Global Hubs of Innovation

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Isabel Castillo NESsT

Enterprising Solutions

in Low-Income Communities

in Peru

NESsT Peru

• Provide sustainable income opportunities for low-income individuals.

• Promote labor inclusion, by creating employment options for marginalized groups.

• Make affordable technologies and basic services accessible to underserved markets.

SOCIAL ENTERPRISES BREAK THE CYCLE OF POVERTY.Social enterprises generate both financial and social returns. Rather than depending on donations to reach their impact goals, these small and growing businesses reinvest their income into solutions to critical social problems. They are self-sustaining and scalable.

NESsT is a catalyst for emerging-market social enterprises that:

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Watch NESsT & Social Enterprise on YouTube.

Since 1997, NESsT has developed sustainable

social enterprises—from planning to scaling. We

use a multifaceted approach that includes

financial investments, capacity support, and

social capital.

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NESsT is a catalyst for social enterprises in emerging markets.

Supporting Social Enterprise: Sponsors & Partners

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Despite ongoing economic growth,

marginalized communities in

Peru are deprived of employment

opportunities, fair wages, basic services, and

access to affordable

technologies.

NESsT social enterprises help them overcome

these barriers in the long-term.

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Peruvians are native entrepreneurs? In fact that 98% of companies are small or micro, demonstrates this entrepreneurial impetus of Peruvians…

But, what are their real

potencial to scale?

What are the big problems/barriers in order to growth in this Incipient Ecosystem?

Peru = Emerging economy

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• Seed Capital• Investment in different stages

• Appropriate technologies• Research and Development

• Entrepreneur Profile• The Team• Capacity Building• Government

• Metrics and indicators• Impact

• Networking and partners

• Bureaucracy in the public sector

• Legal Standards

LON

G T

ERM

S O

F SU

PPO

RT

How It Works: NESsT’s Methodology

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NESsT’s methodology to support high-impact social enterprises follows three phases: planning, incubation, and scaling. We use a customized performance measurement tool to determine an enterprise’s eligibility for each phase.

Enterprises selected to join our portfolio receive five to seven years of support, which includes grants and soft loans; leadership, marketing, sales, human resources, investment-readiness, and scaling workshops; collaborative retreats; finance and management tools; on-site mentoring; and access to our Business Advisory Network of corporate professionals.

Accelerators

Impact investors

Business plan competitions Philanthropic

Capital

4–7 yearsgrants +

transformational Loans +capacity

support + one-on-one mentoring

First Stage ScalingProof of Concept

3 yearsgrants +

incubation loans + capacity

support

Pipeline

Universities

Perform

ance Metrics

NESsT Methodology

Business Advisory Network

ARPEGIOTrujillo, PeruSocial Challenge: In 2005, in La Libertad, 23% of children did not finish primary school and 34% did not complete secondary school. Trujillo has one of the highest juvenile delinquency rates in the country.

NESsT Enterprise: Arpegio’s social enterprise, the “Arpegio Music Academy”, offers music lessons to children and youth. The Academy charges fees to children from higher-income families to subsidize scholarships for low-income children. Additionally, 50 of the students participate in the “Orquesta de Barro”, which offers public performances.

Impact Area: Education

Years in NESsT Portfolio: 4

Portfolio Stage: Incubation

NESsT value added:

•Helped determine an appropriate price point to achieve a balance between the price for students who pay and students who receive scholarships.

•Assisted with the creation of a monitoring system for students to better ensure their individual growth. Developed outreach and loyalty strategies for parents and students and supported the development of a musical syllabus to offer classes at other locations.

•Trained Arpegio to measure and manage the results of the social enterprise, including assessing the impact on its mission and values.

“Thanks to NESsT, we were able to consolidate our

educational proposal, both in terms of infrastructure and

quality of services.”

—Giuliana Casas, Arpegio

$62,155NESsT investment to date

430children reached and

educated in music

$55,570 total revenues from social

enterprise

86%increase in indirect

beneficiaries

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CASA de PANCHITALima, PeruSocial Challenge: According to studies, 40% of the workforce in Peru works in the informal economy, where domestic workers are one of the most vulnerable groups and child labor is common.

NESsT Enterprise: AGTR operates an employment agency for domestic workers called, "La Casa de Panchita.” The agency provides tailored and comprehensive training to domestic workers, from cooking to child and elderly care. It then places these highly skilled workers in formal and dignified employment opportunities, while generating sustainable income for the organization by charging a fee to the employer.

1,579job placements for domestic workers

144% increase in enterprise

income

7,000total indirect

beneficiaries in 2013

Impact Area: Labor Inclusion

Years in NESsT Portfolio: 4

Portfolio Stage: Incubation, in scaling process

NESsT value added:

•Assisted Casa de Panchita to define its business model and to increase its capacity to manage and measure its financial and social impact.

•Helped to strengthen AGTR’s structure, operations, culture and relations with stakeholders, and trained the team to improve its sales and marketing skills.

“Initially, we had no idea how to create a business plan and we did not think we could do

it. With NESsT support we realized that we could.”

—Blanca Figueroa, President, Casa de Panchita

$98,000NESsT investment to date

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INGENIMEDCusco, PeruSocial Challenge: Approximately 50% of newborns have some incidence of Neonatal Jaundice and between 4% and 6% develop Pathological Jaundice. In 2013 approximately 41,000 children required phototherapy treatment. If not treated properly, jaundice can cause permanent neurological problems. The technology available for treatment in rural areas is inadequate.

NESsT Enterprise: Ingenimed designs, produces and sells blue light phototherapy equipment called “NEOLED”, a high-quality, cost-effective treatment for neonatal jaundice. It offers two solutions: a conventional one used directly over incubators and an alternative known as “Madre Canguro” or Kangaroo Pouch.

2,800 newborns have benefitted from

the technology

400%increase in beneficiaries in

2013

Impact Area: Affordable Technology

Years in NESsT Portfolio: 4

Portfolio Stage: Incubation, in scaling process

NESsT value added:

•Helped the development and improvement of the prototype, and tested it in 3 clinics and helped formally start the business.

•Supported and advised on clinical validation and obtaining permits necessary to market the technology.

•Provided strategic, operational and financial advice on the development of a business plan to expand the company’s scale on a national level.

“NESsT supported us to set up the company, helped to develop and

improve our prototypes until they were ready for market, first with

NEOLED and then with our others biomedical equipment.”

—Sandro Gamarra,

Ingenimed

$78,765 NESsT investment to date

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MAGRINICusco, Peru

Social Challenge: In Peru, there are over 65,000 families engaged in the production of Andean cereals. Of these, about 60% use manual labor to harvest the land. This is not only a slower process, but can also cause premature aging and physical ailments.

NESsT Enterprise: Magrini manufactures and sells grain harvesting machinery, forage shredders, corn seeders and other agroindustry machines that result in higher yields and better quality final products. Small and medium farmers can improve their income using these machines.

5,000+ families reached

15%average increase in

annual revenues

$140,000 cumulative sales

Impact Area: Affordable Technology

Years in NESsT Portfolio: 3

Portfolio Stage: Incubation

NESsT value added:

•Helped Magrini to increase production capacity in order to meet the strong market demand.

•Provided strategic advice to improve the company’s organization and operations.

•Helped access new sources of financing to grow the business.

“NESsT encouraged us to overcome our limitations

through ideas and advice in order to improve our

organization and identify product weak points."

—Nicasio Uñapilco,

Magrini

$53,600 NESsT investment to date

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RITECChiclayo, PeruSocial Challenge: Water resource management is critical for poverty reduction and food security in Peru, where varied geographies create distinct microclimates with vastly different precipitation patterns. With 42 percent of Peru's groundwater lost each year, farmers need access to reliable irrigation technology and timely information to make the best use of their limited resources.

NESsT Enterprise: RITEC develops and produces innovative irrigation technologies, which are management tools for water use efficiency for small-scale farmers. It provides an agroclimatic information system that programs field irrigation through the use of automated remote sensors and a web platform.

40%increase annually in

number of users

6000+ direct beneficiaries

24,000+ indirect

beneficiaries

Impact Area: Agriculture

Years in NESsT Portfolio: 1

Portfolio Stage: Planning

NESsT value added:

•Helped Ritec to validate its technological prototype for irrigation information and programming, demonstrating the efficiency of its solution.

•Worked with Ritec to build a business model and develop alliances that enable the launch of this technological service into the market.

”Having access to this type of precise irrigation information gives us a much

greater control of the costs of production. Access to this tool gives

me historic information but in a very simple, accessible way and lets us

make more specific decisions . In this desert zone on the northern coast of Peru, this tool will really allow us to

optimize irrigation frequency.”

—Jorge Panta, Farmer and customer of Ritec

$39,000NESsT investment to date5-

year

go

als

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X-RUNNERLima, PeruSocial Challenge: 3 million people in Lima lack appropriate sanitation services. Water is scarce in poor neighborhoods, making conventional sewage systems unviable, and well-based or bucket-based latrines are unreliable and problematic in urban environments. This results in illness, social exclusion and stigma, and the contaminated land and water makes neighborhoods uninhabitable.

NESsT Enterprise: X-Runner sells basic sanitation services to families who lack drainage systems in Metropolitan Lima, through the installation of easy-to-install dry and portable toilets. It charges an affordable fee for the service, technical support, materials and pickup of waste, which is then composted at its operations center.

70 families reached

by pilot

500 toilets in first year

Impact Area: Affordable Technology, Environment, labor inclusón

Years in NESsT Portfolio: 1

Portfolio Stage: Incubation

NESsT value added:

•Assisted the X Runner team to validate the dry toilet technology and provided technical assistance to refine the business model.

•Provided mentoring and advice through NESsT staff and the Business Advisory Network in different areas: strategy, operations, marketing and knowledge management, in order to consolidate company operations.

“NESsT has prepared and coached us over several months, analyzed our team, our

operations, sponsored various studies and co-wrote our new and complete business plan. We look forward to continuing our collaboration, and we will work hard to achieve all of the milestones set for the

coming year. A big thank you to NESsT!”

—Isabel Medem, X-Runner

US$58,236 NESsT investment to datego

als 7,500

toilets in five years

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BUEN POWER PERÚCusco, Perú

Social Challenge : Peru has one of the lowest electrification rates in Latin America, and many rural communities either do not have access to electricity, or find that the supply is irregular. Hence, many still rely on traditional sources of lighting (e.g. candles, kerosene lamps) which not only contribute to indoor pollution, but also do not provide sufficient illumination for activities such as weaving and studying.

51,000Beneficiaries

700,000 Beneficiaries by 2018

Impact area: renewable energy, environment, education

Years in NESsT portfolio: 1

Stage : Incubation

Added value by NESsT:

•Market research, business plan, financial advisory, accounting training.

US$ 31,000NESsT Inversion to dateG

oals 46K

USDNet income by 2016

Buen Power Peru was founded in 2012 as a pioneer in providing solar energy solutions to the base of the pyramid. Buen Power seeks to fill the significant gap market by providing high quality portable solar lamps and kits at accessible prices. These award-winning products enable customers to realize cost-savings in less than a year’s time, have access to safe and environmentally clean lighting, and as a result increase their productive hours and economic potential.

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• NESsT has invested US$1.09 million in social enterprises in Peru through direct financial investments and capacity support.

• 42 organizations have received support in business planning.

• 28 social enterprises have been members of the the NESsT-Peru portfolio.  

To date, NESsT-Peru has benefitted 40,585 people in marginalized communities and created more

than 4,000 new income opportunities.

NESsT PERU: PORTFOLIO IMPACT

NESsT cultivates a thriving social

enterprise ecosystem by

sharing best practices and tools with entrepreneurs,

investors, and policymakers.

Thought Leadership

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Publications

In partnership with Digital Divide Data, NESsT has developed a guide called Shared Value: Doing Business with Social Enterprises, which promotes alliances between corporations and social enterprises. This important contribution to the Peruvian social enterprise ecosystem will raise greater awareness of the potential for business solutions to critical social problems. 

NESsT has long been at the forefront of social enterprise development, conducting research and documenting experience, developing methodologies and impact measurement tools, and raising awareness of the benefits and importance of social enterprise.

Ecosystem of Innovation for Impact in Peru

NESsT Innova Entrepreneurship Program: Innovation for the Next Generation

This university program provides access to funding, training, mentoring and networks. The main objective is to select and support inventions and innovations that can be disseminated on a large scale in Peru, through a business strategy. NESsT seeks to invest in technology-based ventures with high social impact, that significantly improve the quality of life of vulnerable populations.

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• NESsT Peru has provided consulting services to the National Council of Science, Technology, and Innovation (CONCYTEC) -- composed of academia, government research institutes, business organizations, and civil society -- to define the strategic areas of its National Program for Innovation for Social Inclusion.

• Upon request, NESsT Peru advised the Social Inclusion Ministry on how to design a social innovation fund. NESsT aims to operate this program at the national level. 

• NESsT has signed an inter-institutional cooperation agreement with the National Institute for the Defense of Competition and the Protection of Intellectual Property (INDECOPI) to promote a culture of invention and intellectual property in Peru. With NESsT’s support, INDECOPI has established an “Inventions with Social Impact for At-Risk Populations” category in its annual competition.

An Ecosystem of Innovation for Impact in Peru

NESsT Consulting is a business unit that increases NESsT’s financial sustainability by helping clients achieve their corporate social responsibility objectives.

It offers professional services to execute projects that advance social enterprise around the world by helping clients to accelerate their social impact.

NESsT Consulting: Our Own Social Enterprise

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Client: CONCYTEC

Industry: Government/Technology

Country: Peru

NESsT and science, technology, and innovation agency CONCYTEC’s technology transfer program in Peru launched and evaluated the social inclusion

competition called Technologies to Fight Extreme Weather in Andean Zones. The winners received

training from NESsT to develop sustainable business plans that can successfully transfer their

technologies for social inclusion.

www.nesst.org

ARGENTINA • BRAZIL • CHILE • HUNGARY • PERU • POLAND • ROMANIA • USA

www.nesst.org

https://twitter.com/nesstorg

www.youtube.com/user/nesstorg

www.linkedin.com/company/nesst

www.facebook.com/nesstorg

¡Thanks!

Isabel Castillo icastillo@nesst.org

Kefah NjengaUS International UniversityNairobi, Kenya

NAIROBI INNOVATION ECOSYSTEM

Dr. Kefah Njenga

Introduction

• Kenya’s Vision 2030 recognizes SME Innovation and Technology Parks as important vehicles through which the growth of Kenya’s manufacturing / service/ enterprise sector can be fast-tracked

• Innovation and Technology parks are key elements of the infrastructure supporting the growth of today’s global knowledge economy.

• By providing a location in which government, private sector and universities cooperate these parks create environments that foster collaboration and innovation.

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Justification of the innovation hubs

• There is huge brain power in Kenya• We need to develop hubs that can be used to

incubate enterprises in this country • That way the divide that exists between

academia and industry will be bridged• The country will also harness the brain power

of its population, transform this power to finished products and broaden its export pool

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Link to Vision 2030

Graduating at least 30 SME’s benefiting 200,000 people annually

INNOVATION AND TECHNOLOGY PARK

Promotion

of Innovation

and invention

Business Incubation

Provision of Business

Development Services

Market Linkages

Transfer of Technology

Social Pillar

Economic Pillar

Political pillar

Vision 2030

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Examples around the World• China has over 80 Industrial Parks with some hosting as many

as 200 companies. Many are owned by universities• Brazil has over 50 Industrial Parks • Egypt has over 15 Parks (UNDP support)• Czech Republic has over 30 business incubation parks • In Taiwan Hsinchu Science Based Industrial Park has over 180

high-tech companies• In Singapore the Singapore Science Park occupies 270,000 sq.

m floor space and has over 200 tenant companies • Silicon Valley is an example of a successful

Technology/Innovation Park• India has become a hub for computing for the rest of the

world through technology /Innovation parks 40

Strategic Objectives

1) To facilitate transfer of technology and promote local knowledge-based enterprises

2) To create an environment for inventiveness and innovativeness

3) To stimulate and manage the flow of knowledge and technology amongst university, R&D institutions, companies and markets

4) To provide other value added services together with high quality space and services

5) To translate Government policies into sectoral strategies and action plans

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Priority Sectors

1. Agro-processing 2. Agro-machinery3. Electric and electronics 4. Metal 5. Bio-technology6. ICT7. Packaging

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Why Nairobi

• First, big name companies are attracted to talent. There’s a reason that Silicon Valley is where every tech startup wants to be. It’s an ecosystem built on talent. Nairobi is exploding with world-calibre techies, and companies such as Google, Cisco, Nokia Seimens, and Airtel, (all of whom have built their African headquarters in Nairobi) have recognized that

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Why Nairobi

• Second, the innovative ideas that “catch” in places like Kenya are built for a different use-case than you traditionally see the US and Europe. Ushahidi and M-Pesa weren’t created in the West because the needs are not the same

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Why Nairobi

• Enough computer programmers and business grads coming out of good school programs.

• A strong tech corporate base for people to work with and cut their teeth on. These corporate giants are also the ones that sponsor and keep events going in the community.

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Why Nairobi

• An entrepreneurial culture.• A government that supports growth in tech

and eases business regulations around that growth.

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Incubation services1. Research and Development support 2. Provision of space and infrastructure ( water,

energy, premises) at subsidized rates3. Technical Support 4. Management Support5. Marketing Support 6. Financial support 7. Other services (to the public) like banking,

restaurants, museums, theatres and shopping malls may be provided in future to further subsidize incubated firms.

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Research/Innovation Incubation

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Industrial Park Incubator

Independent Innovators

University Research Pool

Other Research Pools

Technical Support

Work Space

Market Linkages

Business Planning Support

Finance Linkage

R&D Support

Management

Support

Other services

Stand-alone weaned Enterprise

Link Between Research Pools and the incubators

Innovation and Technology Park

Innovation and Technology Park

University Research Findings / Inventions

Commercialization Company/ Anchor

tenant

University Research Findings / Inventions

Commercialization Company/ Anchor

tenant

Research

Pools

Research

Pools

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Challenges of the innovation Ecosystem

• In Kenya and developing countries, necessity and poverty are the mothers of innovation

• In the US and the Silicon Valley, innovation is driven by aspiration, and it’s no coincidence Hollywood is very close. They “sexify everything”, including entrepreneurship (think of Justin Bieber or Ashton Kutcher to name a few).

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Challenges of the innovation Ecosystem

• If startups are to succeed, they must get to know the local contexts, which are multiple, obscure, intangible, and it takes time to get this vital understanding. In Africa, for instance, Nigeria is both a highly religious country where status is mostly reached through the oil & gas business. In Kenya, the population is more diverse, but also has its “niche” population which cannot be addressed in the same way

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Global Hubs of Innovation