On a warm Friday afternoon in the slums of Madhukam, in the heart of Ranchi, India, a middle-aged man arrived at a public water station with two 20-liter containers to fill. The water station - directly adjacent to an open sewage drain - was really just a concerete wall with four pink spigots protruding from its barren surface. On top perched two large, seemingly empty holding tanks of water. The man placed one of his containers under the first spigot and turned the handle. A small flow of water came out. Within a minute, the flow turned into a trickle, and the trickle quickly became nothing. The man moved to the next spigot, and then the next, only to have all four repeat the same pattern. In the end, the man left carrying only six ounces of water in his two 20-liter containers.
For 15 years the World Bank Group’s Development Marketplace (DM) has identified innovative social entrepreneurs who tackle service delivery bottlenecks that disproportionately affect the world’s poorest populations. Originally a competitive grants program, the DM has grown over the years into a multi-faceted program that identifies these entrepreneurs, analyzes their specific needs, and maps out the problems they face and the solutions they offer. Through this approach, the DM is able to assist these organizations in breaking down service delivery barriers so that other social entrepreneurs and the public sector can follow their lead: eventually helping to create a world free of extreme poverty and raising incomes so that we all share in the world’s prosperity.
In Egypt, the social enterprise movement has gained momentum in the years since the January 25, 2011 revolution. This moment in history gave Egyptian youth a sense of belonging and control over thier future they had not previously felt; manifesting itself in a proliferation of young social entrepreneurs who are determined to translate their long held dreams into tangible outcomes that help their communities.
Young Egyptian social entrepreneurs join youth across the developing world in pioneering new ways to provide basic services to their local communities. The power of these emerging non-state providers (NSPs) is especially successful in post conflict fragile states like Egypt. While the state rebuilds itself and its capacity to deliver services, NSPs are able to satisfy the urgent need for basic services, stimulate economic activity, create jobs, and reduce poverty through their sustainable market-based, socio-economic solutions.
I recently returned from travel to India and East Africa where I attended a round table on social enterprise with the Government of India and met impact investors focused on Kenya, Tanzania, Rwanda, and Uganda. After listening carefully to entrepreneurs, investors, and government officials, I’m compelled to say something entirely inconsistent with conventional wisdom in the world of impact investing: there is not enough capital to support the pipeline of enterprises focused on solving our most vexing social problems. By social problems, I mean the provision of basic goods and services to the bottom of the economic pyramid where governments and markets often fail.
Take access to energy for example or access to sanitation in much of Africa and South Asia. More than 1.3 billion people on the globe still lack access to electricity and over 2.5 billion lack basic sanitation. Every 20 seconds a child dies because of poor sanitation.
These are public goods and unambiguously the responsibility of public actors. But in reality, governments often don’t have the resources, the will, or the capacity to provide these basic services to many of their citizens. And purely commercial enterprises lack incentives to provide services where financial upside is limited and the ability of poor people to pay is constrained. But this is precisely where inclusive (or socially driven) businesses and social entrepreneurs, for profit and not-for-profit, are innovating and developing new business models to solve our most pressing social challenges.
As Albania prepares to celebrate 100 years of independence in 2012 with an eye towards becoming a member of the European Union; it must make crucial improvements in a sensitive area: good governance.
For better governance, citizens need more access to information; budgets and local taxes need to be transparent. Women and youth need equal opportunities in business, and agriculture policies need to be developed openly.
To address these, the government is drafting and implementing new policies for central and local government, with support from the World Bank Project for Good Governance in Albania. The World Bank is further supporting the government's agenda through support for civil society projects using the Development Marketplace competition platform to solicit and select high impact projects for implementation. The British Council is overseeing their implementation.
Last week, Aleem Walji participated in GE’s global conference, ‘Disrupt or Be Disrupted’. He has written an entry that is being featured in The World Bank's "Let's Talk Development" blog. Below is an excerpt:
How do you ‘disrupt’ your business from the core by building on your strengths and leveraging your assets? Jeff Immelt, GE’s CEO talked about the fear of losing too many engineers and scientists who don’t ‘fit corporate culture’ but proceed to found billion dollar businesses (Sergei Brin started at GE). It reminded me of a session at the Indian School of Business led by a senior Google Executive where he said that it’s not Microsoft, Facebook, or Twitter that keeps him up at night, it’s ‘three kids in a garage’. Hewlett Packard, Apple, Google, and Groupon, all started small, learned fast from failure, took risks nobody was willing to take, and then fundamentally disrupted business models and industries.
For the full blog entry, click here.
Follow Aleem Walji on Twitter!
Having traveled to both East Africa and India over the past several weeks, I’ve been reflecting on what ‘innovation’ means in different contexts. It’s easy to get caught in a technology-centric worldview in places like Bangalore and even Nairobi these days. But when I get past the superficial stories and dig a bit deeper, I realize that impactful innovation is less about shiny tools and technology and more about ‘listening to users’ and transforming social processes to solve problems that matter to people.
My walk through a Delhi slum comes immediately to mind. While there I visited Operation Asha, a 2011 India Development Marketplace winner that is working to arrest the spread of tuberculosis (TB). India is one of the only countries in the world where the rate of infection is growing despite the falling incidence of the disease globally. The previous day, I sat with colleagues from Microsoft Research in Bangalore who explained the simple but critical advances they had made in writing open-source software to verify the identity of patients visiting clinics, aggregating data on missed doses, and using text messages to increase compliance.
Villgro, one of the largest incubators and funders of social enterprises in India, is hosting its annual Unconvention from December 1-3. Unlike other platforms, this event attracts people at the intersection of innovation and social enterprise with a clear focus on social impact and generating replicable models. I will be presenting at a panel discussion on December 3rd called Mainstreaming Your Social Business.
At the World Bank, we realize that public goods cannot be provided exclusively by governments acting alone. Private actors have a clear role to play and not just commercial enterprises. In India as elsewhere, we’re seeing the emergence of enterprises that combine the passion of NGO’s with the efficiency of business to address government and market failures. This is an extremely exciting possibility for the Bank and for our client Governments to consider. How do we encourage these actors to complement the State and how do we harness innovations around public goods to better serve the poor? The Development Marketplace is but one of many programs we support to surface, support, and diffuse innovation. The role of the Bank’s Innovation Practice is to pay attention to what’s going on around us and use the convening power and resources of the Bank to shine a light on innovations in development and scale-up what works.
Follow me @AlWalji. I’ll be posting on #devmarket, #Innovation, #alchemix throughout the event.
From more on the Unconvention read the interview of Sucharita Kamath at Vilgro as she describes how the Unconvention will convene different players in the social enterprise ecosystem in India to achieve broad-based social impact.
This article was originally published on http://www.nextbillion.net/. NextBillion is a website and blog bringing together a community in the shared mission of development through enterprise.
Unconvention 2011 Hones in on Landing Top Socent Talent
Since its launch in 2011, Villgro has identified and assisted approximately 2,000 social innovators and positively impacted the lives of more than 360,000 people living in rural India. The organization's strength lies in finding innovators and entrepreneurs, providing skill, development and critical access to networks and other resources necessary to take their innovations to the marketplace. Critical to its continued success is the ability to connect with more homegrown geniuses just waiting to be discovered in every corner of India.
It’s surprising how simple the design of a solar bottle light is – take an empty plastic bottle, fill it with mineral water and a few drops of bleach, and cement it halfway through a small metal roof sheet (the kind used as roofs in Manila’s slum areas). Then cut out a small piece of the actual roof, place the sheet with the bottle on top of the hole, cement any cracks, and voilà! Let there be light.
This initiative, a project designed and developed by students from the Massachusetts Institute of Technology (MIT) and implemented by MyShelter Foundation, is already transforming lives of low-income people in the Philippines.
Every fall at Social Capital Markets (SOCAP), the who’s who of impact investing and social enterprise convene in San Francisco to network and share stories about topics like market-based solutions to poverty, social stock exchanges, and just how much capital is waiting to be deployed to solve the world’s toughest problems. It’s inspiring to be sure, especially the growth in the number and diversity of participation. It’s no longer the sole domain of Ashoka, Skoll, and Schwab who have paved the way for so many others. Today, mainstream Banks from Europe to Asia, fund managers, and wealth advisors are sending a signal that doing good and doing well is a more enlightened form of capitalism.
But behind all the feel-good energy and promises that impact investing will be a $50 billion industry by 2020, there are gaps in the story line and challenges that we must confront as a community. First, there is no clear definition of an impact investor. The industry brings together those who are primarily driven by a financial bottom line (finance first) with those who are seeking to optimize a social return without making a loss (impact first), and finally grant makers who are aiming to improve the efficiency of philanthropic capital (largely foundations). Their world views are different, their expected returns are different, and how they use the same vocabulary (e.g. impact, viability, and sustainability) varies widely.