Many people believe that entrepreneurship is about making money, the more the better. Yet there are a growing number of entrepreneurs whose desire for money is to use it to transform society. The Schwab Foundation for Social Entrepreneurship and Business Today Egypt are again launching their search to identify the leading examples of these sorts of entrepreneurs what some call social entrepreneurs.

There is a lot of talk these days about such entrepreneurs and a lot of confusion. So perhaps the best place to begin is by delineating what social entrepreneurship is not. It is not, for example, another word for a charitable organization or foundation. It's not just another do-good campaign. Social entrepreneurship always includes practical alternatives to inequitable states of affairs. It is not the same thing as corporate social responsibility. And, finally, it is not a synonym for a not-for-profit or non-governmental organization.

All four of these activities exercise a valuable and important social role around the world, but by our definition, they are not social entrepreneurs.

Instead, a social entrepreneur is a blend between a business entrepreneur and a saint. The blend shows up in various ways. Instead of seeking to maximize profits, as businesses must do, the social entrepreneur seeks to maximize the good of society. And while a mainstream business entrepreneur creates products and services that will generate profits, the social entrepreneur responds to market failures, coming up with goods and services, or approaches to accessing them, that business cannot because the financial rewards are not high enough and the risk is too great.

A social entrepreneur's chief contribution does not come from an ability to set up hospitals, schools, hospices or centers for the physically and / or mentally disabled. Rather, it comes from the capacity to envisage what does not exist and make it happen through creativity, resourcefulness, courage and persistence.

Laila Iskandar, winner of the Social Entrepreneur of the Year Award in Egypt last year, exemplifies this breed of entrepreneur. She founded the Community and Institutional Development group (CID) in 1995 in Cairo. Her academic credentials prepared her for career success, but an earlier experience working in the area of environmental sustainability and poverty eradication inspired her to create a different kind of company, a social business prioritizing social transformation while being financially profitable.

CID is a business. It began by working with the 60,000 zabaleen who live on the outskirts of Cairo and gather daily 10,000 tons of garbage. CID introduced innovative social and environmental initiatives, including recycling as much as 80% of the inorganic waste into raw materials and manufactured goods. CID works with local and international partners and clients to link business and poor communities and create viable partnerships to address a myriad of needs, from rural sanitation and low cost housing to sustainable waste recycling programs. CID highlights how the reality of megacities, particularly in emerging markets, must place people at the center of waste management planning.

Let's go to Jordan to find another winner of the Social Entrepreneur of the Year award in that country. Soraya Salti's talents could have made her financially wealthy and she was well prepared to do so, with an MBA from Kellogg at Northwestern University in the United States. Instead, she set her sights on transforming possibilities for Arab youth, beginning with Jordan. She decided to encourage them to develop a passion for entrepreneurship for curiosity and innovation and at the same time, cultivate a commitment to their own roots as well as a respect for others.

To do so, she engaged a wide spectrum of society, first the school system through the Ministry of Education and then hundreds of business professionals. In 2001, she created Injaz in Jordan to expose students at all ages to the principles of economics and value, of entrepreneurship and, most importantly, of ethics in carrying out business practice. Injaz draws upon hundreds of CEOs and high level business professionals who volunteer their time at the different grade levels to share their experience with these students, creating a mentorship spirit among them. Today, Injaz reaches 65,000 in Jordan, and Soraya has replicated the model in Egypt, Palestine, Lebanon, Bahrain, Kuwait, UAE, Oman and Iraq and is now looking to do the same in Yemen and Saudi Arabia.

Social entrepreneurs do not just focus their efforts to change systems in developing countries. Similar to the Arab world, where youth employment is a critical issue, Robert Roth in Switzerland spearheaded the Job Factory, a for-profit social enterprise that provides a whole range of "Jobs for Juniors" or internship opportunities for unemployed youth. Teens have the opportunity to learn on the job and get used to a performance-oriented environment. As a private stock company with 15 different business divisions, Job Factory offers a market-driven entry into the professional world while providing intensive coaching and counseling through the Job Training Foundation. Eighty percent of the interns find job or apprenticeship positions.

Dr. Devi Prasad Shetty is meeting unmet needs of a different sort through an innovative business model in health. An Indian cardiologist, Shetty's organization, Narayana Hrudayalaya, is a for-profit social business that strives to make sophisticated healthcare available to all in India. His network of hospitals is able to provide 60% of treatments below cost or for free, thanks to drastically reduced costs resulting from high volumes, innovative cost-saving methods and donations. A network of 39 telemedicine centers reaches out to patients in remote rural areas. Two health insurance programs provide coverage for 2 million farmers at Rs 120 (LE 22.93) per person per year. Again, innovators lead the way in coming up with business models to provide quality health care for the poorest who cannot afford it -- while sustaining and growing the enterprise.

Then there is Rodrigo Baggio, who had a dream where he saw the poorest children living in the favelas of his hometown of Rio de Janeiro, Brazil, using computers. Today, Baggio's Committee for the Democratization of Information (CDI) has moved beyond Rio to 869 cities throughout Brazil and 10 other countries. Working in close partnership with community centers in Brazil's poorest and most violent communities, as well as prisons, CDI teaches computer literacy to the digitally excluded, using it as content material to stimulate citizens' rights and responsibilities. CDI has certified over 80,000 students, 87% whom report it has transformed their opportunities for gainful and dignified employment. But there is much more room for spreading the CDI model to other parts of the world rather than reinventing the wheel.

What do all these individuals and their organizations have in common? First of all, they identify opportunities for market creation and in the process change systems and practices that have excluded millions from benefiting from advances in information education technology, health technology, full employment, and the like. Second, their role is that of a transformational catalyst, spinning off models that can be replicated for wide adoption in many settings. Third, while the examples above are 'success stories,' the obstacles encountered to effect the systems change that have been achieved are enormous. These pragmatic visionaries have a tough road ahead to convince the rest of society, including family, friends and colleagues that their "crazy idea" can work.

As Baggio has quipped, "There is a very fine line between being a madman and a visionary. One day I was a madman, and overnight I was transformed into a visionary".

Indeed, the recent Nobel Peace Prize laureate, Muhammad Yunus, founder of the Grameen Bank and pioneer of micro credit, was deemed borderline sane as he struggled to launch his "bank for the poor" in Chittagong, Bangladesh. No one would have predicted that in the 20 years since Grameen's founding, the biggest banks in the world would be pursuing commercial opportunity among the poorest of the poor. Similarly, those who argue that we can create a sustainable world for between 9 and 10 billion people are often seen as impractical dreamers, at best. Some may be, but those we know and have profiled here are pragmatic visionaries and are set to have an astonishing cumulative impact on markets, business and tomorrow's world.

Adam Smith probably would have approved. This genius who did so much to shape modern thinking about the market economy grew up in a world where social problems were rampant. Instead of relying on the invisible hand of the market, which appears in just one line of his 1776 masterpiece, The Wealth of Nations, he called for action: "No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable."1

The goal of this collaborative effort between the Schwab Foundation and Business Today Egypt is to showcase Egypt's best practices in social entrepreneurship, highlighting how ordinary people can achieve the extraordinary. We aim to be a catalyst that promotes policies and practices to ensure that more social innovators with a business case are encouraged and nurtured.

For information on the Social Entrepreneur of 2007 competition, visit www.schwabfound.org/egypt.

By Pamela Hartigan

© Business Today Egypt 2007

 

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