Scott Anderson

Weekly Roundup – 2/22/14: At FLII building a collaborative flock to complex solve problems

Ramon Marmolejos ended an uplifting presentation on Day One of the Latin American Impact Investment Conference (which goes by the Spanish acronym FLII) with a big picture of what looked like a million starlings. It closely resembles the image accompanying this post.

“There is not one bird leading the flock,” said Marmolejos, executive director of Emzingo Group, which provides a leadership training program combined with social impact consultancy projects in emerging markets. “How do we create those (economic) systems to have these sorts of flocks?”

It takes more than coordination, it takes collaboration. But not the type we’re necessarily used to, and not the kind you see in inspirational office posters.

“We need to move from ego-based to eco-based systems,” he said, referring to both environmental and ecosystem/community-based systems. Marmolejos said the social innovators of today are not necessarily those who reach the summit first, but the sherpas who helped get them there.

This isn’t just a feel-good idea. The “complexity gap” of our problems demands a deeper understanding and a much more nimble response to them, Marmolejos said. Things are changing too quickly for any single “expert” to manage them. (A stark reminder of this fact was emerging a few hundred miles away, as Venezuelan students and police clashed. In what started as demonstrations about crime have mushroomed into mass violence rooted in a host of societal and economic issues. Food prices that have jumped by as much as 74 percent and reached an 18-year high, appear to be at least one of the underlying reasons for the unrest. More on this startling inflation is here and background on the protests is here).

Marmolejos’s talk was a level-setting way to launch the conference, which is managed by New Ventures Mexico, and where I was fortunate enough to host the opening panel, a primer on impact investing from a variety of perspectives. It included not only representatives of impact investing funds, but also from foundations, entrepreneurship organizations, and academia. The panelists were representative of the broader FLII guest list, which also included business-oriented NGOs, the entrepreneurial advocacy community, national and local governments, private equity and venture capital.

It was my first time at FLII, but I wasn’t alone. I spoke with a lot of first timers. Among them were several business leaders – from energy efficiency startups to agricultural management companies – hoping to pick up on the new (at least to them) lexicon of impact investment and, of course, make new contacts who might be willing to invest. By the same token, I ran into several nonprofit development groups hoping to connect with businesses, and a few investors seeking audiences with both constituencies.

Many of these first-time FLII visitors represented micro enterprises or small- and medium-sized enterprises (those under 250 employees). These make up make up 95 percent of the registered businesses worldwide, but in Latin America that number is 99 percent, according to a study by Symbiotics. The problem is SMEs, especially those that can barely afford to make payroll let alone attend economic conferences, do not have access to capital in the same numbers as their fellow business owners and entrepreneurs in developed markets. Less than 15 percent of lending in the region goes to small companies despite the fact that SMEs represent almost 80 percent of employment. The lending gap is estimated between US $330-410 billion, according to the IFC and McKinsey.

What impressed me about FLII was its ability to attract a cross section of players who will be called upon to improve the economic conditions of those left out of the relatively large economic gains across Latin America in the last decade. Many of these players find themselves on the same team for the first time. But it’s often difficult to know who’s pitching, who’s in the outfield or who’s at bat at any given moment. That is what makes these sorts of relationship-building opportunities all the more important.

Unfortunately, I was only able to attend just one day of events at FLII. But, we’re looking forward to bringing you coverage of the final two days of the conference from other contributors who were able to stay for the full schedule.

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