparadigminbusiness-relatedbehaviorsattheearlieststagesofventures?Willentrepreneurshavethesupporttocontinuewithamulti-capitalapproach,orwill“competition”forcethemtoabandonit?Howmightthisbeaddressed?Ifweestablishacooperative“blendingcapitals”structureforallentrepreneursinagivenregionwillthisassistinsupportingentrepreneurstocontinueobservingamulti-capitalapproach?



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TheSDGs&BlendingCapitals:ABeginningTheGlobalReportingInitiative(GRI),theInstituteofCharteredAccountantsofScotland(ICAS),andtheIIRCareallintheprocessofintegratingtheSDGsintotheircorporatereportingguidelines.TheGRI joined the United Nations Global Compact (UNGC) in 2017 to begin a multi-stakeholderengagement to formalize an SDG business reporting handbook. Running concurrently, ICASannounced a similar collaboration with the IIRC - both working to develop a hybrid SDG/<IR>Framework(anintegratedreportingofthevaluationcreationprocessasitpertainstocapitalsandSDGs).These respective initiativesaredesigned to improvecorporateunderstandingof theSDGsand,ultimately,theintegrationoftheSDGsincorporateoperationsandstrategicdevelopment.

Figure10:TheSDGs&BlendingCapitals

Asearlyas2018,corporationswill[conceivably]bepoisedtobeginreportingontheirSDGimpacts;withinacoupleofyears,corporationsmayhavethetoolstoassesstheiroperationsandthatoftheirvalue chains in the context of the capitals and the SDGs. As this knowledge begins to filter intomainstreamawareness,wewilllikelyseetheemergenceofearlyadoptersintheMSMEdomain,aswellastheinvestorrealm,andthroughouttheenablingenvironment.Throughthisprocessofgreaterand greater uptake, the SDGs and the capitals will eventually become completely integrated; ofcourse,itwillrequireglobalconsensusandsignificantcriticalanalysispriortofruition.



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Figure 10 illustrates a first visioning of how entrepreneurs and investors might look at theintegration of capital stocks and the SDGs. Compared to the<IR> Framework,which features sixcapitals,theSDGsseemtobreakintoaseven-capitalmodel,withtheadditionof“WellnessCapital”representingthehealthandwell-beingofthehumanpopulation.Thepurposeofthisschematicistoencourage entrepreneurs and investors to craft a framework representative of the enablingenvironmentandtheinitialflowoftheSDGsintocapitalstocks.

Itisproposed,then,thattheSDGs(asthesourceofthecapitals)arethefoundationalelementsoftheenablingenvironmentatthelocalandregionallevel.InitiatingaBlendedFinanceinvestmentinSDG#1(NoPoverty),SDG#7(Affordable&CleanEnergy),and/orSDG#10(ReduceInequalities), forexample,willessentiallyresultinanetflowoffinancialcapital,accruingtohouseholdsandMSMEspossibly through social protection systems for new mothers, cheaper energy, and/or cheaperremittances, respectively.The “accountabilityof reciprocity” then fallson theMSMEs togeneratefinancialcapitalthroughtheirrespectiveoperations,fulfillingtheROIforBlendedFinanceinvestorsandcreatinganetgainintheSDGsthatflowbackintothecollectiveFinancialCapitalstockfortheentirebodyofMSMEsinacommunityorregion(Figure11).

Figure11:BlendedFinance,SDGs,Capitals,andROI



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Technology:DLT,AI,andAuthenticationOn 27 June 2017, theWorld Bank Group’s Information and Technology Solutions (ITS) divisionlaunchedits“BlockchainLab”toexplorehowDistributedLedgerTechnology(DLT)maysupporttheentity’s development goals. As JP Buntinx points out35, however, DLT and blockchain are, albeitsynonymouslypresented,notequal.“Onpaper,theentiredescriptionofadistributedledgersoundsexactlylikewhatmostpeoplethinkofwhentheyenvisionablockchain.However,theblockchainisjustoneparticulartypeofdistributedledger.”

Later that same day, Christopher Georgen released a whitepaper entitled “Topl, the GlobalInvestmentProtocol.”36“Ourgoal,”Georgenwrote,“istobuildthefinancialinfrastructurenecessarytobringlow-costcapitaltodevelopingcountries.”Georgenoutlinesthefourmajorchallenges,asheperceivesthem,inthe“E&F”(Emerging&Frontier)markets–1)ill-suitedinvestmentstructures;2)alackofreliableinformation;3)legaluncertaintyandlimitationsregardingcontractenforcement;4) foreigncurrencyexchange.TheToplTeamproposestoaddressthesechallengesbyutilizing:ablockchain network, smart contract templating, dynamic privacy controls, a risk assessment tool(“Divine”),andtokenizedcommodityassets.

WeareinanageofexplorationwhenitcomestoDLTandblockchain.The“DLT-rush”hasbecometheequivalentofnumerouspastiterationsoftheearlyadoptionprocess,mostrecentlyseeninthecloudcomputingspace.DLT,however,promisesthepotentialtobringcontractsandcurrenciestocommunitieswhich have long suffered from the challenges of identity and authentication issues,changing the status of the “Un-banked” population,without the need for intermediaries and theresultingincreasedpricesassociatedwiththefour-part,funds-onlytransferprocess–submission,validation,conditionality,andsettlement.Forpost-conflictcommunitiesinColombia,DLTandtheblockchainhavethepotentialtodramaticallychangethelandscapeofthe“trustgap,”andtofacilitate“bridges”forfinancialcapitaltoflowintothesecommunitiesandgoodsandservicestoflowout.

“As a technical innovation, it is a new version of database transaction technology especially fordecentralizedenvironmentsoflimitedorimperfecttrust.Asaneconomicinnovationitoffersnoveltoolstoanyproblemdomainwherethereexistsaneedforareliablerecordoftransactions–aledger- inadecentralizedenvironmentwherenotallparties,whetherhumansormachinescanbe fullytrusted.”37When,throughDLT,trustcanbedistributedacrossabroaderbaseofindividuals,whenitcan be personalized for the participants, andwhen it can be socialized across a broader base ofparticipants,itgeneratesmoretrust.Whenconsideringthemovementofsocialandhumancapital,

35Buntinx,JP(2017).DistributedLedgerTechnologyVsBlockchainTechnology.TheMerkle(https://themerkle.com/distributed-ledger-technology-vs-blockchain-technology/)accessed4July2017.36Georgen,C.(2017).Topl,theGlobalInvestmentProtocol.TOPL.co,WhitePaper,p.1-11.37Lindman,J.,Rossi,M.,andTuunainen,V.K.(2017)OpportunitiesandrisksofBlockchainTechnologiesinpayments–aresearchagenda.Proceedingsofthe50thHawaiiInternationalConferenceonSystemSciences,p.1534.



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aswell asODA, philanthropic, andprivate investment capital, into someof themost remote andsociallyisolatedcommunitiesofColombia,forgingtrustisessential.

Blockchain:GivingBridgingSocialCapitalFintechRelevanceOur understanding of the blockchain and its usefulness in the context of the Peace Process inColombia is still very much in its infancy.We have seen the upsides and the downsides of thisemergingFintechapproachtodecentralizingmarkets,money,andpower.Marketforceshavetendedtobespeculativewithcryptocurrencies–Bitcoinapproachingthe$5,000USDmarkinlateAugust2017,plungingto$3,000USDtwoweekslater–astradersandspeculatorsattempttoextractprofitsamidstthegrowthofcryptocurrencyexchangesandinitialcoinofferings(ICOs).

Oneofthemoreprovocativeelementsoftheblockchain,however,isthepresenceofwhatwemightdescribeas“socialcryptopreneurs”enteringthespace.Havinganevolutionarypurposeassociatedwithacryptocurrency–financialaccess&financialliteracy,asausecasewithStellarLumens–isnota singular phenomenon. Some blockchain developers are bringing their social-conscientiousness,mindfulness and creativity into the world of tough problems, attempting to spread wealth andbenefaction across broader and broader swaths of humanity, while addressing the unequaldistributionofcapitalstocks,particularlyfinancialcapital.

What this appears to be doing (outside of the speculator-driven,wealth-accumulation aspect) ischannelingsignificant intellectual, social,and financialcapitals intoentrepreneurial “solutions” tosomeof theworld’smostwicked problems. It is elongating thevalue chain, forexample, throughengagementofcryptocurrencyholdersinthesupportofsource-verificationandmovementofgoods& services from feeder markets to consumer doorsteps through “proof-of-provenance.” When acoffeegrowerandaconsumerarerealizingnotmerelytheirconnectivityasproducerandpurchaser,butalsotheirsharedvaluepropositionasstakeholdersinthesamecapitalstocksacrosshundreds,ifnotthousands,ofkilometers,thisgeneratesanincreasingamountofbridgingsocialcapital.Itopensvastvistasofpotentiality,suchas:1)greatertransparency&trust,2)directvisitation&exchange,3)deeperunderstanding&appreciation,and4)stewardshipofcapitalstocks.

Again,thereismuchtobelearnedfromthecurrentcrypto-tokensonthemarkettoday.Theyappeartobringenormousfinancialcapitalstocksinshortorderupontheirlaunch;yet,wedonotknowhowsuccessful they will be in fulfilling the socio-environmental, purpose-driven missions of someofferings.Timewillbringricherinsights.Atpresent,thereismuchaboutwhichtobeoptimistic–anew class of “crypto-millionaires,” a burgeoning group of “social cryptopreneurs,” and a host ofconsumerswith,insomecases,first-timeaccesstocapitalstocksnever-before-realized.Doubtless,a“PeaceCrypto-coin”isonthehorizon–acoinwhichwillbeembeddedwithbonding&bridgingsocialcapitalimplications.Colombiamaybewell-positionedtobe,ifnottheinitiatorthereof,certainlyaparticipantandbeneficiary.



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ArtificialIntelligenceandPeaceTechOn6April2017,ProfessorTimoHonkela,DepartmentofModernLanguages,UniversityofHelsinkispoke atTheThirdConference onNationalDiaglogues on the role ofArtificial intelligence (AI) inPeace.Althoughsufferingfromabraintumor,heiscommittedtointerfacingAIandthepeaceprocess,partofwhatisbeingdescribedasthenew“PeaceTech”industry.

“Strictlyorscientificallyspeaking,notwopeopleunderstandanywordinexactlythesameway.Soit’snosurprisethatweenduphavingcommunicationproblems,whenwehavenocommonwordsatall.”Honkelaaddedoptimistically,laterinhistalk,“Inthefuture,wecanhaveadialogueofamillionpeople:technologycanhelpusmeeteachother,collectourideasandourmeanings.Sowhenwearetalkingaboutaparticulartopic,wecanactuallyinessencemeetallofthenation.”

AIhasbeenpartofacollectiveglobaladvancementoverthepastseveraldecades.IBM’sWatson,oneof themore storied expressionsof thisunfoldingnarrative, is an iterationof a growing interfacebetween human- & computer-generated intelligence. The voice-recognition capability of smartphonesandvirtualreality(VR)areotherexamplesofAI.And,Honkela’snotionofa“PeaceMachine”adds yet another compelling chapter to this story. In his presentation, he outlined three maincomponents of the concept: 1) Meanings – meaning translation and cultural interpretation, 2)Emotions–promotingpeacefulandconstructiveemotionalsituations,and3)Society–solutionstocomplexeconomicalandsocietalquestions.38

PeaceTech, according to the British Council, separates into three primary categories ofimplementation across the globe: 1) data (aggregation, gathering, analysis, visualization), 2)communication(morevoices,alternativenarratives,sharing information),and3)networkingandmobilisation (alternative spaces, engagement towards collective action).39 PeaceTech is alreadyplayingaroleinColombia.BuildUp,“asocialenterprisethatamplifiescitizenparticipationinpeacethroughtechnology,arts,andresearch,”hasbeenactivelyengaged in theParticipatoryBudgeting(PB)processinMedellín,throughoneofits“BuildPeaceFellows,”DianaDajer,aPhDCandidateinSocio-LegalStudiesattheUniversityofOxford.Reportingontheprocess,Dajerwrote:

“Basedontheworkshopsandinterviews’results,andkeepinginmindthechallengesahead, we have now identified two main initial objectives to support peace inColombia through technology in a participatory budgeting process: (i) to fosterplanningand interactionthroughtransparent,andcollaborativemeans;and(ii) to

38Honkela,Timo(2017).PeaceMachine.TheThirdConferenceonNationalDialogues,5-6April2017,TheHouseoftheEstates,Helsinki,Finland.(https://www.slideshare.net/timohonkela/timo-honkela-peace-machine-peace-from-a-difference-perspective-dialogue-of-a-million-people-6-april-2017)Accessed4July2017.39BritishCouncil(2016).InnovativePeacebuildingInSyria:AScopingStudyoftheStrategicUseofTechnologytoBuildPeaceintheSyrianContext.p.2.



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createawarenessand interestaroundparticipatorybudgetingandparticipation intheprocess.”40

In lateNovember2016,PeaceHackCampheldanevent inSalento,Quindio [Colombia], inwhichattendees collaborated to “design and assemble a working Arduino-controlled 3-axis drawingmachineandaprototypeforanextruder,entirelyoutofe-waste.”41Mostrecently,ontheOpenIDEOwebsite42, the PeaceTech Lab has launched an effort to, “develop engineering solutions to helpcommunities emerging fromyears of conflict by addressing their needs around access to power,sanitation,water,food,andsafetyandsecurityissues”inColombia.Thefocusonutilizingtechnologytobridgetrustgapsandintroduceinnovationstobrokeringpeaceamongstandbetweencommunitiesisoccurringwithever-increasingzealacrosstheglobe.Colombiais one of the most compelling locations for investment in PeaceTech prototypes and thecorroborating investments that create an enabling environment for these initial innovativeapproaches. PeaceTech has a natural compatibilitywithBlending Capitals for Peace in Colombia,easilyassistingintheearlieststagesofincubationandthroughouttheBlendingCapitalsContinuum.

AuthenticationWithoutauthentication,substantiveODA,philanthropic,andprivateinvestmentflowsintoColombiawilldefinitelybe impeded.Combating illicit financial flows(IFFs) throughanti-money laundering(AML), counter-terrorist financing (CTF), and anti-bribery efforts worldwide have increaseddramaticallyintheaftermathof9/11.Mostrecently,thishasbeguntomeasurablyimpactODAandphilanthropic flows,asgovernments crackdownon themovementof illicit funds,mostespeciallyfundsearmarkedtosupportterrorism.SointenseistheeffortthatglobalNGOshavereportedhavingdifficulties inmovingmoney.ChathamHousedescribedthedisruptionofNGO-funding inanApril2017Reportentitled, “HumanitarianActionandNon-stateArmedGroups:TheImpactofBankingRestrictionsonUKNGOs.”Intheconclusiontheauthorswrote:

“Over the past few years, NGOs have faced ever increasing restrictions on theirfinancialactivities,atbestfacinganincreasingcomplianceburdernandtransactiondelays resulting in programme disruptions; at worst payment failures and bankaccount closures.Theconflictbetween the regulatoryand legislativepressuresonbanksasrelatestofinancialcrimecompliance,particularlycounterterrorismfinance,

40Dajer,D.(2016).PeacetechfromthegroundupinColombia:Chartingunchartedwaters.BuildUp,(https://medium.com/@howtobuildup/peacetech-from-the-ground-up-in-colombia-charting-uncharted-waters-b85265114681)accessed4July2017.41http://makezine.com/2016/12/14/3d-printing-peace-aruba/42https://challenges.openideo.com/challenge/bridgebuilder/ideas/engineering-peace-in-post-conflict-communities



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andthedesireofdonorsandNGOstodeliveraidtopeopleinareaswheredesignatedNSAGs[Non-stateArmedGroups]arebasedoroperateseemsintractable.”43

Althoughbanksandotherinstitutionsmayrelyonsuspiciousactivityreports(SARs),withahostofemployeesworkingto identifypossible illicit transactions,suchsafeguardsarenotpresent in thecontext of rural communities. Biometricpalmauthentication, fingerprint sensors, and retinal eyescanningmayproveusefulinsomecontexts;however,inruralColombiathesetechnologiesare,atleastpresently,nonexistent.AuthenticIDisanexampleofacompanythathasattemptedtoaddresstheissuesassociatedwithauthenticationofidentification,butithasbeenrelegatedtomostlyurbanenvironmentsin“developed”societies.Civic,Tezos,Bitquence,andUport,arefourblockchain-basedcompanies offering authentication services; however, no “roadmaps” for these ventures indicatemovementintorural,“developing”communities.

Challengesaboundinthisspaceasmanyindividuals,especiallythoselivinginruralcommunities,donothavepaper-trailsof identity[anestimated1.1billionpeople(roughlyone-sixthoftheworld’spopulation)donothaveanofficially-recognizedidentity].Compoundingthesituationisthelackoftransparencyaround identificationof thegreaternetworkof individualsbeyond their immediatefamilies.Immediatefamiliesmayhavethepotentialforvouchingforoneanother,creatinga“trusted”family-centricnetwork,butthisisnotnecessarilytransferrableacrosstheirentiresocialnetwork,andcertainlywillnotmeettherigorousdemandsoftransparencyrequiredforfinancialinvestment.

OneofthemostpromisingblockchaintechnologyadvancementsinthefieldofAuthenticationistheID2020Alliance. This initiative, funded by theRockefeller Foundation andAccenture, has awell-conceived RoadMap, significant financial investment, and a substantive body of collaborators.Accenture, with hundreds of thousands of employees worldwide, stands to eliminate expensivebackgroundchecksandotherfinancialoutlaysassociatedwithidentityauthentication,asdoothercompaniesandNGOswhomoveconsultantsandemployeesacrosstheplanet.WhatalsomakesthisprojectsopromisingisitsfocusonSDG16.9,withatargetofglobalidentityfor2030.

Questions&FurtherInquiry…Willauthenticationprovetobeaninsurmountablehurdleinruralcommunities?Asallauthenticationapproacheswiththeblockchainwillrequirelocalverification,howwilltheinitial“trust”beestablishedwithlocalactor(s)?

Willpartnershipswithotherauthenticationandblockchaininitiativesassistindevelopingthebaselineoftrustnecessarytoeaseenablingenvironmentconcernsforfinancialinvestors?

43Keatinge,T.andKeen,F.(2017).HumanitarianActionandNon-stateArmedGroups:TheImpactofBankingRestrictionsonUKNGOs.ChathamHouse,theRoyalInstituteofInternationalAffairs,p.1-22



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AwarenessCapital:TheRiseofMixologists“Fortyyearsofstrategicleadership,cognitivecapacity,andcrystallizedintelligenceresearchhas identified that less than five percent of the world’s adult population has the criticalthinkingcapacity toperformcomplexworkand investmentdecisionmakingat thehigherlevelsofinnovationandsystemsthinkingcomplexity.Thishigherlevelofsystemsthinkingiswhat is required for conceptualizing and implementing new business and economicmodels.”44

In order to address the blendingcapitals approach, it is important torecognize that the human capacity toeven be able to begin to embrace thetotality of this complexity is both acollective and individual work-in-the-making.Inessence,theglobalcollectiveadvancement(anddiminution, insomecases)ofcultural,social&relationship,natural, human, financial, political,intellectual, and other capital stocksover the entire human-existence-continuum, particularly over the past5,000years,hasmadeitpossibleforusto be in the current position ofconsidering the prospect of “BlendingCapitals for Peace” in Colombia.Howeverobviousthismayappeartousinthepresentmoment,reaffirmingthisactualityservestofurthercontextualizethesignificanceoftheBlendingCapitalsapproach: The capitals have been andcontinuetoblend incommunitiesacross theplanet;yet,now,wecanbeconsciouslyawareof theprocessandengageinblendingcapitalswithourexpandingcollectiveawareness.

Tospeaktothis“RiseofAwarenessCapital”morespecifically,ahostofdevelopmentalpsychologistsandacademicshavespentmorethanacenturyobserving,studying,andcontemplatingwhatappears

44NetworkforSustainableFinancialMarkets(NSFM),SubmissiontoMembersoftheTaskForceonClimate-RelatedFinancialDisclosures(TCFD)inresponsetoPublicConsultationonTaskForceRecommendations,12February2017.(http://4a5qvh23tbek30e0mg42uq87.wpengine.netdna-cdn.com/wp-content/uploads/2017/02/NSFM-SubmissionTCFD-Final-02082017-1.pdf)

Figure12:TheSpiralEffect,SusanneCook-Greuter



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to be an individual and collective trajectory toward greater spheres of awareness – a spiral-likeexpansionofhumanconsciousness(Figure12).Piaget,Maslow,Kohlberg,Loevinger,Gardner,Kegan,Wilber,andmanyothershavesharedinsightsonthesubject.SusanneCook-Greuterhasbeenoneofthe more prominent voices in this field of study. Her work on Ego Development Theory (EDT)expressedin“Adetaileddescriptionofthesuccessivestagesinegodevelopmenttheory”appearedmore than three decades ago. In a subsequent rewrite and broadening of the original paper45,publishedin2013,shewrote(p.3):

“What makes EDT unique and different from other theories in the field ofconstructivist developmental approaches is its focus on meaning making. EDTaddressesthewholeperson.Itisbestunderstoodasaframeworkthatportraysthegrowthofindividualsasmovingintoevergreaterawarenessandintegrationaboutboth the inner and theouterworld.AlthoughEDT focuses on thedevelopment ofindividual awareness, it fully recognizes that there is no individual interiordevelopment outside a cultural and linguistic surround, nor is individual growthpossiblewithouttheexternalcontext(historical,geographic,infrastructure,etc.)asitsupportsandconstrainswhatispossibleintheinterior.”

Figure13:SpiralingUp&SpiralingDown:TheBoom-BustCyclesofCopperMining

Notably, Cook-Greutermentions several capitals – infrastructure, cultural, and, arguably, natural(replacing “geographic,” above) – as integral to thedevelopmentofAwarenessCapital:This verycapital,arguably,hasbecometheprimaryvehiclebywhichhumanityhasbeenabletocreatemulti-

45Cook-Greuter,S.(2013).NineLevelsOfIncreasingEmbraceInEgoDevelopment:AFull-SpectrumTheoryOfVerticalGrowthAndMeaningMaking.”SusanneCookGreuter,p.1-97.



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capitalframeworksthroughabroadeningofcollectivevisionandunderstanding.What’smore,whenconsideringtheworkofacademicsandpractitionersengaged incommunitydevelopment,weareconfrontedwithasimilar“spiraling”and“trajectory,”asMaryEmeryandCorneliaFlorapointedoutin200646,andashasbeenmorerecentlyportrayedbyWinkler,etal.47inrelationtotheboom-bustcyclesofminingcommunities(Figure13)–quiterelevantinthecontextofColombia.

Mixologists:TheBlendingCapitalsSpecialistsThe“Mixologist”isoftendepictedasararefiedgeniusresidingbehindanoakbar,handlingsomeoftheworld’smosthighlycovetedstrainsofbourbon,vodka,andgin.InthecaseofBlendingCapitals,however,theMixologistisseenasanindividual,residinginacohortoffellowMixologists,whowillbe integrating social, human, financial, and other capitals to craft an enabling environment thatsupportsentrepreneursthroughouttheearlieststagesoftheentrepreneurialjourneyandbeyond.

Presently,thereareanumberofmixologistsservingtheblendedfinancespace.Theseindividualsaregenerating large-scale ODA/philanthropic/private investment deals in emerging markets.(Convergence48, out of Toronto, houses the first generation of “mixologists.”) Thesemulti-multi-million dollar investments aremitigating the risk for private investors through loan guarantees,supporting private money to wend its way into infrastructure projects, for example. But, theMixologistswhowillbeblendingcapitalswillbecalledupontodofarmorethande-riskfinancing.

Fullyvestedwiththeirrespectiveawarenesscapitalstocks,theseMixologistswillbeworkingwithnumerousactorsacrossavastarrayof“silos”tocraftblendingcapitalsecosystemsthatwillserveasthe enabling environments for possibly thousands of entrepreneurs, early stage ventures, andMSMEs inagivensetting.Theywillbeblendingbonding&bridging social capital,humancapital,intellectual capital, and cultural capital, workingwith a host of corporations, NGOs, professionalassociations, chambers of commerce, and other actors to increase multi-capital stocks forentrepreneurs. And, yes, they will be blending finance to meet infrastructure capital needs, toconservenaturalcapitalstocks,tostrengthencommunitywellnesscapital,andtofurtherenhancetheblendingcapitalsecosystemthroughsuchprojectsasthecreationofDLT/Blockchainstructurestomitigate IFFs. Additionally, theywill be using the power of artificial intelligence to share thisinformationonaplanetaryscalewithothermixologists.

IfwecollectivelycometoaconsensusregardingtheseamlessintegrationoftheSDGsandamulti-capitalframework,somethingthatiscurrentlyinthecapablehandsoftheGRI,UNGC,ICAS,theIIRC,andReporting3.0,thenMixologistsmaybepoisedtobesomeofthefirstglocalliaisonsinitiatingthisvision in post-conflict zones in Colombia. Expanding on the work of the International Finance

46Emery,M.andFlora,C.(2006).Spiraling-Up:MappingCommunityTransformationwithCommunityCapitalsFramework.JournaloftheCommunityDevelopmentSociety,37(1),p.19-35.47Winkler,R.,Oikarinen,L.,Simpson,H.,Michaelson,M.,andGonzalez,M.S.(2016).Boom,BustandBeyond:ArtsandSustainabilityinCalumet,Michigan.Sustainability,8(3)p.284-308.48https://convergence.finance



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Corporation’s(IFC) fragile&conflict-affectedsituations (FCS) inAfricaandelsewhere,ColombianMixologistswillhavearobustBlendingCapitalsecosystemthatalsointegratestheSDGs,buildingintotheverybusiness-fabricofMSMEsthatwhichisintendedtosupporttheirlong-termsustainabilityandthatoftheirsurroundingcommunities.

Figure14providesanoverviewoftheroles&responsibilitiesofacohortofMixologists.ThecohortmodelismeanttosupportMixologists–creatingacontextfortheblendingofcapitalstosupporttheMixologiststhemselves.Thus,bridging&bondingsocialcapitalwillbeintegratedwithintellectual,human, cultural, and awareness capitals to enhance and sustain the power of the mixologistcollective. This will, in turn, facilitate the connections between visitors and residents as theycollaboratetogeneratesustainable,fundableventures.

Figure14:TheMultipleRolesofMixologists

Questions&FurtherInquiry…HowwilltheselectionofMixologistsunfold?Whatcriteriamaybeusedinthisprocess?

AwarenessCapitalisarelativelynewfieldofunderstanding.WhatchallengesdoesitposeinextendingitsreachintotherealmofMSMEdevelopment?

MixologistcohortsofferthefoundationforMSMEmovementthroughthePipeline.Willthesecollectivesbeabletoself-monitor?OrwillanadvisorygroupofMixologistsbenecessary?



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Figure15:Challenges&Opportunities:ARecap



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TheBlendingCapitalsArchitecture

Figure16:TheBlendingCapitalsEcosystem

Inthissection,wewilldiscusstheArchitectureoftheBlendingCapitalsEcosystem(Figure15).Letusbeginwiththeoutsideframewherewefindsixelements:

1) Increasingcapitals–effortswithinthecontextoftheecosystemtoaugmentthecapitalstocksofany/allofthecapitals

2) Creationofnewcapital-includesthedevelopmentofnewcapitalstocksand/orthereplenishmentofadeclineinaselectcapitalstock--e.g.,adecreaseinnaturalcapitalduetoclear-cuttingforagricultureandasubsequentreplantingoftrees

3) Riskmitigationofcapitals–includespracticestominimizetherisksofcapitaldepletion4) Enhancingthequalityofcapitals–eachentrepreneurwillhaveaccesstosomecapitals,

theecosystemwillworktoenhancethequalityofthoseexistingcapitals5) Sharingcapitals–ideallytheecosystemwillinterfacewithotherentrepreneursin

nearbylocationsaswellasthroughoutthevaluechain,andsharingcapitalsalongthesenetworkswillcontributetosustainability

6) Conservationofcapitals–naturalandculturalcapitalwillfirstcometomindregardingconservation,butthisalsoappliestoallcapitals

Collectively,thesepracticessupporttheongoingsustainabilityoftheentireecosystem.Thevariouspracticeswillbeadministeredacrosseachcapitalthroughentrepreneur-partnercollaborations.



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Capital-Specific&Multi-CapitalPartnershipsOneofthemoredifficultaspectsofmulti-captialframeworkstoassimilateisthata“single”capitalis,in fact, not single. TheCommunity Capitals Framework (Figure 16) attempts to bring this to ourattentionbyvisuallydepictingthelayersandoverlappingofthecapitalsintheframeworkschematic.No capital is singularly sufficient and autonomous; interdependence is the underlying principle.Thus, it is important to continually remind ourselves that althoughwemay identify an entity asdeliveringa“specific”capital,e.g.,humancapital,whatismoreinalignmentwiththerealityofthetransferofcapitalistorecognizethatmultiplecapitalswillaccompanyaspecificcapitalasitmovesfrom one source to another. Further to this point, the delivery of human capitalwill be directlyinfluencedby,attheveryleast,theculturalandsocialcapitalsoftheindividual(s)passingthathumancapital toaColombianentrepreneur. (Thisknowledgecanprove invaluable, forexample,whenaMixologistconsiderswhetheranentrepreneurialventurewillrequiretheexpansionofalocalversusaninternationalvaluechain.)

Figure17:Floras’CommunityCapitalsFramework

ThecapitalsportrayedintheBlendingCapitalsEcosystemwereselected, inpart,torepresenttheColombian context, with “cultural capital” and the “additional capitals to consider” – awareness,



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political, wellness, and intellectual - representing elements that are integral to both MSMEdevelopmentandthepeaceprocess.However,themaincapitalstockstobehighlightedinitiallywillbesocial&relationship,human,andfinancialcapitals,astheprimarycapitalstocksfordevelopmentandaugmentation.

Onthelatter,financialcapital,wehavepreviouslyhighlightedthefeaturesofBlendedFinanceandwillnotrepeatthosethoughtsinthissection.Instead,wewilltakeamomenttorecognizethevariousfinancialactorswhowillplayaroleafteraventuremovesthroughthe“MSMEPre-Pipeline”andintothe“Pipeline.”

Countries likeColombia already count on awell-developed financial system that is currentlynotengaged in discussions to mobilize local private and domestic resources for Blended Finance.TheBC.labhasmetandhelddiscussionswith leadersrepresentingthefinancialsector inordertoexploretheneedforacollaborativeapproach,including:

- State-ownedDevelopmentBanks- PrivateBanks- AssociationsofPrivateInvestmentFunds- AssociationsofMicrofinanceOrganizations- ImpactInvestmentFunds- InnovativeFinancingMechanisms- AssociationsofCorporateFoundations- CajasdeCompensacion/CompensationFunds

What these interactions have demonstrated, ironically, is that a significant investment of non-financialcapitalswillbenecessaryinordertoengageColombia-centricfinancialcapital.Investmentsof knowledge, social & relationship, cultural, and human capitals, thus far, all appear to be pre-requisitesforreleasingfinancialcapitalstocksinthecountry.

Ourworkoverthepastfewyearshasfocusedspecificallyonthesenon-financialcapitalinvestmentsinColombiawithinandbeyondtheconflictzones.Thishasresultedinthedevelopmentofeffectivepartnerships with local & national organizations and leaders, with some of those relationshipsexpandingintoanetworkofinternationalstrategicpartners.ThisgrowingcollectiveoforganizationsandleadershaveexpressedinterestinsupportingaBlendingCapitalsInitiativeinColombia.Mostnotably,theseactorswillplayamajorroleinthedevelopmentofthe“MSMEPre-Pipeline.”

When considering thenon-financial capitals, each capital has a set ofpotential partners thatwilleitherconcentratespecificallyonasinglecapitalstock,orwillcontributetoanumberofthesestocks.(Keepinmind,ofcourse,ourpreviouscommentaryontheoverlapofcapitals–theCCFmodel).InColombia,wehaveindentifiedbroadcategoriesofpotentialpartnerstocooperativelyengageintheadvanceofsocial&relationshipcapital:1)NGOs,2)CompensationFunds,3)ChambersofCommerce,4)Foundations,5)Community-BasedOrganizations(CBOs),6)LocalGovernments,7)Universities,



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and8)Corporations.Thesedomesticactorswillserve,primarily,throughtheirabilitiestosupportthedevelopment of vertical networks (bridging social capital) along the value chain.These sameactors,particularlyNGOs,mayalsooffercontributionsindevelopinghorizontalnetworks(bondingsocial capital)within communities. Especiallywhere conflict has had a direct impact onbondingsocial capital, NGOs may offer mediation services and amelioration activities to strengthencommunitybonds,thusmitigatingriskintheenablingenvironment.

Similarly,humancapital isseentobenefit frompartnershipswithsomeof thesesameColombiansources.However,internationalactorsmayassumeamoresignificantroleintheexpansionofhumancapital stocks, particularly if there is a specialist from a rare technology field. For example, weenvisionthatTourism,especiallytravelersthemselves,willplayamajorroleintheincreaseofhumananduniqueculturalcapitalstocks,aswellassocial&relationshipcapital.

SpecialNoteonTourismIntheBlendingCapitalsEcosystemwesetTourismapartfromotherelements.Arguably,wecouldsaythattourismcontributestoeachofthecapitals;paradoxically,itisalsoknownforitscapacitytodetrimentally impact all of them. Rather than rehash the arguments for and against tourism,wewouldratherconsidertheactorswhoarepartofthetourismvaluechainaswellas:NGOs,ChambersofCommerce,ProfessionalAssociations,and,ofcourse,Travelers.

Travelers,wethink,arethemostflexiblepartnersacrossthespectrumofcapitals.Althoughweonlyconnectthemtohuman&culturalcapitalintheschematic,werecognizethattheymayalsohaveaninfluence on the other capitals – positively and/or negatively. We think of travelers as“entrepreneurs”intheirownright.Travelersutilizethemultiplecapitalsavailabletothemtocreateaproduct/service, i.e., their trip toColombia,which ismeant to serve themselvesas theprimaryconsumers,andbasicallyassumingallrisksassociatedwiththedevelopment,implementation,andconsumptionofthatproduct.

It isonlyoverthelastdecadeorsothatacademicshavebeguntoexploretheroleoftourismandtravelersinthecontextofcommunitycapitals.Whilemostofthediscussionshavefocusedontourismdevelopment and community capitals, there are a few examples of travelers’ contributions tocommunitycapitals.Asanillustration,ZahraandMcGehee(2013)discoveredthatvolunteertouristshostedincommunitiesinthePhilippinesmadecontributionstoallofthecommunitycapitalsinthecommunitycapitalsframework(theaforementionedCCF),withbridgingsocialcapitalprovingtobetheconduitthroughwhichthatoccurred.49

Wedonotimaginethattourismdevelopmentwilloccurquicklyinpost-conflictcommunities.Whatisapparentintheacademicliterature,however,isthattourismdevelopmenthaspositiveimpactsonsocialcapital,particularlybondingsocialcapitalforlocalcommunities.Thereparationsofthesocial

49Zahra,A.andMcGehee,N.G.(2013).VolunteerTourism:AHostCommunityCapitalPerspective.AnnalsofTourismResearch,42(July),p.22-45.



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fabricsofcommunitiesimpactedbyconflictoverthepastfivedecadesinColombiawillbeessentialincreatingafoundationuponwhichenterprisecanthrive.Tourismwillplayaroleinthisprocess;however,speakingcandidly,wedonotknowtheextent,northetimeframeassociatedtherewith,ofthatcontributionatthisjuncture.

AdvisoryGroup,Tools,andMediaEstablishinganAdvisoryGrouptoassistintheformationoftheBlendingCapitalsforPeaceapproachinColombiaisofutmostpriority.Otheradvisorygroupswillfollow;however,thisinitialgroupwilloversee the development of the Blending Capitals Continuum and the Blended Financecomponent,aswellasotherelementsof theoverallarchitecture.Theadvisorygroupwill featurelocal&regionalactorsandnational& internationalactors.Theverydevelopmentof theadvisorygroupispartoftheinitial infusionofbridgingsocialcapitaltosupporttheentireecosystem.Thisverticalnetworkinggroupwilloverseefourimportantinitiatives:

1)FormalizingthearchitectureoftheBlendingCapitalsEcosystemandtheBlendingCapitalsContinuumFrameworkforColombia,includingtheBlendingCapitals[BC]Lab,

2)FormalizingthearchitectureoftheBlockchain-enabledPlatform(withGISMapping&CurrencyExchange)whichwillfeaturetheportfolioofentrepreneurialprojectstoallowlocal,regional,national,andglobalaccesstotheseprojectsastheymovealongthecontinuum,aswellasthepossibilityfordirectfeedbacktobothMixologistsandentrepreneurs(addedhuman,intellectual,cultural,andbridgingsocialcapital),

3)FormalizingthepartnershiparchitectureoftheAuthenticationmechanismtomitigateIFFs(possiblywithID2020orotherblockchainprojects),and

4)Identifyingtheleadactorsfromthevarioussectorswhowillimplementthedirectivesoftheadvisorygroup

TheToolsarenumerousandtechnologyisamajorcomponentoftheBlendingCapitalsEcosystem.TheonlinePlatformwillfeature:1)GISmappingintegration,2)currencyexchangeriskmitigationthroughDLT/blockchain technology,3)aglobalMSME,Peace throughEnterprise,andPeaceTechnetworking and data exchange, 4) a series of multi-capital investment options, e.g., volunteeropportunities in support of human capital development, and 5) a Blockchain-enabled QRCode/mobiletaggingaccesstostoriesabouteachenterpriseprojectandtheproductsassociatedwithit.[AdditionalcomponentsofthePlatformwillbelaidoutinfutureiterationsofthisWhitePaper.]

Additional Tools include an Authentication tool for addressing IFFs, which will integrateDLT/blockchaintechnology–Colombia’sFintechcommunitywilllikelybeinvolvedinthisprocessastheyhavedeepknowledgeregardingchallengeswithmoneylaunderingandfraud.AIwillbecalledupontosupporttranslationservicesbetweenresidentsandvisitors,aswellasresidentsandthoseinterestedininvestinginthePeaceprocessinColombia.



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TheMedia,bothnationalandinternational,willbeinstrumentalindeliveringtheunfoldingeffortsoftheBlendingCapitalsforPeaceapproach.Journalistswillprovideavoiceforcommunitieswhichhavebeenlimitedbytheircircumstances.Thedifferentperspectiveswhichcanbetakenregardingthisproject–technology,finance,peace–arediverseandrepresentinroadstobroaderaudiences.The discussions on Blended Finance and the development of platforms normally focus on“developed”countriessuchasCanada,theUSA,andEuropeancountrieswheremostoftheprivatefundsandlargefoundationshaveofficesandaccesstofinancialsupportfromindividualsand/oraspart of wealth management strategy. With the BC Lab, Colombia will be a new feature in thisexpandingbodyofprototypes.

Simultaneous&ParallelIntegrationTherearemanycomponentsinthisarchitecture,eachequallycompellingandintegraltoBlendingCapitals.A“RoadMap,”presentedinalatersection,outlinessomeoftheprocessweenvisioninestablishingeachoftheseelements.ThecreationoftheAdvisoryGroupandtheBlendingCapitals(BC)Secretariatmaychronologicallyprecede,forexample,theidentificationoftheMixologists;nonetheless,whileweareholdingmeetingswithpotentialmembersofbothbodies,concurrentdiscussionswillbeheldwithpotentialcandidatestofilltheMixologistCohorts.Likewise,wewillbeinterfacingwithpotentialdomesticandinternationalpartnerssimultaneouslytosupporttheaccrualofnon-financialcapitalinvestors,whilekeepinginmindthatthesediscussionsmayrevealpartieswhicharemoresuitedtobuildingoutthecontingentoffinancialcapitalinvestors.

Additionally,weareawarethattheAdvisoryGroupandBCSecretariatmayalsobeginasearchforpartnersand/oridentifyindividualsandentitieswhichmayfitwellwithintheBlendingCapitalsEcosystem.Thismayextendtoconferences,workshops,seminars,orothervenuesandwearepreparedtoflexiblymovewiththeserecommendationsastheyareputforth.

Inconjunctionwiththeseefforts,wewillalsobeworkingtoestablishtheMSMEPre-PipelineEcosystem(nextsection)andtheintegrationoftheToplProtocol(astheinitialblockchainintegration).ThisisoneofthemostintriguingelementsoftheBlendingCapitalsEcosystemandpromisestobringahostoftimelyinquiriesasweattempttodelivertheblockchaintosomeoftheremotestregionsofColombia.

Questions&FurtherInquiry…TowhatdegreeisthevisionfortheBlendingCapitalsEcosystemincomplete?Whatelementswouldstrengthenthisapproach?

Willpotentialstakeholdersbedrawnto“invest”inthisapproachtopeaceinColombia?Whatwillhindertheirparticipation?



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TheMSMEPre-PipelineEcosystem:BlendingCapitals&theToplProtocolColombiaisinauniquepositionontheglobalstage:Ithasmadeacommitmenttofinancingpeacewithinitsownborders–SDG#16.Additionally,asitdoesnothavetheresourcecapacitytomeetthismulti-capital outlay, itwill relyheavily onGlobalPartnerships–SDG#17 – in order to fulfill itscommitment topeace in thepost-conflict zonesover thenext tenyears.Asof thiswriting,directpaymentstocampesinosandresidentsinthesezonesasonemillionpesos(perperson/permonth)overathree-yearperiod,or$36millionpesostotal(approximately$12,000USD)areslated.Thisisasignificantaggregateoffinancialresourceswhenmultipliedbythenumberofresidentsinagivencommunity.Presently,however,thereislittleindicationastotheultimatedirectionofthesefunds(what amounts to a three-year universal basic income (UBI) experiment). Will they incentivizeentrepreneurialinitiative?Willtheyfomentsocio-environmentalchallenges?Isthereamechanismthatcanbeintroducedtosupporttheformer,ratherthanthelatteroftheseoptions?

TheaforementionedpartnerswillbeinstrumentalinansweringthesequestionsanddevelopingtheBlendingCapitalsEcosysteminColombiainordertomoveentrepreneursinthepost-conflictzonesalongtheBlendingCapitalsContinuum.Asteadystreamof“Pre-Pipeline”investmentsofbonding&bridging social capital, human capital, and knowledge capital will pave the way to investmentopportunitiesmovingintothe“Pipeline.”Oncethere,enteringintotheregionsofClassesC,B,andA,theseMSMEswilleventuallyreachlevelsofpotentialthatwillattracttraditionalBlendedFinance.Inthemeantime, the initial “Pipeline” of investmentsmay be allocated to projects that support thecreationofarobustenablingenvironment,someoftheToolswhichwerespokenofpreviously.Inthissection,wewilldiscuss,specifically,theBlockchain.

TheBlockchain-EnabledMSMEPre-PipelineinColombiaUndoubtedly,publicandprivateinvestmentandfinancingwillberequiredtomeetMSMEinvestmentneeds;however,differentsourcesarenotalwaysfungible—eachhasitsownincentivestructures,goalsandmandates.Impedimentstoprivateinvestmentcanbeaddressedbydevelopingplansthatcan be translated into concrete project pipelines, and by promoting long-term investments byaligningincentiveswithsustainabledevelopmentforallactorsintheinvestmentchain.Evenwithsuchadditionalsteps,however,therisk/returnprofileofmanyinvestmentsthatgeneratebeneficialreturnstoentrepreneursandsocietyalikewillnotbesufficienttoattractlargeallocationsofprivateinvestment.Granted,onelong-standingapproachtomitigatingriskforprivateinvestmenthasbeenassignedtopublic investment -- includingdirect investment,co-investmentsandriskandrewardsharingwithprivateinvestors,throughguarantees,firstlosstranchesandothermechanisms.But,we already know that the financial outlay for peace (estimated $44 billion USD over ten years)requiredbytheColombiangovernmentismorethanitcanadequatelymeet.Settingblendedfinance



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andsocialimpactinvestingaside,forthemoment,arethereotherinnovativeapproachestofinancingthatwecanintroduceinColombia?

Asafirststep,werecommendattractingnewsourcesofprivateinvestmentviathecreationofanMSMEPre-Pipeline.TheMSMEPre-Pipeline Ecosystem(seenextpage)engagesmultipleactors inmovingnon-financial capitals to theMSMEPre-Pipeline Incubator.Mixologists, in turn, distributethesecapitalsamongthemembers-EntrepreneursandEnterprises–whoconstitutethecollective.Theentireecosystemisaugmentedfurtherbythedual-roleofthefintechinnovationknownastheToplProtocol.Inadditiontoprovidingareliablecurrencyexchangeandcross-borderfundtransfer,the Topl Protocol contributes vetting support for Pre-Pipeline projects through its risk analysisframework, known as Divine, and provides clear incentives for the contribution of non-financialcapitals.

In essence, international and domestic actorswill utilize theTopl Protocol to either earn and/orpurchase tokens that incentivize them to invest (initially non-financial capitals) in Pre-Pipelineprojects. Travelers, for example, can earn Topl tokens (called “arbits”) by visiting a project andcommitting personal time and effort to providing human, social & relationship, and knowledgecapitaltoagivenventure.Thenon-financialcapitalstocksinvestedinagivenventurearerecordedontheToplProtocolbythosewhocontributedsuchcapitals,“staking”thesearbitstoreflecttheirviewoftheproject.Asthesenon-financialcapitalinvestmentsaccrue,weareprovidedwithaclearerpictureofwhenaventuremaybe ready tobepresented to investors across theblended financeecosystem,effectivelyallowing for theconversionofnon-financialcapital to financial investment.The Topl Protocol brings a verifiable record of the capital infusions that a venture receivesthroughout its time in theMSMEPre-Pipeline Incubator.Anatural “ranking”ofprojectsbegins tomaterializeasarbitsareacquiredbyeachventure.

Although prediction markets are often associated with sports-betting, futures-prediction, stock-trading,andelectionoutcomes,theyhavealsobeenusedinternallybycompaniessuchasSiemensandHewlett-Packardtobetterunderstandthelikelihoodofthetimelydeliveryofasoftwareprojectandtoforecastprintersales,respectively.50Insuchsituationstheresultshaveprovenmoreaccuratethanplanning&projectiontoolsutilizedbythesesamecompanies.TheuseofpredictionmarketsasapartoftheToplProtocolprovidesauniqueopportunityforustoaggregatetheeffortsofawidearray of actors in support of the Pre-Pipeline Incubator, staking arbits to represent an expectedoutcome.Witheachinvestmentofarbitsinaproject,theToplProtocolwillcontinuouslyupdatethestatus of the entire list of projects, providing non-financial capital investors, Mixologists andentrepreneursthemostup-to-dateportrayaloftheMSMEPre-PipelinePortfolio.Whichprojectsarereceivingthemostfeedback/input?Earningthemostsupport?Generatingthemostconcern?--AllimportantdataforColombia!

50Wolfers,J.,andZitzewitz,E.(2004).PredictionMarkets.JournalofEconomicPerspectives,AmericanEconomicAssociation,18(2),p.107-126.



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Figure18:MSMEPre-PipelineEcosystem



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TheToplProtocol:AlteringtheEnablingEnvironmentWehaveidentifiedsomesignificantfeaturesoftheToplProtocolwhichwillenhancethemovementofnon-financialcapitals,generatingbettercirculationthroughouttheentiresystemandopeningtheMSMEPre-PipelineIncubatorandsurroundingEcosystemtoamuchlargeraudience.Buthowwillthischangetheenablingenvironment?

First, it alters the quality of the ventures making there way through the Blending CapitalsContinuum.TheToplProtocol,utilizingadistributedapproachtobusinessinnovation,incubation,anddevelopment,deliversahostofstakeholderswellbefore traditionalshareholderswouldeverentertheinvestmentranksofaventure.Second,theToplProtocolalterstheenablingenvironmentviaunprecedentedlevelsoftransparency.Theunalterable,publicnatureoftheBlockchainmeansthatanaccurately-recordedhistoryofallcapitalinvestmentsisavailabletoanyone,atanytime.Bydelivering a thorough accounting of the capital commitments made by each investor to a givenventure,commitedpartiesandwould-beinvestorscanobservethetrack-recordofaventurefromitsinceptionintheMSMEPre-PipelineIncubator.

Withtransparency,ofcourse,comesgreateraccountability.Wecantrackwhetheraventurereceivedaspecificinfusionofhumancapital,asanexample,andcaninquireastowhatanentrepreneurhasdonetoincorporatethathumancapitalintoher/hisventure.Wasthehumancapitaldirectedtowardmarketing & communications, or some other aspect of the venture?Was it helpful (not helpful)havinganindividualvisitfromanothercountrytodiscusspermaculturetechniques?Howdidsuchinteractionbenefit the entrepreneurpersonally?The complete investment record is available forreviewanddirectimpactscanbemeasured,alongwithaccountabilityonbothsides.

Finally, theTopl Protocol is capable of generating incentives for actors to participate in thePre-PipelineIncubatorandtosupportentrepreneursandenterprisesinthedevelopmentofaventure.InColombia, the national government has been involved in supporting small-scale ventures totransition fromproductionof coca to cacaoaspart of apilot initiative in thepost-conflict zones.However,theseeffortsaretime-consumingandarequicklydepletingthescantresourcesavailable.Byutilizingarbits,theTOPLProtocolwillbeabletocompensateactorsfortimeandeffortwhichisinvestedinagivenproject.TheseincentiveswillbedeliveredtoparticipantsonceaventuremeetsacertaincriterialevelasestablishedbytheToplProtocol.Inthecaseofcorporate“volunteers”servingaproject/venture,theseindividualsmayelecttoassigntheirarbitsbacktoagivenprojectorplacethemina“fund”tosupportanewcohortofindividualstojointheIncubator.

Questions&FurtherInquiry…HowwilltheintegrationoftheToplProtocolandthe“in-community”activitiesmanifestinconcreteterms?Willthetheoreticaltranslateeasilyintoreal-worldapplication?

HowopenwillvisitorsbetojoiningtheToplCommunitypriortoarrivinginColombia?Whatwillincentivizethemtodoso–possibledistributionofarbitstoaventuretheyencounter?Howdifficult



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willitbetorecruitvisitorstojoinToplinadvanceoftheirvisit?Aretheymorelikelytowanttojoinaftertheyarrive?

HowwilllocalresidentsconnectwithToplgiventheaccesschallenges–language,etc.?

Figure19:ThreeFeaturesoftheTOPLBlockchain,AlteringtheEnablingEnvironment



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RoadMap:BlendingCapitalsForPeacePhase1:September2017

§ FinalizeWhitePaper&Presentation–InternationalPeaceDay(21September)§ UpdateBC.LabWebsite§ EstablishUniversityPartnersinColombia–“InstituteforBlendingCapitals”§ AdvisoryTeamInvitations§ ExecutiveSummary:–IIRC/Impact2030Integration

Phase2:November2017

§ AllianceforPeacebuilding–Bi-annualConference(11-13October2017)§ CompleteListofBlendingCapitals(BC)SecretariatEnrollees§ Complete“BlendingCapitalsforPeace”Team§ CompleteAlphaBudget&SubmittoImpact2030§ Publishing–KeyPublications&Networks

Phase3:December2017

§ ConveneSecretariat§ WhitePapers:1)BlendingCapitalsforPeaceBlockchain2)Crowdpharming.com§ OfficialLaunch:InstituteforBlendingCapitalsinColombia§ ExecutiveSummary:IIRC/Reporting3.0IntegrationforMSMEs

Phase4:January2018

§ Visioning:BlendingCapitalsPre-PipelineIncubator

Phase5:February2018

§ OpenBlendingCapitalsPre-PipelineIncubator§ WhitePapers:1)GISMappingforBlendingCapitals&MSMEs,2)ProvenanceCode&Mobile

Tagging

Phase6:March2018

§ Engagefirst[BC]CohortsforBlendingCapitalsPre-PipelineIncubator



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ConcludingThoughts"Moneyrepresentstheeasiestandlowest-stakeswaytocontributetonewventures.But for entrepreneurs, the expertise, networking, and intellectual capital thatincubatorsandfoundationsprovide—theresourcestotakeanideafromconcepttocommercialization—often accounts for equal or greater value. It’s time to build amoreeffectiveecosystemofsupportandexpanditasquicklyaspossible."51

Throughoutthisworkingpaper,wehaveattemptedtobuildacaseforBlendingCapitalsforPeaceinColombia–presentinganumberofchallengesandseveralreasonsforoptimismthatwecanindeedsupport the entrepreneurs of post-conflict zones to initiate fundable ventures. Incubating theseventuresinamulti-capitalframeworkwillreciprocallystrengthentheawarenessofMSMEsastothevalue-in-useofthesecapitalsandtheawarenesstoreplenishthesecapitals,ultimatelycontributingtotheSDGs.(Wecontinuallyaskourselves:Wouldtherebeanycollectivevalueincontributingtothegestationof,evenatamicro-level,aventurethatismisalignedwitheithertheSDGsoramulti-capitalawareness?)

With interest growing for Blended Finance in Colombia, there is an increased opportunity forcontinuedcollaborativeactionanddevelopmentofthefield.Granted,BlendedFinanceisstillatanearlystage,yetobviousopportunitiesexistforinformationsharingandcollectiveworkthatwillgrowthe overall body of use cases as awhole. Groups and individualswithwhomwe havemet (andcontinuetomeet)havesuggestedthatanespeciallyvaluablenextstepwouldbethedevelopmentofa cross-sectorallianceof specializedcapital aggregators, institutional investors, emergingmarketprivate equity investors, fintech (especially blockchain) representatives, development agencies,publicactors,andrelatedpartiestofocusonthekeyissuessuchas:1)innovativefinancialproducts,2) impact reporting, 3) technical assistance, and 4) corporate involvement in sustainableMSMEfinance.WiththeaddedwrinkleofIFFsandapost-conflictenvironment,Colombiabecomesfertileterrain for hosting global discussions, field-based research, experimentation & prototyping, andresults-sharingacrossmultiplestakeholdergroups.

In terms of integrating a Blending Capitals approach with Blended Finance, Colombia is thequintessential laboratory for early-stage MSME exploration. With nearly 4 million Diaspora,Colombia has an untapped resource of potential bridging social capital. There is also “bridging”possiblewiththemultiplemillionsofcoffeeconsumerstheworldoverwhohave,atleasttothispoint,notbeen“officially”askedtosupportthecurrentPeaceProcessinColombia,onecupatatime.Inthecaseofwellness capital (physical,mental,andemotionalhealth),ontheotherhand, theabundantpharmacopeia of the country has yet to be harnessed for the overall well-being of its citizenry.

51Speicher,J.(2017).InnovativeSolutionsforClimateChangeNeedMorethanMoney.StanfordSocialInnovationReview,Accessedon22August2017.(https://ssir.org/articles/entry/innovative_solutions_for_climate_change_need_more_than_money)



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Engagementbyinternalandexternalactorsindeliveringincreasedwellnesscapitalforfamiliesandcommunitiesthrough,forexample,thenaturally-occurring,health-enhancingproductssuchasNoni,Guanabana, and other fruits and herbs, will have a net positive impact on human capital, thusincreasingtheproductivityofenterprisesandmitigatinginvestmentrisk.

TheTOPLBlockchainservestofurthermitigatetherisksassociatedwiththeenablingenvironmentandcreatesamechanismforadvancingthecirculationofnon-financialcapitalsintoMSMEventuresattheearlieststagesoftheirincubation.TOPL’sinvolvementfromtheearliestconceptualframingofBlendingCapitalsstandstoattractotherBlockchainactors,suchasProvenance,ID2020,andotherswhichareintegratingBlockchaintechnology,privacy,accountability,exchange,authentication,andmarketplacedevelopment.

Multiple,non-financialcapitalsplayasignificantroleinthesuccessfulimplementationofaBlendedFinance strategy in Colombia. Collaborating with investors and consumers to build out thisEcosystemisaparalleltracktoidentifyingandcreatinganInvestmentPipelineandsubsequentdeal-making.Inourview,theBlendingCapitalsEcosystemcontributesthefollowingtofinancialcapital,as to all other capitals: 1)mitigates capital risk, 2) enhances capital quality, 3) augments capitalquantity,4)manages/conserves thecapital,5)shares thecapital,and6)createsnewcapital.Themoremulti-capitals’ conscious individualsandcommunitiesare themore likely that the financialinvestmentwillproducenotmerelyapositivereturnbutalsoamarkedimpactonlong-termPeaceinColombia:SDG#16.WerecognizethatifweconsiderPeaceasacapital,thenBlendingCapitalswithBlendedFinanceandBlockchain technology, in thecontextofaphysicalBCLab,deliversanintegrativemeansofproducingacapital thatColombiahasbeenseeking formore than50years.SomethingwethinkisamplycompellingtotheColombiangovernment,partners,would-beinvestors,visitors,and,mostofall,residents.

Thisworkingpaperisaninvitation,toyouthereader,tobringyourawarenesstonotmerelywhatiswrittenhere,buttothenotionofaddressingthevolatility,uncertainty,complexity,andambiguitywhichexiststhroughoutColombiaintheseearliestofmomentsofthepost-conflictpeaceprocess.Asawork-in-progress,wethinkthatpeaceinColombiaservesasarichlearningenvironmentandhasthepotentialtoteachusagreatdealabouthowwemightintegrateemergingtechnologies(Fintech&Peacetech),multi-capitalframeworks,BlendedFinance,andmultipleactorsinsupportthereof.Welookforwardtofieldingyourquestions,comments,thoughts,andreflectionsandincorporatingtheseexchangesintofutureiterationsofthisworkingpaper.



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AbouttheAuthorsDavidClemmons–Co-Founder,The[BC]Lab

[email protected]

In 2000, David began focusing his attention on integrating thevisitor experience and addressing the socio-environmentalchallenges of residents and destinations across the planet.LaunchingVolunTourism.orgin2003,hehassincedirectedmuchof his energy to advising destination marketing organizations(DMOs) and other visitor value chain actors, as well as public,private, and social sector stakeholders in engaging visitors inaugmenting thecapitalstocksallocatedtomeeting thedemandsofsocietal issues,environmentalrestoration&preservation,andpost-disasterrecovery.In2012,heandLucLapointebeganexploringhowcountriesinLatinAmericacouldincreasemulti-capitalflowsthroughtourismandthemitigationof tourism-relatedcurrencyexchangeriskvia innovative financing.After fiveyearsof interviews,discussions,andcollaborationswithlocal,national,andglobalstakeholders,theylaunchedthe[BC]LabinCali,Colombiain2017.

LucLapointe–Co-Founder,The[BC]Lab

[email protected]

Overthepast25years,LucLapointe,aregisteredlobbyistinCanada,hasworkedcloselywiththenot-for-profitsectorandprivatesectorinareassuchasbankingreform,vaccinationofpreventablediseases,immigration, international development, financial literacy, health,agriculture,and innovative financing.Hehasmanaged to influencepublicpoliciesatthe international,national,andlocal level.Hehasprovided senior advisory expertise to the Leading Group onInnovative Financing as well as testified at several internationalevents. Luc’s policy recommendations arederived froma rigorousanalyticalmethodologythatemploysan interdisciplinaryapproachto understanding and synthesizing problems while bringing apassionatecommitmenttodeliveringcreativeandstrategicsolutionsto clients. He has chaired several national consultations on

integrationofforeigntrainedworkers,pensionreforms,aswellasliteracyintheworkplace.



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Luc is currently leading a private financial and human (Blending Capitals) strategy for the post-conflictinColombia.Heisalsoleadingaglobalalliancetomakeprivateaidflowsmoreeffectiveandefficient. Luc manages several business relations in LatinAmericaforAuthenticID,andImpact2030.Inhissparemoments,Luc teaches innovative financing at Universidad Libre andUniversidadJaverianainCali,Colombia.

ChrisGeorgen–ChiefArchitect,Topl

[email protected]

ChrisGeorgenisthechiefarchitectbehindTopl.HeisagraduateofRiceUniversity,whereheobtaineddegreesinMathematics,Physics,andPhilosophy.Duringhistime in college, Chris performed multidisciplinary research focused on emergent phenomena incomplexsystemsanddevelopedthecoreeconomictheoriesthatinspiredTopl’sdevelopment.Hehasadeep interest in theapplicationofnew technologies toeconomicand financialproblemsand ismotivatedby the potential for neweconomic systems to improve standards of living around theworld.



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AppendixA:FoundingPartnersTOPL

TheideabehindToplissimple:bybuildinganopencapitalinfrastructuretailor-madefordevelopingmarkets,investmentreturnsandtheireconomicimpactcanbegreatlyimproved.Topl’sinvestmentprotocol isdesigned tohelp investorsovercome thenumerousbarriers that suppress the flowofcapitalintodevelopingregions,therebyraisinginvestmenttolevelsappropriatetothevastpotentialoftheseeconomies.Webelievethatresponsibleinvestmentinyoung,innovative,andlocally-basedcompaniesisamongthemosteffectivedriversofeconomicgrowthandlong-termsocialimpact.ThisisexactlywhatToplseekstoenable.

Impact2030

IMPACT 2030was created in response to UN Resolution A/RES/66/67 that encouraged furtherengagementwiththeprivatesector“throughtheexpansionofcorporatevolunteeringandemployeevolunteer activities”.The IMPACT2030 coalition convenes leaders fromcorporations, theUnitedNations, civil society, academia, and philanthropic organizations. Each IMPACT 2030 partnercompanyhascommittedtoapplyingitsemployeevolunteeractionstowardsoneormoreoftheSDGs.

MovingWorlds

MovingWorldsisasocialimpactorganizationaddressingtheglobaltalentgap.Ouronlineplatformandcommunityconnectspeoplewhowanttotravelandvolunteertheirexpertisedirectlywithsocialimpactorganizationsaroundtheworld.Wemaintainqualitybyselectivelysourcingprofessionalsand organizations who then interact through our website to find each other for “Experteering”engagements. Both “Experteers” and “Hosts” also have access to our MovingWorlds exclusivetraining,resources,andplanningguidetohelpensuresafe,high-impactengagements.Inaddition,forward thinking corporations can leverage the same platform to create andmanageworldwideskills-basedvolunteeringprogramsforemployees.MovingWorlds isaSocialPurposeCorporation(AKABCorp).



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AppendixB:ConceptNote–TheBlendingCapitalsLaboratory[BC]LabTheBlendingCapitalsLaboratory([BC]Lab)hasbeenaworkinprogressfornearlyadecade.Ithasbeenclearfromtheearliestthinkingonthisprojectthatthereareatleastthreemajorelementsthatare impacting communities, especially rural communities, in Latin America and elsewhere. First,accesstofinancialandmanynon-financialcapitalsisdrasticallyimpeded.Second,thesignificance,extent, and integrity of the value chain is, quite ironically, under-valued. Third, there is amajorcommunicationdisconnectbetweenruralcommunitiesandthemassofindividualsmostinterestedinsupportingtheentrepreneurialventuresbeingdraftedanddevelopedinthecontextofmicro-&small-sizedenterprises(MSEs)inthesecommunities.Whatcanwedoaboutthis?

The[BC]Labisproposedasbothaphysicalspaceandavirtualplatform.Asfortheformer,the[BC]Lab is envisionedas aphysical structure atwhichvisitors fromColombia andbeyondmaymorecloselyinteractwithCampesinosandotherentrepreneurs,theventurestheyareproposing,andtheunique environment that is the Pharmacopeia and the natural capital of the Cauca. It will also,literally, be a laboratory for the studyof thePharmacopeiaof the regionaswell as aproductionfacilitywhichwill integratewith a collectiveofnutritionists andnutrition-oriented companies inSouth&CentralAmerica,theEU,NorthAmerica,AsiaandAustralasia.

The [BC] Lab will facilitate the interactions and collaborations between visitors-and-visitors andvisitors-and-residents. Co-creating authentication of production and producers and enhancing thequality and augmenting the quantity of the various capital stocks, visitors and Campesinos willactivelyengageingraduallymovingideasthroughthisBlendingCapitalsPre-PipelineIncubatorintofundableventures.Inthiscontext,visitorswillalsoencounterherbs,fruits,andevenvegetablesrifewith preventative, medicinal benefits, while exchanging knowledge and insights of how theseproductsmaybeconnectedthroughaproof-of-provenance,blockchain-enabled(virtual)platform.

InAugust2017,theNEMFoundationpartnershipwithBlockchainGlobalopenedaBlockchainCenterinMalaysiaasaco-workingspace, incubator,andaccelerator.Onamicro-scale, the[BC]Labalsohopes to replicate this effort and to serve as a location for coders and blockchain enthusiasts tointerfacewithlocalresidentsinordertobetterinfluencetheintegrationofoff-blockchainverification&authentication,aswellasthestarkrealitiesofthevaluechainatthecommunitylevel.Additionally,weintendtousethismicro-BlockchainCenterasaplaceforcollaborationwithBlockchainofferingswhichareeitherreliantonoff-blockchainauthentication&verificationorservetomeetsomeofthechallenges of the enabling environment. The aforementioned ID2020 project and Stellar LumensrepresenttwosuchBlockchainprojectsthatcouldinterfacewiththesechallenges,respectively.

Although there is still much to be explored in terms of the practicality of establishing acomprehensive learning/living/hosting laboratory in the Cauca Region of Colombia, we are



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encouragedbythegrowingsupportofthosewhohavebeenpartofthisexplorationthusfar.TherearesubstantivemodelsofsimilarfacilitiesinothepartsofLatinAmerica;these,however,havenotyet introduced the Blending Capitals approach and the Blockchain and Authentication elementswhichmay support the de-risking of the enabling environment even further. As we continue todiscoverinsightsandbroaderunderstandingfromthelocalandglobalcommunities,wewillprovideregularupdatestothisworkingpaperforfurtherreview.

Documents

A [BC] Lab Working Paper 1.0 September 2017 Blending Capitals … · 2020-05-22 · regenerative capitalism, and newly conceived models from academics focused on ecological economics