Building local capacities of the poor and marginalised must be recognised as an essential part of social entrepreneurship.
Ideas have the power to change history. When new ideas emerge, they challenge established ways of thinking and acting, and suggest alternative approaches to resolve problems confronting the world. Yet ideas can turn out to be birds without wings. Without visionary and committed individuals who can actualise them, new ideas will hardly make any difference to the lives of people. They will remain as wishful thinking and disappear without trace.
Many social entrepreneurs across the world today have been able to make a mark not merely because of their innovative solutions to specific problems of poverty, illiteracy, health care, inequality, insecurity and environmental degradation but because they have also worked with determination towards a systematic realisation of those ideas for social transformation.
David Bornsteins How to Change the World narrates the stories of 10 such visionary entrepreneurs. It includes people such as Fabio Rosa of Brazil who spearheaded rural electrification for poor farmers; Bill Drayton of the United States who instituted the Ashoka foundation to nurture and provide financial support to budding entrepreneurial leaders; Jeroo Billimoria who founded Childline in India, a 24-hour emergency response system to help children in distress; Erzsebet Szekeres of Hungary who championed the idea of assisted living for the disabled; and Veronica Khosa of South Africa who started home-based care for human immunodeficiency virus (HIV) and acquired immune deficiency syndrome (AIDS) patients.
Bornstein intersperses the stories of these remarkable individuals with attempts to identify common patterns and traits among them. Who becomes a social entrepreneur? How does one become a social entrepreneur? What criteria can we use to identify someone as a social entrepreneur? The motivation behind such an introspective exercise is that despite their varied backgrounds and areas of intervention, if one can recognise some common qualities, we can find these pioneers, nurture and support them; their ideas and experience can be spread to others working in the same or similar fields.
Bornstein identifies six traits to be the hallmark of a good social entrepreneur. The first one is the willingness to self-correct. While governments, big development agencies and bureaucratic institutions hold fast to their predetermined ideas and programmes even when they are found to be not working, social entrepreneurs are honest enough to admit their mistakes and flexible enough to try out other things that will work.
Second, charismatic social entrepreneurs are team players, willing to share credit with others instead of attributing success to themselves. Third, entrepreneurial projects which address social problems are successful to the extent the initiators are willing to take risk and think out of the box, venturing out to remedy something in society that will invariably bring confrontation with established structures and institutions.
Four, good social entrepreneurs realise that for effective achievement of their goals and objectives it is important to network and build bridges with other actors involved. Governments, universities, businesses and non-profit organisations should be viewed more as allies than as competitors or antagonists in doing good. Five, most social entrepreneurs have preferred to work quietly focussing on their goals rather than seeking the limelight. When public recognition comes their way, most often after many years of quiet work, they accept it gracefully and use the opportunity to scale up their outreach.
Finally, what differentiates social entrepreneurs from business entrepreneurs and drives them to engage in what they do is the ethical motivation to improve the quality of life of the poor and marginalised.
Bornsteins list of identified qualities, however, misses out another essential trait that comes out so very strongly in most social entrepreneurs: building local capacities for sustainable social change. This feature calls for working with the poor and marginalised to identify their individual and collective capacities and helping them to develop those capacities. In some cases it may mean helping individuals or small groups to participate more effectively in the economy and gain easier access to the market. In other instances, it may require organising grassroots groups with a view to influence governments and policymakers.
For example, the Self-Employed Womens Association (SEWA) started by Ela Bhatt in 1972 has until now helped approximately 9.6 lakh self-employed women, including hawkers and vendors, home-based workers, manual labourers and service providers. In addition to protecting them from exploitation from the local elites, the police and public officials, SEWA offers many services to build their capacities, including banking and financial services, access to health care, skill development, leadership training and development. SEWA has also been quite influential in the formulation of national and international legislation and policies to protect the rights of self-employed women.
Whatever direction the local capacity-building effort may take, entrepreneurial leaders with a social agenda have been very careful to mobilise existing resources of the poor to improve their lives rather than simply import resources and services. This is because mobilising the resources of the poor and grounding development projects in local commitment and capacities increases the likelihood of sustainable social change.
With the intimate knowledge that comes from their fieldwork, social entrepreneurs have come to realise that without the willing participation and cooperation of local partners, development initiatives are bound to fail. Moreover, contribution and involvement create a sense of dignity and ownership among the beneficiaries that they too can take part in a reciprocal relationship. Inclusion of this trait of identifying and cultivating local capacities will make the profile of a social entrepreneur more complete.
Muhammad Yunus, the Nobel Peace Prize-winner and the founder of the Grameen Bank, is a social entrepreneur par excellence. Not only does he embody many of the identified qualities of a social entrepreneur, but his idea of microcredit as a strategy to overcome poverty has spread to every continent and benefited millions of families across the world. He reversed the orthodox banking theory by showing how to extend collateral-free loans systematically on a cost-effective basis to poor villagers, particularly women. He dared to ask: How do you know that the poor are not credit-worthy if you have not tried it out? It is perhaps banks that are not people-worthy.
In his first book Banker to the Poor (Penguin Books India, 2007), Yunus chronicled the idea and development of microcredit and the Grameen Bank. It was also meant to be his autobiography intertwined with his work and vision for the poor. Now, in the sequel Creating a World Without Poverty, he goes a step further than microcredit to propound and promote the idea of social business. It is, according to Yunus, a business that is totally dedicated to solving social and environmental problems. It is neither charity nor a not-for-profit endeavour. It operates on business principles and aims to cover its own costs rather than rely on some external source of funding. The product or service offered by a social business is not free. It charges a fee so that it can be self-sustaining and can grow in potential.
The difference between a social business and other businesses lies on its principle of social benefit. While dominant business enterprises are driven by profit-maximisation and are intended to achieve some limited personal gain, social business operates with the aim of addressing a social cause. For this purpose, investors who want to do something noble with their money can invest in a business that works towards achieving a specific social objective or in a business that is owned by poor people who want to escape from poverty.
The investors, however, are entitled to recover only the amount invested and not dividends. The surplus made here gets reinvested in the business itself either for expansion or for starting up another, related social business, thus passing on the gain back to the target group of beneficiaries. As Yunus aptly puts it, a social business is a non-loss, non-dividend business.
Yunus clarifies that social business is not the same as social entrepreneurship. He understands it as a species and as a special variety of social entrepreneurship for the reason that social entrepreneurship as it has been understood so far is a broad idea that includes any initiative to help the poor. It can be monetary or non-monetary, for profit or not for profit. As Yunus illustrates, distributing free medicine to the sick can be an example of social entrepreneurship. So can setting up a for-profit health care centre in a village where no health facility exists. But in the case of a social business the objective is specific and well focussed. The aim of a social business is to address a social concern through business principles and operation.
As one of its first models of social business, the Grameen Foundation, in a joint venture with the French food company Danone, runs a factory to produce fortified yogurt at affordable prices to bring nutrition to malnourished children in Bangladesh. Interestingly, not only the milk used comes from local people, but also the cows that provide the milk are bought with loans from the Grameen Bank. The companys aim is to expand the business until all malnourished children in the country are reached with this yogurt. Yunus believes that the current social-entrepreneurship movement should pay more attention to and move in the direction of social business because sustainable social change can be more effectively brought through social businesses than through direct charity or non-profit organisations.
In Creating a World Without Poverty, Yunus has two aims: the first is to inspire and initiate a social business movement closely modelled on the Grameen Bank experiment. The second is to articulate the foundational principles that inform and sustain social business.
Yunus criticises the model of one-dimensional human beings espoused by mainstream economics and business thinking. He says: In the conventional theory of business, weve created a one-dimensional human being to play the role of business leader, the so-called entrepreneur. Weve insulated him from the rest of life, the religious, emotional, political, and the social. He is dedicated to one mission only maximise profit. He is supported by other one-dimensional human beings who give him their investment money to achieve that mission.
Such a lopsided view of human behaviour, according to Yunus, is a conceptualisation failure. A balanced and realistic view would be to think of human beings as multidimensional beings motivated not just by profit, but by many factors including sympathy, trust, compassion, fairness and justice. A multidimensional view of the human being is a seedbed for different types of entrepreneurs concerned about doing good to people, society and the environment.
Further, social business is premised on the idea that poor and marginalised people are social assets from which everyone can benefit. Given the right environment and opportunities, the poor, just like anyone else, would be able to participate, contribute and succeed in the economic process. There is no reason to be pessimistic or fatalistic about their talent and future. Contrary to this, governments, non-governmental organisations and development agencies have far too long viewed the poor as a social liability and have failed to recognise their capacities to contribute.
Policies and programmes for the poor have often considered them as mere beneficiaries rather than agents who can take their destiny into their own hands. Among some development audiences such ideas are now slowly being replaced by a more positive attitude. Yet a social business that involves the poor and marginalised and which is specifically targeted to alleviate some of their sufferings and misery will be a more effective venture.
And finally, social business is a realistic way of correcting and refining capitalism to help the poor. As Yunus puts it, capitalism in its present form is a half-developed structure. It needs to be completed with many of its missing elements. Entrepreneurs engaged in social business and investors who want to support them with their capital should keep a critical watch over the way globalisation and the free market operate. While believing that globalisation and the free market have the potential to help the poor, it should be realised that this does not happen automatically.
Yunus warns: Unfettered markets in their current form are not meant to solve social problems and instead may actually exacerbate poverty, disease, pollution, corruption, crime, and inequality. Comparing globalisation and the global trade to a hundred-lane highway that criss-crosses the world, he points out that without stoplights and speed limits, rules and regulations, small and marginal users will be crushed or edged out by big giants. Hence, global as well as local markets need to be regulated to protect the interests of the poor. Without such regulations the rich and the already well-off can alter the conditions of the market to make it work for their own benefit.
Not every social entrepreneur has been able to build a theory out of his/her work and achievement as Yunus. Some among them do not even have the time or interest to make predictions about their work.
Nevertheless, what has been quite common to all noteworthy social entrepreneurs is the commitment and dedication to build local capacities of the poor, and pursue their ideas with passion to the very end for a qualitative change in peoples lives. It is this unique and proven capacity to endure until the very end and be busy with the details of how to make things happen that makes social entrepreneurs a rare breed of leaders whom the young generation can aspire to follow.
Unfortunately, social change theories have too often glorified ideas and their place in history quite disproportionately. They have been busy concentrating too much on how ideas influence hearts and minds. The emerging class of social entrepreneurs is a living proof as to why this oversight needs to be corrected.
Ideas no doubt move people, but we also require generous, public-spirited, hard-working, resilient and dedicated people to move ideas from the realm of theory to practice. Without such people, the world would have been much poorer than what it is now. With more of them, we can certainly hope for a better world tomorrow.