St. Gallen Symposium 2010 Entrepreneurs – Agents of ChangeSo did Anita Roddick. These entrepreneurs eradicate pov- ... It is a personal gathering between a fashion de- ... of local

St. Gallen Symposium 2010

Entrepreneurs – Agents of Change

St. Gallen Wings of Excellence Award 201040th St. Gallen SymposiumUniversity of St. Gallen, Switzerland6–7 May 2010

40

St. GallenWings of Excellence

Award

Christoph BirkholzSt. Gallen Wings of Excellence Award 2010

Christoph Birkholz

Christoph Birkholz (DE)Ph.D. Student in Strategy and ManagementUniversity of St. GallenSt. Gallen

Born in 1983. Christoph Birkholz received a Masters degree from Witten/Herdecke University. He is currently a Ph.D. candidate at the Institute for Economy and the Environment, University of St. Gallen. Christoph Birkholz was a visiting student at IPADE Busi-ness School Mexico and engaged in a research project on scal- ing social impact at an Indian NGO together with IESE Business School.

Christoph Birkholz is passionate about social and environmental entrepreneurship for a sustainable society. As a research assis-tant at the Good Energies Chair for Management of Renewable Energies, he investigates business models that facilitate access to energy at the base-of-the-pyramid. Alongside his academic work, Christoph Birkholz is a co-founder of The Hub Zürich, a not-for-profit incubator and co-working space for social innovators. Christoph Birkholz gained professional experience at BP Germany and Australia, A.T. Kearney and RWE Innogy, where he also con-ducted research on corporate venture capital for clean technology start-ups.

Christoph Birkholz was a Leader of Tomorrow participant in the 38th St. Gallen Symposium.

St. Gallen Wings of Excellence Award 2010

“The movement that might become possible is one that makes en-trepreneurship social […] to reach out for the well-being of all on this earth.”1

A New Breed of Entrepreneurs

I am part of a new generation of entrepreneurs. We are united in the pursuit to create something new, something valuable to the world, something sustainable. We want to go beyond finan-cial returns. We are driven by the creation of value in society. En-trepreneurs like us have always been around. But this time it is different. We are going mainstream. And we gain momentum. Entrepreneurship will not be dominated by economic profit ori-entation any longer. It is more. It goes far beyond. It is a new breed of entrepreneurs.

Is it really that new?

The “young” Schumpeter already knew about it. He must have known it as he explicitly conceptualised his Creative Destruction for economic and social contexts.2 So did Peter Drucker when he wrote about innovations and entrepreneurship.3 And still, since the early days, academics have rather focused on the economic rent imperative and risk-return perceptions. They have neglected the social purposes of entrepreneurs and of the organisations they create.4

Is it just theory?

Entrepreneurs such as Vikram Akula and Muhammad Yunus know it. So did Anita Roddick. These entrepreneurs eradicate pov-

Facilitating a New Breed of EntrepreneursThe Emergence of a Global Movement

1 Steyaert, C. & Hjorth, D., 2006:2.2 Cf. Swedberg, R. 2006.3 Cf. Drucker, P., 1985.4 Only recently, scholars have re-integrated the social in entrepreneurship as they

publish articles on social and institutional entrepreneurship in mainstream entrepre-

neurship journals such as the Academy of Management Review and the Journal of

Business Venturing (e.g. Hargraves & Van de Ven, 2006; Mair, J. & Martí, I., 2008).

Christoph Birkholz

erty through access to microfinance. Or they serve millions of customers with top quality products fabricated by environmental-friendly ingredients. Even a growing number of top busi-ness schools such as Harvard, Columbia, and Duke – sometimes blamed for educating reckless managers and greedy bankers5 – seem to understand it as they initiate programs about social entrepreneurship and sustainable innovations. This is amazing. It leads to a professionalisation of social entrepreneurial ventures. Organisations like Kiva successfully mobilise resources as they connect small-scale money-lenders to under-resourced entrepre-neurs. As new entrepreneurs, we tackle challenges that exceed the complexity faced by exclusively financially-driven “entrepre-neurs”.6 In fact, we are far more innovative. In order to change the rules, we have to.

So where is the challenge?

Despite existing entrepreneurs who successfully combine economic, environmental and social values, the brief outline in the professional and academic domain implies two impeding dy- namics. First, we keep referring to the “usual suspects”: A few “star entrepreneurs” who have succeeded in what had been con-sidered impossible. Yes, these stories are inspiring and important. However, we lack to identify the underlying contextual factors that facilitated their success. Where are the fertile grounds for a global movement? Where is the systemic change? That is the challenge, for professionals and researchers alike. It is a challenge for all of us. Second, an emerging theory of “Social Entrepreneur-ship” tends to alienate non-social entrepreneurs from generating social impact. This distorts a holistic perception of entrepreneur-ship – driven by a pursuit to alter the status quo, be it in the direct environment or on a global scale. I posit that all entrepreneurs share a common DNA of creating social, ecological and economic value. If entrepreneurship is about generating impact, it is these value creators who I call the new entrepreneurs. We are new en-

5 Cf. Ghoshal, S., 2005.6 Cf. Stryjan, Y., 2006.



trepreneurs because we leverage our passion to improve the state of the world.

This is “the becoming social of entrepreneurship!”7

These claims sound inspiring and motivating, but we must not get lost in visionary idealism. There is too much at stake. Let us be crystal-clear about what it takes for a new breed of entrepre-neurs to become the creators of true value in society. Too often we have been misleadingly urged to sacrifice social objectives for economic ones – “trade-offs” that do not necessarily exist. I am convinced that we can overcome these relicts manifested in out-dated concepts of “entrepreneurship”. But what is needed to do so?

The Needs of New Entrepreneurs

We need to be both locally embedded and globally connected.8 Without excluding those who struggle to perceive themselves as “Social Entrepreneurs”, it requires an inclusive movement of like-minded people around the world. Collectively, we can develop a powerful common voice. We can create legitimacy for ourselves and for all our fellows who dream of their own start-up venture envisioning a radically better world. Just imagine this new form of entrepreneurship would be as widely acknowledged as a ca-reer opportunity with McKinsey, Google or the United Nations. Imagine what would be possible. And yet, …

Legitimacy and networks are not enough.

Innovative ideas have always been around. But we require re-sources, infrastructure, knowledge and experience to make them happen. We need workspaces – most likely an office ideally de-signed to suit the purposes of our ventures. But most of all, we require physical spaces where the global community gathers. A

7 Steyaert, C. & Hjorth, D., 2006:2.8 Cf. Battilana, J., Mair, J., Dacin, T. & Seelos C., 2009.

Christoph Birkholz

place where it emerges and develops. A physical location whe-re new entrepreneurship goes mainstream. There, thousands of us who have great ambitions but limited access to resources find the support they need. We demand an inspirational environment that nourishes our intent bridging the gap between idea and im-plementation. With social networks being widely dispersed and already leveraged online, new entrepreneurship necessitates a physical connection. It is a physical place where we persuade impact investors, business angels and venture capitalists with our visions. It is a personal gathering between a fashion de- signer and UK’s largest shoe manufacturer where the vision of sneakers made from recycled waste is boosted towards sustainable commercialisation. Here, ideas are challenged, business plans checked and services offered to develop entrepreneurial initiatives how they ought to be: social and environmental value creating while economically viable. The location I have in mind is for those who consider themselves not only social or sustainable en-trepreneurs but also – straight forward – new entrepreneurs. And it is for those who want to become a part of our movement, for the interested student just joining the community as well as for the stars of the scene. When Ellen O’Connor proposes articulation of local and modest rather than high-profile, professional social entrepreneurship,9 I suggest implementation of both. For a new breed of entrepreneurs to emerge globally, it needs more than a municipal initiative, more than a regional incubator, more than a local phenomenon. One booming Silicon Valley for new entrepre-neurship is not enough. It needs hundreds of those places across the globe. Only then will we pioneer “the becoming entrepreneu-rial of the society.”10 We can see this happening. It is…

The Hub

In twenty-five cities around the world, a movement that started in London not even five years ago provides a habitat for social innovation and proves a revolution of entrepreneurship. Hubs in

9 Cf. O’Connor, E., 2006.10 Steyaert, C. & Hjorth, D., 2006:2.



Amsterdam, Berkeley, Bombay, Brussels, Madrid, Milan, Oaxaca, Sao Paulo, Stockholm, Tel Aviv and Vienna have been hosting over 5.200 new entrepreneurs. Working from Hubs, they have found-ed micro-finance in London’s East End, ethical supply chains with fabric producers in Kenya, and open-source sketches for sustainable homes. New entrepreneurs have designed vertical-axis inner city wind turbines, today funded by Europe’s major clean technology venture capitalists. Ideas to run a restaurant by former prisoners, to start a shop without packaging and to bring solar power to India’s rural houses have become reality. Olive oil ex-ports from the prolific hills of the West Bank, a then “impossible” endeavor, were initiated after two young bloggers from Israel and Palestine formed a Hub Village Square to move from ignorance and complaints to opportunities and collaboration. With Hubs emerging in places as diverse as Kabul, Shanghai, Cape Town, Hel-sinki, Riga, Prague, Atlanta and Bogotá and another 60 Hub pro-jects in the making, the network aims to host more than 100.000 new entrepreneurs by 2015. This is more than McKinsey. It is more than the United Nations. Imagine the power of this movement.

It is the global movement of entrepreneurs.

In Hubs we find flexible co-working spaces, inspiring meeting rooms, a supportive atmosphere and relaxing retreats. We are facilitated by leveraging the best of a hosted office, a member‘s club, a start-up incubator, and a think- and do-tank to create a special type of innovation environment. Hub memberships range from the single event, to the hour, the day, the week and the full month. We invite people from every profession, background and culture, driven by social innovation as well as curious newcomers to come to the Hub.11 There they can discuss with sustainable entrepreneurs, idealistic students, value-driven freelancers, ent-repreneurial NGO workers, social intrapreneurs and purposeful career-shifters for a global movement to emerge. Events are hos-ted at Hubs in order to fuel connections to knowledge, capital, experience, and to market opportunities. At one of the countless

11 Cf. http://www.the-hub.net, latest access on February 1st, 2010.

Christoph Birkholz

Hub lunches, a prototype Hub Shop in Rotterdam – where the concept of desk sharing is transformed to collective shop space – was innovated and is up and running today. A blueprint for a Peace Hub in Kabul combined with a people-powered vision for re-imagining and re-constructing their war-torn country already exists. And a pan European research project into social entrepre-neurship, the biggest of its kind, in partnership with the London School of Economics is being planned. New initiatives emerge in San Francisco, where a nascent Hub Capital fund is raised. Hub people in Latvia collaborate with the EU, thus securing a multi-million Euro grant to prototype an emerging market Hub in Riga. Altogether, there are teams in more than 80 extraordinary places, spread across six continents that are conceiving, building or run-ning Hubs in order to host a multitude of new entrepreneurs. Here is the story of one of them. Here’s my story.

New Entrepreneurs Facilitating New Entrepreneurs

Connected through The Hub Global Network, but with a unique personality, local Hubs are being established across the globe. However, we do not have to travel far. We can stay in the regi-on to envision The Hub Zürich. This is our endeavor, the collective movement of numerous like-minded individuals and organisa-tions such as the WWF and oikos; it is the breed of new entrepre-neurship in Switzerland. The Hub Zürich is the building of a community of new entrepreneurs within a year’s time. We promote an alternative career opportunity to “set in motion a virtuous circle of social capital accumulation.”12 With 400 square meters of work-, meeting and event-space in the beautifully refurbished Wipkinger Viadukt, we want to create an inspirational atmosphere that enables sustainable and systemic change. Therefore we will host at least 300 new entrepreneurs in Zurich by 2015. Imagine what is possible if each one reaches 500 beneficiaries with the support, network and counseling from The Hub. Imagine

12 Leadbeater, C., 1997:3.



The Hub Zürich facilitates new entrepreneurs to change the lives of 150.000 individuals in Zurich, Switzerland and beyond.

Imagine you came to The Hub.

Incorporating the latest video conferencing technology in The Hub Zürich and in strategically located Hubs around the world, we will debate, collaborate on and design systemic changes in this world. We will pursue improving the lives of others – in Swit-zerland and internationally. Not in a social niche, but at the heart of Swiss entrepreneurship. With The Hub Zürich we will facilitate new entrepreneurs to transfer capital, knowledge and technology from Switzerland to the developing regions of the world. Imagi-ne Zurich based Harald Schützeichel leverages the Hub network to replicate his successful Ethiopian solar home systems in rural areas across the globe. Imagine The Hub Zürich gathers a Central European task force for “pop-up Hubs” entering zones of crisis within hours. They should have existed after the 2004 Tsunami hit Asian coastlines. A “pop-up Hub” should have been installed in New Orleans immediately after hurricane Katrina destroyed most of the city. And what happened in Haiti after the country was tor-mented by the terrible earthquake earlier this year? How much have you heard about the people lately? We need a Hub Port-au-Prince to maintain global awareness, media coverage, and dona-tions: A Hub that empowers new Haitian entrepreneurs to design the country as they want it to be. I believe The Hub can help them. I believe we should help them. I am convinced we can facilitate a new breed of entrepreneurs. We need to start now. We can start here. We will open The Hub Zürich this September.

New entrepreneurs are there. New entrepreneurs will follow.

Christoph Birkholz

Battilana, J., Mair, J., Dacin, T. & Seelos C. (2009). The embedded-ness of social entrepreneurship: Understanding variation across geographic communities. Academy of Management Symposium.

Drucker, P. (1985). Innovation and Entrepreneurship: Practice and Principles. Harper & Row. New York.

Ghoshal, S. (2005). Bad Management Theories Are Destroying Good Management Practices. Academy of Management Learning & Education, 4(1):75-91.

Grenier, P. (2006). Social entrepreneurship: Agency in a globalising world. In A. Nicholls (Ed.), Social entrepreneurship: New models of sustainable change: Oxford University Press.

Hargrave, T., & Van De Ven, A. (2006). A collective action model of institutional innovation. Academy of Management Review, 31(4): 864-888.

Leadbeater, C. (1997). The Rise of the Social Entrepreneur, London: Demos Papers.

Mair, J. & Martí, I. (2008). Entrepreneurship in and around insti-tutional voids: A case study from Bangladesh. Journal of Business Venturing. 24(5): 419-435.

O’Connor, E. (2006). Location and Relocation, Visions and Revisi-ons: Opportunities for Social Entrepreneurship. In C. Steyaert & D. Hjorth (Eds.), Entrepreneurship as social change: a third movement in entrepreneurship book. Edward Elgar Publishing Limited. Chel-tenham, UK.

Steyaert, C. & Hjorth, D. (Eds.) (2006). Entrepreneurship as social change :a third movement in entrepreneurship book. Edward Elgar Publishing Limited. Cheltenham, UK.



Stryjan, Y. (2006). The practice of social entrepreneurship: notes toward a resource-perspective. In C. Steyaert & D. Hjorth (Eds.), En- trepreneurship as social change :a third movement in entrepreneur-ship book. Edward Elgar Publishing Limited. Cheltenham, UK.

Swedberg, R. (2006). Social entrepreneurship: the view of the young Schumpeter. In C. Steyaert & D. Hjorth (Eds.), Entrepreneur-ship as social change :a third movement in entrepreneurship book. Edward Elgar Publishing Limited. Cheltenham, UK.

Christoph Birkholz

St. Gallen Symposium Tel. +41 (0)71 227 20 20Dufourstrasse 83 Fax +41 (0)71 227 20 30P. O. Box 1045 [email protected] - 9001 St. Gallen www.stgallen-symposium.org

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St. Gallen Symposium 2010 Entrepreneurs – Agents of ChangeSo did Anita Roddick. These entrepreneurs eradicate pov- ... It is a personal gathering between a fashion de- ... of local