NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Guest blogger Karen Lynn Vincent, a serial social benefit entrepreneur, is the co-founder and current chief operating officer at Resdida, a hybrid social business distributing content via mobile devices to the rural poor. She also works with the Global Social Benefit Incubator (GSBI) in the Center for Science, Technology and Society at Santa Clara University.

She sent us the following post from Santa Clara, California, where the Transformative Changes through Science and Technology: The Role for Social Benefit Entrepreneurs conference took place last week.

By Karen Lynn VincentDuring his morning address, 2006 Nobel Peace Prize winner, Muhammad Yunus of the Grameen Bank said that the integration of the many Grameen companies occurs not in structure or organization but with the woman in the village.? The Grameen companies are separate entities that converge in their compassion and empathy for the rural poor.?

Compassion and empathy were the recurrent themes of the day at the Transformative Changes through Science and Technology: The Role for Social Benefit Entrepreneurs conference, presented by the Center for Science, Technology and Society at Santa Clara University in on November 13, 2008.? This conference was held following and in conjunction with the Tech Awards Gala on the evening of November 12 at the Tech Museum in San Jose and brought the many sponsors and laureates together for a highly inspirational day.

It was also a very full day. Yunus delivered the morning keynote, and Bill Drayton of Ashoka addressed the audience with the luncheon keynote.? Tech Awards laureate presentations were in the afternoon.? A panel discussion shared lessons learned at the Global Social Benefit Incubator and featured many of the program alumni.? It drew to a close with a town hall discussion.? The energy throughout the day was high and the atmosphere was buzzing as so many great minds were converging to consider the impact of social benefit entrepreneurship.

Beggars can now be Choosers

Yunus described how Grameen Bank employees sat with beggars to learn which events precipitated becoming a beggar.? It was through this understanding that the bank developed its lending program for beggars that had 0% interest and no term for repayment.? With the suggestion that they might choose to carry goods with them as they beg, beggars were offered a microloan and were told they never needed to worry that the principal would increase and no one would ever chase them for the money.? However, if they repaid the loan, they would be eligible for other loans.??

The loan officers listened with compassion to the beggars they wished to help, developed empathy for their struggles, and worked out a solution molded to their needs.? Approximately eleven thousand beggars chose to become full-time peddlers.? They were empowered by the program to make a choice.

Emerging Social Business

Some might say that a 0% interest, no term loan cannot or should not be done in traditional business practice, and many would argue that the non-profit model may not be agile enough to manage the innovation.

Here rises the need for social business.? All it takes is for an individual to listen with compassion, understand through empathy, innovate a solid business model, persevere through obstacles, defy all common reason and execute with passion.? That sounds like a tall order, but it is the way of life for social benefit entrepreneurs all over the world.?

Despite appearances, the for-profit model is equipped to execute a social mission.? Rewards are based on how well the customer’s needs are met, making empathy essential for success.? Sales volume directly relates to how well business understands and solves the problems of its customer. Yunus said that in traditional business money is both the means and the end, but for social business money is only the means.? The end is compassionately serving the needs of customers.? The agility of the for-profit model and its inherent reward system can encourage the innovation needed to creatively solve the problems of the poor.

Developing the capacity for empathy

In his discussion of the Ashoka Changemakers program, Drayton highlighted the importance of teaching empathy skills to young people to inspire this innovation.? Drayton feels that empathy is a skill set that can be taught and needs to be developed in children. As these children grow, they will create change at the grass-roots level.

If the capacity for empathy is developed in youth around the world, human capacity will grow in response which will increase economic capacity globally.? Empathic youth can direct their passion toward solutions but will not be locked into the confines of societal rules.? The mind is still open, and they will be better equipped to drive economic growth more creatively leading us into the future.??

Yunus also noted that the human capacity for creativity is a real driving force behind the rise of entrepreneurship, and urges university professors to enlighten and inspire their students, yet be careful not to “replace” their “eyes and minds.”? Students enter with wide eyes and open minds and should leave that way as well to preserve the ability to creatively innovate.

A disruptive economy

We often hear about disruptive technology in innovation.? I was recently asked for my opinion as to why for-profit social business seems to be growing among the rural poor throughout the world.? To me the answer is timing.? Technology is penetrating the most rural reaches of the world in the form of the mobile phone, and although many are the most basic handsets, these are still more powerful than the first personal computers I was hacking away on back in the 80s.?

Although much of the functionality is untapped, the rural poor hold so much power in their hands, and like Yunus says, human beings have a tremendous capacity for creativity.? Creativity is allowing them to create new livelihoods using this tool.? For instance, Edgardo Herbosa of b2bpricenow.com created a mCommerce mobile phone solution that allows impoverished farmers to obtain the latest prices, transfer funds, execute trades, and thereby participate in the global economy while in the field.?

Due to the many disruptive technologies, the time is finally right for disruptive economy.? Social business models are upsetting tradition and creating change, and the technology is there to accelerate its growth. Social business is agile and revenue is based on the ability to understand the human condition and tailor the best possible solutions.?

These solutions empower the customer to choose to purchase products and services that matter to them.? Products and services do not need to be given charitably; the poor can have the power to choose and the economic ability to pay which inspires confidence. The most empathic businesses will see the most growth and will likely create the most jobs.? These jobs will perpetuate the cycle of continued confidence, new products, more jobs and economic growth.?
Social business is a highly disruptive economic catalyst for the local economy which can set the lives of many in motion.? It injects cash.? It inspires innovation.? It balances power.? The timing is right, the world is becoming smaller through technology and now is the time to (1) feel compassion; (2) develop empathy in ourselves, our children and our communities; and (3) channel our human creativity to invoke change.?

It was a phenomenal day at Santa Clara University, and I encourage everyone to do as Yunus suggests and apply your passion to innovation and use your personal human capacity to change the world.