26 03 social enterprise_irene bengo

Social enterprises and its role in achieving energy access for all

Prof. Irene Bengo, Ph.D.Department of Management, Economics and Industrial EngineeringPolitecnico di MilanoPresident of Engineering Without Borders - Milan

I. Bengo, Engineering Without Borders - Milan

ContextContext 2

This situation has highlighted the need of alternative economic,

entrepreneurial and social development structures both in

"developing countries" than in "developed countries"

SOCIAL ENTERPRISE

1. WELFARE SYSTEM CRISIS

3. ECONOMIC CRISIS

Unsatisfied social needs

2. DEVELOPMENT ASSISTANCE CRISISLocal and foreign policies, organizations and multilateral

institutions have failed to provide a real response to the need of:access to basic services

creation of real systems that involve the active participation of stakeholdersability to form stable employment and enable the integration of

disadvantaged people.


ContextContext 3


The Social Enterprises: some numbersThe Social Enterprises: some numbers 4

Growth in social entrepreneurship globally over the last decade has been impressive

social entrepreneurship is a “good thing”

European Commission 2012: there are more than 11 million jobs in the social economy across Europe, but membershipof social economy enterprises is much wider: 160 million.

Social economy enterprises represent 2 million enterprises (i.e. 10% of all European businesses) and employ over 11 million paid employees (the equivalent of 6% of the working population of the EU).

Italian case, the report on SE (Iris Network): there are over 15 thousand SEs, 350 thousand employees including social cooperatives, foundations and other organizations


Increasing interest in social enterprises Increasing interest in social enterprises worldwide: worldwide: “entrepreneurial spirit with social aims“entrepreneurial spirit with social aims”

“whenever I wanted to deal with a social or economic problem, I tried to solve the problem by creating a business around it” (M. Yunus 2010,17)


Idea of Social Enterprises 1/2Idea of Social Enterprises 1/2 6

The Social Enterprise (SE):private, autonomous, entrepreneurial organizations providing goods or services with the goals of provide benefit to the community.

SEs • Have relevant expected impact in term of social value creation• Is a potential response to critical problems in the North/South of the world

The SEs aim at: • transforming the maximization of profit and wealth creation in a mean by which the “social entrepreneur” satisfies unmet social needs. • transforming the social benefit into a real “business idea”


“Social enterprises created by social entrepreneurs through social entrepreneurship processes”

Social entrepreneurship• emphasizes the social innovation processes undertaken by social entrepreneurs;• refers to a wide spectrum of initiatives, from voluntary activism to corporate social responsibility (CSR);• characterized by “blended value creation” (profits alongside social value) and “blurred boundaries” as for institutional and legal forms.

Social enterprise• appeared in Italy in 1990 (“impresa sociale”) and gradually spread all over Europe;• positioned at the croassroads of market, public policies and civil society;• innovation models arising from ‘hybridization of resources’ and ‘inter-institutional cooperation’.

Social entrepreneur• emphasized by American foundations since the mid 1990s;• refers to individuals launching new activities dedicated to a social mission while behaving as true entrepreneurs in terms of dynamism, personal involvement and innovative practices.

Idea of Social Enterprises 2/2Idea of Social Enterprises 2/2


“The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man”

George Bernard Shaw

Who’s this?Who’s this?

The social entrepreneur should be an enthusiastic innovator and, above all, a an excellent manager in order to guarantee – in a competitive market- the difficult trade-off between the generated social impact and the economic sustainability of the entrepreneurial activity




Andreas Heinecke: Andreas Heinecke: Dialogue in the DarkDialogue in the Dark

Andreas Heinecke founded Dialogue in the Dark with a twofold aim: to bring ordinary people closer to the world of the blind and sight impaired people and to offer them a job so they can better fit into society.

The success of these shows was huge that Dialogue in the Dark is now a global phenomenon, with exhibitions all over the world.

It has not just represented a true “eye-opener” for over 6 million visitors, but also offered a job about to about 6000 blind and sight impaired people.




Jean-Marc Borello: Jean-Marc Borello: Groupe SOSGroupe SOS

Jean-Marc Borello, he founded a real social business giant. In 15 years the group SOS has developed a wide range of health and social services designed mainly to the recovery of people with serious drug and alcohol dependencies.

With a turnover of € 150 million, 170 health facilities and 2700 employees, SOS provides every day thousands of health care services.




Paul Newman: NewmanPaul Newman: Newman’’s Owns Own

In 1982, Paul Newman founded Newman's Own, a company founded to commercialize his own special recipe for salad dressing that had long been a hit among his friends.

After the success of the first product on the market, Newman's Own began to market a wider range of sauces, condiments and drinks that have become famous and distributed all over the world.

The peculiarity of Newman's Own is that all profits are donated to various non-profit organizations (hospitals, camps for sick children ....). From 1982 to 2008 about 280 million dollars have been donated to these charities.




Reed Paget: Belu WaterReed Paget: Belu Water

Reed Paget is the founder of Belu Water, the first eco-friendly bottled water company.

In fact, Belu water is extracted from natural springs and is bottled in a local English-biodegradable bottles (with plastic derived from corn).

Belu Water sells in England (especially London) 500,000 units per month.




Jamie Oliver: Fifteen RestaurantJamie Oliver: Fifteen Restaurant

Jamie Oliver is a renowned chef in London who starred in several television series and is author of many cookbooks.

At the height of his fame and success Jamie has decided to give something back to society.

His idea was to use his talent and name to give to marginalized boys and girls (for alcohol and drugs) a second chance. Thus he founded Fifteen Restaurant.

The restaurant offers two years of training as a chef to help marginalized children.

After this learning experience, with a Master Chef like Jamie, some guys are now working at Fifteen Restaurant, while others found work in other London restaurants.




Muhammad Yunus : Grameen GroupMuhammad Yunus : Grameen Group

Muhammad Yunus is perhaps the most famous member of the social business world. After the 1974 famine in Bangladesh, Yunus, a professor in economics, created a system of loans to very poor based solely on trust.

This is how the Grameen Bank microcredit has (founded by Yunus) its most representative institutions (with $ 7.6 billion provided from its origins to 2008).

For the positive impact that microcredit has had in reducing world poverty, Yunus and Grameen Bank were awarded the Nobel Prize for Peace in 2006.

Yunus founded in the same year with the French multinational Danone, a manufacturer of highly nutritious yogurt at low prices to combat malnutrition in Bangladesh (Grameen Danone Foods).


DevelopmentDevelopment of SE of SE 21

Different reasons of Social entrepreneurshipdevelopment during last 20 year

Privatization of the public responsibility for public welfare:

• government’s participation decline regarding the services offered to the community• the experimentation with "new forms of solidarity and collectivity" by civil society and social movements as they enter high politics

The development of a culture better oriented to the responsibility and personal

involvement towards social problems:

Increase of the entrepreneurial spirit of no profit sector (association, NGOs, Cooperatives)

• introduction a social purpose to a business company, corporation or even government

the third sector’s will to increase its entrepreneurship and the social enterprise’s interest to unify its values with the standard profit sector business’s principles

• changes occurred into the no-profit sector for increase the opportunities of funding


SE as a middle way between two extremesSE as a middle way between two extremes 22

SE represents a hybrid form, located somewhere in between the traditional non-profit and for-profit organizations

SEs pursue a broad social goal, they try to promote a new model of economic development, fostering a more democratic decision-making process

From an economic standpoint, SEs need to assure their economic sustainability: market oriented activities and fundrising are strictly “at the service” of the social goal

Compared to not for profit entities, SEs have the purpose to achieve social benefit, but their vision, organization and processes are quite different when compared to non-profits

Ses achieve social goals that meld socio-political, environmental, and financial objectives: give them a major importance compared to profit organizations (social purpose is central to the Se operation)


SE as a middle way between two extremesSE as a middle way between two extremes23

Hybrid Model of Social Entrepreneurship:

Alter (2004): "Hybrid Spectrum of sustainability" to underline the Ses position respect the other organizations.

As a hybrid, the social enterprise is driven by two strong forces


SE as a middle way between two extremesSE as a middle way between two extremes24

4° Sector: For -benefit organizations

Figure 1 details the traditional organizations new kind of firm: for-benefit organizations.

These organizations are driven by a social purpose, they are economically self-sustaining and seek to be socially, ethically, and environmentally responsible.

Dennis A. Pitta and J. Howard Kucher,University of Baltimore, Baltimore, Maryland, USA, Journal of Product & Brand ManagementVolume 18 · Number 2 · 2009 · 154–158

Social enterprises are prime examples of for-benefit organizations


Different definitionsDifferent definitions25

SOURCE DEFINITION

DTI, Department of Trade and Industry; 2002

Businesses with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or in the community, rather than being driven by the need to maximise profit for shareholders and owners

M. Bull, H. Crompton; 2007

Enterprises with the specific purpose of addressing social issues, in favor of the community or the environment and employ a business structure that allows it to remain sustainable

Social Enterprise Coalition 2011

Businesses trading for social and environmental purposes. Social enterprises are distinctive because their social and/or environmental purpose is absolutely central to what they do - their profits are reinvested to sustain and further their mission for positive change..

Muhammad Yunus

“We have described and keep on describing organisations motivated by social objectives as non-profit organisations. We need to have another description: ‘non-loss ’organisations, because we don’t want to lose money and our objective is to address a particular problem. So we are non-loss businesses with social objectives.”

The academic and professional literature provides several definitions of SE


Different definitions: Different definitions: EMES definition

"Social enterprises are not-for-profit private organizations providing goods or services directly related to their explicit aim to benefit the community.

Economic Criteria

• A continuous activity, producing and selling goods and or services

• A high degree of autonomy

• A significant level of economic risk

• A minimum amount of paid work

Social Criteria

• An explicit aim to benefit the community

• An initiative launched by a group of citizens

• Decision-making power not based on capital ownership

• A participatory nature, which involves the various parties affected

by the activity

• Limited profit distribution


Legal forms within the EU contestLegal forms within the EU contest27

At present, no specific legislation exists at the European Community level.

There are very different concepts of SE and different legislative framework

regulating its governance, activities, ownership…:

In the last 20 years, the debate about social enterprise in Europe increasingly

focused on its specific aims and its role in the welfare systems the

emergence of a complex and diversified legislative framework.

Legal Form


28

Country Forms used Profit

distribution

Governance Activities

Italy

Law n. 118 of 13

June 2005

Associations

Foundations

Co-operatives

For-profit

Enterprises

Direct and indirect

distribution of

profits prohibited

Participatory

nature

Production or exchanges of services

in the sectors of social and health

assistance, education and training,

environmental protection, social tourism,

cultural services or work integration of

disadvantaged persons independently

from the field of activity of the enterprise

Portugal

Co-operative code (Law

n° 51/96 of 7

September 1996) and

Legislative decree n°

7/98

Social

Solidarity co-

operatives

Direct and indirect

distribution of

profits prohibited

Participatory

nature

Work-integration of vulnerable

groups

France

Law of 17 July 2001

General-interest

co-operative

societies

Redistribution of

profits is possible,

but limited

Participatory

nature

Production or provision of goods and

services of collective interest

Table 3.1

Legal forms within the EU contestLegal forms within the EU contest


29

Country Forms used Profit

distribution

Governance Activities

Belgium

Law of 13 April

1995

Limited company;

Limited liability co-

operative society;

private limited liability

society

Redistribution of

profits is possible,

but limited

Participatory

nature

Activities that are aimed at

pursuing a social goal. What

constitutes a social goal results

from constitutive elements

foreseen by the legislation.

United

Kingdom

Community

Interest

Company

regulations 2005

Enterprises regulated by

Companies Act 1985

Partial

distribution of

profits allowed

Participatory

nature

Wide range of activities that

correspond to the needs of

communities. Social definition

assessed by the Regulator

Finland

Law n.

1351/2003

All enterprises

regardless of their legal

form and ownership

structure

Distribution of

profits allowed

with no

constraints

Participatory

governance

not envisaged

Social enterprises have to employ

at least 30% of people with

disabilities and long-term

unemployed

Table 3.1

Legal forms within the EU contestLegal forms within the EU contest


30

1. SEs are multi – objective organizations

2. SEs have a multi-stakeholder governance external players more relevant respect the private sector:

• Groups of citizens regarded as agents of change• Participation of stakeholders in the decision making processes • This involvement is essential (i.e SE can’t do without) to

understand the real needs of the context

SE specificitiesSE specificities

SEECONOMICENVIRONMENTAL

SOCIAL

Different definitions and different legal framework across European and non European countries exists

Sustainability

Sustainability

model

model


Different typology of the Different typology of the activitiesactivities

31

Activity Yes/no Yes/no

Work integration Agriculture

Personal services Education

Economic Development University education

Environmental Conservation

Non-formal training

Arts and Cultural Preservation

Tourism

Social Welfare and Human Development

Water management

Health Production Energy

Recycling Catering and hospitality


Different typology of the Different typology of the activitiesactivities

32

Activity Yes/no Yes/no

Work integration Agriculture

Personal services Education

Economic Development University education

Environmental Conservation

Non-formal training

Arts and Cultural Preservation

Tourism

Social Welfare and Human Development

Water management

Health Production Energy

Recycling Catering and hospitality

√√√√

√√√√

√√

√√

√√

√√√√

√√√√

√√

√√

√√√√ √√


What's new about social enterprises? What's new about social enterprises?

• providing access to basic services (social, educational, and health) to local communities, including innovative schema for people who are unable to pay;

• contributing to a more balanced and sustainable use of local resources encouraged by wide participation of local stakeholders;

• creating new employment as a result of the new services supplied and favouring labour market integration of disadvantaged people (minority groups, single women, people with disabilities, etc.) otherwise excluded from income-generating opportunities;

• breaking poverty traps by allowing financial inclusion for self-employment;

• contributing to take informal activities out of the underground economy for instance by regularizing the situation of illegal workers on the black market; also contributing to a fair integration of small economic actors into markets

Contributions to socio-economic development, empowerment and environmental challenges

• contributing to the promotion of inclusive governance models that empower the local community in strategic decision-making;

• contributing to enhance social capital at local levels (based on broad ownership and local participation), which is of crucial importance.


Social Enterprises: Social Enterprises: Increased local participation to expand the energy market

For these reasons these organization can play a fundamental role, in addition to governments, to better understand the socio-cultural context, have a key role in reaching low-income communities with efficient and sustainable energy delivery systems.

Social enterprises are fundamental actors to ensure that energy access initiatives can result in development benefits deriving from productive activities but also from improved health, education and livelihoods.

Since these organization take into account the socio-cultural context needs, to ensure that people are willing and able to pay for energy services as they satisfy their needs and also ensure the adequate level of awareness about technology options and utilization.


35

How to understand local needs?

Participation and ownership are fundamental to ensuring the correct choice of technology and the success of a project

Promoting participation and ownership


The sustainability of the projects and the local social enterprises depends on the way in which they are integrated in the local cultural and social context, environmental and economic conditions, institutions and available technologies.

The purpose of this type of engineering interventions is to make the community autonomous, self-organized and independent.

Technology and Innovation alone are not sufficient to guarantee success; they must be driven by human factors and coupled with the principle of participation and direct community involvement


Key principles of participatory approaches

• Involving people as subjects not objects

• Respect for local knowledge and skills

• Ensuring influence over development decisions, not simply involvement

• A learning process as much as an outcome

• An approach and attitude rather than a specific set of technical skills

The participatory approach is also a state of mind, an

attitude. It is about having a genuine concern and

respect for the values, skills and needs of others,

particularly those who are least advantaged.



Financial inclusion for self-employment Financial inclusion for self-employment generation: generation: the European microfinance landscape

• Founded in 1989 by Maria Nowak• To be effective, the Right to Economic Initiative requires access to capital and removal of administrative constraints for creating self-employment. • Adie finances the self-employed and microenterprises through a variety of products based on clients’ needs:- Loans at market rate up to 6000 €- "Start-up grants" funded by the French government or by local authorities

"Microfinance's mission is to provide basic financial services to poor people"

EMN (European Microfinance Network) gathers organisations primarily involved in the European Union and mainly addresses issues related to professional and personal microcredit in Europe, other financial services being still underdeveloped.

Microcredit is defined by the European Commission, as a loan under € 25,000 to support the development of self-employment and microenterprises. It has a double impact:

• an economic impact as it allows the creation of income generating activities

• a social impact as it contributes to the social inclusion and therefore to the financial inclusion of individuals.


Financial inclusion for self-employment Financial inclusion for self-employment generationgeneration: the European microfinance landscape

Andreoni, A., Sassatelli, M. e Vichi, G. (2013) New Financial Needs: the microcredit response in Italy, Bologna: Il Mulino.


Social enterprise delivering energy solutionsSocial enterprise delivering energy solutions39

On this map you can see over 40 social enterprises delivering energy solutions to underserved populations around the world.

http://energymap-scu.org/social-enterprise/

Energy Plus Ltd. sells battery inverter backup systems and energy efficient lights to grid-connected schools and businesses in Uganda, so that they no longer need a diesel generator when the grid is out and pay less for electricity when the grid is working.



WE CARE Solar: provides solar electric kits for medical lighting and communication that are reliable, robust, and low-cost, enabling timely and appropriate emergency care in maternal health facilities and settings without reliable electricity. Impact Areas : Sub-Saharan Africa, Haiti, Southeast Asia

EnterpriseWorks/VITA: a division of Relief International (EWV-RI), sells improved cooking stoves that are manufactured in Ghana and sold through local retailers. Income is generated for manufacturers and distributors; the improved cookstoves allow households to be more efficient in the cooking process, household earning are better utilized, indoor and outdoor pollution is reduced and charcoal consumption is significantly reduce

Some examples of social businesses…

Smart Oil is creating thousands of jobs in rural West Africa by producing a cheaper substitute for diesel fuel derived from jatropha plantations.



Energy in Common is a crowdfunding platform allowing online lenders to provide project-specific financing for green energy through microfinance institutions. Impact Areas Ghana, Nigeria, Tanzania

Trees, Water & People has designed a cookstove for the charcoal dependent population of Haiti, that reduces fuel consumption by up to 40%. The design is similar to a popular improved cookstove in the local market, but makes use of insulation, properly-sized flue gaps and a smaller fuel bowl to deliver cooking heat more effectively.

Some examples of social businesses..

Solar Sister eradicates energy poverty by empowering women with economic opportunity. combining the breakthrough potential of solar technology with an Avon-style direct sales network, Solar Sister brings light, hope, and opportunity to even the most remote communities of rural Africa.


42Social enterprise delivering energy solutionsSocial enterprise delivering energy solutions

In addition to training activities, EFrem develops some projects: "GRID"(General Recharging to Implement Development) that offers to implement one system of solar power unit for charging batteries to create permanent jobs in poor areas with no electric power available.

HOASIS Plan (Holistic Approach Significant to Implement Self-Reliance).Hoasis is an evolution of GRID project. The plan provides, as a central engine, a unit of production of alternative energy (generally photovoltaic, the easiest to develop, the most modular and the easiest to manage).

EFrem (Energy Freedom)

Sector Renewable energy, training

Forms used Non-profit association

Social Mission Increasing culture on renewable energy in LDC

N. employees 15

N. members 30

Year Founded 2007

Geographic Area Impact Burundi, Kenya, Ivory Coast,Ghana, RDC, Rwanda

Activities Training of trainers


Social enterprise: Social enterprise: Italian Movement

Make a Change is a movement that operates through an operative organization to achieve the following goals:

Support the development of new social entrepreneurs in Italy promote social entrepreneurship as a new asset class for responsible

investments Promote among young people values of balance and social responsibility as an

alternative to the pursuit of money and power at all costs.

the first Italian answer to the global movement of social business. Our founders come both from the profit and not-for-profit worlds: 3 companies and 12

individual professionals promoting new business models : businesses that aim to reach economical sustainability

while maximizing social welfare. The mission: to change the system within the system.

Training for migrants: a support to developmentTraining for migrants: a support to developmentTarget:

Migrants and their association in Milan area

Objective: To promote the development of activity income

generation, like social enterprises, in Italy and their origin countries

To promote culturally community exchange and networking

Course program: Tools and methodologies for project cycle

management Profitability assessment: market analysis and social

enterprise business plan Case study: product and technologies available in

developing country.

Countries: Togo, Burkina Faso, Ghana, Camerun, Perù, Senegal, Tunisia, Albania, Kosovo


Possible barriers to developmentPossible barriers to development

Source: Social Enterprise UK Report 2011


Thank You for your attention

Documents

26 03 social enterprise_irene bengo