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Tuesday, March 4, 2014

Economic Inclusion – Accelerating Impact Collectively 03-05

Economic Inclusion – Accelerating Impact Collectively

Social Entrepreneurs with proven models for including low-income populations convene to refine their impact scaling strategies and collectively overcome ecosystem barriers.

Great business ideas go global to serve customers around the world. Great social innovations, however, too often remain local or national because market forces do not work as efficiently in low-income markets. Although many of the ideas and the entrepreneurs behind them have the potential for global spread, the inclusive business sector still lacks the processes, resources and mechanisms necessary for scaling impact successfully. The Ashoka Globalizer is working to help change this scenario. Founded in 2010, Globalizer capitalizes on Ashoka’s global reach, selection process and network of social and business entrepreneurs to connect “ready to globalize” innovations with the strategic and intellectual support they need to go global rapidly and efficiently.

At the end of February 2014, a group of 20 international Ashoka Fellows will convene for the Economic Inclusion Globalizer Summit in Chennai, India. During three days of structured interactions with business and impact sector thought leaders, they will share and synthesize knowledge and best practices around emerging scaling pathways, exchange practical advice to support each other’s endeavors, and distill their stories to share with the sector at large. In preparation for the summit, Fellows spent several months working to distill or “unbundle” the core elements of their theory of change and refine their strategies for scaling with support from teams of advisors from Ashoka and our business sector partners.  

Systems changing innovations for Economic Inclusion
Much has been written about the great treasure that lies within low-income markets: Four billion people living on less than $3,000 per year who collectively spend $5 trillion per year. By 2050, the world’s population is expected to increase by 3 billion, with growth rates being highest in developing countries. This treasure, however, lies buried at great depth. In order to access it, entrepreneurs have to overcome significant systemic barriers such as low levels of education, inadequate infrastructure, and poorly designed and enforced regulations. Including low-income groups as pure consumers will not necessarily improve their livelihoods. This is why the most promising social entrepreneurship models go beyond increasing peoples’ access to critical goods, services, and financial markets. Rather, they also engage them in creating local value through stimulating economic opportunities. More than 500 of Ashoka’s 3,100 Fellows around the world work on solutions that engage low-income populations in economic value chains as contributors, producers, and micro-entrepreneurs.

Here are three examples of successful models that several Ashoka Fellows are using:
Creating employment and access to markets in remote areas through the set-up of locally owned last-mile distribution infrastructure: Katherine Lucey’s organization Solar Sister trains women in rural Uganda to become last-mile micro-franchise entrepreneurs who bridge the gap in the distribution of affordable, renewable energy products through peer-to-peer sales networks. Greg van Kirk’s Community Enterprise Solutions is delivering health-related goods and services to remote villages using a micro-consignment model in Central America.

Spurring economic opportunity through the support of micro, small and medium enterprises (MSMEs): Through his organization Agora Partnerships, Ben Powell is equipping promising impact entrepreneurs with business knowledge and access to investment capital to run for-profit businesses that help address social problems and promote development in their communities. Paul Basil’s Villgro provides mentoring and funding to early stage innovation-based social enterprises, which positively impact the lives of India's poor.

Empowering informal workers through lobbying and information: Arbind Singh’s organization NIDAN in India provides excluded informal workers with access to markets through large people-owned and managed institutions – large enough to influence policy and act as legitimate competitors in a globalizing marketplace. Ananya Raihan is ushering in an era of information-on-demand in the rural areas of Bangladesh by building a network of locally run kiosks that offer villagers access to everything from up-to-date market prices for their rice to health information and legal forms, all through a centralized, Bengali-language information clearinghouse.

How to scale the impact of inclusive business models in low-income markets
Over the last decade, the notion of “scaling what works” has emerged as a broadly shared priority across the social sector. Still, the challenge of enabling powerful inclusive business innovations to spread to where they are most needed continues to frustrate social entrepreneurs and their supporters. Many failed attempts to scale economic inclusion initiatives are due to widespread overreliance on the conventional wisdom of the business sector, in which scaling efforts typically focus on increasing the size of organizations. In recent years, however, the social entrepreneurship sector has increasingly focused on scaling social impact without necessarily increasing the size of the organization. Indeed, Richard Bradach may have framed the current thinking best when he wrote that “finding ways to scale impact without scaling the size of an organization is the new frontier for work in our field.”(1) This emerging paradigm holds the promise of shaping strategies that succeed, thanks to the defining characteristics of the social sector. Leveraging the collaborative potential of mission-driven innovators while keeping organizational footprints— and attendant resource needs—to a minimum are key. The Economic Inclusion Globalizer seeks to accelerate this paradigm shift in the field of economic inclusion.

All businesses, whether standard or inclusive, face similar challenges when growing such as lack of access to appropriate financing mechanisms and qualified human capital, or the lack of a conducive regulatory environment. When operating in low-income environments, however, structural barriers make coping with these challenges even more difficult: Consumers are even harder to reach; support organizations, such as training providers, are not available; and the general business infrastructure is less developed. This is why the first day of the Globalizer summit focuses on the systemic barriers preventing economic inclusion initiatives from scaling their impact to meet their full demand. Ashoka’s social entrepreneurs will come together with leading minds from different sectors, industries, and markets to share their challenges, solutions, and new ideas for tackling these systemic barriers collectively. A special pool of funds will benefit the most outstanding solutions that emerge, thanks to GIZ and eBay Foundation, in partnership with Ashoka India and Ashoka Globalizer. The Globalizer Summit seeks to facilitate the creation of a strong economic inclusion ecosystem that truly allows economic opportunities to thrive where they are most needed..

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