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On 24 July, 2013 Martin wrote:
Here is a summary on what I did and on the experiences I took from Europe. Please see this as a mere collection of notes and thoughts. I find it interesting how a concept --- social entrepreneurship/social markets --- that has been developing in countries like India at great speed, but is still nowhere near maturity, is all of a sudden gaining ground in the West.
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There is an Ashoka study which states that there do exist some private as well as public programmes to financially support early stage social enterprises. But in Germany, like in other European countries, there seems to be a vast gap between early stage seed funding and the next levels. There is not enough systematic consulting to support social entrepreneurs taking their businesses to the next level. There are not enough platforms promoting knowledge transfer and co-operations among social enterprises and other players in the field. This study comes to the conclusion that as a result of this situation there are a few hundreds of "project ruins" strewn all over the country which will never make it to scalability.
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The "KfW Roundtable on Social Finance" was another example of how detached European funders, investors and government institutions are from the reality on the ground. Especially hardcore impact investors like LGT Ventures from Leichtenstein, who also attended, seem to be rather frustrated about the lack of good investment targets, that satisfy their high return expectations. I think they are making a big mistake by putting all the blame on the social entrepreneurs and their alleged "lack of competence".
A CSR-Director from Deutsche Bank mentioned his problem with sending highly qualified bankers to India where they ought to support local social enterprises with their expertise. When I asked him for how long he sent those interns to India, his answer was: Six weeks! My initial thought was: How would anyone get a deeper understanding of a vast and culturally diverse country such as India within 6 weeks?
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At the Skoll Forum I had a chance to meet Gary White, the CEO of Water.org. He was part of a panel that gave further proof that our approach is right: Especially him but also investor Phil Falcone, CEO of Harbinger Capital were both complaining about a lack of last-mile support in order to create more successful water pilots. Quote: "Implementation at the local levelis a very critical issue. It's not about technology. It's about training and education at the local level."
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On the final day of the Skoll there was a panel discussion hosted by McKinsey called: "Crossing the 'Last Mile': Delivery strategies for the Base of the Pyramid." This panel was focussing more on large-scale commodity and service providers. However, many of the issues raised sounded familiar: Attention to address the design needs of the BoP has been increased steadily. But what happens after that product --- a bag of seeds, a solar lamp, or a vaccine --- is developed? Many promising innovations fail due to the cost and the challenge of delivering to customers in extremely rural communities. The question is: How can organisations distribute and build awareness, demand, and uptake for these goods without going broke? The panellists were discussing the pros and cons of a "hub and spoke" model versus local partnerships. Hub and spoke models are like having a local sales force. However, they are more cost intensive than partnerships. The downside of partnerships is that you can't control them as much as a hubs and spoke. Quote: "You have to make it easy for your local partners, otherwise your products and offerings will drop to the 'bottom of the pocket', because those local partners will have alternative products and services to offer.
On 26 July, 2013 KM wrote:
I completed reading your notes. As I was reading it, I could not help feel that the term "social" is increasingy being used as a cloak by too many stakeholders. In the best case, it is an admission of confusion and in the not so best cases it is about pushing specific agendas through in a different form. In between, I feel there are players who view this as a creative and intellectual challenge.
But it was difficult to intuit in these conversations a genuine concern and sensitivity to the community --- theoretically the reason why this whole field and terminology should arise in the first place. In a very crude way, it seems that the terminology of the material capitalist model is played out with new terms and definitions including 'BoP' and 'Social Entrepreneur'.
It is my intuition that the phenomenon of 'scale [to the benefit of the intended beneficiaries in a way that does not leave behind a scattering of damaging side-effects].' is now [unconsciously] acknowledged to be universally elusive because in the final analysis this sensitivity to the 'humane' aspect is missing. Unless one is willing to acknowledge (deep down, as it may not be fashionable to voice it explicitly) that one is finally solving a moral/humane problem, and not a business problem none of these solutions can scale.
P.S.: The following paragraphs from the article Why Poverty is development's best friend (by G. Sampath in 'The Hindu' dated 13 July, 2015) state directly what the above correspondence vaguely implies.
"And here in India today, gloriously reprising recent history --- already played out multiple times in the '60s, '70s, '80s, and '90s across Africa and Latin America --- with yet another government leading a billion souls down the garden path of 'sabka vikas'.
Coming back to evidence-based policy-making, the SECC data is ample evidence, if any was needed, that 67 years of 'development' have failed to eliminate deprivation in India. Yet the critical interrogation occasioned by this evidence is never extendable to the doxa that the poor are people lacking in essential economic goods which can only be accessed by them when they embrace the market, increase their productivity, and improve their incomes.
On the one hand, industry-led growth --- with its concomitants of displacement, dispossession, and proletarianisation of the peasantry --- severs people from access to land, water, and other communal resources, creating a constellation of deprivations. On the other, these very deprivations serve as the reason for a tighter embrace of the market economy, a policy aggressively pushed by the Bretton Woods institutions in the name of development.
For instance, there is no axiomatic or natural reason why poverty needs to be defined by measures of income or consumption. It could also be defined in terms of a people's political agency --- how much control they exercise over the factors that determine their life chances, which may or may not be linked to a money economy. But defining poverty in terms of income limits possible solutions to those that can raise income --- development via economic growth. This was the logic behind the statements made by the finance minister and the editorials cited above.
Economic thinking has saturated our common sense to such an extent that it has become almost impossible for us to imagine that there might be an alternative vision of social change that has nothing to do with development or an economic agenda of progress (emphasis added).
How did societies change before colonialism? Before the era of development? What if, say, a people's culture dictates that they produce only for need and not for accumulation (emphasis added)? Does the developmental paradigm allow space for such a cultural choice?
Developmental discourses, both the Keynesian-inspired one mandating state intervention, as well as the currently dominant noe-liberal school advocating market solutions, are united by a common vision of the poor as entities in need of assistance --- be it welfare or 'skilling' or jobs. What if it's not the poor but the missionaries of growth and the archangels of development who need help?
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