In this blog, I will tease out some of the key points and questions which emerged from the conference.
From charity to innovation
Philanthropy and Overseas Development Assistance are not enough to create a lasting impact on a number of urgent development challenges in the world. What is needed is a shift from charity to ‘social innovations’, which is a new way of exploring untapped resources and approaches to tackle daunting global issues. The private sector can play an important role in propelling this trend. With the right products, strategies and channels, private companies can provide water, sanitation, health and housing for those in need in a sustainable and commercially viable way.
The meaning of ‘sustainability’ and ‘scalability’
In a panel discussion entitled ‘the social entrepreneur’ – panellists, who are working in the areas of corporate citizenship and social entrepreneurship in global companies, repeatedly highlighted that their corporations are increasingly focusing on ‘sustainability’ and ‘scalability’ rather than profitability in their businesses. While these two terms are providing important input to targets in the private sector, which I believe is a desirable trend, how do these corporations define these elusive notions? And do they have any methods to monitor and evaluate them?
Challenge of measuring ‘social impact’
One of the central motives for social entrepreneurs is to generate ‘social impact’ or ‘social values’ through their businesses. Again these terms are challenging to define, evaluate and assess. For instance, certain values such as ‘well-being’ and ‘happiness’ are significantly different by sub-regions and may not be suitable as universal measurements. Some researchers and organisations are making admirable efforts to systematically evaluate social impacts but most of these initiatives are still in early stages of development.
Importance of linking livelihood support with market demands
‘Own Your Own Boda’ (OYOB) is a for-profit enterprise that provides financial services for motorcycle taxi drivers in Kampala, Uganda’s capital, to purchase their own motorcycle. The loan repayment rate is quite good with few failed cases, offering the drivers an attractive alternative to expensive motorcycle rental prices. Many drivers are now on a waiting list for this loan. The success of OYOB’s model highlights the importance of linking micro-loans with market-based livelihoods. These motorcycle taxi drivers already have a means of generating income, which is based on significant demands for cheap and fast transportation in Kampala. Micro-credit programmes sometimes provide money without adequately examining the cash-generating capacity of recipients’ livelihoods, which should be evaluated vis-à-vis existing and potential demands for their subsistence.
The private sector = dangerous?
The private sector and markets are sometimes portrayed as ‘dangerous and exploitative’ by biased development workers and institutions. However, the important thing is whether a right product or service is provided for those in need and whether customers feel that they are being exploited or not. For example, OYOB is not necessarily providing a ‘cheap’ loan, however motorcycle taxi drivers are able and willing to pay this financial cost since they have little access to financial services provided by banks or other financial institutions.
Balancing ‘social’ and ‘commercial’ goals for social enterprises
Many ventures collapse in the first few years after initiation. For enterprises pursuing both social and commercial goals, financially stabilising their business seems to be even more challenging than for-profit enterprises. I chatted with one founder of a for-profit social enterprise running a remittance business. Although his enterprise sounded to be gradually increasing in number of customers, he frankly admitted that the company has not yet reached the break-even point. His comment resonates with another comment from the founder of a social venture in the field of energy in Uganda.
The importance of bottom-up approach
‘Ask, listen, listen and listen…’ and ‘start where people are and build upon them’ – these are phrases which speakers and panellists, especially those working in developing countries, resonated. Many of them emphasised the importance of learning from mistakes and of modifying their products, programmes and services. ‘Learn from mistakes’ is a mantra widely acknowledged in the private sector but it is less appreciated in the development and humanitarian sector. The previous failures and bad practices may be an important source of innovations.