Speech at Social Entrepreneurship Seminar 28.2.2020

1. Thursday, February 27, 2020
New Directions in
SOCIAL ENTREPRENEURSHIP
by: Dr Darin Gunesekera1
Thomas Benton’s view of the Real World
Dr Darin Gunesekera is a graduate in Economics, BA (1st Class) UVIC Canada, MA MPhil1
PhD (Yale, USA), and set up the Stock Exchange - Regulator system in Sri Lanka in '80-'85
as Presidential Advisor, and in Kenya in ’90-'94 as Advisor to CMA & NSE. The Paris Stock
Exchange awarded him its 200th Anniversary Medal for his Stock Exchange work and was
recognized by the world organization, FIBV. He later worked as Privatization Advisor
(Finance) in Uganda. He did the Sri Lanka REIT (Sahaspura) project under Cabinet
appointed Advisor (Urban Development). This was for Re-Housing and Re-Development of
Colombo Area by using REIT investment tool for infrastructure. He expanded this in
presentation to Indian Planning Commission for Varanasi Inner City. It was later decreed as
the President (of India) Project to end Slums in 5 years,(2009) using direct funds and the JN
Fund of Trillion Rs. He has advised in 'Community REIT' projects by advising Community led
projects within Cities and separately within rural Agriculture. (specific - Philippines (one
Metro area), India (Varanasi, Silks), Sri Lanka (Cinnamon), generally - London (UK), some
Asean cities). He originated the movement, Capital Markets for the Marginalized, and heads
the Wiros Lokh Institute (Sri Lanka). He has US awards for Social Entrepreneurship (Ashoka
Fellow, 1st from SL; Skoll) and was selected by UNHABITAT as one of the five best practices
in the World in Affordable Housing. He was the first Secretary of the African Stock
Exchanges Association and at its 20th annual meetings in December 2016 gave a TED talk
on 'Capital Markets for the Marginalized: Social REIT’ https://youtu.be/WD2vhFp0lk4. And
https://darincapitalmarkets.wordpress.com .
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2. Contents
1.Social Entrepreneurship is the ROMANCE or Romantic Movement in Economics and
Business Today 3
II.FUTURE DIRECTIONS 6
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3. Chairman of this Meeting, Senior Professor H D Karunaratne,
Professors, Lecturers, Students and Guests,
I thank you and especially the Team for the Doctoral Program in
Business Administration for kindly inviting me to give this talk. It is an honor
and I appreciate your kind regards.
I have circulated a set of Readings, really for the Doctoral students,
arranged by normal sections of a Doctoral Course and a page relating to
some of my own work.
1.Social Entrepreneurship is the ROMANCE or Romantic
Movement in Economics and Business Today
Economics and Business Administration are perhaps rather dull
subjects. Economics as an international theoretical field is today asphyxiated
by mathematical constructions and blatant disregard for its ceteris paribus
nature.
So it is refreshing when one can get back to Visions and an Economics
of Reality. It brings back the Romantic or Thinking person’s sense of passion
into the subject.
In the centers of Power in the Western World, there was once a great
hope that the UN System and its institutions, the World Bank in particular will
save the world from poverty and disparity between peoples. As a youngster I
was with my father during the time he was the initial executive to start the
Asian Development Bank and can remember the visions and aspirations of
surrounding persons.
In a decade or so sheer Power politics and a deadening world
bureaucracy had stilled those hopes and visions. In the Capitals of the world,
it was apparent that there was no progress out of Poverty and instead there
was massive self rewards for the doers.
Then came the NGO revolution which caught the attention of the
leaders of the articulate world. This was the movement that would redirect the
efforts of those who care to make a better world. They would End Poverty .
Again not a decade had gone by when NGO was a bad word. Ending
Poverty had come to be seen as a matter of investing Capital. And the
Stanford Social Innovation Review published articles stating that the cost of
capital raised by social work NGOs were in the range of 22 to 43 %, compared
with normal top corporate costs of 2 to 4%. Moreover NGO Directors and
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4. Chairpersons spent 60% or more of their time in fund raising than in actually
doing the work expected of the NGO. As Foundations and NGOs were
creations of the Tax system, the loopholes also caught the eye. Donations of
Real Estate and valuable items as Art work or even movables as sail boats, in
the main market the US, could still be used by the Donor while recorded as
charitable property.
It was at that time, that Bill Drayton who was trying to get the Corporate
Consulting sector to support Social Entrepreneurs caught the public eye.
Within a short space of time Drayton was on Time Magazine’s cover and the
movement for Social Entrepreneurship was born and carried forward. In time
it gained Centers in major Universities as the Skoll Center at Oxford and even
spawned its own academic literature, still headed by the Journal of Social
Entrepreneurship including as Editor Jill Kuckics, author of at least 700 articles
in the field.
However the story of Social Entrepreneurship as an intellectual
construct is still the heart of the subject.
The observation was that the industrial revolution was led by
entrepreneurship. The encroachment of the Commons in England is the
traditional Economic Historians’ starting point of the new age of technology
and industry. It all began in Agriculture and soon progressed to manufacture
and and its finance. Drayton summarized this as the entrepreneurial age with
increasing returns to capital and enterprise but still of only a few percentage
points above the ancient average. Yet private concentrations of power grew.
They were in instances taken over by communities or states.
However other forms of enterprise also appeared. Initially associated
with charity and helping others. However a citizen sector did emerge. The key
insight by Drayton was that the difference between the rate of return in the
private profit entrepreneurial sector and the citizen sector started to narrow. It
happened in irregular ways but the gap was narrowing. By the 1980s this
had happened and we had a full active citizen sector of size the world over.
It is asserted that now this sector has its home territories in Tech or ICT
and its uses.
The subject was, by the 1990s, augmented by the popularization of the
notion of Empathy. Its pioneer Mary Gordon was honored as a social
entrepreneur, though this idea of empathy was really a needed adjunct to the
central piece of a Social Entrepreneur as opposed to the old style Capitalist
Entrepreneur.
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5. At this point I would like Bill Drayton himself to make his points in the
video where he talks of how he came to this subject and its importance. I am
showing a 15 minute excerpt for time reasons.
********** video show (Early life; Harvard and India; Launch of Ashoka)
I hope that this video brought home to all of you some home truths.
Mainly that Social Entrepreneurship is for us, living in the immediate prime
area of Gandhist thought, a very normal thing. We know it well. It is not
necessary to be treated to treatises on Greed, Truth and Non Violent protest.
Similarly, Vinoba Bhave is well known. To a person whose intellectual
history is in Adam Smith and John Stuart Mill, he may appear miraculous.
John Stuart Mill I am referring to as a founding father of Liberal thought. We
actually know him as the founder of the Waste Lands Ordnances of the
Empire ! Yet for European cultures, ownership has a profound meaning.
I realized this in my work in India. I have always dressed as I stand
before you now and spoken like this. I cannot imagine that anyone would
mistake me for a “Sadhu”. However after speeches in Varanasi on our Social
REIT and Stock Exchange, the “Colombo Sahaspura” talks, many people and
even Temples would come to me publicly, in Varanasi, offering their Land
Titles or Certificates as known in India. I would of course hastily refuse and
ask them to keep them safely and await our institutions.
Actually on this theme of prevalent culture, there is a lot that we in Sri
Lanka think which is actually of a limited cultural scope.
For instance, we have allowed Accountancy to take over investment
and business. In fact certified Accountants head most of our business. They
start and end their thinking with double entry book keeping. They have Trial
Balances, the Accounting Equation, Suspense Accounts as their normal
language. But actually this is an aberration in the world. Our systems are
quite different to major Asian Powers. Japan has had its own system for
centuries. The great Commercial Icons of our own country, who are of long
standing were built by a very different calculation.
Similarly we take English Law as a principle from which to launch
ventures. We are actually the most Latin Law country in the world, especially
now with South Africa going social. England itself left our style many centuries
ago.
Under English Law, as our most famous lawyer or barrister H V Pereira
used to say, ‘the Law is for them, the Powerful, whereas the Courts are for us,
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6. the people’. We seem to have by practices moved ourselves out of even that
now.
So let me recast the idea of Social Entrepreneurship. (Give my typing
fingers a break by letting me use SE.)
We are used to thinking of Capital and Money as the starting point of
any enterprise. And we accept the provision that Capital and Money exist only
as defined under international English Law.
SE asks us to leave this idea aside. Our concern is the social
entrepreneur, let us also say SE. This is a person who like Gandhi sees the
Truth and the Reality of Social life. So he sees Life. He does not see Debt as
a starting point. I should explain to those not in Economics.
Money and Capital that we talk of are debt. What we are interested in
using as SE is not Debt but Life. Power is Life. That is where it is. In
Drayton’s concept, he is welcome to disagree, a SE is a person who knowing
the truth or reality acts to confront Power and with personal Ju-jitsu, a fighting
which uses the other’s power, uses Power and so Life to move reality. The SE
uses skill and mind. He or she uses media and getting to the public. It may
well be doing the “Not Done” as society may describe variants to its norm. But
it effects change.
So this moneyless yet Power using individual may also be termed a
“Changemaker”. This is the modern Social Entrepreneur. He or she is more
likely to be quite young and youthful and thus naturally not carrying the social
restrictions of an oppressive society.
II.FUTURE DIRECTIONS
It is important to realize that the future SE only needs openings and day
to day survival. This is the support needed. He or she does not need Capital
or debt. So the devious structures governed or not governed by the Registrar
of Companies, the Central Bank, the SEC and so on are of no usefulness. In
fact these are OK for social enterprises, I refrain from comment on these, but
that is not where SE is at.
A great deal is made of Supply Chains and various forms and
procedures that your Business Administration training has prepared you for.
All of that may very well be true. But the core and only center of SE is simply
Power Playing. And no one in South or any other part of Asia needs special
course work in that.
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7. But where do we go? Look for the opening opportunities.
The State today is in general retreat. Politicians, that is the persons
possessed of Power, want to do a lot. But their main tool, the State Coffers,
is just leaking and collapsing. This is true all over the world. High Vision and
not very educated men and women direct Politics to want to do all sorts of
Good Things. They normally do this with money, bonds, loans and lots of
other forms of debt. But those who allow such debt to be or increase are in
fact busily reducing the debt opportunity.
I would have thought that this is a Changemaker or SE’s Heaven.
Power is in the hands of persons who plainly cannot achieve the desires
they have, with the money, capital, bonds and loans they have access to.
Moreover those with Higher Power, the IMF, the World Bank, the International
System of bankers and moneylenders, are uniting against spending in each
and every State.
Surely it is ‘enter the SE’.
Look at the fields where the State is under retreat. Health, Education
and Old Age care and well being are having major shortages. And private
Capital cannot supply the rising gap as they too are built on debt, money,
capital and loans.
But where can the SE start ?
In the Drayton film, he goes along with the McKinsey consulting
company and Foundations to devise ways through which a SE can be
supported for 3 years so as to be free to do his or her SE without a lack of
living income.
Yet we all know that in this country there are peculiar places which
could provide the opportunity. Aren’t there places where a person can get a
monthly pay check and not do the corresponding work ?
Certainly there are. Of course you may wish to raise irrelevant issues.
And we do also have a large number of persons who are required to be
effectively SE and are so paid and housed. These are firstly our religious
persons. Then there are persons who are supposed to work with weaker
social persons ranging from schools to Institutes.
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8. The real problem is to devise ways to wrest power from those who are
selfish about it and to instead apply Power to a creative social purpose. Well,
that is the Romance.
Let me also get personal.
At present I am still taking around the ideas of the People’s Stock
Exchange which I espoused in Varanasi and also of Sahaspura-REEL which I
have since located in East Africa. You can all get into similar acts as there are
Government and Associations initiatives throughout areas you can access
which could be harnessed.
A few years ago, in 2013/14, I was at NASA in California at Singularity
University campus to give a presentation. The place was the Silicon Valley
based NASA. It is well known in technical circles as Moffet Field.
The ideas prevalent were tech taking over Finance through automation
and high speed processing and also an idea whose time is now, Block Chain.
These Financial techniques will create a Finance that is happening now and
displacing massive numbers from the industry and creating a new
phenomenon of Robotic Finance. Instead of talking with your friendly bank
manager, customers will deal with a friendly robot. Even in Colombo today
this has been realized in many areas. It spawns a different form of finance
whose ramifications are not simply “computerize the Registry”. It is far from
that. It is goodbye to a lot of English Law.
The idea which is perhaps greater is that of IOT, the Internet of Things.
This is very widespread. I have since met many Latin Americans especially
who have agricultural fields where routine functions as turning on and off taps,
doing agricultural work with precision, is done by IOT instruments. I have
come to see that labor for agriculture in Europe is now either imported migrant
labor, including Sri Lankan migrant labor, or IOT. Needless to say, IOT will
prevail.
My own contribution which I made to the field at Moffet Field was IOE.
That is the Internet of Emotions. ( I initially called it the internet of social
actions, but IOE has come to be the name that has stuck). This is very
important in my view. It is not the conversion of Emotions to IOT but rather
IOE as the interactive internet in itself.
In IOT theory we are close to the point where the ceteris paribus or all
other things equal premiss does not hold. The situation is similar as what
happened in Physics with Newtonian Laws as stated in Mathematical form.
The small changes or holding other conditions equal condition ceased to be
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9. relevant at some time. This was when speeds or timings or measurements
were no longer small or small displacements where other things could be
considered as holding steady. After that stage is reached a different
mathematics is needed. I have termed it IOE.
If you think of what is the realization of much of what is around you and
affects you, you will realize it is not due to temperature and water level or
other IOT stuff . Rather we are really dealing with emotions and emotive
reactions. And these are not simple or capable of being expressed in simple
class room expression.
And this is surely understood. If a person is raising a knife to kill,
reactions of others aware of this event are pretty much standard. Some may
react faster than others. But we all do react. This is the stuff of emotions.
Euclidean space served mankind well. But as we came to situations of
speed, we needed a better way to assess the world. The idea involved is like
that.
I suggest this as it is a mistake to think that all has been thought of and
handled in the Science and Technology around us and even where it is
careening away as in California Tech areas. Our role in Sri Lanka in the
century of Tech is not really to do the menial tasks of fast welding or fast
typing. Actually we are not even good at that old standby of the Finance
trade, the “call shops” of Bankers and Bond Salesmen.
SE has a future in Tech once you realize what both these concepts are
about. And all of you can participate in this Future.
Anyway I am I think coming close to my allowed time, so Thank You for
being a tolerant audience and listening to me just talking.
__________—— Dr Darin Gunesekera Thursday, February 27, 2020
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