1 P A C A P Soical Enterprise


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1 P A C A P Soical Enterprise

  1. 1. Social Enterprise: A Strategic Proposition www.unladkabayan.org Maria Angela dlc. Villalba Unlad Kabayan Migrant Services Foundation 73 Maningning St, Teachers Village, Quezon City Phone: 794 1399/ Telefax: 433 1292 / unladkamain@pldtdsl.net by
  2. 2. www.unladkabayan.org Considering entrepreneurship and social enterprises? 1 st system 2 nd system 3 rd system Planning-regulatory Public sector State/government LGU/National/GOCC-GFI Mutual help Social sector Community-CSO Voluntary groups/Faith-based/ Profit-motivated Private sector Business HH economy mSME Multinationals Black economy cooperatives
  3. 3. Why focus on the social system? <ul><li>Inadequacies and excesses of the private system </li></ul><ul><li>> Private profit orientation </li></ul><ul><li>> Inefficiencies of the market </li></ul><ul><li>Failures and abuse of the public system </li></ul><ul><li>Weak planning and regulation </li></ul><ul><li>Wasteful government spending – corruption </li></ul><ul><li>Inadequate social safety nets </li></ul><ul><li>Vulnerability of the social system </li></ul><ul><li>Dependency on the 1 st and 2 nd systems </li></ul><ul><li>Lack of access to resources </li></ul><ul><li>Redress socio-economic injustice and democratize economy </li></ul><ul><li>Vulnerability to disasters </li></ul>www.unladkabayan.org
  4. 4. Similarities–differences of the 3 systems <ul><li>Indicators Business Government Social </li></ul><ul><li>Motivation financial value common good social value </li></ul><ul><li>Core value profitability quality of life human dignity </li></ul><ul><li>Resources financial capital laws & policies commitment </li></ul><ul><li>innovation national income innovation </li></ul><ul><li>efficiency state machinery community </li></ul><ul><li>Governance shareholders bureaucracy social stakeholders </li></ul><ul><li>Outcome increase national improved quality of life </li></ul><ul><li>shareholder value development of community </li></ul><ul><li>Measures of ROI-NPV-ROE GNP/GDP sustainability and </li></ul><ul><li>Success resiliency </li></ul><ul><li> </li></ul>www.unladkabayan.org
  5. 5. What is Entrepreneurship? Who is an entrepreneur? <ul><li>It is the pursuit of opportunity beyond the tangible resources that is currently within control . (Stevenson) </li></ul><ul><li>Entrepreneurship had been a key element in the process of advancement of the economy and society. (Schumpeter) </li></ul><ul><li>Seeking out new business opportunities, innovating and commercializing new goods and services. </li></ul><ul><li>An entrepreneur is one who undertakes the risks in establishing and running a new business. </li></ul><ul><li>Innovative, opportunity-seeking, resourceful, value-creating change agents. (Jean Bapiste) </li></ul>www.unladkabayan.org
  6. 6. Social Entrepreneurship <ul><li>Social entrepreneurship </li></ul><ul><li>is about finding new and better ways to create social value (rather than personal and shareholder wealth/value). (Dees) </li></ul><ul><li>> An innovative, social value-creating activity that can occur within or across the non-profit, business or government sector. (HBS) </li></ul>www.unladkabayan.org
  7. 7. Qualities of a Social Entrepreneur <ul><li>1. Committed to a social mission </li></ul><ul><li>2. Highly motivated </li></ul><ul><li>3. Passion for the work </li></ul><ul><li>4. Opportunity seeking </li></ul><ul><li>5. Innovative </li></ul><ul><li>6. Risk taker </li></ul><ul><li>7. Creative </li></ul><ul><li>8. Problem solver </li></ul><ul><li>9. Inspiring </li></ul><ul><li>10. Unifier – builds esprit de corps </li></ul>www.unladkabayan.org
  8. 8. Social Entrepreneur as Leader & Manager <ul><li> Manager Leader </li></ul><ul><li>Focus on things Focus on people </li></ul><ul><li>(manages things) (Leads people) </li></ul><ul><li>Administers Innovates </li></ul><ul><li>Short-range view Long-range perspective </li></ul><ul><li>Asks how & when Asks what and why </li></ul><ul><li>Eye on bottom line Eye on the horizon </li></ul><ul><li>Accepts status quo Challenges status quo </li></ul><ul><li>Leadership is about inspiring your team to achieve high performance and creating as compelling vision of the future. </li></ul><ul><li>Management is about making an organization run better. </li></ul>www.unladkabayan.org
  9. 9. www.unladkabayan.org Opportunity People Deal Context PCDO Framework Source: Stevenson, Stahl, HBS Key elements in the social entrepreneurship process
  10. 10. PCDO Framework <ul><li>PEOPLE – those who actively participate in the venture or bring resources to the venture: skills, attitude, knowledge, contacts, goals, values. </li></ul><ul><li>CONTEXT – elements outside of the control of the venture but influence its success or failure: macro-economy, regulatory structure, taxation. </li></ul><ul><li>DEAL – substance of the bargain that defines who are in the venture, what they bring, what they get and when: economic contribution and benefits, social recognition, autonomy and decision rights. </li></ul><ul><li>OPPORTUNITY – a desired future state different from the present and the belief that the future state is possible, or achievable. </li></ul><ul><li>It is any activity acquiring the investment of scarce resources in hopes of a future return. </li></ul>www.unladkabayan.org
  11. 11. Nuggets to consider: <ul><li>Small operations are an endangered species </li></ul><ul><li>Demonstrating impact and ability to fund raise is at best tenuous </li></ul><ul><li>Market forces neither reward nor punish poor performance readily </li></ul><ul><li>Impact of contextual factors are ambiguous and may manifest over a long period of time </li></ul><ul><li>Unfavorable context (market failure) is often a social opportunity </li></ul>www.unladkabayan.org
  12. 12. www.unladkabayan.org Migration and Unlad Kabayan experience OFW destinations
  13. 13. www.unladkabayan.org Remittance & capital flows
  14. 14. www.unladkabayan.org Private sector Migrants Social sector (CSOs) Labor supply Remittance market Consumer market Source of foreign exchange Ease unemployment pressures Investor for private sector Public sector Philanthropic donors Target for social services Social investors Entrepreneurs 3-sector dynamics in migration
  15. 15. Applying PCDO to migration <ul><li>PEOPLE : OFWs, families, communities, government </li></ul><ul><li>CONTEXT : unemployment, poverty, job insecurity abroad, vulnerability to abuse </li></ul><ul><li>DEAL : Savings mobilization, planned reintegration and jobs at home, family reunification, reduced vulnerability </li></ul><ul><li>OPPORTUNITY : Remittances, capital, enterprise building, job creation </li></ul>www.unladkabayan.org
  16. 16. Social Value Proposition (SVP) www.unladkabayan.org SVP SVP is the driver of social entrepreneurs. SVP is the organization’s theory of change. It is about how scarce resources are used for social value creation. Opportunity People Capital Regulatory Socio-cultural Macro-economy Political Demographics Taxation
  17. 17. SVP in MSAI-CDR <ul><li>MSAI-CDR: Migrant Savings for Alternative Investments – Community Development and Reintegration </li></ul><ul><li>People : OFWs </li></ul><ul><li>Capital : Disposable income/savings </li></ul><ul><li>Opportunity : Building capital </li></ul><ul><li> Building enterprises </li></ul>www.unladkabayan.org
  18. 18. www.unladkabayan.org Desired change Crafting the mission Vision : A people who can build their own livelihood and a sustainable economy for society Mission : Promote social entrepreneurship and social enterprises by mobilizing migrant workers, the marginalized and their resources to build a sustainable local economy
  19. 19. www.unladkabayan.org Social Enterprise Building Efforts
  20. 20. www.unladkabayan.org Core benefits of Social Enterprises <ul><ul><ul><ul><li>Financial value: </li></ul></ul></ul></ul><ul><li>Capital and profit generation </li></ul><ul><li>Incomes </li></ul><ul><li>Increase in purchasing capacity </li></ul><ul><li>New products developed and commercialized </li></ul><ul><ul><ul><ul><li>Social value: </li></ul></ul></ul></ul><ul><li>Jobs and livelihood </li></ul><ul><li>Improved nutrition, health and education </li></ul><ul><li>New skills & knowledge </li></ul><ul><li>Entrepreneurial mindset and practices </li></ul>
  21. 21. www.unladkabayan.org <ul><li>Current Framework </li></ul><ul><li>Social sector an adjunct to the economy </li></ul><ul><li>Trickle down </li></ul><ul><li>Primacy of finance capital and financial value creation </li></ul><ul><li>Making the social sector bankable </li></ul><ul><li>Framework Shift </li></ul><ul><li>Social sector is integral to the economy </li></ul><ul><li>Trickle up </li></ul><ul><li>Primacy of human capital and social accounting </li></ul><ul><li>- Financial architecture appropriate to the needs of social sector and social enterprises </li></ul>Shifting the Framework and Focus
  22. 22. Management issues <ul><ul><li>PEOPLE </li></ul></ul><ul><li>Inefficient labor market </li></ul><ul><li>Short-term job vs. long-term sustainability </li></ul><ul><ul><li>CONTEXT </li></ul></ul><ul><li>Vagaries of the macro-economy </li></ul><ul><li>Conflicting regulatory regimes </li></ul><ul><li>Ethical vs corrupt practices </li></ul><ul><li>Market disorder </li></ul><ul><ul><li>DEAL </li></ul></ul><ul><li>Shifting focus and priorities of partners </li></ul><ul><li>Slow shift in mindset and practices of partners </li></ul><ul><li>Lack of appreciation on rigors of business practice </li></ul><ul><ul><li>OPPORTUNITY </li></ul></ul><ul><li>Inadequate and impatient capital </li></ul><ul><li>lack of access to technology </li></ul><ul><li>Low entrepreneurial literacy </li></ul>www.unladkabayan.org
  23. 23. Constraints of Social Enterprises <ul><li>Business </li></ul><ul><li>Competitive & competent personnel </li></ul><ul><li>Technology access </li></ul><ul><li>Access to diverse capital sources </li></ul><ul><li>Performance easy to measure </li></ul><ul><li>Punishment and rewards are quick </li></ul>www.unladkabayan.org <ul><li>Social </li></ul><ul><li>Personnel lower than market quality </li></ul><ul><li>Long gestation period </li></ul><ul><li>Unable to offer equity options </li></ul><ul><li>Reliance on SVP </li></ul><ul><li>Performance and outcomes are difficult to measure </li></ul>
  24. 24. Challenges faced by social enterprises in the Philippines <ul><li>Policy: </li></ul><ul><li>Absence of an enabling legislation for social enterprises to be built and grow </li></ul><ul><li>Lack of coherence and clarity on development policy and priorities </li></ul><ul><li>Conflicting policies and mandates (e.g. DTI, DOLE, DA, etc.) </li></ul><ul><li>Export-oriented growth </li></ul><ul><li>Cost: </li></ul><ul><li>High cost of capital (money) </li></ul><ul><li>High business tax (30% - a disincentive for growth) </li></ul><ul><li>High cost of energy/power (a major input) and other inputs </li></ul><ul><li>Corruption and cost of development </li></ul><ul><li>Government support: </li></ul><ul><li>Lack of incentives to micro-small entrepreneurs (insistence on “level playing field”) </li></ul><ul><li>Lack of access to resources (R&D, technology) </li></ul><ul><li>Bureaucratic processes and requirements </li></ul><ul><li>Competition </li></ul><ul><li>Competing economic and political interests </li></ul><ul><li>Competition for scarce resources among SEs, NGOs, etc. </li></ul>www.unladkabayan.org
  25. 25. Social Entrepreneurship & Social Enterprises: The way forward <ul><li>For CSO and NGO : </li></ul><ul><li>Develop entrepreneurial mindset and aptitude </li></ul><ul><li>Build ethical values and practices </li></ul><ul><li>Instill the rigor of business </li></ul><ul><li>Enhance CSO/NGO capacity to generate earned income and reduces reliance to donors </li></ul><ul><li>Lead to financial and organizational sustainability </li></ul>www.unladkabayan.org
  26. 26. For the community: <ul><li>Enable them to appreciate and harness local assets </li></ul><ul><li>Build their spirit of self-reliance and self-worth and dignity </li></ul><ul><li>Reduce dependency and patronage mentality </li></ul><ul><li>Crucial lever in negotiations and social dialogues with private and public sectors </li></ul><ul><li>Start for building sustainable and resilient local economy </li></ul>www.unladkabayan.org
  27. 27. For the government-nation <ul><li>An important asset and pillar in nation-building </li></ul><ul><li>Reduce the pressure for out-migration and dependence on remittances </li></ul><ul><li>Provide the push for good and effective governance </li></ul><ul><li>Stimulate internally driven development </li></ul>www.unladkabayan.org
  28. 28. www.unladkabayan.org Overcoming Barriers <ul><li>Lobby for Social Enterprise Legislation </li></ul><ul><li>Entrepreneurial Literacy Program in Education curriculum </li></ul><ul><li>Mindsets, values and practices </li></ul><ul><li>Technical expertise </li></ul><ul><li>Financial competence </li></ul><ul><li>* Changing the way society is managed </li></ul><ul><li>Foster common good </li></ul><ul><li>Appreciation and respect for the social sector </li></ul>
  29. 29. www.unladkabayan.org Development Bank of the Philippines (DBP) Migrant Associations Local Government Units
  30. 30. www.unladkabayan.org MAG-IMPOK, MAMUHUNAN ITATAG ANG KABUHAYAN SA SARILING BAYAN! Maraming Salamat Po!