GLOBALIZATION & SUSTAINABLE DEVELOPMENT
Strategies for Poverty eradication & Wealth creation

The role of multinationals C...
Index
1. Introduction to “Globalization & Sustainable
   development”:
   - Globalization context
   - Current Global Chal...
Our goals for today
Based on the book
“The power of unreasonable people”
(J Elkington & P. Hartigan –
 Harvard Business Pr...
3. “THE POWER OF UNREASONABLE PEOPLE
How Social Entrepreneurs Create Markets that Change the World”
                      ...
Understanding what is a Social Entrepreneur

“The reasonable man adapts himself t the world

The unreasonable man persist ...
Social entrepreneurs are…
 Innovative, Resourceful, Practical and Opportunistic,… as any
 other entrepreneurs

 But… What ...
Why are they unreasonable? Because…
 They Want to Change the World
 They are insanely ambitious
 They are propelled by emo...
Characteristics of Successful Social entrepreneurs
  Try to shrug off the constraints of ideology or discipline
  Identify...
How they look like…

                                                         Nicholas Negroponte (MIT-medialab)
         ...
Classifying types of Social Enterprises
Traditional classification:
  Model 1: Leveraged Nonprofit ventures
  Model 2: Hyb...
Traditional classification
Model 1: Leveraged Nonprofit ventures
  A public good is being delivered to the most economical...
Traditional classification
  Model 1: Leveraged Nonprofit ventures
                                                       ...
Traditional classification
Model 2: Hybrid Nonprofit ventures

  Goods or services are delivered to populations that have ...
Traditional classification
   Model 2: Hybrid Nonprofit ventures
                                                         ...
Traditional classification
Model 3: Social Business ventures

  The entrepreneur sets up the venture as a business with th...
Traditional classification
Model 3: Social Business ventures




                                                         ...
Team activity
 Select one social entrepreneur you might know?
 Identify which characteristics does he/she have?
 Identify ...
Classifying Social enterprise from a wider perspective




   Dr. JM Luzarraga – ETEO-MU – Sustainable Development - April...
10 market opportunities for social entrepreneurs
1. Demographic opportunities
Facts:
-   Human population toward 9 billion...
10 market opportunities for social entrepreneurs
2. Financial opportunities
Facts:
-   The notion that the haves will find...
10 market opportunities for social entrepreneurs
3. Nutritional opportunities
Facts:
-   True famine, hunger, and poor nut...
10 market opportunities for social entrepreneurs
4. Resource opportunities
Facts:
-   A growing world population will not ...
10 market opportunities for social entrepreneurs
5. Environmental opportunities
Facts:
-   Environmental issues are univer...
10 market opportunities for social entrepreneurs
6. Health opportunities
Facts:
-   From HIV/AIDS, to malaria, to potentia...
10 market opportunities for social entrepreneurs
7. Gender opportunities
Facts:
-   There is always an inescapable gender ...
10 market opportunities for social entrepreneurs
8. Educational opportunities
Facts:
-   Few factors are as powerful as ed...
10 market opportunities for social entrepreneurs
9. Digital opportunities
Facts:
-   Enthusiasts may talk of “growing up d...
10 market opportunities for social entrepreneurs
10. Security opportunities
Facts:
    September 11th terrorism attack cha...
“YOU HAVE TO BE THE CHANGE YOU
                      WANT TO SEE IN THE WORLD”
                                         GA...
Eskerrik asko
Muchas gracias
Thank you
谢谢你

                 “Our strength does not lead to struggle but co-operation”

  ...
Dr. JM Luzarraga – ETEO-MU – Sustainable Development - April 2009
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UNDERSTANDING THE POWER OF SOCIAL ENTREPRENEURS

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GLOBALIZATION & SUSTAINABLE DEVELOPMENT Strategies for Poverty eradication & Wealth creation

The power of Social Entrepreneurs

Bilbao - May 2009

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UNDERSTANDING THE POWER OF SOCIAL ENTREPRENEURS

  1. 1. GLOBALIZATION & SUSTAINABLE DEVELOPMENT Strategies for Poverty eradication & Wealth creation The role of multinationals CSR strategy, the fortune at the bottom of the pyramid & SOCIAL ENTREPRENEURS La Comercial UD – Sustainable development – Bilbao May 2009 Dr. JM Luzarraga –Mondragon University jmluzarraga@gmail.com jmluzarraga@eteo.mondragon.edu Dr. JM Luzarraga – ETEO-MU – Sustainable Development - April 2009
  2. 2. Index 1. Introduction to “Globalization & Sustainable development”: - Globalization context - Current Global Challenges in a Knowledge Economy - Impact on economic developed countries - Impact on developing & emerging countries 2. Three Paths to Poverty eradication & Wealth Creation - Corporations’ CSR strategy: employment creation (Karnani) - Fortune at the Bottom of the Pyramid strategy: new customers (Prahalad) - Social Entrepreneurs: new socio-economic agents (Bornstein- Yumus & Schwab) Dr. JM Luzarraga – ETEO-MU – Sustainable Development - April 2009
  3. 3. Our goals for today Based on the book “The power of unreasonable people” (J Elkington & P. Hartigan – Harvard Business Press 2008) Our objectives are: To introduce a new generation of social & environmental entrepreneurs To understand their Business Models & leadership styles To identify their market opportunities To find out their financial resources Dr. JM Luzarraga – ETEO-MU – Sustainable Development - April 2009
  4. 4. 3. “THE POWER OF UNREASONABLE PEOPLE How Social Entrepreneurs Create Markets that Change the World” (Harvard Business Press 2008) - Understanding what is a Social Entrepreneur - Classifying types of Social Enterprises - Identifying SE market opportunities - Tapping SE financial resources Dr. JM Luzarraga – ETEO-MU – Sustainable Development - April 2009
  5. 5. Understanding what is a Social Entrepreneur “The reasonable man adapts himself t the world The unreasonable man persist in trying to adapt the world to himself. Therefore, all progress depends on the unreasonable man” (George Bernard Swaw, 1903) Dr. JM Luzarraga – ETEO-MU – Sustainable Development - April 2009
  6. 6. Social entrepreneurs are… Innovative, Resourceful, Practical and Opportunistic,… as any other entrepreneurs But… What motivates social entrepreneurs is not doing the “DEAL” but achieving the “IDEAL” So they have a long term commitment with their projects Most Social entrepreneurs stumble across the opportunity to SERVE OTHERS Common inspiration is: “You have to be the change you want to see in the world” (Gandhi) Dr. JM Luzarraga – ETEO-MU – Sustainable Development - April 2009
  7. 7. Why are they unreasonable? Because… They Want to Change the World They are insanely ambitious They are propelled by emotions They think they know the future They seek profit in unprofitable pursuits They ignore the evidence They try to Measure the Unmeasurable They refuse to be made into Superheroes They are, well, unreasonable Dr. JM Luzarraga – ETEO-MU – Sustainable Development - April 2009
  8. 8. Characteristics of Successful Social entrepreneurs Try to shrug off the constraints of ideology or discipline Identify & apply practical solutions to social problems, combining innovation, resourcefulness, and opportunity Innovate by finding a new product, a new service, or a new approach to a social problem Focus-first & foremost-on social value creation and, in that spirit, are willing to share their innovations & insights for other to replicate Jump in before ensuring they are fully resourced Have an unwavering belief in everyone’s innate capacity, often regardless of education, to contribute meaningfully to economic & social development Show a dogged determination that pushes them to take risks that others wouldn’t dare Balance their passion for change with a zeal to measure and monitor their impact Have a great deal to teach change makers in other sectors Display a healthy impatience Dr. JM Luzarraga – ETEO-MU – Sustainable Development - April 2009
  9. 9. How they look like… Nicholas Negroponte (MIT-medialab) “Entrepreneur behind the One laptop per child project” VIDEO: http://tinyurl.com/qkavho Dr. Govindappa “Aravind Eye Hospital” “The largest Eye care medical Dr. Mohammed Yumus centre in the world” “Grameen Bank – Nobel Price 2006” VIDEO: http://tinyurl.com/qb37rm VIDEO: http://tinyurl.com/dmbz9f Dr. JM Luzarraga – ETEO-MU – Sustainable Development - April 2009
  10. 10. Classifying types of Social Enterprises Traditional classification: Model 1: Leveraged Nonprofit ventures Model 2: Hybrid Nonprofit ventures Model 3: Social Business Ventures Social Enterprise from a wider perspective Dr. JM Luzarraga – ETEO-MU – Sustainable Development - April 2009
  11. 11. Traditional classification Model 1: Leveraged Nonprofit ventures A public good is being delivered to the most economically vulnerable, who do not have access to, or are unable to afford, the service rendered Both the entrepreneur and the organization are change catalysts, with a central goal of enabling direct beneficiaries to assume ownership of the initiative Multiple external partners are actively involved in supporting the venture financially, politically, and in kind The founding entrepreneur morphs into a figurehead, in some cases for the wider movement, as others assume responsibilities and leadership Dr. JM Luzarraga – ETEO-MU – Sustainable Development - April 2009
  12. 12. Traditional classification Model 1: Leveraged Nonprofit ventures Bunker Roy “Barefoot College” http://tinyurl.com/ottmg8 N. Negroponte OLPC www.laptop.org http://tinyurl.com/5tfazu Mother Teresa “Missionaries of Charity” VIDEO: http://tinyurl.com/d25chs Dr. JM Luzarraga – ETEO-MU – Sustainable Development - April 2009
  13. 13. Traditional classification Model 2: Hybrid Nonprofit ventures Goods or services are delivered to populations that have been excluded or underserved by mainstream markets, but the notion of making a profit is not totally out of the question Sooner or later the founding entrepreneur or his/her team, typically develops a marketing plan to ensure that the poor or otherwise disadvantaged can access the product or service being provided The enterprise is able to recover a portion of its costs through the sale of goods & services, in the process often identifying new markets To sustain activities & address the unmet needs of poor or otherwise marginalized clients, the entrepreneur mobilizes funds from public, private, and/or philanthropic organizations in the form of grants, loans As mainstream investors & business enter the picture, even when they are not seeking mainstream financial returns, they push to become model 3 Dr. JM Luzarraga – ETEO-MU – Sustainable Development - April 2009
  14. 14. Traditional classification Model 2: Hybrid Nonprofit ventures Rick Aubry “Rubicon Programs” VIDEO: http://tinyurl.com/o4dd82 Martin Fisher Dr. Govindappa KickStart: www.kickstart.org “Aravind Eye Hospital” http://tinyurl.com/qb37rm VIDEO: http://tinyurl.com/p7mep3 Dr. JM Luzarraga – ETEO-MU – Sustainable Development - April 2009
  15. 15. Traditional classification Model 3: Social Business ventures The entrepreneur sets up the venture as a business with the specific mission to drive transformational social and/or environmental change Profits are generated, but the aim is not maximize financial returns for shareholders but instead to financially benefit low-income groups and to grow the social venture by reinvestment, enabling it to reach and serve more people The entrepreneur seeks out investors interested in combining financial and social returns The enterprise’s financing-and scaling- opportunities can be significantly greater because social business can more easily take on debt and equity Dr. JM Luzarraga – ETEO-MU – Sustainable Development - April 2009
  16. 16. Traditional classification Model 3: Social Business ventures F. Arizmendiarrieta Dr. Mohammed Yumus MONDRAGON Cooperatives “Grameen Bank – Nobel Price 2006” http://tinyurl.com/p75akt VIDEO: http://tinyurl.com/qt65ux http://tinyurl.com/otm9ft Dr. JM Luzarraga – ETEO-MU – Sustainable Development - April 2009
  17. 17. Team activity Select one social entrepreneur you might know? Identify which characteristics does he/she have? Identify which type of social enterprise is in used? Dr. JM Luzarraga – ETEO-MU – Sustainable Development - April 2009
  18. 18. Classifying Social enterprise from a wider perspective Dr. JM Luzarraga – ETEO-MU – Sustainable Development - April 2009
  19. 19. 10 market opportunities for social entrepreneurs 1. Demographic opportunities Facts: - Human population toward 9 billion to10 billion people - Age distribution skewing: old vs. young boom nations - Worldwide migration: from rural to cities - One of the best ways of reining population growth is encouraging economic development Examples of successful Social Entrepreneurs - Jeroo Billimoria – Child Helpline International - http://www.childhelplineinternational.org/ - Martin Fisher – Cooperative Home Care Associates (CHCA), the Paraprofessional Healtcare Institute (PHI) & Independence Care System (ICS) http://www.chcany.org/ Dr. JM Luzarraga – ETEO-MU – Sustainable Development - April 2009
  20. 20. 10 market opportunities for social entrepreneurs 2. Financial opportunities Facts: - The notion that the haves will find ways to gain more and that the have-nots will lose more has been acknowledged since biblical times - Extreme financial inequality can sow the seeds of insurrections and social cataclysm - Tools & frameworks for economic justice are weak or nonexistent Examples of successful Social Entrepreneurs - Jeroo Billimoria – Aflatoun - http://www.aflatoun.org/ - Martin Fisher – Kickstart - http://www.kickstart.org/ (0.6% GDP of Kenya GDP & 0.25% of Tanzania GDP) - Fazle Abed – Bangladesh Rural Advancement Committee- http://www.brac.net/ Dr. JM Luzarraga – ETEO-MU – Sustainable Development - April 2009
  21. 21. 10 market opportunities for social entrepreneurs 3. Nutritional opportunities Facts: - True famine, hunger, and poor nutrition have been constants through-out human history - 862 million people across the world are hungry, up from 852 million a year ago - Every day, almost 16,000 children die from hunger-related causes-- ONE CHILD EVERY FIVE SECONDS. Examples of successful Social Entrepreneurs - Takao Furuno – The power of Duck - http://tinyurl.com/ojdwy7 - Hector Gonzalez – Cuadritos - http://www.cuadritos.com.mx/ (the largest self-sustaining food bank in Mexico, feeding 100.000 people a day) Dr. JM Luzarraga – ETEO-MU – Sustainable Development - April 2009
  22. 22. 10 market opportunities for social entrepreneurs 4. Resource opportunities Facts: - A growing world population will not be a problem if the planet’s resources were limitless, but they are not - Demographic pressures are fistering awareness of the natural resource limits to economic growth - Example: the UN argues that the conflict in Darfur has been driven by competition for water as climate change bites Examples of successful Social Entrepreneurs - Phil LaRocco – E+Co - http://www.eandco.net/ - Fabio Rosa – Ideaas - http://www.ideaas.org.br/ & the widely replicated Palmares project http://www.ashoka.org/node/3291 Dr. JM Luzarraga – ETEO-MU – Sustainable Development - April 2009
  23. 23. 10 market opportunities for social entrepreneurs 5. Environmental opportunities Facts: - Environmental issues are universal: there is not South-North differences - Nevertheless, poor populations everywhere in the world re forced to live in the worst circumstances - The dominant environmental concerns include the immediate of clean water & sanitation, the risks of local & indoor pollution , & vulnerability to natural hazards. - Other parts of the world: noise, traffic congestion, air & water pollution, long- term climate change,… Examples of successful Social Entrepreneurs - Yan Arthus-Bertrand – The Earth from the Air - http://www.wecommunic8.com/earthfromtheair/ - Wangari Maathi – Green Belt Movement - http://www.greenbeltmovement.org/ Dr. JM Luzarraga – ETEO-MU – Sustainable Development - April 2009
  24. 24. 10 market opportunities for social entrepreneurs 6. Health opportunities Facts: - From HIV/AIDS, to malaria, to potential pandemics like SARS or Flu- A, the world problems can seen overwhelming - In 2006,11 million children <5 years died from preventable causes - 4 million babies will not survive their first month of life - > 1/2 million women died in pregnancy, during labor, or after birth Examples of successful Social Entrepreneurs - Dr. Paul Farmer – “The Man who will cure the world” - http://tinyurl.com/aovmpq - Dr. Devi Shetty – Narayana Hrudayalaya - http://www.narayanahospitals.com/ - Vera Cordeiro – Resnacer - http://www.ashoka.org/node/3420 Dr. JM Luzarraga – ETEO-MU – Sustainable Development - April 2009
  25. 25. 10 market opportunities for social entrepreneurs 7. Gender opportunities Facts: - There is always an inescapable gender component - In the 1995 Kobe earthquake, 1,5 times more women than men died - In the Asian tsunami, death rates for women were 3-4 times those for men - There are several factors: biological, cultural, economic, or access to health care, education & information technology. Examples of successful Social Entrepreneurs - Wu Qing – Beijing Cultural Development Center for Rural Women - http://www.nongjianv.org/english/index.html Dr. JM Luzarraga – ETEO-MU – Sustainable Development - April 2009
  26. 26. 10 market opportunities for social entrepreneurs 8. Educational opportunities Facts: - Few factors are as powerful as education in empowering humans - In a knowledge society access to educations becomes eevn more important Examples of successful Social Entrepreneurs - Bunker Roy – Barefoot College - http://www.barefootcollege.org/ - Kyle Zimmer - Fist book - http://www.firstbook.org - Wendy Kopp – Teach For America - http://www.teachforamerica.org/ - Michael Brown & Alan Khazei –City Year - http://www.cityyear.org - Javier Gonzalez – abcdespanol - http://www.abcdespanol.com/es/ - Liz Maw – Netimpact - http://www.netimpact.org/ Dr. JM Luzarraga – ETEO-MU – Sustainable Development - April 2009
  27. 27. 10 market opportunities for social entrepreneurs 9. Digital opportunities Facts: - Enthusiasts may talk of “growing up digital”, but the IT revolution has created its own divides - 80% of people in the world have never heard a dial tone, let alone surfed the Web - Kofi Annan: “People lack many things: jobs, shelter, food, health care & drinkable water. Today, being cut off from basic telecommunications services is hardship almost as acute as these other deprivations, & may indeed reduce the chances of finding remedies to them” Examples of successful Social Entrepreneurs - Rodrigo Baggio – Committee for Democracy in IT - http://www.cdi.org.br/ Dr. JM Luzarraga – ETEO-MU – Sustainable Development - April 2009
  28. 28. 10 market opportunities for social entrepreneurs 10. Security opportunities Facts: September 11th terrorism attack changed world security, however this - might be an effect of deeper & previous security causes. - Instead of turning to companies like General Dynamics or Halliburton for security measures, governments should look to social entrepreneurs who recognize address the physical, psychological, social, economic, energy-related, water-related, or environmental security. - Rich western countries spend up of 25 times as much on defense as they do on overseas aid. Examples of successful Social Entrepreneurs - Pioneer Human Service - http://www.pioneerhumanservices.org/ Dr. JM Luzarraga – ETEO-MU – Sustainable Development - April 2009
  29. 29. “YOU HAVE TO BE THE CHANGE YOU WANT TO SEE IN THE WORLD” GANDHI Dr. JM Luzarraga – ETEO-MU – Sustainable Development - April 2009
  30. 30. Eskerrik asko Muchas gracias Thank you 谢谢你 “Our strength does not lead to struggle but co-operation” P. JM Arizmendiarrieta - 1956 Dr. JM Luzarraga – ETEO-MU – Sustainable Development - April 2009
  31. 31. Dr. JM Luzarraga – ETEO-MU – Sustainable Development - April 2009

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