1SOCIAL IMPACTMARKETS & POLICIESBuilding a Social Entrepreneurship and Social InvestmentMarketplace in Turkey: Landscape, Best practice and Policy OptionsProject presentation1st November 2012www.socialimpactmarkets.org
2Agenda 1. Background 2. Relevance for Turkey 3. The project
3Why does social innovation matter in oursocieties? • Socio-economic challenges in housing, education or health in many countries at unacceptable levels – including Turkey • Climate change, environmental degradation deepening • For emerging economies such as Turkey: poverty and fast growth of new wealth next to each other • Limitation of existing approaches of governments, civil society => need to do things differently and work across traditional boundaries
4This field is about blurred boundaries & in-between worlds and no agreed definitions Social entrepreneurship: Primarily social or environmental objective, both for profit and non-profit, innovative and entrepreneurial in their approach, generating revenues Social investment: Various forms of financing between ‘financial returns only’ and ‘impact only’ Social innovation: Innovations (=making new ideas work) that are both social in their ends and their means.Source: Pharaoah, N. (2008): Landscape of social investing
5Sustainability entrepreneurship: Moving from‘either ….or ‘ to ‘and’ ! Too good to be true? Important elements of a social entrepreneurship definition: Economic • Creating a social AND/OR environmental impact intentionally OR OR • Innovative (=making new ideas AND! work) in terms of process, products or servicesEnviron OR • Involved in trading/revenue Social-mental generating activities • Ideally combining economic,Source: Parrish, B. (2008): Sustainability entrepreneurship – green and social dimensions =a literature review. sustainability entrepreneurship
6Focus: sustainable & innovative for profit and non-profit organisations that intentionally aim atgenerating a social/environmental impact Charities Enterprising Hybrid Social Commercial NGO business CorporationsNon profit Non profit Organisation For profit Full profit (with with social company with some CSRRelies entirely Financially mission social mission activities)on grants, sustainablesubsidies,fundraising Financially Reinvests x% Strategic sustainable or more of its partnerships through own profits back into income its core social generation activitiesSocial Financialreturns returnsBased on: Wolfensohn Centre for Development at Brookings (2011): Social Entrepreneurship in the Middle East
7So what is the role of government, what canthey do to grow this emerging field?Options for policy interventions range from directinterventions to enabling action, including: (co-) financing;legal regulations; building market infrastructure; publicprocurement; tax incentives.Thornley et al (2011): Impact investing – a framework for policy design and analysis
8There is a lot going on in this areas outsideTurkey…..
9A few global examples of social innovation atgovernment, investment and enterprise levelInitiative DescriptionSocial Impact Bonds Pay-out to social investors is linked to the government savings achieved by(UK)/Pay for Success delivery of certain social outcomes (e.g. reoffending rate amongst prisoners)Bonds (USA) with support by social organisationsBonventure (Germany) Social Investment Fund investing in social enterprises in Germany (equity, loan, grants) in education, environment, democracy projectsSocial Stock Exchange Enable investors to trade exclusively in companies with social andLondon (2012), Nairobi environmental goals (beyond CSR)(2011), Singapore(2010)Kiva (USA) Non profit that allows individuals to lend small amounts of money to people in developing countries via field partners (incl. Turkey)Skoll Foundation (UK) Investor in SE worldwide; established Skoll Center for SE at Oxford University; Skoll World Forum; socialedge.co.uk online communityCiudad Saludable Less expensive garbage systems, organized more than 1,500 waste(Mexiko) collectors, created jobs, improving living conditions for > 6 mio, replicated around the world.
10And what is happening in Turkey? ? Source: Jackson & Associates (2012): Accelerating impact – achievements, challenges and what is next in building the impact investing industry. Prepared for Rockefeller Foundation July 2012.
11Agenda 1. Background 2. Relevance for Turkey 3. The project
12Turkey’s economy has been on the rise inthe last decade. • The worlds 15th largest economy • Fastest growing amongst OECD countries in 2011 (8.9%) • GDP/capita: $14k (Brazil $11k, India $3k, Russia $16k) • 50% of 72 mio pop below 28y • Anatolian Tigers contribute much of the boom (textile and furniture) • 35 mio internet users, second fastest growing e-commerce market • A regional and global player with increasingly self confident international diplomacy
13However, Turkey is often placed at thebottom in social, environmental rankings.Issue Rank/%UN Development Index 2011 92nd/187Legatum Prosperity Index 2012 75th/110Year of school attendance 2009 (ERI data) 115th/173Adult literacy rate 2009 (ERI data 73rd/141Freedom of press index 2011-12 148th/179Yale University Environmental Performance Index 109th/132World Economic Forum Gender Equality Gap Index 2012 122nd/135% of female mayors in Turkey 0.8% of women facing violence 42
14There are some amazing Turkish socialentrepreneurs and new initiatives that have emergedin the past two years Family&Turkish SE Corporate SE workingeco-system Social Venture Foundations group in Competitions Ministry of TUSEV SE Development Project B-Fit Endevor Turkiye Cop Kiva.org DFI financed AKUT Investment Madam funds The HUB Impact Grameen Istanbul &Social Bugday Foundation Balyolu change Ashoka Etc.. Associations Turkiye Yesilist Zumbara PNB IT, Youth, Women Sabanci Dream Turkiye entrepreneur Bir silgi Changemaker Academy financing bir kalem International SE and II SE courses SE community at private ‘Big Conferences universities Business’ 2010, 2012
15B-Fit offers women the space to gain fitnesscombined with a franchise system => scaling upand women become entrepreneurs themselves
16Cop(m)adam*, a for-profit venture, addresseswaste problem in cooperation with Unilever whilecreating income-generating opportunities for localwomen * Started as a project out of Sabanci University
17Zumbara: ‘time bank’ for individuals to exchangeservices without money emphasizing the value ofreciprocity, time and personal relationships
18Ashoka re-launched their operations in Turkeyin 2011 Omer Madra Acik Radio IPC Senior Ibrahim Betil Fellow 2012/13 TOG Youth development Nasuh Maruki AKUT Rescue Service And many others….. http://www.ashoka.org/country/turkey
19What are elements that play are role in the Turkishecosystem for social entrepreneurship and impactinvesting? Trust! Entre- preneur Blurred Collaboration! ship boundaries! climate Socio- State & Beyond profit! economic partner- & political ships situation ImpactBottom up approach &social Social well-being! change Empathy! Social SE&inter- cohesion& Matchmaking! me-diaries culture Diversity! Social capital Information markets Innovation! sharing! Interdisciplinary! Putting pieces together! Holistic approach!
20Entrepreneurship climate: (Social)entrepreneurship is a new concept - and a unusualcareer path for many Turks.“When I told my parents I • Jobs with Governments or multinationalswanted to work on socialand environmental issues preferredinstead of joining the family • Only 6 out of 100 are entrepreneurs andfirm, they told me I was most ‘by necessity’crazy” • Entrepreneurs ‘by choice’ often discouraged by their families • Turkey one of the most difficult countries to do business (143rd/184)* • Combining the notion of ‘business’ andZ. T., owner of a ‘social’ would seem as a misfit to manysustainability consulting Turksfirm, Istanbul *WB Doing Business Indicators 2011
21Social capital markets and finance: Developing– slowly.• Family and friends still main source of finance• Turkey not included in the geographical coverage of most impact investing funds• Development Finance (IFC, KFW/DEG, EIB) main providers of sustainable debt and equity finance• Kiva partnership since 2011, but generally microfinance industry surprisingly underdeveloped• Foundations started with grant making in 2008• Some incubation, seed financing for entrepreneurs (youth, IT, women)
22Social cohesion: Strong friend & familynetworks, but other connections not alwayseasy• Turkey ranks 136th/153 in the World “ I wanted to discuss my Giving Index 2011 business with other start up entrepreneurs and see where• Low level of trust in others (8%), i.e. in we can collaborate but they people outside the family and friends think I only want to steal their network* ideas. There is a huge• Access to opportunities (education, mistrust even amongst us and jobs and economic status) strongly everybody works alone. ” correlated with socio-economic background and personal connections*• Little tolerance for minorities and immigrants*• Polarisation (e.g. constitutional M.N., IT and social media referendum voting patterns) entrepreneur, Istanbul *Legatum Proseperity Index 2011
23State & Partnerships: There is (still) a highconfidence in the State as a provider of socialwelfare • The State (together with mosques and religious institutions) traditional seen as the main provider of social welfare • Traditionally centralised, top down approach in politics and business, little local management and participation • Civil society historically weak BUT: • Increased participation and engagement by civil society • PPP legislation introduced recently (2011) • Strong separation between public, private and civil society
24Despite challenges there are significantopportunities to grow this field in Turkey • Young, social media and tech-savvy population • Increased recognition of high profile social entrepreneurs in society • Big corporations: potential for intra-preneurship and JV/social business • Potential for innovative financing mechanism (both public and private) • Turkish family foundations and Turkish diaspora • Capacity of civil society and grass root movements is increasing • Increased awareness of international developments in Turkey – and international attention on Turkey • Government interested in SE
25 What does it take for this ‘market’ to develop in Turkey? Uncoordinated Marketplace Growth Maturity innovation buildingSporadic Market Mainstream Activities reachentrepreneurial infrastructure players enter a relatively steadyactivities (intermediaries) functioning state and growthDisruptive built market rates slowinnovators =>lower Organisations Consolidationpursue new transaction become more New disruptionsbusiness costs higher specialised,models scale professional Impact at scale TodayAdjusted from The Monitor Institute (2009): Investing for Social and Environmental Impact.
26Agenda 1. Background 2. Relevance for Turkey 3. The Project
27What are our main research questions?1. Who are these new social entrepreneurs, what are their strategies and constraints?2. What is the perception of funders and Building a investors in Turkey and internationally? What marketplace is keeping them away from engagement and for social investment in value driven organisations in entrepreneur Turkey? ship & social Investment3. What are specific issues with regard to green in Turkey entrepreneurship compared to ‘normal’ social entrepreneurship?4. What can the Turkish Government do to promote this emerging field?
28Project objective: strengthen the eco-system forSocial Entrepreneurship and Social Investment inTurkey 4 Impact 3 2 Outcome. Eco-system for Output social, environmental1 Outcome 1: Key innovation in Turkey player‘s awareness, Input Data strenghtened interest increased Briefing Outcome 2: BetterTask 1 –5 documents Social and policies developed Blogs environemntal(More details Outcome 3: Lessons Reports challenges reducedsee below) learned prepared, Policy contributed to recommen- international dations debates
29The work benefits from support andcollaboration with many partners Additional task Focus: on climate Survey data change Cross-sectoral Legal & Rockefeller regulatory work IPC Foundation Focus on impact Social (PCV/IRI at Harvard investing enterpreneurship University): and the role of Building a Collaboration Government in marketplace for Turkey: best practice impact investing in Collaboration: and policy options in Turkey: landscape TEPAV the climate change and policy options Thomson Reuters sector Foundation Sabanci University Turkish Government Sector stakeholder (TUSEV, Ashoka)
30 An outline of the building blocks of the ecosystem – and the project designTask 2 & 4 Task 3&4 Policy, regulatory & legal framework Government International ContextTask 3 Perception by Market Intermediaries potential investors Investment advisors, SE trainers, rating and evaluation agencies, and support private business organisations Social venture models Demand Supply Development of Social and green PE&VC funds, DFIs, entrepreneurs banks, foundations, marketplaces government, business Best practice policy interventions
31 The work will be implemented in five steps1 2 Framework 3 4 5 Preparation Market Review Policy options Outreach reviewConceptual Relevant Demand side International Briefingbackground policies Supply side experience sessionsQuestionaires Legal & Intermediaries BlogInterview regulatory Policy options Workingguidelines framework for Turkey groupLawyers ToR Socio- Legal meetings economic & Liaison with Financing cultural internat context Other Experts/ Practicioners Workshops IIPC annual conference
32 The core of the work will be implemented in the next 8 months Work schedule Project duration Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8-10 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28Task 1: Mobilize and refine researchmethodologyTask 2: Review policy, legal and regulatoryframeworkTask 3: Carry out market reviewTask 4: Identify policy optionsTask 5: Consult and dissiminate findings
34I have completed much of task 1(preparatory work) & started some of task 2No Tasks Status1 Social media presence (LINKEDIN; facebook; √ LINQTO)2 Conceptual background to questionnaires (demand) √3 Interview guidelines (demand) √4 Demand survey questionnaire design √5 Conceptual background to questionnaires (supply) In progress6 Interview guidelines financiers (supply: international In progress and Turkey)7 Contact strategy and list In progress8 Lawyer’s terms of reference (if confirmed by Thomson In progress & Reuters/Mercator)/Recruitment of research assistant
35Outreach: listening, gathering data,conceptualising ideas, identifying best practice,connecting, raising awareness, facilitating policychange • Project website and presentation • Social media presence: LinkedIn, LinqTo; Facebook • Collaborative approach • 2-3 workshops during the project • Participation at international conferences • Project workshop in Istanbul • Presentation at international conference IIPC London 2013 http://www.socialimpactmarkets.org
36Thank your for your attention!Anja-N. KoenigIstanbul Policy Center/Sabanci University Istanbul Turkeyakoenig@socialimpactmarkets.orgwww.socialimpactmarkets.org