Where will Social Enterprise be in 20 Years?

Check out a recent interview I did with Columbia's School of International and Public Affairs in conjunction with their Social Enterprise Bootcamp! Read here!

Forget the American Dream, Collaborative Consumption is a Better Path for Developing Countries

My latest post for Good Magazine.

The United States was founded on the idea of idea of individual liberty, individual ownership, and individual needs. Unfortunately, this is a costly way for a country to develop, especially if every citizen aspires to express his freedom and individuality by owning a car or a house or a hammer.

Nearly 250 years into the evolution of our ethos of individuality, some Americans are starting to recognize that the primacy of individual ownership is not always economically sustainable. A movement has begun that places value on providing access to products and services, rather than ownership. Do we all really need to own a car? Or can we share a ZipCar that can be rented by the hour and used as needed? Consider the space we use. Do we all need to live in a house? Or can we seek out co-housing situations, where families share communal spaces like kitchens and yards, but have private sleeping quarters. Consider items that are used by all, but infrequently: Could the residents of each floor of an apartment building share tools like hammers and brooms instead of buying their own?

The move toward access, rather than ownership is documented and promoted in three recently released books, The Age of Access, The Mesh, and What's Mine Is Yours. (See GOOD's infographic on this.) This trend has applications far beyond liberal American households and communities.

The concept of communal living and shared resources has long been a feature of Eastern society. Households are characterized by their joint family nature. Food is shared, and often served from one bowl. In poorer areas, multiple families share water taps, groups of women access microfinance together, strangers share taxis and rickshaws. However, the collective nature of Eastern society is less a political statement than an imperative to stretch sparse resources.

As the East develops, and the size of the middle class grows, there is a push toward individual ownership. With increased incomes, the incidence of joint families reduces, and sharing resources is less of a financial necessity. However, if the East starts to choose individual ownership more readily over communal access, emerging economies will likely struggle to manage these patterns of consumption, particularly with regard to pollution and waste.

From an economic development perspective, Western practitioners are guilty of seeking solutions for the poor that are based on these American values. It’s only natural; this ideal is integral to the West’s notion of progress. Solutions to a lack of access to clean water, sanitation, healthcare, and education often cater to the provision of individual ownership: a faucet in every kitchen, a toilet in every home. However, this paradigm is wasteful, and thus, may not be ideal or sustainable for developing world countries.

The indicators we use to gauge wealth creation and poverty alleviation often involve measuring whether each person or family owns a TV or a phone, or has a toilet. These indicators may be an imperfect way of evaluating progress, and more importantly, they place value on a framework of development that may not be in a developing country’s best interest.

While instinct pushes us to value ownership, it may actually be better to approach complex issues by instead offering access. Rather than providing every household financing for a solar battery charger, a better option might be a communal charging station in each village. Rather than pushing for every citizen to own a mobile device, perhaps merely having access to a phone number will suffice for a group of people that can share a single phone.

Development experts and social entrepreneurs from the West are sometimes tempted to provide solutions that we enjoy for ourselves. However, as our eyes open to the waste and excess that are byproducts of Western development, we must seek new paradigms instead of grafting traditional ideals onto others.

Image: (CC) by Flickr user tibchris.

Is India Really a Hotbed for Social Enterprise?

I'm writing a few posts a month for Good Magazine. Here's the first!

If you know anything at all about social enterprise, you are probably familiar with the fact that many of the case studies cited as successful are Indian in origin. Case in point: Aravind Eyecare, Jaipur Rugs, Barefoot College, d.Light. It makes you wonder: Is India better at producing social entrepreneurs than other countries? Is there something in the water? And if India really has cornered the social enterprise market, how did they do it?

First, let’s look at what we know. India is massive. It’s bursting at the seams with people, and because one out of every six people on the planet is an Indian, we are statistically more likely to stumble upon Indians anywhere—and some of those people are bound to be social entrepreneurs, right? Of course, a big pile of people does not explain why social enterprises often thrive in India, and the policy environment certainly doesn’t help: There are no freebies for social enterprise, no special legal structures (like the L3C here in the United States or the CiC in the U.K.), and few policies that help enterprises get funding. In fact, some might say that Indian social enterprises have succeeded in spite of policy, not because of it.

What about funding? Most Indian social entrepreneurs would tell you that they have just as much trouble as the next guy. There are only a handful of “social” or “social/commercial” funds in India, and while there is a frenzy of interest in India from foreign investors, many of them ride on the coattails of domestic funds, investing only after a trusted Indian social investor has made the first move.

So, what makes India different?

India has had a long, rich love affair with nonprofit organizations. A recent survey commissioned by the Indian government found that there is one non-governmental organization for every 400 people—which means there are about 3.3 million NGOs. Regardless of how great each NGO's impact is, the sheer number of them is symbolic of a culture that favors trying to help those in need. However, many have seen that these NGOs are not always accountable, transparent, or sustainable. Stemming from this tryst with NGOs is a graduation to sustainable social enterprise.

Second, with over 40 percent of people on the subcontinent living on less than U.S. $1.25 a day, there is plenty of need for social enterprise. With such a large population in need, there’s plenty of opportunity to test things out. Because of a lack of regulation and oversight, it is possible to get in there, run pilots, and figure out what works.

Third, the currency of language cannot be underestimated. One of India’s national languages is English, and many people, rich and poor, speak it. Even if social entrepreneurs in Romania or Ecuador or Côte d’Ivoire have great ideas, they may be held back in their ability to spread those ideas, enter international business competitions, or get funding from English-speaking Western countries.

Fourth, never underestimate the power of the Indian family. Indian families are tight, complex webs of people who you know and love, and people who you don’t know, but who you call “cousin” and “uncle” even if they have absolutely no relation to you. These networks—close and extended—translate into resources for social entrepreneurs. They are the building blocks of most start-up businesses, and these enable enterprises that would not otherwise have a chance, to get off the ground.

Lastly, and perhaps most important, there is a certain ethos in India which makes it possible for social enterprise to thrive. You can’t manufacture this attitude; it is something that only comes from living and working in India. This attitude, a mix of confidence, perseverance, and “can’t-touch-this,” known as jugaad, is an Indian way of getting things done using any means, against the odds. This ethos gets social entrepreneurs, once they put their minds to something, to figure out how to make broken systems work, to close gaps in service delivery, and to change the status quo.

So, combine a whole bunch of people who have an unstoppable attitude, an incredible combination of personal resources, a population in need, and a propensity towards helping others…and what do you get? A hotbed for social enterprise. What do you think? Are you drinking the KoolAid?

Image (CC) by Flickr user Meanest Indian