26 03 social enterprise_irene bengo

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  • I.Bengo

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  • 1. Social enterprises and its role in achieving energyaccess for allProf. Irene Bengo, Ph.D.Department of Management, Economics and Industrial EngineeringPolitecnico di MilanoPresident of Engineering Without Borders - Milan
  • 2. Context 2 1. WELFARE SYSTEM CRISIS Unsatisfied social needs 2. DEVELOPMENT ASSISTANCE CRISIS Local and foreign policies, organizations and multilateral institutions have failed to provide a real response to the need of: access to basic services creation of real systems that involve the active participation of stakeholders ability to form stable employment and enable the integration of disadvantaged people. 3. ECONOMIC CRISIS This situation has highlighted the need of alternative economic, entrepreneurial and social development structures both in "developing countries" than in "developed countries" SOCIAL ENTERPRISEI. Bengo, Engineering Without Borders - Milan
  • 3. Context 3I. Bengo, Engineering Without Borders - Milan
  • 4. The Social Enterprises: some numbers 4 Growth in social entrepreneurship globally over the last decade has been impressive social entrepreneurship is a “good thing”European Commission 2012: there are more than 11 million jobs in the socialeconomy across Europe, but membershipof social economy enterprises is much wider: 160million.Social economy enterprises represent 2 million enterprises (i.e. 10% of all Europeanbusinesses) and employ over 11 million paid employees (the equivalent of 6% of theworking population of the EU). Italian case, the report on SE (Iris Network): there are over 15 thousand SEs, 350thousand employees including social cooperatives, foundations and other organizationsI. Bengo, Engineering Without Borders - Milan
  • 5. Increasing interest in social enterprises worldwide: “entrepreneurial spirit with social aims” aims“whenever I wanted to deal with a social or economic problem,I tried to solve the problem by creating a business around it” (M. Yunus 2010,17)I. Bengo, Engineering Without Borders - Milan
  • 6. 6 Idea of Social Enterprises 1/2 The Social Enterprise (SE): private, autonomous, entrepreneurial organizations providing goods or services with the goals of provide benefit to the community.The SEs aim at:• transforming the maximization of profit and wealth creation in a mean bywhich the “social entrepreneur” satisfies unmet social needs.• transforming the social benefit into a real “business idea”SEs• Have relevant expected impact in term of social value creation• Is a potential response to critical problems in the North/South of the worldI. Bengo, Engineering Without Borders - Milan
  • 7. Idea of Social Enterprises 2/2 “Social enterprises created by social entrepreneurs through social entrepreneurship processes”Social entrepreneurship• emphasizes the social innovation processes undertaken by socialentrepreneurs;• refers to a wide spectrum of initiatives, from voluntary activism to corporatesocial responsibility (CSR);• characterized by “blended value creation” (profits alongside social value) and“blurred boundaries” as for institutional and legal forms.Social enterprise• appeared in Italy in 1990 (“impresa sociale”) and gradually spread all overEurope;• positioned at the croassroads of market, public policies and civil society;• innovation models arising from ‘hybridization of resources’ and ‘inter-institutional cooperation’.Social entrepreneur• emphasized by American foundations since the mid 1990s;• refers to individuals launching new activities dedicated to a social mission whilebehaving as true entrepreneurs in terms of dynamism, personal involvement andinnovative practices. I. Bengo, Engineering Without Borders - Milan
  • 8. Who’s this? The social entrepreneur should be an enthusiastic innovator and, above all, a an excellent manager in order to guarantee – in a competitive market- the difficult trade-off between the generated social impact and the economic sustainability of the entrepreneurial activity“The reasonable man adapts himself to the world; the unreasonable onepersists in trying to adapt the world to himself. Therefore all progress dependson the unreasonable man”George Bernard Shaw I. Bengo, Engineering Without Borders - Milan
  • 9. Who’s this?I. Bengo, Engineering Without Borders - Milan
  • 10. Andreas Heinecke: Dialogue in the Dark Andreas Heinecke founded Dialogue in the Dark with a twofold aim: to bring ordinary people closer to the world of the blind and sight impaired people and to offer them a job so they can better fit into society. The success of these shows was huge that Dialogue in the Dark is now a global phenomenon, with exhibitions all over the world. It has not just represented a true “eye- opener” for over 6 million visitors, but also offered a job about to about 6000 blind and sight impaired people.I. Bengo, Engineering Without Borders - Milan
  • 11. Who’s this?I. Bengo, Engineering Without Borders - Milan
  • 12. Jean-Marc Borello: Groupe SOS Jean-Marc Borello, he founded a real social business giant. In 15 years the group SOS has developed a wide range of health and social services designed mainly to the recovery of people with serious drug and alcohol dependencies. With a turnover of € 150 million, 170 health facilities and 2700 employees, SOS provides every day thousands of health care services.I. Bengo, Engineering Without Borders - Milan
  • 13. Who’s this?I. Bengo, Engineering Without Borders - Milan
  • 14. Paul Newman: Newman’s Own In 1982, Paul Newman founded Newmans Own, a company founded to commercialize his own special recipe for salad dressing that had long been a hit among his friends. After the success of the first product on the market, Newmans Own began to market a wider range of sauces, condiments and drinks that have become famous and distributed all over the world. The peculiarity of Newmans Own is that all profits are donated to various non-profit organizations (hospitals, camps for sick children ....). From 1982 to 2008 about 280 million dollars have been donated to these charities.I. Bengo, Engineering Without Borders - Milan
  • 15. Who’s this?I. Bengo, Engineering Without Borders - Milan
  • 16. Reed Paget: Belu Water Reed Paget is the founder of Belu Water, the first eco-friendly bottled water company. In fact, Belu water is extracted from natural springs and is bottled in a local English-biodegradable bottles (with plastic derived from corn). Belu Water sells in England (especially London) 500,000 units per month.I. Bengo, Engineering Without Borders - Milan
  • 17. Who’s this?I. Bengo, Engineering Without Borders - Milan
  • 18. Jamie Oliver: Fifteen Restaurant Jamie Oliver is a renowned chef in London who starred in several television series and is author of many cookbooks. At the height of his fame and success Jamie has decided to give something back to society. His idea was to use his talent and name to give to marginalized boys and girls (for alcohol and drugs) a second chance. Thus he founded Fifteen Restaurant. The restaurant offers two years of training as a chef to help marginalized children. After this learning experience, with a Master Chef like Jamie, some guys are now working at Fifteen Restaurant, while others found work in other London restaurants.I. Bengo, Engineering Without Borders - Milan
  • 19. Who’s this?I. Bengo, Engineering Without Borders - Milan
  • 20. Muhammad Yunus : Grameen Group Muhammad Yunus is perhaps the most famous member of the social business world. After the 1974 famine in Bangladesh, Yunus, a professor in economics, created a system of loans to very poor based solely on trust. This is how the Grameen Bank microcredit has (founded by Yunus) its most representative institutions (with $ 7.6 billion provided from its origins to 2008). For the positive impact that microcredit has had in reducing world poverty, Yunus and Grameen Bank were awarded the Nobel Prize for Peace in 2006. Yunus founded in the same year with the French multinational Danone, a manufacturer of highly nutritious yogurt at low prices to combat malnutrition in Bangladesh (Grameen Danone Foods).I. Bengo, Engineering Without Borders - Milan
  • 21. 21 Development of SEDifferent reasons of Social entrepreneurshipdevelopment during last 20 year Privatization of the public responsibility for public welfare: • government’s participation decline regarding the services offered to the community • the experimentation with "new forms of solidarity and collectivity" by civil society and social movements as they enter high politicsThe development of a culture better oriented to the responsibility and personalinvolvement towards social problems: • introduction a social purpose to a business company, corporation or even governmentIncrease of the entrepreneurial spirit of no profit sector (association, NGOs,Cooperatives) • changes occurred into the no-profit sector for increase the opportunities of funding the third sector’s will to increase its entrepreneurship and the social enterprise’s interest to unify its values with the standard profit sector business’s principles I. Bengo, Engineering Without Borders - Milan
  • 22. 22 SE as a middle way between two extremesSE represents a hybrid form, located somewhere in between the traditional non-profit and for-profit organizationsCompared to not for profit Ses achieve social goals thatentities, SEs have the meld socio-political,purpose to achieve social environmental, and financialbenefit, but their vision, objectives: give them a majororganization and processes importance compared to profitare quite different when organizations (social purposecompared to non-profits is central to the Se operation)  SEs pursue a broad social goal, they try to promote a new model of economic development, fostering a more democratic decision-making process  From an economic standpoint, SEs need to assure their economic sustainability: market oriented activities and fundrising are strictly “at the service” of the social goal I. Bengo, Engineering Without Borders - Milan
  • 23. 23 SE as a middle way between two extremes Hybrid Model of Social Entrepreneurship:Alter (2004): "Hybrid Spectrum of sustainability" to underline the Ses position respect theother organizations. As a hybrid, the social enterprise is driven by two strong forcesI. Bengo, Engineering Without Borders - Milan
  • 24. 24 SE as a middle way between two extremes 4° Sector: For -benefit organizations Figure 1 details the traditional organizations  new kind of firm: for-benefit organizations. These organizations are driven by a social purpose, they are economically self- sustaining and seek to be socially, ethically, and environmentally responsible. Social enterprises are prime examples of for- benefit organizationsDennis A. Pitta and J. Howard Kucher,University of Baltimore, Baltimore, Maryland,USA, Journal of Product & Brand ManagementVolume 18 · Number 2 · 2009 · 154–158 I. Bengo, Engineering Without Borders - Milan
  • 25. 25 Different definitionsThe academic and professional literature provides several definitions of SESOURCE DEFINITION Businesses with primarily social objectives whose surpluses areDTI, Department principally reinvested for that purpose in the business or in theof Trade and community, rather than being driven by the need to maximise profit forIndustry; 2002 shareholders and owners Enterprises with the specific purpose of addressing social issues, inM. Bull, H. favor of the community or the environment and employ a businessCrompton; 2007 structure that allows it to remain sustainableSocial Enterprise Businesses trading for social and environmental purposes. SocialCoalition 2011 enterprises are distinctive because their social and/or environmental purpose is absolutely central to what they do - their profits are reinvested to sustain and further their mission for positive change.. “We have described and keep on describing organisations motivated byMuhammad social objectives as non-profit organisations. We need to have anotherYunus description: ‘non-loss ’organisations, because we don’t want to lose money and our objective is to address a particular problem. So we are non-loss businesses with social objectives.”I. Bengo, Engineering Without Borders - Milan
  • 26. Different definitions: EMES definition"Social enterprises are not-for-profit private organizations providing goods or services directlyrelated to their explicit aim to benefit the community. Social Criteria Economic Criteria • An explicit aim to benefit the community • A continuous activity, producing and selling goods and or services • An initiative launched by a group of citizens • A high degree of autonomy • Decision-making power not based • A significant level of economic risk on capital ownership • A minimum amount of paid work • A participatory nature, which involves the various parties affected by the activity • Limited profit distribution I. Bengo, Engineering Without Borders - Milan
  • 27. 27 Legal forms within the EU contestLegal FormIn the last 20 years, the debate about social enterprise in Europe increasinglyfocused on its specific aims and its role in the welfare systems theemergence of a complex and diversified legislative framework. At present, no specific legislation exists at the European Community level.There are very different concepts of SE and different legislative frameworkregulating its governance, activities, ownership…:I. Bengo, Engineering Without Borders - Milan
  • 28. 28 Legal forms within the EU contest Table 3.1Country Forms used Profit Governance Activities distribution Associations Direct and indirect Participatory Production or exchanges of servicesItaly in the sectors of social and health Foundations distribution of nature assistance, education and training,Law n. 118 of 13 Co-operatives profits prohibited environmental protection, social tourism,June 2005 For-profit cultural services or work integration of Enterprises disadvantaged persons independently from the field of activity of the enterprisePortugal Social Direct and indirect Participatory Work-integration of vulnerableCo-operative code groups Solidarity co- distribution of nature(Law n° 51/96 of 7 operatives profits prohibitedSeptember 1996) andLegislative decree n°7/98France General-interest Redistribution of Participatory Production or provision of goods andLaw of 17 July 2001 co-operative profits is possible, nature services of collective interest societies but limited I. Bengo, Engineering Without Borders - Milan
  • 29. 29 Legal forms within the EU contestTable 3.1 Country Forms used Profit Governance Activities distribution Limited company; Redistribution of Participatory Activities that are aimed atBelgium Limited liability co- profits is possible, nature pursuing a social goal. WhatLaw of 13 April operative society; but limited constitutes a social goal results1995 private limited liability from constitutive elements society foreseen by the legislation.United Enterprises regulated by Partial Participatory Wide range of activities thatKingdom Companies Act 1985 distribution of nature correspond to the needs ofCommunity profits allowed communities. Social definitionInterest assessed by the RegulatorCompanyregulations 2005Finland All enterprises Distribution of Participatory Social enterprises have to employLaw n. regardless of their legal profits allowed governance at least 30% of people with1351/2003 form and ownership with no not envisaged disabilities and long-term structure constraints unemployed I. Bengo, Engineering Without Borders - Milan
  • 30. 30 SE specificities Different definitions and different legal framework across European and non European countries exists1. SEs are multi – objective organizations SOCIAL Su o d Su o d m m s t el s t el ai ai na na bi bi lit lit SE y y ENVIRONMENTAL ECONOMIC2. SEs have a multi-stakeholder governance external players more relevant respect the private sector: • Groups of citizens regarded as agents of change • Participation of stakeholders in the decision making processes • This involvement is essential (i.e SE can’t do without) to understand the real needs of the context I. Bengo, Engineering Without Borders - Milan
  • 31. 31 Different typology of the activities Activity Yes/no Yes/no Work integration Agriculture Personal services Education Economic Development University education Environmental Non-formal training Conservation Arts and Cultural Tourism Preservation Social Welfare and Water management Human Development Health Production Energy Recycling Catering and hospitalityI. Bengo, Engineering Without Borders - Milan
  • 32. 32 Different typology of the activities Activity Yes/no Yes/no Work integration √ Agriculture √ Personal services √ Education √ Economic Development University education √ √ Environmental Non-formal training Conservation √ √ Arts and Cultural Tourism Preservation √ √ Social Welfare and Water management Human Development √ √ Health √ Production Energy √ Recycling √ Catering and hospitality √I. Bengo, Engineering Without Borders - Milan
  • 33. Whats new about social enterprises? Contributions to socio-economic development, empowerment and environmental challenges• providing access to basic services (social, educational, and health) to localcommunities, including innovative schema for people who are unable to pay;• contributing to a more balanced and sustainable use of local resources encouragedby wide participation of local stakeholders;• creating new employment as a result of the new services supplied and favouring labourmarket integration of disadvantaged people (minority groups, single women, people withdisabilities, etc.) otherwise excluded from income-generating opportunities;• breaking poverty traps by allowing financial inclusion for self-employment;• contributing to take informal activities out of the underground economy for instance byregularizing the situation of illegal workers on the black market; also contributing to afair integration of small economic actors into markets• contributing to the promotion of inclusive governance modelsthat empower the local community in strategic decision-making;• contributing to enhance social capital at local levels (based onbroad ownership and local participation), which is of crucialimportance.I. Bengo, Engineering Without Borders - Milan
  • 34. Social Enterprises: Increased local participation to expand the energy marketFor these reasons these organization can play a fundamental role, in addition togovernments, to better understand the socio-cultural context, have a key rolein reaching low-income communities with efficient and sustainable energydelivery systems.Social enterprises are fundamental actors to ensure that energy accessinitiatives can result in development benefits deriving from productiveactivities but also from improved health, education and livelihoods.Since these organization take into account the socio-cultural context needs, toensure that people are willing and able to pay for energy services as theysatisfy their needs and also ensure the adequate level of awareness abouttechnology options and utilization.I. Bengo, Engineering Without Borders - Milan
  • 35. Social Enterprises: Increased local participation 35 to expand the energy market How to understand local needs? Promoting participation and ownership Participation and ownership are fundamental to ensuring the correct choice of technology and the success of a projectThe sustainability of the projects and the local social enterprises depends on the way inwhich they are integrated in the local cultural and social context, environmentaland economic conditions, institutions and available technologies.The purpose of this type of engineering interventions is to make the communityautonomous, self-organized and independent.Technology and Innovation alone are not sufficient to guarantee success; theymust be driven by human factors and coupled with the principle of participationand direct community involvement I. Bengo, Engineering Without Borders - Milan
  • 36. Social Enterprises: Increased local participation to expand the energy market Key principles of participatory approaches • Involving people as subjects not objects • Respect for local knowledge and skills • Ensuring influence over development decisions, not simply involvement • A learning process as much as an outcome • An approach and attitude rather than a specific set of technical skillsThe participatory approach is also a state of mind, anattitude. It is about having a genuine concern and respectfor the values, skills and needs of others, particularlythose who are least advantaged.I. Bengo, Engineering Without Borders - Milan
  • 37. Financial inclusion for self-employment generation: the European microfinance landscape"Microfinances mission is to provide basic financialservices to poor people" • Founded in 1989 by Maria Nowak • To be effective, the Right to Economic Initiative requires access to capital andEMN (European Microfinance Network) gathers removal of administrative constraints fororganisations primarily involved in the European creating self-employment.Union and mainly addresses issues related to • Adie finances the self-employed andprofessional and personal microcredit in Europe, microenterprises through a variety ofother financial services being still underdeveloped. products based on clients’ needs: - Loans at market rate up to 6000 € - "Start-up grants" funded by the FrenchMicrocredit is defined by the European government or by local authoritiesCommission, as a loan under € 25,000 to supportthe development of self-employment andmicroenterprises. It has a double impact:• an economic impact as it allows the creation ofincome generating activities• a social impact as it contributes to the socialinclusion and therefore to the financial inclusion ofindividuals. I. Bengo, Engineering Without Borders - Milan
  • 38. Financial inclusion for self-employment generation: the European microfinance landscapeAndreoni, A., Sassatelli, M. e Vichi, G. (2013) New Financial Needs: the microcredit response in Italy, Bologna: IlMulino. I. Bengo, Engineering Without Borders - Milan
  • 39. 39 Social enterprise delivering energy solutions On this map you can see over 40 social enterprises delivering energy solutions to underserved populations around the world. Energy Plus Ltd. sells battery inverter backup systems and energy efficient lights to grid- connected schools and businesses in Uganda, so that they no longer need a diesel generator when the grid is out and pay less for electricity when the grid is working .http://energymap-scu.org/social-enterprise/ I. Bengo, Engineering Without Borders - Milan
  • 40. 40 Social enterprise delivering energy solutionsSome examples of social businesses…WE CARE Solar: provides solar electric kits for medical lighting andcommunication that are reliable, robust, and low-cost, enabling timely andappropriate emergency care in maternal health facilities and settings withoutreliable electricity. Impact Areas : Sub-Saharan Africa, Haiti, Southeast AsiaEnterpriseWorks/VITA: a division of Relief International (EWV-RI), sells improvedcooking stoves that are manufactured in Ghana and sold through local retailers.Income is generated for manufacturers and distributors; the improved cookstovesallow households to be more efficient in the cooking process, household earning arebetter utilized, indoor and outdoor pollution is reduced and charcoal consumption issignificantly reduceSmart Oil is creating thousands of jobs in rural West Africa by producing a cheapersubstitute for diesel fuel derived from jatropha plantations. I. Bengo, Engineering Without Borders - Milan
  • 41. 41 Social enterprise delivering energy solutionsSome examples of social businesses..Energy in Common is a crowdfunding platform allowing online lenders toprovide project-specific financing for green energy through microfinanceinstitutions. Impact Areas Ghana, Nigeria, TanzaniaTrees, Water & People has designed a cookstove for the charcoal dependentpopulation of Haiti, that reduces fuel consumption by up to 40%. The design issimilar to a popular improved cookstove in the local market, but makes use ofinsulation, properly-sized flue gaps and a smaller fuel bowl to deliver cooking heatmore effectively.Solar Sister eradicates energy poverty by empowering women witheconomic opportunity. combining the breakthrough potential of solartechnology with an Avon-style direct sales network, Solar Sister brings light,hope, and opportunity to even the most remote communities of rural Africa. I. Bengo, Engineering Without Borders - Milan
  • 42. 42 Social enterprise delivering energy solutions EFrem (Energy Freedom)Sector Renewable energy, trainingForms used Non-profit associationSocial Mission Increasing culture on renewable energy in LDCN. employees 15N. members 30Year Founded 2007Geographic Area Impact Burundi, Kenya, Ivory Coast,Ghana, RDC, RwandaActivities Training of trainersIn addition to training activities, EFrem develops some projects:"GRID"(General Recharging to Implement Development) thatoffers to implement one system of solar power unit for chargingbatteries to create permanent jobs in poor areas with no electric poweravailable. HOASIS Plan (Holistic Approach Significant to ImplementSelf-Reliance).Hoasis is an evolution of GRID project. The plan provides, as a centralengine, a unit of production of alternative energy (generallyphotovoltaic, the easiest to develop, the most modular and the easiestto manage). I. Bengo, Engineering Without Borders - Milan
  • 43. Social enterprise: Italian Movement Make a Change is a movement that operates through an operative organization to achieve the following goals:  Support the development of new social entrepreneurs in Italy  promote social entrepreneurship as a new asset class for responsible investments  Promote among young people values of balance and social responsibility as an alternative to the pursuit of money and power at all costs. the first Italian answer to the global movement of social business. Our founders come both from the profit and not-for-profit worlds: 3 companies and 12 individual professionals promoting new business models : businesses that aim to reach economical sustainability while maximizing social welfare. The mission: to change the system within the system.I. Bengo, Engineering Without Borders - Milan
  • 44. Training for migrants: a support to developmentTarget:  Migrants and their association in Milan areaObjective:  To promote the development of activity income generation, like social enterprises, in Italy and their origin countries  To promote culturally community exchange and networkingCourse program:  Tools and methodologies for project cycle management  Profitability assessment: market analysis and social enterprise business plan  Case study: product and technologies available in developing country.Countries: Togo, Burkina Faso, Ghana, Camerun, Perù,
  • 45. Possible barriers to developmentSource: Social Enterprise UK Report 2011 I. Bengo, Engineering Without Borders - Milan
  • 46. Thank You for your attentionI. Bengo, Engineering Without Borders - Milan