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Effecting change through innovation
SOCIAL entrepreneurs, as defined by Ashoka's vision, set out to change society by addressing issues in innovative ways in areas such as healthcare, environment and education. Thanks to the Ashoka Fellows network, a breed of social entrepreneurs is emerging who are demonstrating that business may well be one of the most powerful ways to fght poverty.
Ashoka itself raised this question in a blog on Forbes.com in 2014: How do you profitably sell to people who earn less than US$2 a day? These potential customers are at the "base of the pyramid", typically illiterate and have barely any savings or access to credit. Yet a good number of its Fellows are making waves in this segment, changing patterns well beyond national borders.
Here are some examples:
Felipe Vergara, Ashoka Fellow 2006, US
In most countries, access to education is predictive of economic success. Mr Vergara grew up in Colombia and was acutely aware of the inefficiencies of the educational system and how it favoured the wealthy who can afford the fees. Lumni is a partnership between Mr Vergara and Miguel Palacios. The frm pioneered the concept of "human capital contracts" as an alternative way to tap private capital to finance tertiary eduction.
Lumni finances students through "income share agreements", where in exchange for funding for university education, students undertake to pay a percentage of their future income – capped at 15 per cent for a number of years. These contracts are pooled and financed through human capital funds; Lumni has designed and launched funds in Chile, Colombia, Mexico and the US.
A study of social entrepreneurship by the Inter-American Development Bank in 2013 found that Lumni has helped finance over 8,000 students aged between 18 and 22 in Colombia, Chile, Mexico, Peru and the US. As at 2013 there were 11 investment funds with an average annual return of 9.1 per cent and an average of 2 per cent of students defaulting on repayments. Each fund has a life of about 10 years.
Lumni's model spreads the risk between students and investors. Investors' returns depend on how well students do and their salary levels. The study said that Lumni's financing option was attractive as it offered lower interest rates and longer repayment periods than other alternatives.
Lumni's model has since been adopted by a number of organisations in a number of countries including the US.
Jordan Kassalow, Ashoka Fellow 2010, US
An optometrist, Mr Kassalow seeks to address the need for affordable eye care in developing countries. His not-for-proft company VisionSpring seeks out affordable manufacturing of spectacles. For distribution in rural areas, it engages "vision entrepreneurs" who help to generate awareness, conduct screenings and sell low-cost spectacles.
To achieve more scale, it also partners non-governmental organisations, governments, social enterprises and private businesses for distribution. The firm has supplied over 400,000 ready-made eyeglasses, helping to boost customers' health and earning capacity.
It had found that VisionSpring eyeglasses raised customer productivity by 35 per cent; and reading glasses have the potential to raise users' monthly income by 20 per cent.
The firm is piloting a "full service" approach that features a diversifed product range and approaches proftability through the introduction of higher margin products
Yuhyun Park, Ashoka Fellow 2013, South Korea
Children have easy access to unsavoury online content and Dr Park is doing something about it. Dr Park's idea is to empower young children to become responsible digital citizens by helping instill respect, self confidence and empathy through fun and learning activities. She believes that it is vital to begin to help elementary school students under 10 years old to develop responsible digital habits.
Her non-profit firm InfollutionZERO sets out to address challenges such as cyber bullying, game addiction and exposure to inappropriate content.
The iZ HERO programme, developed jointly with the Nanyang Technological Institute, has been rolled out to Singapore primary schools. The programme includes comic books, online games, and peer mentoring. It has been cited by Unesco for educational innovation. W
Making it work
SOCIAL entrepreneurs are on a mission to change the world. How do they do that?
Insights from an Ashoka Globalizer event, re?ected in a blog that was published by Forbes in 2014, are instructive in terms of how business can help to lift people out of poverty.
Here are some strategies pursued by some Ashoka Fellows, as re?ected in the blog:
• Recruit and empower local changemakers. Hire individuals with entrepreneurialism and the drive to create change on the ground.
• Build a movement, not market share. Social entrepreneurs think about how to turn their product or idea into a movement to magnify the impact beyond a Effecting change through innovation single organisation.
• Embrace competition. More competition means more people trying to solve the problem. "In the hands of the right entrepreneur, price itself can become a weapon in the battle to scale impact," said the article.
An example is David Green who founded medical device companies that can substantially lower costs for the poor. When Mr Green's company Aurolab began selling lenses for eye surgery, the market price of the lenses was US$300. Aurolab sold them at US$10 proftably. Today Aurolab sells them for less than US$2, and it is one of the world's largest manufacturers of intra-ocular lenses.
• Mission, not money. Social entrepreneurs are driven by their mission rather than profts.