#SocEnt, Capitalism, Change, Charity, Davos, franchise model for social change, Global impact, Global social impact, Impact Investing, Ray Kroc, Social business, Social developers, social development, Social Enterprise, social entrepreneur, Social Entrepreneurship, social impact, Social investing, Social Investor, social sector., World Economic Forum
“This week’s 2013 World Economic Forum calls for social entrepreneurs as architects of this year’s theme: Resilient Dynamism. Last year at Davos 2012, after a panel on social entrepreneurship, I witnessed the room buzzing with phrases like “creative capitalism” and “solving the problems of the world’s poor” as bubbly champagne was poured and shrimp cocktail served. The world business owners,celebrities, and athletes, dressed in black suits and armed with blackberries, vigorously engaged in discussion, forming a new social enterprise mafia. But is this a bit of self love and self congratulation? What has arisen for elites is social enterprise as the solution, a remaking of the world in the image that has made them successful. Charity is no longer charity: it is applying capitalism to make the poor rich.
While it would be convenient and gratifying if maximizing profit and minimizing social suffering worked well together, evidence suggests that in many instances, the combination is a volatile one. Social entrepreneurship is just a buzz word, and it never succeeds without a deep understanding of the local environment, corporate governance, and long-term infrastructure. If I were Bill Gates or any other elites at Davos, I would remove the champagne and shrimp cocktail and bring the CEOs to India for a week as an assessment team. The concept of social enterprise, so attractive in sites like Davos, tends to fall apart when we actually step outside the Western world. I know it did for me and I wish I could give theelites at Davos the same experience.
I joined an education social enterprise startup in 2009 focused on selling high quality e-learning tools to schools in small towns. It was led by an Indian-American, with an all-Indian board. It sounded great to me. We had adiverse team from both India and the US with backgrounds in social enterprise fundraising, networking and technology product development and a wealth of Indian education contacts. Within three months, our apparent promise made us an education award finalist at an Indian social enterprise forum in Mumbai. The only problem was that this promise ended up being an intention without effective follow-through. We ended up not getting the funding we needed and did not sell any e-learning tools to the schools we visited. I took away three major lessons for our social enterprise attempt that failed. First, it is difficult to lead a social enterprise with a Western perspective. We were structurally set up to please our investors more than our customers, causing a haze of distraction. Second, in any sizeable market, social enterprises cannot get too far before being hit by the big players. We were quickly overthrown by large for-profit education corporations who were entering the low income market and were better than we were. Lastly, investment takes commitment and ongoing resources. I lasted almost a year, but other priorities, and frustration, lured me away. Just how far does the patience and commitment of those in the Davos group extend?
I don’t want to be too hard on social entrepreneurs. Certainly foundations with large amounts of money arefacing similar problems. The Bill & Melinda Gates Foundation has spent $450M in funding for a malaria vaccine, with no cure yet in sight. Google.org, founded by Larry Brilliant, was set to change the face of philanthropy, butrecently scaled back, reorganizing around more modest goals that play to the company’s high-tech strengths. From these examples, social enterprise is an improvement over merely aid with no thought, but there are places where it is being done well and others where it is being done poorly.
Current work among the elites and work in social enterprise can indeed be a good thing, but we need to get away from romanticizing social entrepreneurship and instead focus on providing the resources that local social entrepreneurs need to grow these enterprises. My request to Davos leaders; let’s remove the bubbly champagne and shrimp cocktail, turn the social enterprise mafia into an assessment team in India, and examine social enterprises for both their strengths and limitations–that is resilient dynamism.”
A wonderful blog on Forbes’ website that addresses the role social enterprise should be playing in our current economic times: http://www.forbes.com/sites/85broads/2013/01/23/at-davos-a-romance-with-social-entrepreneurship/.
Other interesting blogs: Where Are the Ray Krocs of the Social Sector? (http://blogs.hbr.org/cs/2013/01/where_are_the_ray_krocs_of_the.html)