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Professor Alex Nicholls MBA

Professor Alex Nicholls MBA. Social Entrepreneurship and Social Innovation. Boundaries and Discourses. Session 1. 2. Course structure Assessments Social entrepreneurship Context Discourses Setting the boundaries Better World Books. Overview. Course Objectives.

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Professor Alex Nicholls MBA

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  1. Professor Alex Nicholls MBA Social Entrepreneurship and Social Innovation

  2. Boundaries and Discourses Session 1 2

  3. Course structure Assessments Social entrepreneurship Context Discourses Setting the boundaries Better World Books Overview

  4. Course Objectives To explore the range and nature of social entrepreneurship and social innovation Key drivers Contexts Opportunities and challenges

  5. Topics Session 1 Boundaries and Discourses Session 2 Market Solutions: Social Enterprise Session 3 Third Sector Solutions: Advocacy and Social Movements Session 4 Restructuring the State Session 5 Performance and Impact Session 6 Towards a Social Finance Market Place Session 7 Investors and Exit Session 8 Impact Investing

  6. Reading Essential reading Recommended range of material in pack Additional reading Useful in topic areas of particular interest Do NOT have to read it all! Case Preparation is essential

  7. Individual Essay Discursive and analytical Include theory and original research Include practical examples International in scope Choose from list of questions or devise your own

  8. Example Titles Social innovation is not the same as social entrepreneurship. Discuss Failure is the best source of successful social innovation. Discuss How can social entrepreneurship be fostered? What are the downsides to social innovation? How does social innovation differ across sectors? What is the role of government in social entrepreneurship?

  9. Example Titles Is there such a thing as a socially entrepreneurial ecosystem? Social entrepreneurship is always political. Discuss Impact measurement is less important than accountability. Discuss. How can social entrepreneurship scale up most successfully? Is social entrepreneurship the same across the world?

  10. Individual Business Plan Identify a social/environmental market failure/opportunity Design an organizational response To include: Market survey Strategic plan Operations plan Funding/financial structure/exit Performance metrics Governance/accountability structure

  11. Key Questions • What contribution can social entrepreneurship make to solving the greatest challenges of our time? • What is the role of: • Government as a regulator, policy maker and investor • Market as source of investment and competition • Civil society as guardian of values and source of non-market innovation • And how do all three work creatively together?

  12. ‘Wicked Problems’ Global Financial Crisis (GFC) Industrialization and climate change Global security Health pandemics Population growth Water and food shortages Massive inequality and persistent poverty Community regeneration Youth unemployment

  13. Social Entrepreneurship 13 • ‘Wicked problems need clumsy solutions’ • Social entrepreneurship blurs sector boundaries and reconfigures relationships • Public-private partnerships • Social enterprise • Shadow state • Often disrupts ineffective or unjust systems • Requires entrepreneurship and intrapreneurship • Institutional entrepreneurs are champions are critical • Government can generate, sponsor, or catalyse social innovation

  14. Reinventing Government • Increased privatisation of government and public services • Search for better quality/efficiency/legitimacy • Reduction in taxation • Formats: • Outsourcing contracts • Voucher schemes • PFIs/PPPs

  15. Social Sector Effectiveness • Move towards more ‘efficient’ business models in social sector • For-profit subsidiary ventures • Cross sector partnerships/hybrids • Drive towards ‘sustainability’ • Better responsiveness

  16. Predators v Creators

  17. Mulgan (2013) • Capitalism rewards innovators, makers, and creators (bees): creating value • Also rewards takers and predators (locusts): capturing value • Capitalism is articulated in the institutions of market and via business • Capitalism is in constant flux and is superbly able to reinvent itself and adapt to changing contexts and critiques: crisis is the norm • Its future can be more creation or more predation

  18. Mulgan (2013) • > predation = more state sanctioned monopolies (energy, IP); deeper marketization of public goods; commoditization of ‘lifeworld’; transactions as one off interactions • >creation = better alignment between markets and individual life; linking business to individual meaning and sense-making; civility and empathy; transactions as relationships • Lived Value

  19. Sustainable Business • Enhanced CSR • Triple Bottom Line strategies • Pressure to act as corporate ‘citizen’ • Role in solving social problems • Role in social institution building • BoP opportunities

  20. Shared Value 20

  21. Haque (2010) ‘Thin’ v ‘Thick’ Value?

  22. Social Entrepreneurship Public Sector Private Sector Private-Public Partnerships Reinventing Government 2.0 Corporate Social Responsibility 2.0 Social Entrepreneurship Social Innovation Policy Social Enterprise ‘Big Society’ Community 23

  23. Fluid and sometimes controversial phenomenon Solution to state failures in welfare provision (Leadbeater, 1997; LeGrand, 2003; Bovaird, 2006; Aiken, 2006) New market opportunity for business: BoP (Prahalad, 2005) Space for new hybrid partnerships within Civil Society (Austin et al, 2006) Model of political transformation and empowerment (Alvord et al, 2004; Yunus, 2008) Driver of systemic social change (Bornstein, 2004; Nicholls, 2006) Social Entrepreneurship Debates

  24. ‘Limited’ v ‘extended’ definitions of the term (Perrini, 2006) Former positions social entrepreneurship as a new aspect of the not-for-profit world Latter discusses it as a wider societal force for change Apparent tensions between a ‘big’ and ‘small’ tent approach to social entrepreneurship (Light, 2006) Enterprise v innovation models Social Entrepreneurship Debates

  25. Social Entrepreneurship? http://www.ashoka.org/ http://www.skollfoundation.org/about/ http://www.schwabfound.org/sf/index.htm http://www.unltd.org.uk/ Defining features Dominant logic Ideal type Case example

  26. Key Field Building Actors 27

  27. Logics Of Self-Legitimation

  28. Social Entrepreneurship? Cafedirect Aravind Eyecare Dwr Cymru Apopo

  29. Defining Features Nicholls and Cho (2006) 34 • ‘Sociality’ • Innovation • Market orientation • Hybridity • SE often addresses market failures or institutional voids (Mair and Marti, 2009)

  30. Sociality 35

  31. Innovation 36 • Schumpeterian notion of change agents • Creative destruction • Resourcefulness: bricolage approach • Innovation in institutional structures • Reconfiguring (social) needs, wants, demands

  32. Innovation 37 • Incremental • To address identified market failures more effectively • Negative externalities • Institutional voids • Institutional • To reconfigure existing market structures and patterns • Mobile telephony • Carbon trading • Fair Trade • Disruptive • To change the cognitive frames of reference around markets and issues • Social movements • Microfinance

  33. Market Orientation 38 • Reconfiguring markets • BoP • Addressing Market Failures • Private/Commercial Market Failure • Free Rider/Capturing Full Economic Value • Public/Government Market Failure • Collectivity/Democracy • Social Sector Market Failure • Resource dependency • Supplyside bias

  34. Market Orientation 39 • Reconfigures commercial markets to capture economic value as a by-product of creating social value • Social enterprises as ‘businesses with a social purpose’ (DTI, 2002) • New market opportunities at the ‘Bottom of the Pyramid’ (Prahalad, 2005; Karamchandani et al, 2009) • Generates innovation in charitable models that fail to deliver mission outcomes effectively • Offers solutions to (social) policy failures and voids

  35. Market Orientation 40 • Performance focus • Impact measurement • Stakeholder accountability • Competitive strategy • Combines value creation and strong values

  36. Sociality Enterprise development of the poor Innovation/Systems Change Idea: poor are low risk debtors Products: financial products to the poor Market orientation Build a scalable model Shift from philanthropic funding to access capital markets Microfinance

  37. Sociality Enterprise development of the poor Capacity building Innovation/systems change Marketing model: connecting consumer and producer via labelling initiative Economic model: reduce inefficiency of global supply chains Market orientation Grow ethical consumer market Develop producer voice Fair Trade

  38. Sociality Puts beneficiaries first Innovation/systems change Bottom-up solutions Empower beneficiary voice Market orientation Build a model drawing on existing practice Well designed consultation process BOND Quality in NGOs

  39. GAVI Alliance • Sociality • Focus on vaccines for neglected diseases in developing world • Innovation/systems change • Public-private partnership • Use pledges of future aid to back $1b in bonds • Market orientation • Market building for orphan drugs

  40. Three Societal Fields

  41. Boundary Blurring Community Formal-Informal Social Enterprises Shadow State Multi-Sector Collaborations Profit-Non Profit Private-Public Public-Private Partnerships Private Sector Public Sector 46

  42. Spectrum Of Action Guide Dogs for The Blind City Year cafedirect Benetech Grameen Phone Voluntary Organisations Charities Not-for-Profits Social Enterprises Corporate Hybrids 47 47

  43. 2005 IFF Survey for Small Business Service and DTI 15k SEs (IPS and CLGs); 1.2% of all enterprises; £18 billion t/o; 475k staff Annual Small Business Survey 2005-7 for DTI 55k SEs with employees (62k in 2009); likely to exclude many charities and CLGs National Survey of Third Sector Organizations 2008-9, Ipsos/MORI for OTS (using Guidestar data) 82k SEs (ie earning at least 25% of their income) NCVO Civil Society Almanack (charities only) 2009-10 36k SEs (ie earning at least 25% of their income) ‘Hidden Social Enterprise’ (Delta Economics) 2010 ‘Businesses with a social purpose’ (inc. job creation) 232k SEs (‘wanting to make a difference’) 110k SES (‘wanting to make a social difference’); £17.7 billion t/o Key Data Sources 48

  44. UK Social Enterprise

  45. Size and Scale • Bangladesh: • 2013 BRAC ran more than 37,000 schools • Provided microfinance products to over 8 million • Engaged 80,000 health volunteers • Employed 120,000 workers • Served >100 million people (Dees, 2010) • GEM 2010 (Bosma and Levie, 2010): • Direct engagement with SE ave. 1.6 -1.9% of the total population • Fair Trade: • 2013 >£4 billion of sales benefitted >7million in 60 countries • Ashoka’s global Fellowship >2500 members 50

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