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Wednesday, Nov. 20, 2013
Originally published on Weds, Nov. 20 2013 on nextbillion.net
The BoP Summit organized by William Davidson Institute last month focused on creating an “action agenda” to help build better enterprises serving the global poor. In both breakout and plenary sessions, human capital emerged as a core challenge. Specifically, many social enterprises struggle to attract, develop, and retain talent – especially in rural markets that lack infrastructure and the big-city vibe that appeals to young entrepreneurs.
A number of social enterprises focus on livelihood training and have developed hybrid models. GSBI alum Anudip, for instance, provides market-aligned skills training for marginalized women and youth in rural and peri-urban India. Graduates can compete in the open market, or if they wish to remain in their communities, work at global “smartsourcing” firm iMerit, a for-profit in which Anudip holds a significant stake. Digital Divide Data, another GSBI alum, provides higher education opportunities and impact sourcing employment to youth in Kenya, Cambodia, and Laos.
Many social enterprises provide other goods and services that governments and markets fail to deliver – safe drinking water, clean and affordable energy, therapeutic foods, agricultural inputs – to name a few. While these enterprises frequently result in dignified livelihood opportunities that fuel local economies, the paucity of proximal talent can impede their rate of scaling. Experienced managers know that the cost of turnover is high: it takes time to recruit and develop; institutional knowledge, often not centrally stored is lost; and relationships that drive revenue aren’t instantly transferable. Harris and Kor recently reported on the role of human assets in scaling of social enterprises.
The human capital challenge spans every level of the enterprise including entry-level positions, mid-level management, senior leadership, and more often than not, governance. Proportionally, there simply aren’t that many experienced, successful business people who can serve as leaders or mentors in frontier markets, particularly not in rural areas. Moreover, entrepreneurial ecosystem services that catalyze formation of appropriate human capital are underdeveloped, including a paucity of institutions of higher education, credentialing programs, and enterprise incubators and accelerators.
A “$1:$1:$1” recommendation emerged from the BoP Summit working group on Enterprise Support. It goes like this: for every $1 invested directly in a social or BoP enterprise, there is a need for $1 in capacity development or technical assistance to the enterprise, and for another $1 in ecosystem development. The dollars don’t all need to come from the same source. Still, the burning question is, where is all this money going to come from?
In September, the World Economic Forum assessed the impact investing sector from the supply side, citing various estimates of growth to the $400 billion to $1 trillion range by 2020. However, WEF noted the current market size is around $25 billion. Whether the growth estimates are unrealistic or not, the estimated $41 trillion upcoming wealth transfer from Baby Boomers to Generation X and the Millennials is transforming asset management paradigms as younger generations express enthusiasm for double or triple bottom line returns. Once reliable financial and social returns are demonstrated, it is reasonable to anticipate that investment capital will become much more abundant.
But human capital is a different matter. Among the more than 200 social entrepreneurs with whom we’ve had the honor to work, a significant fraction are Western educated. As they scale their ventures, their compelling visions for a more just and sustainable world attract young talent, whom they train and groom. These ambitious young managers forsake high-paying jobs with benefits that enable them to plan for their own futures. After several years, however, many feel they are “falling behind” – servicing student loans, saving for a home, creating a foundation for their own families are simply not possible on the salaries social enterprises are able to pay them, even if they enable quality lifestyles in Kenya, India, or elsewhere in the developing world. In the developed world, social sector salaries present many of the same challenges and often preclude quality lifestyles, especially in big cities; the human capital gap is not limited to BoP markets.
Providing reasonable compensatory benefits to Western educated talent would encourage more to devote their careers to building and leading social enterprises; this of course only a partial solution: ecosystems services must evolve to generate sufficient local talent to build and lead impact enterprises globally. In parallel, however, encouraging well-educated Western youth to pursue careers in social entrepreneurship can help close the human capital gap.
It seems ironic that choosing vocations devoted to poverty eradication and planetary sustainability should consign some of the most talented young leaders of our generation to relative poverty themselves, at least compared to their peers. Providing compensatory benefits, such as contributions to a 401(k) and student debt service, would further tax the financial returns of social enterprises, or reduce the surplus available to invest in scaling. So, what, then, is a possible solution?
The Overseas Development Institute identified a potential source in a report released last week: redirect fossil fuel subsidies to support human capital for social good. Shockingly, the International Energy Agency found that fossil fuel producers received over $500 billion in subsidies in 2011. These subsidies distort both energy and carbon markets. Off-grid clean energy solutions created by social enterprises around the world are less competitive, as the full cost of extraction isn’t reflected in market prices for fossil fuels. Carbon prices are artificially low as a result of these subsidies, limiting incentives for innovation that slow global warming. Energy accounts for a disproportionate share of household expenditures among the poor, and global warming disproportionately affects the poor, a fact that not only causes significant harm to those nations, but is disrupting international relations around the world. As ODI indicates in the title of its report, time for change: let’s shift subsidies to sustainable energy solutions and to closing human capital gaps so that social enterprises can scale more quickly.
Thane Kreiner is executive director of the Center for Science, Technology, and Society, at Santa Clara University, home of the Global Social Benefit Institute.
Thursday, Nov. 7, 2013
Many people I know and respect had told me that Opportunity Collaboration was the best conference they went to. Being an unconference, the guidance was “it is what you make of it”.
From the moment we were all boarding the flight from Mexico City to Ixtapa/Zihuatanejo, I knew I was in for something different. It felt like we were going to summer camp. The plane was abuzz with conversations. Fellow conference goers were already meeting and engaging one another. The conversations ensued on the bus ride from the airport to the conference facilities, Club Med. Even though most of us had been on red-eyes to get to Mexico City, the air sparked with energy and enthusiasm.
Upon arrival at Club Med, we were taken to Communications Central where each of us had mail slots. This was one way of connecting with each other. I came to refer the slips of paper I would find in my box, asking to meet, as love notes. It proved to be an efficient method of scheduling time with interesting people. The only difficult part was where to meet. By the pool? In the bar? Walk on the beach? One of my favorite moments was scheduling a meeting using my iPhone. The location of the meeting? “Beach”. I laughed typing that in.
I can safely say that every conversation I had throughout the week, be it in a breakout session, before or after colloquium (homeroom class), by the pool, or saddled up at the bar, were fascinating learning moments. I have been to hundreds, if not thousands of conferences throughout my professional career; that never happens. There is a magic combination of attracting 350 passionate people from around the sector and the relaxed environment that allows for truly interesting discussions. The transactional nature of “typical” conferences has no place at Opportunity Collaboration. I went from one impromptu discussion on what role BIG banks can play in this sector to a dinner breakout on spiritual activism.
The connections I made at the conference go way beyond having a business card. I have already had a number of conversations with people I met, some of which were “thank you”, others “see you soon” and others still “let me connect you with people I believe can help you”. And who knows where other connections I made will go. There were many stories of people meeting several years ago at Opportunity Collaboration and now they are working together.
Opportunity Collaboration is an unconference about continuing to build a strong and resilient social impact sector through relationships. Like good wine, it takes time.
From the Desk of Pamela Roussos, Director of Strategic Alliances
Tuesday, Sep. 17, 2013
Evolution and Adaptation of the Flagship GSBI Yields Promising Results
As part of its vision to positively impact the lives of 1 billion of the world’s poor by 2020, the Center is successfully experimenting with ways to scale social benefit.
We explained the design of these experiments in a Huffington Post blog earlier this summer. The GSBI Online experiment met with terrific success and we’ve just announced a third cohort. Through GSBI Network, we help “incubate incubators” for social enterprises, and are pleased by the recent addition of two new members, Birla Institute of Management Technology (India), and Instituto Tecnológico de Monterrey (Mexico). But our most ambitious experiment was the GSBI Accelerator to prepare proven social enterprises for scaling their impact and help them secure appropriate capital.
We think of the Center as an open-source learning laboratory for scaling social entrepreneurship and impact investing. As we learn from our experiments, we endeavor to share the knowledge with the broader ecosystem. Data from our GSBI Accelerator experiment suggests that optimal capacity development paradigms will vary depending on the stage of the social enterprise. We discussed some key emergent parameters just before the social entrepreneurs arrived on the Santa Clara Campus for the in-residence component of GSBI.
Immediately after the GSBI Showcase in a NextBillion blog, we explained both the GSBI Accelerator design and what Silicon Valley can learn from social enterprises that are preparing to scale. This year’s highly customized program for more advanced social entrepreneurs was extremely well received by mentors, content leads, impact investors, and critically, the social entrepreneurs themselves. As Venture Beat noted, our central theme of investment-readiness includes helping the entrepreneurs learn how to find appropriate capital. Impact investors are engaged in the continued evolution of our GSBI Accelerator experiment. We are accepting applications for the next cohort!
From the Desk of Thane Kreiner
Monday, Aug. 26, 2013
CALL FOR FALL 2014 GSBI® ACCELERATOR PROGRAM APPLICATIONS
Up to 20 Scholarships for Social Enterprises Available
SANTA CLARA, Calif., August 26, 2013 — Applications for the Fall 2014 GSBI Accelerator Program open on September 2, 2013, and will be accepted through October 31, 2013. Up to 20 ventures will be selected and enrolled in the lauded ten-month social enterprise capacity development program. The 2014 GSBI Accelerator program runs from February 2, 2014 through November 30, 2014, and includes a ten-day in-residence “accelerator boot camp” at Santa Clara University, a leading Jesuit university in the heart of Silicon Valley, California. Information on the application process can be found at: http://scu.edu/socialbenefit/entrepreneurship/gsbi/apply.cfm
The GSBI Accelerator helps social entrepreneurs understand and fill gaps in their organizations that prevent them from achieving scale, and prepares them for appropriate capital to rapidly increase their impact. Investment readiness is a central theme of the Center’s Impact Capital program, which provides thought leadership and financial innovations to drive impact investing into underserved sectors.
The GSBI Accelerator combines best practices of online learning with a proven curriculum (over 11 years of experience), complemented by experienced in-country and Silicon Valley mentors, to provide social entrepreneurs the tools to help them scale their enterprises and prepare them for financial investment. “The GSBI Accelerator brings together mentors, experts, impact investors, and social entrepreneurs to collectively identify and overcome gaps in their operating businesses,” said Cassandra Staff, GSBI Program Director.
At the end of the in-residence or “boot camp” portion, entrepreneurs present to a select audience of impact investors, philanthropists, corporations, and government agencies. With GSBI’s successful track record, Accelerator program draws the best practitioners in the social impact world. The 2013 GSBI Accelerator Cohort recently presented to almost 200 premiere investment professionals, corporate and foundation executives, and Silicon Valley leaders with entrepreneurs returning home having tapped into Silicon Valley acumen and potential funding.
For more details about the GSBI Accelerator program, visit http://www.scu.edu/socialbenefit/entrepreneurship/gsbi/ For questions regarding the program, please send an email to firstname.lastname@example.org.
About the Center for Science, Technology, and Society
The mission of the Center is to accelerate global, innovation-based entrepreneurship in service to humanity. Its flagship GSBI® programs include the GSBI Accelerator, GSBI Online, and GSBI Network, which have served over 200 social enterprises over the past 11 years. The Impact Capital program improves the capital match between social entrepreneurs and impact investors. The Global Social Benefit Fellows Program provides practice-based action learning opportunities for undergraduates with GSBI Alumni.
About Santa Clara University
Santa Clara University, a comprehensive Jesuit, Catholic university located 40 miles south of San Francisco in California’s Silicon Valley, offers its more than 8,800 students rigorous undergraduate curricula in arts and sciences, business, theology, and engineering, plus master’s and law degrees and engineering Ph.Ds. Distinguished nationally by one of the highest graduation rates among all U.S. master’s universities, California’s oldest operating higher-education institution demonstrates faith-inspired values of ethics and social justice. For more information, see www.scu.edu.
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Monday, Aug. 12, 2013
The Center for Science, Technology, and Society would like to thank all of our supporters who voted for our panels for SOCAP 2013. All three of our panels were accepted out of 128+ submissions! Your efforts helped us make it to the top and we could not have done it without you.
Santa Clara SOCAP Panels
For more Information on SOCAP13, please visit http://socap13.socialcapitalmarkets.net