© 2004 by the Schwab Foundation for Social Entrepreneurship. This presentation was used by the Schwab Foundation for Social Entrepreneurship foreducational purposes. It does not constitute a complete documentation of the teaching unit. The Foundation wants to stimulate thinking and discussion aboutsocial entrepreneurship. Thus, the presentation may be duplicated for personal use as well as for teaching, provided it is properly cited. However, this materialis copyrighted. Any use for commercial purposes other than teaching requires prior written permission from the Schwab Foundation for SocialEntrepreneurship.

Social Entrepreneurship: PromotingEntrepreneurial Solutions for Social Change

AIESEC Workshop

Dr. Maximilian Martin, Head of Research, Schwab Foundation for Social Entrepreneurship

HEC Geneva, 10 March 2004

Agenda

• Setting the Stage: Context and Concepts

• The Work on the Ground: Select Social Entrepreneurs

• Promoting Social Change: The Work of the Schwab Foundation

• So, What Do You Think? Discussion Assignment

Con

text The Demand Side: Why Do We Need New

Approaches and Partnerships?

Macro-level: Cooperation between governments, business,and civil society to create enabling conditions and frameworks

Local level:Change agents who have innovative ideas and practical solutions

Environmental damageHIV/AIDS,other diseases

Migration

Sub-optimal employment levels

Poverty & inequality

Demographic transformation

Pressure on social protectionsystems

Social exclusion

Challenges in a globalizing world

Con

text The Supply Side: The Weaknesses of

Established Modes of Intervention

“Crisis of the welfare state”“Crisis of development”

• A few poorcountries havebecome rich• By and large,convergence is nothappening• Due to populationgrowth andresource depletion,we may not evenbe keeping up witha moving target• Needed: newparadigm

• Long-termstructural forcescreate new welfareproblematics forchildhood, worklife,retirement

• But normativecommitments tosocial justicedifficult to finance

• Needed: large-scalewelfare reform

Addressing the Challenges:A Structured PerspectiveC

once

pt

We need new policy frameworks. And we also need change agents who ...

Innovation

Identity

Wed performanceorientation with acommitment tosocial valuecreation

Innovate tocreatesystemicchange

Leadership

Exercise trueleadership,mobilizinggroups to tackletheir adaptivechallenges

Per-formance

Deliver publicand privategoods efficientlyand effectively

Division of Labor: The Roles of the PrivateSector and Civil SocietyC

once

pt

Corporate Social Responsibility

Actor: established businessDefinition: “achievingcommercial success in waysthat honor ethical valuesand respect people, com-munities, and the naturalenvironment” ( BSR)Often used interchangeablywith business ethics,corporate citizenship,corporate accountability,sustainability

Social Entrepreneurship

Actor: grassroots leadersMay set up businesses, butnot with a primary profitmotivationRather, social enterprisesmay be the most effectivevehicle to achievetransformational changeWe will look into examplesto illustrate this

The Case for Corporate Social ResponsibilityC

once

pt

Why do companies give? Four models

Profit motive

Altruism

Ethical/altruisticmodel: Company isgiven power by societyand has a responsibilityto benefit society

Neoclassical/corporateproductivity model:corporate givingimproves financialresults

Stakeholderengagement

Stakeholder model:Company ascomplex entity withmultiple constituentsto be satisfied

Power

Political model:Company buildsrelationships withNGOs to maintaincorporate power

Source: Young, D.F., and Dwight Burlingame. 1996. “Paradigm Lost.” In Corporate Philanthropy at the Crossroads, D. F. Burlingame and D.R.Young, eds. Blomington, Ind.: Indiana University Press.

Change Agents on the Ground:Social EntrepreneurshipC

once

pt

Social entrepreneurs are …

Driven by a mission to create social value. To devise practical solutions forthe pressing social problems of our times, they found companies andorganizations.Opportunity-oriented. They focus on the new possibilities globalization andthe communications revolution generate.Innovative. They develop new products, services or frameworks.Resourceful. Social entrepreneurs think economically—but operationalefficiency aims at maximizing social rather than financial value.Accountable. They look for lasting benefits for their constituencies.Social entrepreneurs operate in all sectors: education, environment, health,microfinance, human rights, enterprise development, and so on.In short, social entrepreneurs are practical visionaries.

Source: Dees, J. Gregory. 2001. Social Entrepreneurship. In: Enterprising Nonprofits: A Toolkit for Social Entrepreneurs, J. GregoryDees, Jed Emerson, and Peter Economy, eds., pp. 1-18. New York: Wiley.

Agenda

• Setting the Stage: Context and Concepts

• The Work on the Ground: Select Social Entrepreneurs

• Promoting Social Change: The Work of the Schwab Foundation

• So, What Do You Think? Discussion Assignment

Gisèle YitambenASAFE

StrategyTarget group: Women micro-entrepreneurs

Objective: Seize newly emergingopportunities and empower womeneconomically through business education,micro-finance, and business advice

Programs: Microfinance and savingsprograms, Cisco Networking Academy andgraduate placement center, web agency

Snapshot

Established in 1989

Non-profit based inDouala, Cameroon

5,000 members

Works in Cameroonand adjacent Africanstates

www.asafe.org

Focus: Helps disadvantaged women and youth become successful entrepreneurs

Cam

eroo

n

Rodrigo BaggioCommittee for the Democratization of

Information Technology (CDI)

Strategy/ProgramsFranchise model to promote the socialinclusion of low-income communities byusing information and communicationtechnologies

Leverages business partnerships andprovides hardware, software andtechnical assistance

Combines IT and citizenship classes

Charges symbolic student fees

Snapshot

Established in 1995

Based in Rio deJaneiro, Brazil

19 Brazilian states,Japan, Chile, Honduras,Guatemala,

Focus: Information Technology, Education, “Digital Divide”

Bra

zil Rodrigo Baggio

Committee for Democracy inInformation Technology (CDI)

StrategyFranchise model: Computer schools inslum areas

Partnership with companies to mobilizesoftware, hardware, and technicalassistanceCurriculum combines IT skills withgeneral education

Students pay course fees

Snapshot

Established in 1995

Based in Rio de Janeiro

More than 700 centersin 19 Brazilian statesand in Japan, LatinAmerica, SouthernAfrica

Web site:www.cdi.org.br

Bra

zil

Focus: Democratizing information technology, promoting citizens rights

Martin Fisher & Nick Moon ApproTEC

StrategyDevelop low-cost capital equipment andmass market it to the rural poor, who starthighly profitable new businesses

So far 35,000 new micro-enterprisescreated in East Africa

US$ 36 million/year in profits and wages

Revenues equivalent to 0.5% of Kenya’sGDP and 0.2% of Tanzania’s GDP

Snapshot

Established in 1991 inKenya

Also income-taxexempt 501(c)(3) non-profit in the U.S.

Budget: US$ 2.2million (2001)

80 employees

www.approtec.org

Focus: Enabling wealth creation through appropriate technology

Ken

ya

Rory StearFreeplay Energy Group

StrategyDevelop range of self-powered products:radio, cell phone chargers, flashlight

Achieve financial sustainability through salesin industrialized country markets

Partner with international organizations to getproducts to the rural poor. Access toinformation can provide a lifeline, especiallyin complex emergency settings. Mozambicanflood (2000): 7,120 radios donated

Snapshot

Established in 1994

Company + foundation

So far, 3 mn radiossold. 50,000 radiosdonated to the poor,touching 1 mn people’slives

Sales: 7.5 mn $ (2003)

www.freeplay.net

UK

Focus: Providing access for all to energy and information at all times

Agenda

• Setting the Stage: Context and Concepts

• The Work on the Ground: Select Social Entrepreneurs

• Promoting Social Change: The Work of the Schwab Foundation

• So, What Do You Think? Discussion Assignment

The Work of the Schwab Foundation

ProfileFounded and endowed by Klaus and Hilde Schwab in 1998

Complementary to World Economic Forum activities:Social Entrepreneurs provide practical solutions on the ground

Operational since August 2000; so far 71 social entrepreneurs selected

Legally and financially independent from the World Economic Forum

StrategyPromotes social entrepreneurship by creating a network of “OutstandingSocial Entrepreneurs”

Inte

rven

tion

Accelerating the diffusion of innovation through strategic network insertion

Selection Criteria for “SchwabEntrepreneurs”

Direct positive social impact

Innovation

Sustainability

Reach and scope

Scalability

Role model

1

2

3

4

5

6

Inte

rven

tion

1) Build legitimacy2) Establish relevant contacts with business and politics3) Secure financial and in-kind support

What Does the Schwab Network Offer?

SocialEntrepreneurs

Summit

World EconomicForum meetings:

- Davos- Regional meetings

Mobilization ofsocial investorsand technical

advice

Resource centeron social

entrepreneurship

Objective: Address social entrepreneurs‘ primary needs

Inte

rven

tion

Challenges for the Future

Community-Building: Identify and connect many moreoutstanding social entrepreneurs

Scale: Broker partnerships between social entrepreneurs undcompanies to scale the initiatives

Awareness: Make Social Entrepreneurship known to a wideaudience

Performance: Empirical analysis of success factors and furtherdevelopment of the field of “Social Entrepreneurship”

Pros

pect

s

Agenda

• Setting the Stage: Context and Concepts

• The Work on the Ground: Select Social Entrepreneurs

• Promoting Social Change: The Work of the Schwab Foundation

• So, What Do You Think? Discussion Assignment

Discussion Group 1: Social Entrepreneurship

Take ApproTEC as an example

What does “thinking like a business” mean in the social sector?

Should ApproTEC produce in China?

Why or why not?

Pros

pect

s

Discussion Group 2: CSR

“The only social responsibility of business is to increase profits”(Milton Friedman)

Do you agree?

Why or why not?

What is the proper role of business?

Pros

pect

s

Discussion Group 3: Policy Frameworks

In Europe, many argue that we need a new social contract

Which strategies can you think of to:

(1) Invest in children, families and women?

(2) Address problems with working life and social exclusion?

(3) Devise a new social contract for the elderly?

Pros

pect

s

Discussion Group 4: Personal Perspective

How have you given back to society so far?

Why did you choose this form of intervention?

How do you plan to give back later in your lifecycle?

Please be as specific as possible!

Pros

pect

s

Discussion Group Format

You have 30 minutes for the discussion

Please designate a moderator and a notekeeper who will also bethe rapporteur

Please go around the table and share views for 20 minutes

Please use the remaining 10 minutes to agree on what the groupwould like to convey to the plenary

The rapporteur reports back to the plenary (max. 5 minutes)

Pros

pect

s

For additional examples of Schwab Entrepreneurs,please refer to

http://www.schwabfound.org

For additional examples of Schwab Entrepreneurs,please refer to

http://www.schwabfound.org