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Page 1: Social Entrepreneurship: Challenges and Promises for the Next Decade Mirjam Schöning, Schwab Foundation for Social Entrepreneurship “Social Innovation”

Social Entrepreneurship: Challenges and Promises for the Next

Decade

Mirjam Schöning, Schwab Foundation for Social Entrepreneurship

“Social Innovation” ConferenceRome, 7-8 October 2009

Page 2: Social Entrepreneurship: Challenges and Promises for the Next Decade Mirjam Schöning, Schwab Foundation for Social Entrepreneurship “Social Innovation”

The Schwab Foundation

Objectives

1. To be the foremost organization for identifying, selecting and highlighting accomplished social entrepreneurs at the national, regional and global levels.

2. To be an effective conduit between its community of social entrepreneurs and companies as well as governments.

3. To build a global community of outstanding social entrepreneurs and others interested in promoting social entrepreneurship, leveraging successes of social entrepreneurs to achieve wider impact for the public good.

Activities

• Selection: 20-25 social entrepreneurs p.a

• Regional selection in Africa, Latin America, Europe, South-East Asia, South Asia

• « Social Entrepreneur of the Year » and respective media partnerships established in 15 key countries

• Events / Connecting Annual Meeting Davos / Dalian

6-8 Regional Meetings

• Knowledge Building Academic Activities (Case studies,

Executive Education)

Global Agenda Council & Global Redesing Initiative

Page 3: Social Entrepreneurship: Challenges and Promises for the Next Decade Mirjam Schöning, Schwab Foundation for Social Entrepreneurship “Social Innovation”

The Schwab Foundation Network of the World’s Leading Social Innovators

Currently 160 organizations in total

Main sectors:• Education (47)• Enterprise Development (40)• Rural Development (37)• Health (35)• Environment (33)• Children and Youth (28)• Technology (21)• Financial Inclusion (20)• Housing (14)• Agriculture (13)• Trade (12)• Energy (10)• Waste Management (7)• Water (7)

Type of social enterprise:• 53 Social Business • 89 Hybrid Non-Profit• 32 Leveraged Non-Profit

USA and Canada

24

Latin America 38

Africa 11

Australia 2

Asia 39

Europe 40

Middle East and North Africa 12

Geographic spread:

Page 4: Social Entrepreneurship: Challenges and Promises for the Next Decade Mirjam Schöning, Schwab Foundation for Social Entrepreneurship “Social Innovation”

Corporate Partnerships with Social Entrepreneurs

Basic Development

Supply Side/ Production

Demand Side/ Consumption

Linking Producers and markets:• Handicraft / Fashion • Fair trade• Agriculture

Reducing production costs:• Medical technology• Agricultural devices

Examples:• SEWA & GAP, PeopleTree• TransFair USA, Max Havelaar• IDE India• IDEAAS, Brazil

Examples:• Aravind Eye Hospital/ David

Green• IDE India / KickStart (Africa)

Page 5: Social Entrepreneurship: Challenges and Promises for the Next Decade Mirjam Schöning, Schwab Foundation for Social Entrepreneurship “Social Innovation”

The Case for Engaging with Social Entrepreneurs

Basic Development

Supply Side/ Production

Demand Side/ Consumption

Access to new markets / Linking Companies and Customers / BoP:

• Financial services• Telecom • IT

Rationale for engaging SE:• BoP markets are radically

different• Deep market knowledge of

SE • Trusted Social

entrepreneurs have deep market knowledge and are trusted

Examples:

• SKS Microfinance • CellBazaar • Center for Digital

Inclusion

Page 6: Social Entrepreneurship: Challenges and Promises for the Next Decade Mirjam Schöning, Schwab Foundation for Social Entrepreneurship “Social Innovation”

Entrepreneurial

Social Mission-driven

Innovative

Sustainable

Founder of for-profit or not-for-profit organization

Employs business methods, but aims at maximizing social or ecological impact. Financial return is optimized.

New products, services or approaches driving social transformation.

Revenue through fees, sales of products and services

What is a Social Entrepreneur?

Practical Visionary Focus on implementation

Page 7: Social Entrepreneurship: Challenges and Promises for the Next Decade Mirjam Schöning, Schwab Foundation for Social Entrepreneurship “Social Innovation”

1. Social Business• "For-profit" organizations• Financially self-sustainable and profitable

2. Hybrid Organizations• Financing mix of earned income and

grants • Typically a combination of different legal

forms

3. Leveraged Non-Profits• Non-profit organizations• Financing primarily through partnerships

with corporations, governments and foundations

• Highly innovative and leveraged approach

The Social Entrepreneurship Spectrum

Combining social impact and financial sustainability

Combining social impact and financial sustainability Three types of social enterprisesThree types of social enterprises

1. Corporate Social Responsibility.2. Non-profit-Organisationen.Quelle: BCG-Analyse; Schwab Stiftung für Social Entrepreneurship

financial return social return

SE

Charities / NGOs2)Companies with or without CSR1) activities

Social Entrepreneurs maximize social return while optimizing financial return

30 %

50 %

20 %

Page 8: Social Entrepreneurship: Challenges and Promises for the Next Decade Mirjam Schöning, Schwab Foundation for Social Entrepreneurship “Social Innovation”

Social Entrepreneurship Spectrum

Social Business Social Business Hybrid OrganizationHybrid Organization Leveraged Non-ProfitLeveraged Non-Profit

Objective/ Mission

Financial sources and goals

Treatment of investment/

Use of profits

Legal form

• Social /ecological impact maximization

• Revenues through sale of products or services•At least loss free

• Pay back principal• Reinvest profits in the SB• Grameen SB: no

dividends/interests

• For-profit entity

Degree of Innovation/ Social Change

• Adapting products and services for marketability to the “base of the pyramid”

• Involving marginalized as producers and/or distributors

• Oriented towards scalability

• Social /ecological impact maximization

• Social /ecological impact maximization

• Testing innovative market-based solutions

• Bringing products and services to the “base of the pyramid”

• Highly innovative and social change oriented

• Mobilizes a large number of partners (corporate, government, volunteers) for the cause

• Generate revenue through sales of products, services or fees • Long-term reliability on a mix of grants, (subsidized) loans and equity investments

• Combination of for-profit and non-profit entities

• non-profit entity

• Profits of one subsidiary either reinvested or paid out to non-profit entity

• No profits

• Primarily reliant on grants and partnerships

Page 9: Social Entrepreneurship: Challenges and Promises for the Next Decade Mirjam Schöning, Schwab Foundation for Social Entrepreneurship “Social Innovation”

Leapfrog Fund for Technology Innovation Transfer

The Leapfrog Fund is supported by the Lemelson Foundation to stimulate the transfer and adaptation of technological innovations developed by accomplished social entrepreneurs to alleviate poverty and to provide access to clean water, energy, housing and sanitation in additional communities.

Five new transfer projects involving 11 social entrepreneur partners are being supported:

# Organisation Country Organisation Country Technology Innovation

1 TARA / DA India Sewa Lanka Sri Lankamicro-enterprise housing construction

2 IDEAAS BrazilInstituto Sertão Vivo

Brazilsolar powered irrigation systems for rural farming

3 Gram Vikas IndiaComprehensive Rural Health Project

Indiawater and sanitation systems for rural villages

4Waste Concern

Bangladesh SAIBAN Pakistanwaste management and recycling technology

5Aravind Eye Hospital

IndiaFundación ParaguayFundacionVisión

Paraguaysustainable eye-care services for low income populations

Page 10: Social Entrepreneurship: Challenges and Promises for the Next Decade Mirjam Schöning, Schwab Foundation for Social Entrepreneurship “Social Innovation”

BACK UP

Page 11: Social Entrepreneurship: Challenges and Promises for the Next Decade Mirjam Schöning, Schwab Foundation for Social Entrepreneurship “Social Innovation”

Examples of Leading Social Entrepreneurs

Social BusinessSocial Business

Organization: Sekem Group Founder: Helmy AbouleishCountry: Egypt

FocusLandwirtschaftsbildung, Unternehmensentwicklung, Umwelt

InnovationEntwicklung innovativer biodynam.Landwirtschaftsmethoden, Weiterbildung & Qualifizierung

Strategie Anwendung "grüner" Leitlinien und Technologien in Farms Berücksichtigung sozialer & kultureller Aspekte in Gesundheits- und Bildungseinrichtungen

Hybrid OrganisationHybrid Organisation Leveraged Non-ProfitLeveraged Non-Profit

Organization: Job Factory BaselFounder: Robert RothCountry: Schweiz

FocusArbeitslosigkeit, Jugendarbeitsbedingungen

InnovationZweite Job-Chance für Jugendliche mittels speziellem Praktikum mit effizientem Coaching

Strategie 15 profit- und marktorientierte Ausbildungszentren mit unterschiedl. Fokus (Informationstechnologien, Gastronomie, Gitarrenbau etc.) zur Berufsfindung und -qualifizierung

Organization: Teach for AmericaFounder: Wendy KoppCountry: USA

FocusBildung

InnovationHervorragende Graduierte bilden für die Bildungsgleichberechtigung aller Einkommensschichten

Strategie Ausbildung von exzellenten Graduierten zu bezahlten Lehrern von öffentl. Schulen mit Aktionsfokus in sozial schwächeren Regionen

Quelle: Schwab Stiftung für Social Entrepreneurship, BCG-Analyse

Page 12: Social Entrepreneurship: Challenges and Promises for the Next Decade Mirjam Schöning, Schwab Foundation for Social Entrepreneurship “Social Innovation”

Regional Selection Process

New Regional Selection Process

• Reduction of the Schwab Foundation involvement in the national “SEOY” processes

• Focus on selecting the leading 2-5 social entrepreneurs per region/continent p.a.

Latin America Africa Middle East East and Southeast Asia India

• Using the World Economic Forum regional meetings as platform to highlight regional winners

• Development of new partnerships

National “Social Entrepreneur of

the Year” winners

Newly identified Soc. Entrepreneurs from

other countries

2-5 regional “Social Entrepreneur of

the Year” winners

Page 13: Social Entrepreneurship: Challenges and Promises for the Next Decade Mirjam Schöning, Schwab Foundation for Social Entrepreneurship “Social Innovation”

Regional Selection Latin America

Name Organization Country Sector

Veronica Abud Fundacion La Fuente

Chile Literacy programs for children and youth

Marta Arango CINDE Colombia Early childhood care and development

Andre Cavalcanti de Albuquerque

Terra Nova Brazil Resolution of land conflicts and rights

Martin von Hildebrand

Gaia Amazonas

Colombia Preservation of Amazon rainforest and empowerment of indigenous populations

Rio de Janeiro, April 2009Announcement of winners:

Page 14: Social Entrepreneurship: Challenges and Promises for the Next Decade Mirjam Schöning, Schwab Foundation for Social Entrepreneurship “Social Innovation”

Abbreviated List of Social Entrepreneurs submitting GRI case studies

Health• Making medical technology

affordable, PATH/Aravind/David Green

• Improving access to health services, Riders for Health

• Improving child nutrition, Un Kilo de Ayuda

• Neglected diseases, OneWorld Health• International patent reform, CAMBIA

Poverty Eradication/ Rural Development• Agriculture risk insurance, BASIX• Low-cost energy solutions,

Freeplay/SELCO• Land ownership reform, Rural

Development Institute• Solving the water scarcity crisis, IDE

India• Investment fund for start-up social

enterprises, KickStart• Reversing the urban distress migration,

Gram Vikras• Unleashing the power of the SME

sector, TechnoServe• Universal access to credit, Kashf

Foundation

Education/Human rights• Global literacy, Fundacion La Fuente• Universal socio-financial education for

children, Aflatoun• Creating an enabling environment for

girls, CAMFED/Fundacion Paraguaya

Page 15: Social Entrepreneurship: Challenges and Promises for the Next Decade Mirjam Schöning, Schwab Foundation for Social Entrepreneurship “Social Innovation”

Leapfrog Fund (2)

Phase I completed:

• Site visits, training of staff and beneficiaries, stakeholder consultations and buy-in, purchases of equipment and project assessments and planning by the "importing" social entrepreneur.

• INSEAD initiated research of all 16 Leapfrog finalists discovered that 14 of the 16 replication proposals stimulated by the Leapfrog Fund are in progress (despite not receiving Leapfrog funding).

Phase II in progress:

• The final 50% of the grants has been disbursed to facilitate the purchase of equipment and employment of staff to implement and apply the new technologies.

• Some initial outcomes: Construction of sanitation facilities throughout all households in 2 villages in Jamkhed, Rajasthan.

Construction of compost plant for solid waste management and recycling programs in low cost housing development in Karachi, Pakistan

Research & development of best low-cost solar irrigation model for rural agriculture in Brazil

Production centre with equipment and trained staff established for production of earth blocks, roofing and flooring tiles and certificate training of micro-entrepreneur builders in Batticaloa, Sri Lanka.


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