Center for Science, Technology, and Society, News page
Tuesday, Sep. 2, 2014
The Group to Promote Education and Sustainable Development (GRUPEDSAC), GSBI Alumni 2009, is a Mexican social enterprise that operates sustainable rural development training centers addressing food, water, building technologies, and rural livelihoods. GRUPEDSAC operates two locations in Mexico. The Center sponsored Jack Bird, GSBF 2013 – Zambia, Lifeline Energy, to spend 3.5 weeks (23 June to 16 July) with GRUPEDSAC to prepare a training manual based on their food and water education demonstration training events. During his time in Mexico he learned about the hard work and community that is required to build a sustainable world.
As our truck bumped up the rocky road to GRUPEDSAC’s center at Piedra Grande outside of Mexico City, I remember chuckling to myself at the fact that I had packed shorts and flip-flops for this adventure. Not only was the weather consistently below 50° F and rainy for the entire week I was in Piedra Grande, but within days, all of the pants I had brought were caked in mud and specks of cement, my shoes were falling apart, and several of my shirts were stained with salsa. But if I have learned anything from living and working in the developing world, it is to throw out all expectations and preconceptions about what life will be like.
GRUPEDSAC, a former GSBI participant, is an organization working to promote sustainable development by implementing ecotechnologies in impoverished communities. These technologies include rainwater catchment systems, earth construction methods, and efficient cook stoves. My job was to spend about month between the two centers that GRUPEDSAC runs researching several of these ecotechnologies for the purpose of creating a manual.
After doing similar work in Zambia last summer I figured it could not be much different. But whereas in Zambia I was with two other students and spoke the language, in Mexico I was alone, and with no Spanish under my belt, I was reduced to using hand gestures in order to procure simple items like a tube of toothpaste. In order to adjust to my new surroundings in Zambia, I had been able to ask question after question about everything that interested me including politics, the geography, and culture. In Mexico, I was reliant almost entirely on my ability to silently observe my surroundings. I had a translator to help me with the more technical aspects of the ecotechnologies that I was documenting. However, in order to understand what was going on, I had to patiently observe everything. What I learned from this observation was not just how to create ecotechnologies, but also something much deeper regarding our common future.
What was abundantly clear was how difficult this work was. For instance, building a wall of rammed earth is an incredibly time consuming and energy intensive task. I found myself drenched in sweat after only a few minutes of working and the sunburn I received on the back of my neck was quite a spectacle. But at least I could retreat to the shade from time to time and had the luxury of being driven 40 minutes through the steep hills to the communities where we were working.
What was truly impressive was the commitment of the community members to one another. Many had to walk for hours to be at the given worksite and the women often carried several children and all the food for lunch. Nevertheless, each day there were about 30 or 40 community members working together to build these ecotechnologies. They would start long before I arrived and stay long after I had left, committing themselves wholeheartedly to the implementation of a technology that would benefit only one of their members and make the world just slightly more sustainable.
These campesinos and bricklayers understand something that we in the developing world can learn from. Creating a sustainable world is not easy. It takes a lot of work, and not from just from a single individual. These community members rallied together to help one family at a time, knowing that when it was their turn to build a water cistern or eco toilet, the others would be there to help them. This type of cooperation is empowering not only for the beneficiary of the technology, but also for the community as a whole, which realizes that building a sustainable planet is not reserved solely for those with lots of money and technology. Although each project on its own will not solve the environmental crisis, taken all together this type of community-based dissemination can have a big impact. Observing how these communities were capable of actualizing sustainability certainly gave me hope. The future of our planet depends not on individual effort, but on a widespread commitment to help one another, even if the task at hand is difficult.
Tuesday, Sep. 2, 2014
Fr. Phil is a Jesuit working with the Center completing a Fellowship. Previously, he has volunteered in many places such as Guatemala, Chicago, LA, and the Pineridge Indian Reservation. During his time in these various situations, Fr. Phil noticed that he was working with the poor that have become trapped in dependency. He recently joined the Center because he wants to learn more in order to utilize social entrepreneurship so that he could aid the poor in getting out of the cycle and become more independent.
Enterprise as a Tool for Social Justice
Currently I am an executive fellow at Santa Clara University’s Center for Science, Technology, and Society
(CSTS). The Center’s mission is to assist social entrepreneurs worldwide, primarily through their Global Social Benefit Institute, which provides intense training, mentorship and ongoing support for social enterprises. My goal at CSTS is to help launch the methodology and principles of social entrepreneurship into some of the hundreds of Jesuit Social Ministries worldwide. The aim is not to convert Jesuits or our colleagues into social entrepreneurs, but to solve social problems in an entrepreneurial, innovative and sustainable way.
Life among the Lakota and Maya
As a Jesuit priest who has been on mission in various impoverished areas of the world, I have directly witnessed the demeaning effects governments, churches and NGOs can inadvertently have on the poor, by freely giving various types of “handouts” to beneficiaries they were hoping to empower. Too often, such gifts or handouts keep the poor entrapped in poverty.
For instance, while working on the Pine Ridge Indian Reservation for six years, I often saw the negative and damaging effects that a culture of welfare had upon a people. When resources or money were given freely, people often came to expect more. Not asking people to reciprocate in some form -- so they can bring their own gifts, resources, labor and/or treasure in exchange for needed resources -- denies the dignity and potential of the human person. Such a “free exchange” is really not free because it fails to demand a sense of return of responsibility from the intended beneficiary. It disrespects the exercise of human agency from the intended recipient. I witnessed many Lakota become dependent upon United States welfare or similar types of handouts from churches and non-profits working on the Pine Ridge Reservation. Many Lakota saw no other way to live economically, other than taking what such organizations gave them.
On the other hand, when I lived in the highlands with the Mayan people in Guatemala at the tail end of their 36-year civil war, the government provided practically nothing for the people –no subsidies or welfare. All the people had to work to merely survive, albeit for a paltry $1.00 USD a day, working in the fields of a wealthy landowner. If they did not work, they would not eat. Despite the dehumanizing poverty, the heavy oppression, and the struggle to survive there was an inherent dignity among the Mayan peasants. I will never forget one Mayan peasant I saw walking to work in the fields in the morning. He was tall, sandaled and easily in his late sixties or early seventies. The wrinkles on his face told the story of years of suppression, civil war, poverty, struggle for justice and, yet, overall, pride. This man walked straight up, with his head held high. He was proud to be Indian, to own a hoe, to have work and to be a child of God who found life in the struggle. I witnessed many such Mayan peasants in Guatemala. They had such dignity among such strife. No entity gave it to them, so they found it through their hard work and sense of self. When people exercise their human agency the result is a healthy sense of self, pride and dignity – a deep passion to be exactly who God made us to be.
Poor People Need Practical Means to Create Their Liberation
When it comes to working with the poor, they need something tangible, something concrete to hang onto so they can get themselves out of the poverty trap. Since the 1970’s, the Church has responded to hungry people by talking about liberation theology. Many Catholics have come to realize that it is not God’s Will that people are starving.
A solution lies neither in the creation of a dependent welfare state nor in leaving those caught in poverty to fend for themselves. A viable solution lies in the healthy struggle to work with the poor so they can meet their needs. To alleviate this problem, I’ve come to discover that social entrepreneurship, its methodology and principles, is a viable and lasting solution to this problem. It not only encapsulates positive aspects of capitalism, but also is committed to people living at the base of the economic pyramid – those who make less than $2 USD a day. Social entrepreneurship can actually be an incredibly effective pastoral tool, as well, a way to bring people closer to God and provide them the proper means to create their own their own path of liberation.
JITA Bangladesh: A Social, Entrepreneurial and Innovative Method of Liberation
One example of the liberation I envision is Bushabala, age 26, who lives in rural area of Bangladesh. When her husband died, she had no livelihood. In order to survive and feed her family she had no choice but to work in other households to support herself and her son.
The social enterprise, JITA Bangladesh, has begun to change her dire situation. JITA, a social business under CARE (a leading organization in fighting global poverty) established an Avon-like sales business that employs women to sell consumer goods to other women, who are often stuck at home in the patriarchal villages where they operate. Bushabala became a sales person for JITA distributing and selling household goods to the poor in her community. She journeys from her home every day with a bag of household goods and brings quality items such as soaps, sanitary napkins, and nutritional food to hundred of consumers everyday who never before had access to such basic necessities. She also teaches awareness about health, hygiene, nutrition and how to plant a garden within rural households, which has created tremendous social impact among thousands of consumers.
The income from such sales have enabled Bushabala to be one of the 2,500 women who have been able to lift themselves out of poverty – in her case including the purchase of a goat, a cow, almost an acre of her own land, and the ability to send her son to school.
Growing out of CARE, JITA was created because it saw a human crisis, and found a creative business-oriented solution. JITA supported the women with training, starting capital, and the informed business acumen that has kept the company in the black – not free handouts or products that will disappear with the grant money or when NGO contract ends. JITA has promoted an avenue for Bushabala and the other women in Bangladesh to claim their agency and to promote a livelihood for themselves.
When properly implemented, the method of social entrepreneurship is an empowering act of social justice. It allows us to step aside and let the poor and marginalized become the active agents of change. The poor will no longer need us, because their human agency -- that drive I saw in Guatemala, that will to survive and make the world a better place -- will be fully actualized. It is time to celebrate and act upon this new opportunity that lies ahead of us. I encourage all of the church to tap into our own agency and that of the poor, those who lack the resources to live a better life. In doing so, through the principles of social entrepreneurship, a sound theology and authentic spirituality we will all be living more fully in the kingdom Jesus promised.
Tuesday, Sep. 2, 2014
The 2014 Global Social Benefit Fellowship and Action Research Programs of Santa Clara University
The Global Social Benefit Fellowship
provides a comprehensive program of mentored, field-based study and action research for SCU juniors within the GSBI® worldwide network of social entrepreneurs. The fellowship combines two quarters of academically rigorous research with a fully-funded 6-7 week international summer field experience in the developing world. This is a richly rewarding yet demanding experience, one that requires a time-intensive, nine-month commitment. Continue on to read about the experiences of some of our GSB Fellows while they were in their respective placements.
Team Anudip/iMerit (Kolkata, India)
Rosella Chapman (Political Science), Monet Gonnerman (Sociology), and Kathryn Hackett (Political Science) spent their fellowship working with Anudip/iMerit and travelled to Kolkata, India to complete their work with the social entrepreneurs. Anudip
creates livelihood opportunities for impoverished people by funding and shaping rural training centers that develop skilled professionals and entrepreneurs in information technology. Rosella mainly worked with iMerit, interviewing employees on how their lives changed through the MAST program to then help iMerit to improve internal processes. Monet worked in the DREAM (Developing Rural Entrepreneurs through Adoption and Mentoring) centers looking at ways to integrate technology in the already existing cooperatives. Kathryn was involved in curriculum development and helped to extend their virtual MAST system.
During their time in Kolkata with Anudip/iMerit, the students learned about the women that this program was benefitting. They were able to get to know this group of Indian women who wished to become more independent, and the program that was allowing them to do so. Throughout their trip, the fellows were able to experience various places in Kolkata, and Rosella explained both the good and frustrating parts of being a foreigner, “Overall my goal is to treat each person with respect and do my best to blend in, learning from cultural differences and appreciating Indian culture in every way possible.” Read more about their experiences on their blog
Team Banapads (Uganda/Tanzania)
“There are so many lessons that can never be taught in the classroom, and fortunately for us, we have had the opportunity to make Nyarushanje, Uganda our classroom. “ – Team Banapads
Kaci McCartan (Mechanical Engineering), Caroline de Bie (Public Health), and Ty Van Herweg (Economics) worked with the GSBI alumni Banapads. Banapads
manufactures affordable, eco-friendly sanitary pads to keep girls in school and create local jobs. The team spent their time all over Uganda to work with Banapads and help them with their mission. Their time in Uganda consisted of a fair amount of travelling, adventures (including live chickens!), and some dancing! Their fellowship was a rewarding experience where they were able to to travel and meet many different people throughout all of the communities that Banapads benefits. They were very well received by every single person they met throughout their journey, and they were able to experience how generous people who have so little can truly be. Read their blog
to learn more about their daily adventures and all the wonderful communities they got to meet.
Team Iluméxico (Various States, Mexico)
Alex Cabral (Economics) and Kiara Machuca (Marketing, Spanish) make up Team Iluméxico. Iluméxico
is a social enterprise that provides solar energy to communities in Mexico that do not have electricity. During their time in Mexico, they conducted a customer service study and communication analysis in several rural communities where Iluméxico works, in order to give the company a clearer idea of what they can do in order to improve their product line and customer satisfaction levels. While they traveled throughout Mexico, they were able to meet so many different people from various villages outside of Mexico City. The girls wrote about how every place they went to was beautiful and they people were welcoming and very grateful. In one of their blog posts, Alex explains that in most of the homes, families would have just one light bulb and they could not be more pleased about their light. This really put things into perspective and made Alex question what exactly defines ‘happiness’ and ‘success.’ Read more about their experiences and questions on their blog
Team Nazava (Various Islands, Indonesia)
“Culture shock is necessary to learning and is a humbling experience, and I welcome the opportunities in which I am forced to see through a different perspective.” - Ilhan Ahmed, referring to her trip to Bali
Ilhan Ahmed (Economics) and Lisa McMonagle (Political Science, Environmental Studies) spent their fellowship aiding Nazava Water Filters and island hopping throughout Indonesia. Nazava Water Filters
provides the most affordable and safest household water filters in Indonesia, enabling lower-income households to filter well or tap water, eliminating the need to boil water or use electricity, and reducing human diseases, household costs, and greenhouse gas emissions. The students were never in one place for very long, so they were able to see so much of Indonesia, including Java and Bali. Ilhan and Lisa kept personal blogs, where they share very personal thoughts and experiences about their trip as well as how they ended up applying for the fellowship. Read Ilhan’s blog here
and Lisa’s here
Tuesday, Sep. 2, 2014
James L. Koch
Senior Founding Fellow, Center for Science, Technology, and Society
Don C. Dodon Distinguished Service Professor of Management
Twelve years ago I joined small group of approximately 40 mayors, international NGO leaders, and senior World Bank officials for a meeting with Pope John Paul II. It was five years after the founding of the Center for Science, Technology, and Society at Santa Clara University and six months after the launching of the Tech Awards—Technology Benefiting Humanity. It was also just eight months after September 11, 2001. For me, the takeaways from this Rome meeting mirrored the sense of humility and hope embodied in the network of inventors, corporate leaders, venture capitalists, pioneering practitioners, and World Bank Development Marketplace officials that had been drawn to the mission of the STS Center back home in Silicon Valley.
In this meeting Pope John Paul called for a new solidarity as an essential condition for human progress in the context of mass global migrations to cities. Today, after more than a decade of work vetting thousands of technology innovations for their potential social benefit impact, hands on mentoring with hundreds of social entrepreneurs, and continuous engagement with a global network of practitioners, the broad outlines of a new solidarity are beginning to emerge. But first, Pope John Paul II, in his own words from May of 2002:
“A city is much more than a territory, and economic productive zone, a political reality. It is above all a community of people, and especially of families with their children. It is a living, historically rooted, culturally distinct, human experience. Those who exercise administrative and political control over it have weight responsibilities for the common good of the people, human beings graced with inalienable dignity and rights; just as citizens have important duties toward the community.
The ethos of a city should be marked by one characteristic above others, solidarity. Every one of you faces serious social and economic problems which will not be solved unless a new style of human solidarity is created. Institutions and social organizations at different levels, as well as the state, must share in promoting a general movement of solidarity between all sectors of the population, with special attention to the weak and marginalized. This is not just a matter of convenience. It is a necessity of the moral order, to which all people need to be educated, and to which those with influence of one kind or another must be committed as a matter of conscience.
The goal of solidarity must be the advancement of a more human world for all, a world in which every individual will be able to participate in a positive and fruitful way, and in which the wealth of some will no longer be an obstacle to the development of others, but a help.”
A new style of human solidarity and a general movement of solidarity between multiple sectors for the advancement of a more human world for all are now visible across the 2014 landscape. The messy process of entrepreneurial activity focused on the development of sustainable market-based solutions to the most daunting and urgent issues of our time is a transformative change in business mindsets—one that values human progress and social impact over short-term profits.
This bottom up process is part of a powerful convergence of three trends: triple bottom line business mindsets; friendlier government policies like B-corporation statutes; and, a growing consensus in development economics that aide and welfare without human agency and market mechanism are insufficient to alleviate global poverty. While not to diminish the shrill headlines of regional crises and human suffering, several factors provide encouraging evidence of a general movement of solidarity between all sectors for the advancement of a more human world for all.
The BoP movement framed by the pioneering work of C.K. Prahalad and subsequently documented as a market opportunity
by Al Hammond and his colleagues has evolved since 2002 from small number of case studies to literally thousands of bottom up experiments around the world. There are over 3,000 Ahsoka fellows alone.
Through formalization of the tacit knowledge
from this bottom-up experimentation radically new approaches to technology and business model innovation are being diffused to practitioners, universities, and businesses around the world. The network effects of this diffusion is spreading
viable solutions, creating the economies of scale to stimulate new and complimentary capabilities up and down previously nonexistent value chains. For example, in the off-grid energy space, Beyond the Grid
, a joint US-Africa initiative is leveraging the falling cost of renewable energy generation, advances in storage, smart meter and mobile payment technology, innovative business models, and new distributed energy companies.
The current Fourth Sector Mapping Initiative of the Urban Institute is documenting the emergence of new models of shared value enterprise
—from pay for performance public-private partnerships, to hybrid social businesses, community based co-ops, and B-Corporations. In May of 2002, there were no B-Corporations; today there are more than 1,000.
Sector wide collaborations are focusing resources on the need to catalyze ecosystems and develop holistic solutions. The previously mentioned Beyond the Grid initiative has brought together 27 private sector partners to expand access to clean, affordable energy to 240 million people in the rural and peri-urban communities of Africa. This collaboration spans investors like Capricorn, Gray Ghost, and Khosla Impact, as well as companies like Schneider Electric, and distribution businesses like Solar Sister which is expanding its last mile network of women entrepreneurs to provide energy access
to more than 400,000 homes.
There is an increased readiness on the part of financially strapped local governments to embrace public-private partnership and pay-for-performance social business solutions as more cost effective alternatives to the provision of essential government services.
Innovations in social sector finance are facilitating the aggregation of capital to support the growth financing needs of promising social mission enterprises and leveraging network effects to expand geographic reach or deepen penetration in regional markets. Of particular note here
is the work of John Kohler in the Center for Science, Technology, and Society at Santa Clara University.
The Social Progress Index,
developed under the leadership of Michael Porter, was launched in 2013 as a common way of measuring multi-dimensional progress in human well-being across nation states and over time. It is a robust and empirical measure of the degree to which our institutions are adapting to address the complex and urgent needs of humanity. In some respects it is a proxy for our collective intelligence about how to live more sustainably, justly and peacefully on this earth. In a number of instances these and other measures, like the World Bank’s poverty line threshold of $1.25 a day, suggest that our trajectory of learning and progress is increasing. By the latter measure the United Nations 2014 Millennium Development Goals Report concludes that the portion of the world’s population living in extreme poverty halved between 1990 and 2010.
However, when medical research on minimum nutrition requirements, to say nothing of education, clothing, shelter, and transportation, are taken into consideration this penury baseline guarantees at best a wretched existence.
“In his 2013 book “The Great Escape,” the Princeton economist Angus Deaton argues that poverty measurement is ultimately a question of democratic consensus, not scientific calibration—a continuing exercise based on what is acceptable to policy makers and the public, including the poor themselves” .
Answering the question of how to advance “a more human world for all, a world in which every individual will be able to participate in a positive and fruitful way, and in which the wealth of some will no longer be an obstacle to the development of others, but a help” (Pope John Paul, II, May 2002) is a moral imperative of the highest order.
While the hope of a new solidarity may appear to be within our grasp, progress will depend on our ability to muster the financial, human and social capital needed to address complex challenges both on the ground, in the pioneering work of social entrepreneurs, and at institutional levels. While much has been learned, so much more remains to be learned. Ultimately, we may find that humility and the subtle processes of consensus building, collaboration, and humble inquiry will be our greatest assets.
Friday, Jul. 18, 2014
James L. Koch is the Don C. Dodson Distinguished Service Professor of Management. He was founding director of Santa Clara University's Center for Science, Technology, and Society, and a co-founder of the Tech Museum Awards, as well as the Global Social Benefit Institute (GSBI®).
Among the chief takeaways from the Incubation to Acceleration track I chaired at Michigan’s 2013 BoP Summit was a singular notion: conventional business wisdom has limited applicability at the BoP. That insight stood in stark contrast to the assumptions that underscored the 2003 Networked World Conference at Santa Clara University. The purpose behind the latter conference had been twofold: to engage technologists, inventors and entrepreneurs in alternative future scenarios, and to spark Silicon Valley potential to develop solutions to urgent global problems, including poverty alleviation.
What can we learn from what did – and what notably did not – transpire in the decade between the two gatherings?
In answering that question, it’s important to consider how we might strengthen some of the lessons learned, to frame, as Peter Buffet wrote in a "New York Times" op-ed, “… a new operating system. Not a 2.0 or a 3.0, but something built from the ground up. (A) new code” that “truly creates greater prosperity for all.”
The 2003 Networked World Conference at Santa Clara University
The late C.K. Prahalad delivered the April 2003 keynote at the Networked World Conference – a conference coordinated with Santa Clara’s launch of the Global Social Benefit Institute (GSBI®). Prahalad reiterated the assertion of his 2002 Harvard Business Review article, “Serving the World’s Poor Profitably,” co-authored with Al Hammond, that, “Serving the lives of the billions of people at the bottom of the economic pyramid is a noble endeavor. It can also be a lucrative one.” Moreover, he argued, “Multinational companies should lead this market driven paradigm.”
Why Didn’t MNCs Lead the Way?
Since those early days, Hammond has worked to catalyze the BoP movement at a variety of levels. While my efforts have focused on teaching and mentoring social entrepreneurs, including nearly 200 GSBI ventures, we’ve collaborated in a number of areas such as the development of a sector approach to scaling innovation. Independently, we’ve observed that the BoP market development efforts of major corporations have been greatly eclipsed by grassroots innovators.
Bill Davidow, co-founder of Mohr Davidow Ventures, offered discussant comments following Prahalad’s keynote. In retrospect, they proved prescient. Among them he suggested:
Corporate infrastructure is not equipped to do the job.
BoP markets are risky and fragmented, and the needs are very different. Social customs are different, politics are different.
Unique markets require special attention and understanding. Large organizations like to do things that are homogeneous.
Davidow concluded, “I believe the opportunity is to create lots of entrepreneurship and inventiveness. I have lots of faith in that messy process.”
What Can We Learn from Social Entrepreneurs at the BoP?
The Michigan summit was an opportunity to reflect on the experiences of the GSBI ventures, but also to learn from other conference attendees, especially the individuals who joined my New Venture Development panel: entrepreneurs Donn Tice of d.light and Radha Basu of Anudip; Nancy Wimmer and her meticulously documented study of Grameen Shakti’s transformative rural business model; and Saurabh Lall, director of Research at the Aspen Network of Development Entrepreneurs and recent coauthor of a major study of BoP incubators and accelerators.
Four recurring themes emerged. First, the BoP customer has been poorly understood. Second, customer needs may exist, but market demand for products that meet the need may not. Third, vertical integration is often a necessity. Fourth, depth and breadth approaches offer alternative paths to scaling impact.
The BoP Customer Has Been Poorly Understood
Only recently has the “one-size fits all” myth been rejected. For example, the renewable energy success story of Grameen Shakti grew because it embedded its customized products and after-sales services in rural villages. Even at the BoP, consumers want choices, and may prefer to invest in aspirational goods that give them a perceived higher quality of life rather than goods that directly benefit their health (e.g., cell phone applications like mobile banking versus clean cooking stoves).
Customer Demand Must be Created
While a consumer need may exist, market demand for products that meet the need may not. For example, before d.light could sell solar lanterns, they needed to educate consumers about the product to generate market demand. Similarly, Anudip needed to overcome self-limiting, culturally-based concepts of women’s roles in Muslim society to stimulate demand for its market-based skills training; and Grameen Shakti leveraged the trusted “brand” of Grameen Bank and pragmatic agency of village engineers to create customized use-case solar solutions fitted to the needs of rural households and future cash flows of micro-enterprises.
New Businesses are Often Forced to Become Vertically Integrated.
The actors in the supply chain are commonly in formative stages or simply do not exist. Distribution channels must be created, often to penetrate low-density markets that characterize the rural poor. This was the case for both d.light and Grameen Shakti. Becoming vertically integrated from product design, to manufacturing, marketing, distribution and after-sales service strains the integrative capacity of new ventures and requires increased attention to organizational culture, systems and talent. Because of this, the flat portion of S-curve market cycles stays flatter longer. A great deal can be learned from the practices of organizational development in severely resource-constrained environments.
Influential players including investors and funders are often guided by incorrect assumptions. Conventional business wisdom holds that ventures are most likely to scale through a narrowly focused product or service strategy, or by doing a few things well. While the economic rationality of this approach is frequently compelling in large established markets, many BoP ventures find that becoming embedded in local ecosystems requires that they seek a more significant level of social and economic impact through a depth-scaling approach within a community or narrower geographic context. Key in Grameen Shakti’s becoming the world’s largest solar home system provider to the poor was the ethos of its founders – if the village does well Shakti does well.
How can we strengthen the contributions of incubators and accelerators? Below are four suggestions.
1. Reduce Pressure to Scale
Investors equate scale with success. Despite the uncertainties under which BoP ventures operate, new ventures are often pressured to scale before they know their customers, develop cost efficient distribution channels, understand unit economics and price structure, create demand, and attract and train the correct talent. The incubation phase for new BoP ventures should be a time to gather this information and “get the unit right” before scaling. This entails understanding the “unit of social benefit” or impact as well as the “unit economics” or financial viability of a replicable unit of the business.
2. Coordinate Funding Sources
Capital is often aimed at specific stages of venture development, resulting in fragmented funding sources and “lean periods” as ventures graduate from one funding source but do not yet qualify for the next. John Kohler, Director of Impact Capital in the Center for Science, Technology, and Society at Santa Clara University advocates that incubators and accelerators should facilitate hand-offs across venture financing stages by conscious attention to milestones that are relevant to investor criteria for early-to-growth stages of organizational life cycles. This is a work in progress that will involve re-imaging how capital markets might work if they were truly intended to serve the greater good.
3. Set Appropriate Expectations
There is a greater need to emphasize the challenges of execution. Investments are needed to build the organizational capacity and support sustainable growth. Research by the Aspen Network of Development Entrepreneurs (ANDE) on incubators and accelerators suggests that by fostering a disciplined approach to growth, providing access to technical services, and increasing selectivity these intermediary organizations can become more central actors in facilitating access to a continuum of capital that is aligned with organizational life cycle needs.
(Above: Eco-fuel Africa, a member of the GSBI class, aims to empower communities in Africa by converting locally sourced farm and municipal waste into clean cooking fuel and organic fertilizers. Image credit: GSBI)
4. Codify Informal Knowledge
Over the past decade, hundreds of ventures have been launched, but few have achieved significant scale in relation to the size of the market opportunity. The success of ventures depends on understanding the unique characteristics of doing business with those at the BoP. While the domain is just starting to understand these particularities, this process can be accelerated by learning from the exemplary practices of successful entrepreneurs. Codifying informal knowledge can enable the participants in incubators and accelerators to ground abstract concepts and convert uncertainty into clearly defined risk factors with field-tested mitigation strategies. Incubators and accelerators would benefit from a greater attention to learning from success and failure. ANDE research finds that systematic assessment of social benefit or impact is seldom used by incubators and accelerators as a feedback mechanism to measure and improve their effectiveness.
A Concluding Note
The “fortune at the base of the pyramid” thesis may not have been correct. That’s especially true if our ultimate measure of value is the functioning of the global economy in facilitating growth through the flows of material goods, money, and people. It may not have been correct if we apply the rationality of large company decision making that measures success in quarterly returns or ad revenue growth curves. Neither is this thesis of a fortune in serving the unmet needs of humanity likely to hold in the future if we measure our fortune in the prospects of a sequel to “Angry Birds,” the unprecedented stock option wealth of CEOs, or the ability of social media to lure brilliant mathematicians and physicists to apply their genius to the development of “big data” algorithms for high frequency trading or monetizing the private data of unsuspecting users to benefit a small number of people.
The real fortune at the base of the pyramid is a different kind of treasure — one that is measured in life options as opposed to stock options. It is measured in children who will not die of diarrheal disease before the age of five. It is measured in access to economically sustainable technology solutions that can provide all members of a family with safe water for just eighteen dollars a year. It is measured in the recognition of our collective humanity.
The challenges discussed at the 2013 Michigan BoP summit are complex, and reflect a different mindset and reality than the 2003 Networked World Conference a decade earlier. These challenges call for whole systems thinking. At the same time, we’ve made real progress in identifying the critical factors for market-based solutions to play a meaningful role in providing every child the freedom to hope. In the next ten years, converting those dreams into reality is the scale by which we should measure our progress.
Friday, Jul. 18, 2014
The Pontifical Council for Justice and Peace (PCJP), Catholic Relief Services, and the Mendoza College of Business, University of Notre Dame convened a two-day Impact Investing symposium at The Vatican on June 16-17, 2014. John Kohler, Director of Impact Capital at Santa Clara University’s Center for Science, Technology, and Society offers his reflections on the event.
Pope Francis is the real deal.
In mid-June, I had the distinct pleasure to join a unique 2-day session on impact investing that was hosted by the Vatican. As one would expect, the generative question posed was: “How might the church use or promote impact investing to serve the poor?” What made it unique were the recent writings and pronouncements Pope Francis has made to encourage the use of capital to lift up the poor. Now, for the first time, there is direct acknowledgement and support from the Papacy for those involved in impact investing globally.
Two weeks before we arrived Pope Francis sacked the entire board of the Financial Information Authority (AIF), the financial watchdog of the Vatican Bank, and replaced them with an international group of experts, including a woman. It’s clear that Francis is a man with the courage to enact change. He is intent on using the Church’s position, presence and energies to serve the poor. Impact investing is one of those ways.
Impact investing employs private capital to achieve measurable social and environmental impact, often in underserved communities. While some monetary return is expected, the end goal is a more vibrant community, abundant with opportunities for sustainable, satisfactory livelihoods. At the conference, we explored specific examples of how impact investing aligns with the Church’s mission to serve the poor and used them as points of discussion and discernment.
Part of my contribution were a few observations from the field:
· For micro-enterprises, the mom-and-pop shops that are the critical tendrils of commerce in poor communities, access to capital remains stubbornly difficult or far too expensive.
· Involvement by local banks requires a pledge of substantial assets (which the poor do not have).
· Businesses need ‘capacity development’, a strengthening of their business model, at every stage of the lifecycle, from idea conception to successful execution to spreading and scaling the model.
· Equity exits, (the ability to sell investor shares in a company for a financial return) are difficult to achieve in base-of-pyramid markets.
· It is wise to focus on financial inclusion for women based businesses, since research from Goldman Sachs finds that women are 80% likely to bolster her community with the additional revenue, as compared with men at 30%.
I ended my presentation by showing the following photo (below). In it you can see a woman in a poor community parenting her children. Notice the flower in her hair and in the little girls’. While the backdrop depicts their dismal economic condition, what is strikingly evident is the dignity that these poor people possess. In the main, the poor are not asking for our handout - they are simply asking for the tools to earn a dignified living – the same tools, financial or otherwise, that we have used to build our societies.
In Rome, our discussions navigated in the right direction, but that we have a long way to go. One point I was guided to is the immense complexity of the Catholic Church and how difficult it is to take unified action. There are numerous religious orders—Jesuits, Franciscans, Dominicans, Benedictines—each with their own priorities, approach, and culture. Yet, it’s important not to hide behind the complexity. Even though impact investing is a bold new concept and still somewhat unproven, we must continue to make strides towards discovering new financial tools to work on behalf of the marginalized.
It seems so evident that the Church’s funds should go to those that need it most and in the most sustainable way possible, that in the days that followed, I wrestled with the questions: Why the Church is just now addressing this issue. Why are they so late to the game?
The answer awoke me at three in the morning.
We are the Church. We are already in the game. This little pocket of activity at Santa Clara University is the Church in action. Let’s continue leading the way.
Wednesday, Jun. 18, 2014
What is the GSBI Network and how many organizations are in it?
The GSBI Network is the lynchpin in our plan to multiply the positive impact that we’ve already seen our GSBI programs can have. At Santa Clara University, the Jesuit mission and ethos, combined with Silicon Valley ambition and entrepreneurial know-how, have produced a very powerful formula; we want to make that “open source” and enable others to capitalize on and expand what we have done.
There are 11 members of the GSBI® Network with several other new members currently in the process of formally joining the Network. Most are Jesuit universities, but other members include non-Jesuit, but mission-aligned universities and non-governmental organizations. We’ve got some practices that are working exceptionally well, which we want to spread. Yet, there are important things for us to learn from the other Jesuit members. They are based in the developing nations we aim to serve and have a better context to make change happen on the ground.
Can you give me the top accomplishments of the Network over the last 3 years of its existence?
The GSBI Network was founded in late 2011. In the three years of its existence, more than six new social enterprise incubator and accelerator programs have launched at member institutions. Students are also learning about social entrepreneurship through courses and experiential learning opportunities that let them engage with social enterprises in their communities or across the globe. Network members are also sharing best practices directly with each other in true South-South collaboration. Members of the GSBI Network have individually established themselves as thought leaders in social entrepreneurship through publications like the Journal of Global Management for Sustainability’s special issue on social enterprise. Network programs have already supported the efforts of dozens of enterprises.
In what specific ways would you like to see the Network evolve over the next five years?
We want to grow dramatically in the number and breadth of members – engaging university and non-university members. We also want to see the collaborations and partnerships among members multiply. Finally, maybe most importantly, by seeing how certain practices work across multiple sites over time, we can pin down the best practices for building an ecosystem that enables social enterprises to flourish.
Given the recent global meeting of the Network on May 19-21, what are the action items/collaborations that come out of it? How did this meeting differ from past Network meetings?
Some of the positive outcomes from the recent May meeting include an agreement for Santa Clara University to deliver a “train the trainers” program at Ateneo de Manila in the Philippines share our methodology with 8 Asian Jesuit universities. For the first time ever, we engaged domestic (US-based) Jesuit institutions with the GSBI Network and expect that some of them will go on to launch social enterprise programs.
Another outcome we’re especially excited about is a commitment among other GSBI Network members to pursue an innovative “Replication” idea, where we would orchestrate something akin to franchising successful social enterprise business models from their original communities to new sites using the GSBI Network members as Replication Hubs. Many successful social entrepreneurs don’t seek to grow their business too far beyond a home community that is the focal point for their passion. A Replication network would enable us to take already-proven business models, match those with carefully selected entrepreneurs, and give them training, support and mentorship at a GSBI Network member; this would dramatically improve their chances for success and investment-readiness.
I read that the focus of the meeting was on having students spend their service learning time helping social enterprises solve practical challenges. Is this correct? Will this be a push to involve students more directly in the work of the Network?
As institutions of higher education, GSBI Network members have a special interest in global education and experiential learning for their students. SCU shared our innovative Global Social Benefit Fellowships program, which raises the bar on traditional models of service learning; beyond giving students a chance to visit and volunteer in the developing world, our GSB Fellowships engage students in direct work with a social entrepreneur to provide a valuable business service or deliverable that helps the enterprise. Other Network members are also innovating in this space, like Ateneo de Manila’s SE Consultancy course, in which student teams work as consulting teams for local social enterprises.
Across the world, cash-strapped social enterprises frequently lament that getting and keeping competent personnel in uneducated communities is one of their greatest ongoing challenges. Students and faculty offer a tremendous reservoir of volunteer talent, to help enterprises complete important projects at low or no cost. The benefit is mutual: for Universities with a mission to serve humanity, social enterprises offer a compelling opportunity for global education and learning through service.
Students are eager for these opportunities, and the Network members see this as an excellent way to connect our centuries-old mission of education and service to humanity, with cutting-edge programs to foster social entrepreneurship.
How can I help or get involved?
One of our most pressing needs is to grow our pool of GSBI mentors. Mentors are seasoned business professionals who work directly with social entrepreneurs to develop their business. We are taking more social entrepreneurs under our wing, and more mentors are needed to support them. We are especially seeking people with direct experience as entrepreneurs and investors. However, we are also in need of professionals at various levels who bring experience in areas such as finance, marketing, business strategy, and human resources. Many of our social entrepreneurs have a great idea and a passion to help their community, but have limited knowledge of the mainstream business principles that Silicon Valley business professionals encounter daily.
The Center also relies on charitable contributions of every level to operate. While the University covers our overhead, the Center’s programs are completely sustained by grants and donations. We are counting on community support to enable the Network to reach its full potential.
Wednesday, Jun. 18, 2014
Established in 1876 by Joseph A. Donohoe in honor of John Nobili, S.J., founder of Santa Clara University, the Nobili Medal is given to the male graduate for his constructive contribution to the University as deemed by the faculty and the provost. Jack Bird won the historic award for outstanding academic performance, personal character, and student activities.
The most defining of those activities was the Global Social Benefit Fellowship.
“The Fellowship has truly been the most inspirational and stimulating experience I have had at Santa Clara University” remarked Jack.
“My time in rural Zambia allowed me to synthesize what I had learned in the classroom with real world issues and gave me a chance to actualize my passions in service to humanity. The Fellowship has shaped my vocational perspective in ways that I never imagined were possible.”
Jack worked alongside fellow Santa Clara students Lynsey Cumberford and Laura Ruggles at the Jesuit Chikuni mission, four hours south of Lusaka, Zambia. The Fellows conducted action research projects to evaluate and further develop Chikuni mission’s agroforestry and energy education program.
The three also worked with GSBI® trained social enterprise Lifeline Energy, which enhances the education of rural Zambians through the Lifeplayer, an interactive radio.
Wednesday, Jun. 18, 2014
JUNE 17, 2014 - ROME: Catholic Relief Services and the Mendoza College of Business at the University of Notre Dame, together with the Pontifical Council for Justice and Peace (PCJP), closed its two-day symposium regarding Impact Investing today.
Some of the highlights included
· Dr. Carolyn Woo, President and CEO, Catholic Relief Services, began the day by providing an overview of day one highlights. She discussed the importance of measurement, details and the new framework we must work in to properly design and execute a successful Impact Investment program. Woo also described the important role as a moral authority the Church needs to play moving forward.
· Sr. Helen J. Alford, O.P., Dean of the Faculty of Social Sciences at The Pontifical University of Saint Thomas Aquinas (the Angelicum), helped to shed light on Impact Investing in the Light of Evangelii Gaudium. She explained that “the Church needs impact investors to be reliable, concrete and relevant,” and added “This is not a new issue—it’s old, it’s part of bigger movement—creating money and creating social good at the same time.” Religiously inspired investors among religious communities such as the Methodists and Quakers were among the first to employ social benefit as a criteria in investing. Turning to Pope Francis’ Apostolic Exhortation, according to Evangelii Gaudium, the number one priority of our mission should be social inclusion. Pope Francis has talked about how exclusion is one of society’s biggest problems.
· Sean Callahan, Chief Operating Officer, Catholic Relief Services, led a panel on Sectoral Needs and Opportunities. He made it clear that it’s not a question of whether we do these things—but when and how we do these things and added that we all must align in the same direction. Shaun Ferris, Director of Agriculture Programming, Catholic Relief Services, described agricultural livelihoods in Latin America and CRS’ Path to Prosperity model, moving beneficiaries from the status of Recovery (highly vulnerable); to Building (vulnerable, yet viable); to Growing (entrepreneurial and thriving); Tom McPartland, CEO, ELMA Philanthropies Services, described some very successful Impact Investing programs for healthcare in Africa; and Paul Polak, Founder and CEO of Windhorse International, presented several case studies about his success designing water programs in India.
· Dr. Mirza Jahani, CEO, Aga Khan Foundation U.S.A, ran a session about Blending Philanthropy and Impact Investments in a Faith-Based Model. He explained the goal of the organization: to improve quality of life through local, permanent institutional development and added that the key to his organization’s success has been in building institutions that take a long-term approach to addressing social issues. These include banks in Afghanistan, a university in central Asia, a park service in Nairobi, Kenya, and a hospital in Karachi, Pakistan, among others.
· Matt Bannick and Sal Giambanco from the Omidyar Network described the important collaboration that must take place between for-profit and non-profit communities. We all have shared interest here. We care deeply about disadvantaged and the poor and our core values very much aligned with Pope Francis and other universal principles. This begins with respect and ends with humility. They added that the three fundamental keys to profit investment are value, self-sustainability and massive scale.
· Terry Mollner, Board Member, Calvert Family of Socially Responsible Investment Funds, presented on Emergence of Investing for Good, and Ernest von Freyberg,President of the Holy See’s Institute for Works of Religion, provided Vatican Bank perspective on Impact Investing. According to Freyberg, the Catholic Church is well positioned to engage with Impact Investing. It has an impact vocation in promoting the dignity of the human person. It has great service providers in its global ministries in health care, education and social services. And the church has great potential impact investors: the Catholic Church in Europe and North America built up tremendous wealth in the 19th and 20th centuries, and as its institutions shrink, church groups are looking to put this patrimony to use.
· Mark Palmer, Chief Financial Officer, Catholic Relief Services, moderated a panel about the outlook of Catholic institutional investors and introduced Steve Schott, CapTrust Advisors and Jimmy Ryan from Merrill Lynch/Bank of America. According to Schott, “There is an appetite among my clients to learn more about Impact Investing.” Ryan explained that none of his clients are engaged in Impact Investing yet because he has not heard enough about the options available for his clients. He added it will be important for everyone to become educated on this topic.
· Andreas Widmer, Director of Entrepreneurship Programs at The Catholic University of America and President of The Carpenter's Fund, suggested that there should be very different teams for humanitarian aid vs. economic development, just as in a counseling relationship there are different providers who handle crisis and long-term counseling, so we don’t fall into the co-dependency trap. He explained that we need to find the best entrepreneurs on the ground in the countries to be role models. He ended by saying the root of evil in companies does not come from the system but resides in individuals making bad decisions. We need to hold our business community to a higher standard and live our Christianity seven days a week, not just on Sunday. Because as Pope Francis has said, business is a noble vocation.
· Dr. Patricia Dinneen, Chair, Impact Investing Council, Emerging Markets Private Equity Association, said that the conference had achieved its three objectives:
o Shared learning
· His Eminence, Cardinal Peter K. A. Turkson, President of the Pontifical Council for Justice and Peace, closed meeting by saying “everything we have done here is a way of responding to the Pope’s call for inclusive economics for the common good. In a very real way our discussion here on Impact Investing is a way of also addressing how we can make market-based business reach out to fashion an inclusive system of economics.” He added that we need to have a strong strategy and competent people on the ground to execute, and he sees CRS as playing a mediating role. The most immediate task is to present all that has been discussed during this conference to the local churches and the local bishops.
He gave sincere thanks to all attendees and ended with a blessing for all attendees for safe travel back to their homes and their families.
Monday, Jun. 16, 2014
JUNE 16, 2014 - ROME: Catholic Relief Services and the Mendoza College of Business at the University of Notre Dame, together with the Pontifical Council for Justice and Peace (PCJP), convened its two-day symposium regarding Impact Investing today just outside the Vatican in Rome, Italy.
Some of the highlights included:
· A private meeting with Pope Francis at the Vatican. The Holy Father addressed all 100 participants of the conference and then met and shook hands with each attendee. “I offer you a warm welcome and I express my gratitude and appreciation for your Conference, which offers an important contribution to the search for timely and realistic strategies to ensure greater social equality,” Pope Frances told the conference participants. “A sense of solidarity with the poor and the marginalized has led you to reflect on Impact Investing as one emerging form of responsible investment.”
· Dr. Carolyn Woo, CEO & President of CRS, called the gathering “a conference of high church and high finance.” Regarding the issue of why we are engaging in Impact Investing, she added, “We must, we can and we will. Our Faith tells us we must do this, major studies prove that we can eradicate poverty and today we will learn how to do it effectively.”
· Dr. Filipe Santos, Academic Director, INSEAD Social Entrepreneurship Initiative, started the conference by introducing the concept and context of Impact Investing. He defined Impact Investing as “the purposeful allocation of financial resources to initiatives that can deliver measurable societal impact (social and environmental) alongside financial returns.” He noted that society is divided into three sectors: the commercial sector, the public sector (government) and the charity sector (foundations and philanthropy). The trend over the past 10 to 15 years has seen the public and charity shrink while the commercial sector has grown exponentially. At the same time, there has been an increased dissatisfaction with the role of both the financial system and the commercial sector in allocating resources in a productive way, and the inequality that results from a concentration of wealth. This has provided a motivation for the rise of Impact Investing. He also noted that in order to pursue Impact Investing, we must let go of prejudices, such as the discomfort many feel at seeing an entrepreneur who helps the poor receive high compensation.
· Dr. Pat Dinneen, Chair, Impact Investing Council, Emerging Markets Private Equity Association, introduced three speakers who described successful Impact Investment projects that include insurance, healthcare and microfinance already taking place in Brazil, Nicaragua, Southeast Asia and several countries in Africa.
· Sir Ronald Cohen, Head of the Social Impact Investment Task Force established by the G8, said we are on the brink of a revolution that will help developing countries. He described more than 26 Social Impact Bonds -- in which investors fund social services and are paid back by the government from its savings if certain benchmarks are achieved -- that are already working around the world to help prisoners, hospitals and microfinance. Official aid is being dwarfed by private investors, and it’s time for us to step up and reshape the concept of philanthropy.
· Father Seamus Finn, OMI, Vice Chair of the Board, Interfaith Center on Corporate Responsibility, presented the concept of Impact Investing through the lens of Catholic Social Teaching. He described the responsibility of the Church as laid out in Catholic Social Teaching to help promote the common good. He noted that historically church communities, such as monasteries and universities, created cultural “spaces” in which new ideas could be tried, and that the Catholic Church might provide such a space for Impact Investing. He also described some of the challenges of the model, such as reputational risk and skepticism in some Church circles toward the corporate sector, as well as adherence to the Precautionary Principle, that this new approach must have a reasonable prospect of success without doing a lot of harm, especially to the poor, should it fail..
· Margie Sullivan, COO Chief of Staff, USAID, moderated the next panel. She said that 30 years ago 90% of development was generated by the government, and 10% from private investors. Today it is the inverse, as the role and scale of government shrinks. The panel included Dr. Rajiv Shah, Administrator of the U.S. Agency for International Development, who said his $20 billion agency with a staff of 10,000 should use its resources in a catalytic way. “We can achieve transformational changes,” he said. Other panelists included Tom Steyer, founder of NextGen Climate and John Rogers, Executive Vice President, Chief of Staff, and Secretary to the Board of Goldman Sachs.
About Catholic Relief Services:
Catholic Relief Services is the official international humanitarian agency of the Catholic community in the United States. The agency alleviates suffering and provides assistance to people in need in 93 countries, without regard to race, religion or nationality. For more information, visit www.crs.org and on social media: Facebook, @CatholicRelief, @CRSnews, Goggle+, Pinterest and YouTube.
Catholic Relief Services: http://newswire.crs.org/media-contacts/
Mendoza Business College: http://business.nd.edu/contact_us/#mendoza_press
A daily summary will be posted on the conference website.