« Please Sign Our Guestbook! | Main | Video Game to Fight Hunger? »

June 16, 2004

The Hidden World of Social Entrepreneurship

SolutionsmagDavid Bornstein, author of the bestseller "How to Change the World: Social Entrepreneurs and the Power of New Ideas," wrote this original article for Solutions Magazine, with the college student audience in mind. His personable style and first hand accounts of social entrepreneurs makes this an inspiring and informative article.

A few nights ago, I made the mistake of turning on the TV news. As promised, in twenty-two minutes I was “given the world” – that is, a world dominated by partisan politics, terrorism and war. I turned off the TV and resolved to stay away – at least until November. It’s not that I can’t handle bad news. When I turn on the TV news, I’m hoping to gain a better understanding of the world in all its ugliness and beauty. The problem is that the image of the “world” that gets beamed into my home – and into the homes of millions – is like a badly doctored photograph: like an image of a forest in which most of the trees have been edited out. The desolate landscape left behind, I’m informed, is “reality.” To me, this impoverished depiction of the world – omitting vast stretches of human activity – is worse than useless; it is deadening. But there is a hidden world out there that is very exciting. I have spent the past five years traveling around the globe – to India, Bangladesh, Brazil, South Africa, Hungary, Poland, Canada and the Unites States – getting a glimpse of this world through the eyes of a hundred “social entrepreneurs” who are successfully advancing large-scale social changes in their societies. There is a great deal that is powerful and “newsworthy” that we do not hear about.

In India, for example, a child-protection network called Childline, founded by a social worker, has provided emergency assistance to hundreds of thousands of street children and spread to 55 cities. In South Africa, an organization called Tateni Home Care Services, founded by a nurse, has trained thousands of unemployed youth as home-care attendants – advancing a simple model for delivering compassionate care to people with AIDS and orphaned children across the country. In Hungary, an organization called the Alliance Industrial Union, founded by the mother of a disabled child, has launched a network of 21 assisted living and working centers for people with severe disabilities. In the United States, a Washington, D.C.-based organization called College Summit, founded by a former divinity student, has helped thousands of low-income students enroll in college (with an 80 percent retention rate), and is now working with the public schools in several cities to rebuild their college guidance systems. Each of these organizations was founded by an ordinary citizen; each was built up largely over the past eight years; and each represents a fundamentally new approach, a new model, for solving a particular social problem in a given context. There are many other examples: Today, one can find social entrepreneurs marketing low-cost reading glasses and hearing aids to Indian villagers, developing long-lasting mosquito nets to protect Africans from malaria, building thousands of libraries across rural Asia, and pioneering better high school models in the Bay Area. In fact, judging from the millions of new organizations founded in recent years by citizens around the world seeking to address social problems, there are vastly more social entrepreneurs out there than terrorists; and their impact is both wider and deeper. But we rarely hear about their work. What I have seen watching the social entrepreneurs for five years, I don’t think I would have seen if I had watched the TV news, or read the newspapers every day, for fifty years.

* * *

To business students, it may not come as a surprise that the field of “social entrepreneurship” is taking off. The same kinds of information-sharing networks that fueled the tech boom are spreading awareness (again, ahead of the curve) about this wave of “social innovators” coming up around the globe. Business schools and networks of business students and B-school graduates have been among the first groups to seriously talk about “social entrepreneurs” and to create courses and competitions to study and encourage their efforts. As with any new field, there is considerable debate about what constitutes “social entrepreneurship.” While some people hold that a social entrepreneur is someone who uses “business skills” to achieve “social ends,” others hold that a social entrepreneur is someone who runs a nonprofit organizations that “generates revenues” to support its “mission.” Still, others argue that social entrepreneurs create businesses that pursue “double- or “triple-bottom line” returns. While each of these characterizations illustrates something that a social entrepreneur may do, none captures the essence of what a social entrepreneur is – because social entrepreneurs are not defined by their strategies, tools or skills, but by their vision, motivation and ethics.

Let me illustrate this with the “career” of Fabio Rosa, a social entrepreneur who has been working for more than 20 years to deliver low-cost electricity to poor people in Brazil, where 25 million citizens still lack power. In the early 1980s, Rosa, then 22, an engineer and agronomist, accepted a position in a small municipal government in the south of Brazil, where, working with a local inventor, he developed a “monophase” electrical distribution system that was 95 percent cheaper than the government’s model (“monophase” because it employs one wire instead of three). Over the years, Rosa fought to overcome opposition from state-owned electric companies and cement cartels to expand his system. He lobbied governments, pitched to journalists, raised money from bankers, engaged academic researchers and marketed to villagers. In time, his system spread to more than half a million people.

Along the way, however, he ran into so many frustrations dealing with bureaucrats, that he decided to start his own company – STA Agroeletro – so he could advance his ideas without government interference. One of his initial plans was to sell solar-energy solutions to rural dwellers across Brazil, but he soon found that the solar systems were often beyond their means. So Rosa decided to focus on one particular market – cattle farmers – a vast market. He discovered that many farmers could not afford conventional fencing; as a result, their grazing land was managed inefficiently. This resulted in lower farm yields and degradation of grasslands, a serious environmental problem. Rosa got the idea to bundle photovoltaic solar power with low-cost electric fencing. Doing so, it turned out he could reduce the cost of fencing by 85 percent, help farmers boost their incomes through better land and flock management, and sell his products at a profit. Rosa’s company has since installed thousands of solar electric and fencing systems across Brazil.

Three years ago, Rosa decided to step down as director of STA to focus his efforts on a new vision -- bringing solar energy to all Brazilians who are currently without electricity. He spent two years doing a market survey of poor households and what he discovered surprised him. When he asked people to tally their monthly expenditures for energy and lighting needs – typically for candles, batteries and kerosene – he discovered that most families were already spending more than $13 per month on non-renewable forms of energy. It occurred to Rosa that it made little sense to try to sell solar panels to poor Brazilians. A solar panel, well maintained, lasts 25 years. Why was he asking people to pay for 25 years of electricity in advance? People should pay for electricity as they use it, he reasoned, like food. Why not rent it to them? Renting solar panels and lighting fixtures at a price of $13 per month could be a profitable business; the panels would be repaid in less than four years. So Rosa approached a number of villagers and said: ‘Instead of spending $13 each month on candles, kerosene and batteries each month, why don’t you pay me $13 each month and I will install solar panels, light fixtures and electrical outlets for you? You will have better light, your houses won’t be so hot at night, and your children won’t have to inhale the smoke from kerosene lamps.’

Since then, Rosa has launched his rental business and dubbed it “The Sun Shines For All.” He also created a non-profit organization, IDEAAS, to deliver electricity and services at subsidized rates to very poor families who spend less than $10 per month on their energy needs. Over the past two years, he has begun raising investment capital, and started building up a network of electricians to install and maintain the solar-electric systems. His initial target market is 1,000 households. The first 100 homes – a test market – are already up and running.

What makes Fabio Rosa a social entrepreneur? It is not his organizational or revenue strategy; it is not his use of business tools, although they have helped him considerably. Rosa has pursued his ideas through government, business and nonprofit channels. He has shifted strategy several times over the past two decades, responding to new problems and opportunities, and he will likely change his approach many more times in the future. What makes him a social entrepreneur is 1) his ability to envision how Brazil will look when millions have access to electricity and his determination to find a practical way to make it happen; 2) his need to realize this vision no matter how long it may take; 3) his belief that he has the capacity to realize this vision; and 4) his willingness to do whatever is necessary to spread (or market) his ideas as far as he possibly can.

Social entrepreneurs like Rosa serve the same functions vis-à-vis social change as business entrepreneurs do vis-à-vis economic change: they seize opportunities, gather resources, build organizations, overcome resistance; and, through a multi-decade process of marketing and continual adjustment, they gradually change patterns in their industries and open up new opportunities for others. Looking ahead, there is certainly no guarantee that Rosa’s new business will succeed. Time will tell if he can work out the distribution channels and raise the financing he needs to take it to scale. However, whether “The Sun Shines For All” succeeds or not, Rosa will continue to pursue new ideas into the future (he is now 43) and apply, to considerable effect, his entrepreneurial energies and his understanding of solar energy to build a more inclusive society. Given his life history, it appears that that is what he is hardwired to do.

* * *

From a global perspective, the emergence of the field of social entrepreneurship represents a fundamental reorganization of society – and therefore presents widespread opportunities for everyone. What has happened is that the sector of society concerned with “social value” – a sector that for centuries has been run much like a “command economy” – is beginning to resemble a market economy – comprised of many young, decentralized, flexible institutions created by entrepreneurs. The result is a kind of “creative chaos” with countless self-motivated citizens, like Rosa, attacking problems in new ways, learning how to connect with one another, and with businesses and governments. The personal side to this story is that, everywhere, people share similar desires: they love to build things; they enjoy working with inspiring colleagues; they seek to use their talents in ways that bring security and recognition; they want to have some fun and feel that their work is meaningful. Of course, not everyone would want to be a social entrepreneur, just as not everyone wants to start a business. But today everyone has the option to work in this field. Because it is growing so fast and in so many directions, the opportunities are wide open for people with diverse interests and skills. So if you happen to be someone who would like to combine what you are good at, what you enjoy doing and what you care about – and get to do it every day – that’s news worth watching.

Posted by Tony Wang at June 16, 2004 11:01 PM

Comments

Post a comment




Remember Me?

(you may use HTML tags for style)