Issue 9 Social Business Nov 2010 by Noviscape Consulting Group

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SOCIAL BUSINESS Social Entrepreneurship in Southeast Asia Socializing Business in Urban Asia

An Unusual Business: Social Economy in the Rice Culture Interview with Ms. Jittra Kochdech Roadmapping as a Strategic Tool to Survive Todayâ&#x20AC;&#x2122;s Marketplace

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LEADER

ISSUE 9 - SOCIAL BUSINESS

Welcome to Issue 9 of TrendNovation- a monthly magazine devoted to discussion of long-term technological, social and political trends in Southeast Asia. Issue 9 of TrendNovation focuses on social entrepreneurship - a phenomenon that is sweeping the region, and casting aside conventional notions of doing business. Asia is home to some of the world’s best-known and most successful social enterprises; the Grameen Bank microfinance model in Bangladesh has been embraced and adopted around the world. Though social entrepreneurship is typically categorized alongside traditional philanthropic, social enterprises, voluntary and aid work represents a new class of actor, distinct from civil society/NGOs and private-public partnerships (PPPs). As a new and distinct organizational category, social enterprises will require a new institutional infrastructure: new norms, laws, regulations, practices, and of course, markets. Our contributors have tried to emphasize this fundamental distinction using examples of initiatives that utilize business knowledge and skills for social objectives.

By Wyn Ellis Chief Editor

The growing buzz over social entrepreneurship has attracted the attention of governments and the international donor community, too. Our first article, ‘Social Entrepreneurship in Southeast Asia’ by Pred Evans and Sumalee Amnuaiporn of the British Council (Thailand) provides a helpful introduction to social enterprise, including a definition of this loosely-used term and a commentary on its different modalities around the region. The authors identify three key trends in the evolution of social enterprise in Southeast Asia over the coming decade. ‘Socializing Business in Urban Asia’ by Assoc. Prof. Dr. Aida Velasco (De La Salle University, Manila, Philippines) describes the emergence of social enterprises as a response to the pressing social problems in Southeast Asia’s crowded megacities. She highlights the growing engagement of the private sector beyond corporate social responsibility, and points to the success of programs around the region to exemplify that a social mission and profits can go hand-in-hand. She concludes by pointing to the future importance of BOP actors as active participants rather than passive consumers in new markets for products and services. In ‘An Unusual Business: Social Economy in the Rice Culture’ Dr. Pun-Arj Chairatana examines social entrepreneurs from the perspective of the rice sector. He points to challenges in formalization of social enterprises and the implications for BOP in terms of livelihoods, education and empowerment. TrendNovation this month interviews Jittra Kochdech, coordinator of the Try-Arm labor union in Thailand. She tells the story of how a labor dispute in a lingerie factory gave rise to an influential and profitable social enterprise that promotes worker rights and equity. And last but not least, in this issue’s TrendTools section, Dr. Nathasit Gerdsri and Ronald S. Vatananan discuss another important forecasting tool: ‘Roadmapping as a Strategic Tool to Survive Today’s Marketplace’. TrendNovation is available online at http://www.trendsoutheast.org. As always, your comments and feedback are invaluable to us.

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Social Entrepreneurship in Southeast Asia By Mr. Pred Evans and Ms. Sumalee Amnuaiporn

About The authors: Pred Evans is Director of Programs at the British Council in Thailand with responsibility for education, arts and English. He previously held the position of Director of Education for the British Council in Thailand. Prior to this, he was Country Manager of the British Council in Trinidad and Tobago. Sumalee Amnuaiporn is Programs Manager at the British Council in Thailand, responsible for BC’s Skills for Social Entrepreneurs program introduced two years ago.

IDEA: What is a Social Enterprise? The term ‘social enterprise’, though often heard, is used rather loosely, and its definition continues to be debated even in societies such as the UK or USA, where the so-called ‘Third Sector’ has enjoyed a long and active history. In general, the term is typically used to describe a business set up with the goal of addressing specific challenges in a community, society or on a larger scale. The most frequently-cited definition comes from the Office for Civil Society in the UK to refer to “… 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 maximize profit for shareholders and owners.” Impact Investment Exchange Asia, which focuses on regulating trading platforms for social enterprises and investors, explains that companies must meet key criteria to be recognized as social enterprises.

KEYWORDS: Social entrepreneurship; social enterprise; Southeast Asia; British Council For example, the primary reason for the entity’s existence must be to accomplish a specific positive social impact (not as an ancillary or secondary development, such as a company’s Corporate Social Responsibility program). Also, the company’s business model should reflect responsible entrepreneurship and growth for staff and overseers, beneficiaries/customers, overall community/environment. And finally, the company must retain a market orientation. We might note that the success of IIX itself is an early indicator of the rise of social enterprises.

Scenarios: Social Enterprise in Southeast Asia The goals and modalities of social enterprises in Southeast Asia naturally tend to reflect their economic and social contexts, and so we find for example in Indonesia that social entrepreneurship not only covers civic innovation but also reaches out to traditional as well as modern approaches. In contrast, social enterprises in Singapore tend to use innovations and modern technologies to ‘do good’. In Asia, social enterprises often need to be operated as for-profit organizations in order to generate cash flows required to maintain sustainability and growth. Social enterprises do not rely on handouts to survive; entrepreneurs in this region are often able to run their business to fulfill their objectives without support from government and funding from philanthropists. In this region, there are many issues – social, financial, environmental and educational – and there are also many NGOs running activities to tackle those problems. Those NGOs have often struggled and competed with one another to gain funding from those organizations in order to survive and help others at the same time.

Disclaimer : The opinions expressed herein are those of the authors and do not necessarily reﬂect the ofﬁcial positions of Noviscape Consulting Group or the Rockefeller Foundation. Copyright © Trendsoutheast 2009 - 2011. All Rights Reserved.

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In addition, the concept of social enterprise has only recently gained momentum in Southeast Asia. Pham Kieu Oanh, Director of the Centre for Social Initiatives Promotion (CSIP) observes that “Social enterprises as well as social entrepreneurs are new concepts in Vietnam.” Existing social enterprises and entrepreneurs who want to step into this field therefore must surmount new challenges, including lack of funding, weak capacity, lack of government support and lack of networks. Nevertheless, there are signs that social enterprise in Southeast Asia is growing and evolving on a sustainable trajectory. Young people have shown strong interest in becoming social entrepreneurs and are working innovatively to tackle issues in their own communities and societies. Governments have begun to recognize that SE might be the answer to solve problems such as poverty, education, social problems, etc. In Thailand, Prime Minister Abhisit Vejjajiva commented in his keynote speech to the Regional Social Enterprise Knowledge & Partnership Symposium in October 2010, “Social enterprise is a solution to social challenges…It [social enterprise] is a combination of entrepreneurial spirit with the social soul.” In Malaysia, social entrepreneurship is to be harnessed as a new strategy in government affirmative programs that encourage private involvement. In this region, we may take note of some emerging trends in social entrepreneurship that we may expect to witness over the course of the coming decade. The Philippines government launched the PhilippinesAustralia Community Assistance Program (PACAP), aiming to reduce poverty and achieve sustainable development partly through social entrepreneurship. The program was set up as a grant and mentoring program to help community entrepreneurs develop their community development projects. PACAP has worked with over 500 NGOs and grass-roots organizations to support over a thousand community-based projects, benefiting 250,000 poor people. During its last phase (2005 - 2010) PACAP funded almost 500 more projects. Agencies such as the Asian Development Bank and the British Council are also keen to unlock the potential of social enterprise in addressing socio-economic problems. The British Council’s Skills for Social Entrepreneurs program aims to raise awareness of the experiences of social entrepreneurs in the UK in the Asian region, and also to act as a focal point for social entrepreneurs from UK and the region to learn from each other and find new ways of doing business for social purposes. The program operates in China, Indonesia, Japan, New Zealand, the Philippines, Thailand and Vietnam.

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Implications: Young Social Enterprise: New Hope for the Region •

•

In many Southeast Asian countries, the younger generation is paying increasing attention to social entrepreneurship. This new trend lends new hope that the solution to many problems faced by Southeast Asia’s disadvantaged will be tackled by those young social entrepreneurs. In Thailand too, many competitions for young social entrepreneurs over the past two years have helped encourage young people to participate and develop their social business plans along the principles of social enterprises e.g. the Social Enterprise Business Plan Competition, arranged in collaboration with Chulalongkorn Business School, CYPN, British Council, Change Fusion and others. In Singapore, competitions and training programs have been set up to provide opportunities for the younger generation to develop their capacity in social entrepreneurship. For example, the Youth Social Entrepreneur Program was launched by the Singapore International Foundation, aiming to build and foster a regional network of Asian youth interested in this field. The startup and ongoing support for young social entrepreneurs will encourage the younger generation to step into this field.

More government support for social enterprises •

•

Given the increasing complexity of social and environmental issues nowadays, governments in Southeast Asia are starting to recognize the significance of social enterprises as a potentially potent mechanism to address some of these problems. In Thailand, the government developed a Social Enterprise Master Plan 2010-2014 in the hope that it will contribute towards sustainable development. The Master Plan will be implemented through more supportive regulations when the National Social Enterprise Act, which is now in process, comes into force. In Singapore, the government realizes that social enterprises can add value to society, and established the Social Enterprise Association to foster social entrepreneurship in the country, and offer various kinds of support to social enterprises. For social enterprises in this region, these are encouraging signals that they will probably not have to walk alone to pursue their social and environmental concerns but will also be able to seek government support to facilitate their work in some ways e.g. through specific financial regulations for social enterprises such as tax exemptions and other incentives. If such governmental support for social enterprises results in visible and more effective solutions to social, economical and environmental concerns, it is likely to be

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adopted as a model of best practice by other governments across the region

Early indicators: •

•

In Malaysia a survey distributed to 6,488 young Facebook users showed that 75 per cent of youths considered themselves as social entrepreneurs aiming for both profits and social objectives (people and environment). In the Philippines, one of most well-recognized social enterprises in the country - Rags2Riches (R2R) - was set up by a group of students and young professionals.

Drivers & Inhibitors: Drivers: •

•

Social enterprise networks Driven by ICTs and social networking tools, more networks are emerging among social enterprises, investors and government departments. Social Enterprise Network Asia (SENA) is a good example, with SE members from various Asian countries. SENA was conceived as a way to foster further collaboration in the region, and emerged after the British Council facilitated a trip to the UK for SE professionals in the region to learn from the UK’s own experiences. According to the UK Office for Civil Society, the UK has 62,000 registered social enterprises generating turnover of US$45 billion, representing five per cent of UK revenues. SENA and similar networking initiatives will enable social enterprises and related sectors to share knowledge and experiences and support each other in addressing problems e.g. through peer support for capacity building and funding issues. Networking will also stimulate more widespread and rapid adoption and diffusion of effective ‘best-practice’ approaches, business models and technical solutions to social and environmental problems at all levels (community, city, country and regional). In addition, social-entrepreneurship-related collaboration can provide excellent opportunities not only for social enterprises to network and share experiences, but also as the first port of call for investors, CSR and social venture funds interested in the latest trends. Clearly, this can lead to closer levels of collaboration and funding for social enterprises.

Inhibitors: •

Social enterprises as well as their partners will have to develop in several respects in order to work effectively to address issues in a sustainable way. Judging from past experience in the sector, social enterprises will need to acquire and develop their fundraising skills in order to secure startup and

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venture capital funds in an increasingly competitive fund-raising environment. They will also need to build capacity in traditional areas such as business management in order to operate their enterprise professionally and sustain a secure financial footing. Networking among social enterprises and related sectors is still at a relatively nascent stage, and will need further strengthening to realize the potential that such networks can unleash in terms of collaboration in information sharing, problem-solving, establishment of stable and sustainable business clusters, peer-to-peer groups and Communities of Practice (COPs).

From the examples above, we may anticipate much greater interest and participation by future entrepreneurs in this rapidly evolving field. The increasingly more intense networking among social enterprises, together with growing public sector support offers the prospect of new and unexpected alliances, new business models and new approaches to enable social entrepreneurs to work more effectively. This carries strong and encouraging implications for solving issues at community, country and regional levels, and of course, to give a boost to the goal of sustainable development. Dare we wish for a kinder, more caring world? References Hamm, Steve. Social Entrepreneurs Turn Business Sense to Good, Business Week, November 2008. Available at http://www.businessweek.com/magazine/ content/08_49/b4111048005937.htm Accessed on 31 January 2011 International Entrepreneurship, ‘Entrepreneurship in Cambodia’, April 2009. Available at http://www.internationalentrepreneurship.com/asia_ entrepreneur/cambodia_entrepreneur.asp Accessed on 28 January 2011 Jingga, Intan. Social Entrepreneurship in Small Business. Available at http://www.scribd.com/doc/34692032/Social-Entrepreneurship-in-SmallBusiness Accessed on 28 January 2011 Mahalingam, Eugene. “Push Needed for Social Entrepreneurship”, StarBizWeek, November 2010. Available at http://biz.thestar.com. my/news/story.asp?file=/2010/11/6/business/7372284&sec=business Accessed on 28 January 2011 Nabia, Jovel O., Social Entrepreneurship in the Philippines, Business World. October 2010. Available at http://www.bworldonline.com/main/ content.php?id=19157 Accessed on 31 January 2011 Pham Kieu Oanh, “Social Enterprise and Community Development Projects”, September 2010. Available at http://vacne.org.vn/en/default. aspx?newsid=513 Accessed on 20 January 2011 Sabrie, Mohamad Mohamad Salleh. Entrepreneurship Survey Among Malaysian Youths 2010. Available at http://www.scribd.com/doc/28127075/ Entrepreneurship-Survey-Among-Malaysian-Youths-2010 Accessed on 28 January 2011 Social Earth, ‘Singapore Launches New Youth Social Entrepreneur Program’, March 2010. Available at http://www.socialearth.org/singapore-launches-newyouth-social-entrepreneur-program# Accessed on 20 January 2011 Tee, Eddie. The Young Do-gooders Who Profit from their Ethics, February 2010. Available at http://www.cnngo.com/singapore/shop/singaporesstudent-social-entrepreneurs-347424 Accessed on 28 January 2011 www.civilsociety.co.uk www.socialenterprise.org.uk www.ashoka.org/social_entrepreneur www.asiaiix.com http://pacap.org.ph http://www.brac.net http://www.pda.or.th/eng http://www.changefusion.org

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Socializing Business in Urban Asia By Dr. Aida Licaros Velasco, DBA, Associate Professor at De La Salle University, Manila, Philippines

IDEA: Development and economic growth have always been associated with urbanization and the emergence of mega cities; the Asian Development Bank projects that by the year 2030, 55% of Asia will be urbanized (Choe & Laquian, 2008). Given that more than half of the world’s cities are in Asia, populated by more than half of the world’s population (UN DESA, 2009), urbanization will without doubt add to Asia’s socio-economic problems, particularly housing, employment, environmental degradation, food and water sources, equity, and quality of life. Though, such issues are usually approached through large-scale public sector interventions, experience of developed economies shows that this alone is not enough to address these problems in a sustainable manner.

KEYWORDS: Social innovation; social entrepreneurship; entrepreneurial solutions; business partnership; sustainability; affordability portation, or healthcare. The goal of recovering costs and generating a surplus to sustain the operation or application of the innovation has led to a new entrepreneurial discipline called social entrepreneurship. Many individuals have seen social entrepreneurship as an avenue to promote society’s growth and development and eventually translate this into equitable, prosperous, and improved living conditions for the disadvantaged in our societies. Failures by governments to tackle the many pressing social issues in emerging mega cities led individuals and groups of individuals (usually working through NGOs) to approach social concerns through entrepreneurial solutions. There is an emerging trend towards social entrepreneurship as a tool for poverty alleviation, creating business partnerships with low-income groups. The concept of doing business with the poor has long been espoused by Pralahad and others, and is taking root throughout Asia. The next ten years will mark a shift towards the establishment of the base of the pyramid (BOP) as a dominant target market.

Scenarios:

Implications:

Sustainability and social innovation

Innovations for marginalized groups

So what is social innovation? Social innovation refers to new products/services, processes, business models, strategies, organizations or infrastructure that satisfy a specific social need such as housing, education, trans-

Second, the need for housing by the growing population will force firms and entrepreneurs to use new business models to provide very low cost housing. Informal settlers occupying idle or vacant lands in the city can be assisted by providing low cost housing infrastructure. Tenants are now being involved in the construction of housing facilities, reducing labor costs. Volunteerism

Because sustainable interventions must be economically feasible, physically replicable, and politically acceptable, there is growing interest in multi-sector partnerships and new models of collaboration among community stakeholders. People have recognized the need to address these social issues and still create a profitable business venture. To meet this need, a new trend is emerging in Asia and in different parts of the world: social innovation and entrepreneurship. The success of the Grameen Bank in India, Centro Migrante in the Philippines, and the experience of many different cooperatives around the world have shown that a social mission and profit orientation can successfully coexist within an enterprise. This trend is expected to take a strong hold over the next decade.

Social entrepreneurship starts from the premise of understanding the root causes of social issues and developing social innovations that will solve these problems. First, products and services should be brought to the market at least cost not only for the producer, but also for the market to acquire such products or services. This will mean making the product cheaply available to the market. This in turn means more engagement by large firms in harnessing the BOP as a distribution channel. Innovations in adapting traditional trading practices are seen to be an important trend in the future.

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and active involvement of the community is seen as part of the solution to Asia’s housing problems. Some social entrepreneurs such as the Gawad Kalinga project in the Philippines have already proven the success of this business model. Third, a new model of pricing the product/service is emerging. This model: “Pay with service” may offer an effective strategy to sell products and services at low cost by using the services of the customers as part of the payment, thereby reducing total operating costs. Accommodation costs can be offset by cleaning services contributed by tenants in hotels and dormitories (Pier One Seafarers’ Dormitory, 2010). This makes the products/ service affordable to the BOP by using labor component as part of the payment. In the next 10 years, many more social enterprises will spring up in Southeast Asia, served by intermediary facilitating agencies such as clearing houses and exchanges (e.g. IIX), and contributing to various development agendas focusing on providing basic needs. Business schools in the region will offer more classes on social entrepreneurship, and NGOs will increasingly incorporate the concept of social entrepreneurship into their organizational missions.

Early indicators: • • • •

Exponential growth of new business based on the concept of social entrepreneurship helping the marginalized sector through their business involvement Increasing number of young people discovering the opportunity to help in job generation by putting up business that will cater to the need of the poor sectors Exponential growth of non-government organizations that aims to help in the development and growth of small and medium enterprises Emergence of intermediary agencies to support social enterprises, e.g. Impact Investment Exchange Asia (IIX). Such platforms are a real indicator of how financial markets are taking social entrepreneurship seriously

About The AUTHOR: Dr. Aida Licaros Velasco Dr. Aida Licaros Velasco is an Associate Professor at De La Salle University, Manila, Philippines. Her research area covers innovation and technology management, entrepreneurship, operations and supply chain management. She earned her Doctor of Business Administration, Master in Business Administration, and Bachelor of Science in Industrial Management Engineering minor in Chemical Engineering from De La Salle University. She had her post doctorate studies in innovation and technology management at the University of Sussex, Brighton, England. She is currently involved as the country leader for the Philippine team on the IRDC funded project on City Innovation Systems in ASEAN Megacities. She can be reached at aida.velasco@dlsu.edu.ph; aidalvelasco@yahoo.com

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Drivers & Inhibitors: Drivers: • • •

Increasing social problems brought about by globalization and urbanization of economies Increasing awareness of different sectors that social issues can better be addressed by engaging different stakeholders and not only government Focus of ASEAN in promoting entrepreneurship among different ASEAN countries

Inhibitors: • •

Misconception on the potential of the poor as business partners Traditional thinking of profit as the ultimate goal of any business enterprise

The changing future The next ten years will witness emergence of products and services offered in new ways, with affordable price points. The operational side of the business model will require greater participation of customers in marketing and logistics, allowing prices to be kept low. A new way of thinking in earning profit through social involvement is emerging. As big firms worry about how they will live up to their commitment to corporate social responsibility to assure sustainability, small entrepreneurs are already starting their businesses based on the premise of social commitment for sustainable business. This is the new playing field for business in the next decade.

References Bessant, J. and Caffyn, S. (1997) High involvement innovation, International Journal of Technology Management, Vol:14, Pages:7-28 Bosma, N. and Levie, J. (2010) Global Entrepreneurship Monitor: 2009 Global Report, Global Entrepreneurship Research Association (GERA). Curl, J. (2009) For All The People: Uncovering the Hidden History of Cooperation, Cooperative Movements, and Communalism in America, PM Press. Dees, J. G. (1998) The Meaning of “Social Entrepreneurship”, Graduate School of Business, Stanford University, October 31, 1998. Mahathir, M. (2009) Fatal Consluences?, in Esack, F. and Chiddy, S. (eds.) Islam and AIDS, OneWorld Publications. Piper, J. M. (1993) Rice in South-East Asia: Cultures and Landscapes. UK: Oxford University Press. Witkin, J. (2009) Innovation at the Bottom of the Pyramid in Green: A Blog About Energy and the Environment, September 18, 2009, The New York Times. Zahra, S. A., Rawhouser, H. N., Bhawe, N. Neubaum, D. O., and Hayton, J. C. (2008) Globalization of Social Entrepreneurship Opportunities, Strategic Entrepreneurship Journal, Vol. 2, pp.. 117 - 131.

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An Unusual Business:

Social Economy in the Rice Culture By Dr. Pun-Arj Chairatana, Managing Director – Noviscape Consulting Group

IDEA:

KEYWORDS: Social economy; Social innovation; Social enterprise culture; Formalization well-established trilogy among a mainstream economist. More confusion has topped up a general perception of what social business should be through an invention of dedicated terminology, e.g. ‘social entrepreneur’, ‘social enterprise’, and ‘social innovations’.

Rice, a simple crop, has found its way into the traditions of Southeast Asians. The crop defines the region as a whole through its indispensable food and cultural roots. Countless social and economic traditions, arts and handicraft, norms and taboos, have been interwoven into rice culture. Rice portrays the region as a single entity with the economic divide between the village poor, urban upper classes and the financially sufficient (Piper, 1993). The myth of rice culture has shown us that contemporary Southeast Asians are no longer divided by geographical boundaries but instead are split between the ‘haves’ and the ‘havenots’, i.e., an expanded inequality. Adopting a structured social oriented economic ideology from more advanced economies into an intra-regional context is a huge challenge for practitioners and policy makers. Southeast Asia, with a wide developmental gap, shares a complexity and diversity on such informal economic evolution with its neighboring giants and the rest of the world. How will innovations from the region’s social entrepreneurs prosper and nurture ‘a contemporary rice culture’ and what will be the influencing ingredients that may shape the image of the region’s social economy over the next decade? These are the key questions to be discussed in this article.

Southeast Asia’s social economy may not necessarily resemble that in other parts of the world. Social entrepreneurs and their enterprises still evolve and compete with the mainstream business development model against traditional small and medium sized enterprises (SMEs) and other large corporations. By sharing similar resources and markets, the future of social economy and entrepreneurial development in Southeast Asia in the next decade would partly contribute to socio-economic transformation by engaging with 3 key elements; innovations, entrepreneurial culture, and formalization.

Scenarios:

Conventional business innovation embraces firm growth and market competition (Bessant and Caffyn, 1997). Existing social innovations in the region emerged from the need to solve social problems through political and economic solutions to reduce poverty and enable all groups of people through new opportunity, and to participate in decision-making, especially in areas with greater inequality (gender,

The social sector or the third sector is one of three key groups of actors— the private sector, the public sector, and the social economy. In line with this perspective, agriculture, industry, and services are a

Social innovation 2.0: The most important and smallest unit within the social sector is the social entrepreneur. It is safe to illustrate that the first generation of social entrepreneurship applied the social sector as the business sector. The core idea emerges from an adoption of Schumpeterian economics and business school that describes a mind-set and a kind of behavior that can be manifest anywhere, especially in a world in which sector boundaries are blurring. As one species in the genus entrepreneur, social entrepreneurs glorify a social mission that presents them with some distinctive challenges (Dees, 1998).

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and distribution of education, health, and income). In the forthcoming attempt to rectify the regional social innovations, there will be 4 key areas of developments: 1. Social technological innovation: a social extension of spilled over benefit and exploitation from an application of existing industrial innovations within the region, especially in the food and energy sectors. Innovation at the Bottom-of-the-Pyramid (IBoP) has proved that the role of technology will be more crucial in the future to tackle the issues on digital poverty, accessibility to information, and other tangible facilities (Witkin, 2009). There will be more regional poor aspiring to emerge from poverty and join the organized sector as micro-consumers and micro-producers, especially for the new rural middle class. 2. Social process innovation: unfortunately, a bridge between such proven technology and social business demands will not easily constructed and the social entrepreneur will face with an obstacle from the current political economic regimes (intellectual property rights or IPR, taxation, state monopoly, and other red tape). 3. Social paradigm innovation: Social enterprise cannot directly compete with the more experienced incumbents by developing product/service/process innovations in conventional ways. Conventional socio-economic activities subscribe stage of firm capability development on function, efficiency, and innovation. Levels of enterprise capability have been justified by the capability to perform complex assignments and earn stateof-the-art intellectual property. It will be more difficult for the growing social enterprises to catch up or disrupt the competitors in the market through such conventional innovation management paradigm. Combination of confined targeted issues from the series of existing rice culture disparity, especially in the relationship between gender, power and democratization, ethnic group, new rural middle class, religion and the general welfare of under-privileged and ordinary citizens will be a great source of social innovation ideation. 4. Intangible aspects of social innovation: In the near future, a formation of the BOP social network, censorship and state monopoly control over basic resources will broaden the gap between rich and poor. These are intangible, and it leads the social enterprise to shift

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the paradigm within the system. Social innovation will increasingly play a crucial role as bridging elements between knowledge ownership and social entrepreneurial regimes, especially, on whom the key players interact on an idea of inclusiveness and how robust social business models for intangible innovation will emerge to nurture the firm growth and benefit the rice culture society.

Social enterprise culture: In the 1980s, the concept of ‘innovators for the public’ or ‘public entrepreneurs’, the Schumpeterian style of reformist or revolutionist of production of socially important goods, like education and healthcare and access to credit, were publicized by Dreyton’s Ashoka. By the 1990s, the ‘social entrepreneur’ became the phrase to describe the innovators who behave in a social-sector setting the same way business entrepreneurs behave in a business or economic setting, changing the patterns of production. Starting a new business is considered as a good career choice among an individual in Southeast Asia, especially for Chinese and Indian diasporas. In this sense, the Southeast Asian late-coming social entrepreneurs have learned from the international forerunner. Social enterprise culture is shaped by various factor conditions are not necessarily similar to the ordinary for-profit establishment. After the start-up survives its first 3 years, a critical number of the social enterprises will enter into an expansion stage. Those social entrepreneurs will face the transitional challenges. Firm growth model and business attitude will shape entrepreneurial culture in the next decade. 1. Firm Growth Model: After a fully implemented ASEAN Economic Community (AEC) in 2015, some survival social enterprises will

Source: http://idc-insights-community.com/posts/36f02822de

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market. A new business model may evolve from the juggling between a mainstream corporate social responsibility (CSR) style of business enterprise and the “self-help styled business” among less privileged entrepreneurs, e.g. Try Arm in Thailand.2

Formalization of the social sector: Source: http://blog.socialware.com/2011/05/01/social-media-≠-social-business/

embark into a cross road to select business paths. One is to gain ‘a status quo’ through the existing corporate regime platform by bending the rules or playing along with those business giants by enacting ‘a cultural changing agent role’ to advocate an alternative enterprise culture. 2. Attitude towards social business conduct: Current attitudes among young social entrepreneurs in Southeast Asia are prospering, which can be observed from the new start-up social enterprises in the IT and media sectors in Thailand (BE Magazine)1, religious social businesses (Islamic social business in Malaysia and Indonesia and Catholic social business in the Philippines), and pro-poor social business in Indochina. Key challenges towards attitudinal transformation in the next decades will shift from these well-educated new generation group into grey people, semiautonomy agencies, and the ordinary house wife according to the penetration of ICT and severity of intangible inequality (Mahathir, 2009). Also, the existing pool of entrepreneurial role models and success cases may not be dynamic enough to shift or expand the ideal horizon of social entrepreneur culture into distinctive characteristics to those in the

About The AUTHOR: Dr. Pun-Arj Chairatana Dr. Chairatana is Managing Director of Noviscape Consulting Group (NCG). He is the Principal Investigator of Trendnovation Southeast Newsletters. His areas of research are intertwined between foresight and innovation management. He is working on the emerging issues of innovation and strategic foresight in Megacities.

An organization of social businesses has slowly evolved over time in the free and fiercely competitive Asia-Pacific market. Social enterprise represents a current organizational set-up, while an unpopular cooperative can be considered as the first wave of social entrepreneurial organization (Curl, 2009). The other two profound established pillars; the public sector and social economy or an informal economy, which embraces a wide range of institutional set-ups from community have been integrated voluntary and not-for-profit activities associated with for-profit business enterprises for centuries. This is comparable with the classical research triangle model of government, private enterprises, and the educational institutes, interaction. In the forthcoming years, there will be an active movement to formalize the regional social sector from 3 forces; nationalization, bureaucratization, and education. 1. Nationalization: Evolving social enterprises in SEA will be imposed with nationalization attempt from the government. These will positively and negatively affect social sector through formulation of social business policy, social enterprise registration, rules and regulations, tax incentives and supporting schemes. In the opposite direction, internationalization of sector will mainly strengthen local social enterprise from networking and social venture in particular areas (Zahra, Rawhouser, Bhawe, Neubaum, and Hayton, 2008). The roles of international social venture groups (i.e. Skroll Foundation, Ashoka, etc.) may face with national barrier on social engagement when their networked grantees become more mature and established. 2. Bureaucratization: National governments and groups of anchored non-governmental organizations (NGOs) in Southeast Asia will cooperate more to impose stricter control over social enterprise set-up, clustering, firm registration, and business transaction as it will directly affect the social administration and indirectly boost self-reliance of the underprivileged and beneficial groups through democratization and empowering their living standard, particularly in religion, energy, and knowledge sectors. 3. Education: There will be more new intensive, advanced and executive degrees on social entrepreneurship in Southeast Asia, particularly in the ASEAN5 nations, especially the Philippines and

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Singapore, while the Indo-China countries will have more access to a learning-by-doing style of selfhelp and mentoring education from various local and international support organizations3.

Implications: •

• • •

•

Encouraging for-profit entrepreneurs to tackle social issues and to provide support, working on income earning strategies for non-profits, create a blurring stage on a hybrid structures between the roles played by non-profits and for-profit groups in achieving sustainable social impact. Strategizing roles and contribution among key players will be very crucial for the future development of social economy. System failure and vicious cycle of social works will accelerate a new entry of the disappointed idealistic newcomer to solve social problems. A tipping point of an impact on a shift of social enterprise culture will be in a balancing focus on an expression of pragmatism and idealism. Social enterprise registration will create an entry barrier to social market. Social business ownership foresight is a more appropriate point of departure to investigate a possible future of social business. Formation of policy and business model with special reference to local norms and focus on urban and rural disparity should embrace rice culture with concepts of social innovation and social entrepreneurship.

Early indicators: •

•

A positive perception towards entrepreneurships can be seen in the Philippines and Thailand, but reluctant to take a high risk with less confidence to start a new business or seeking a new business opportunity. This contrast with the situation in Malaysia and Singapore, which contains a practical entrepreneurial DNA (GEM, 2006 and 2007) (Bosma, and Levie, 2010). In general, entrepreneurs in key regional economic power houses disregard a desirable society with similar standard of living, except for Thais, who share the highest preference for such ideal society (GEM, 2006) (Bosma, and Levie, 2010). Across the region, males are significantly more likely than female to start businesses. Thailand has the narrowest gender gap compared with its neighbors and those countries with high income (GEM, 2006) (Bosma, and Levie, 2010). Asian Institute of Management (AIM) was the regional pioneer educational institute to set up a Social and Development Entrepreneurship Program (SDEP) under its Asian Center for Entrepreneurship in 2001. Establishment of Thailand Social Enterprise Office

•

(TSEO) in late 2010. Social business for HIV/AIDs infected groups in Thailand and Islamic females in Malaysia (Mahathir, 2009).

Drivers & Inhibitors: Drivers: • • • •

Establishment of dedicated social enterprise development authority to promote social business activities. Clear and definitive ownership legislative structure will increase and induce new social business startup to enter the market. New media coverage for new business cases and updating as knowledge diffusion channels. Existing social norm in Southeast Asia on hospitality and harmonious living with nature.

Inhibitors: • • •

Less prioritized public subsidized and promoted sub-sectors may suffer from under representation and general supporting schemes. Too rigid and formal pedagogy may deteriorate an implementation and innovation in social sector. Risk averse ideology among an individual is prohibited an entry of new business start-up into the market, especially in the Philippines and Thailand.

References BE Magazine is the “Big Issue” version of the first social magazine business in Thailand. Mr. Arun Achapilas.

Try Arm is lingerie brand for group of female business owners who were laid off from Triumph (Thailand) in the mid 2000s. 2

ASEAN5 composes of Indonesia, the Philippines, Malaysia, Singapore, and Thailand.

Bessant, J. and Caffyn, S. (1997) High involvement innovation, International Journal of Technology Management, Vol:14, Pages:7-28 Bosma, N. and Levie, J. (2010) Global Entrepreneurship Monitor: 2009 Global Report, Global Entrepreneurship Research Association (GERA). Curl, J. (2009) For All The People: Uncovering the Hidden History of Cooperation, Cooperative Movements, and Communalism in America, PM Press. Dees, J. G. (1998) The Meaning of “Social Entrepreneurship”, Graduate School of Business, Stanford University, October 31, 1998. Mahathir, M. (2009) Fatal Consluences?, in Esack, F. and Chiddy, S. (eds.) Islam and AIDS, OneWorld Publications. Piper, J. M. (1993) Rice in South-East Asia: Cultures and Landscapes.UK: Oxford University Press. Witkin, J. (2009) Innovation at the Bottom of the Pyramid in Green: A Blog About Energy and the Environment, September 18, 2009, The New York Times. Zahra, S. A., Rawhouser, H. N., Bhawe, N. Neubaum, D. O., and Hayton, J. C. (2008) Globalization of Social Entrepreneurship Opportunities, Strategic Entrepreneurship Journal, Vol. 2, pp.. 117 - 131.

TRENDNOVATION SOUTHEAST NEWSLETTER

INTERVIEW with MS. Jittra Kochdech

Try Arm: From lingerie protest to social enterprise By Dr. Pun-Arj Chairatana,

Managing Director – Noviscape Consulting Group And Ms. Nartrapee Wongseangchundr

In the midst of Thailand’s political protests, the labor dispute at Triumph drew wide public attention. The fight began when a group of female workers demanded that the company respected their rights after being laid off, but took an unexpected and unconventional twist, as it led to a different way of doing a business- a social enterprise. The workers set up their own company, Try Arm, pledging to prioritize the well-being of workers, their friends and society, rather than simply focus on profits. Try Arm has subsequently attracted much attention as an alternative business model. Jittra Kochdech, a former worker and President of Try Arm labor union, currently coordinates Try Arm employees and serves as advisor to the Try Arm labor union. She tells us the Try Arm story in this interview with TrendNovation.

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Q: How did the story start, and why did it grab the public’s attention? “One of the reasons why the dispute was able to draw public attention was that it exemplified a new and creative means of protest that was smart and constructive, compared with traditional forms of protest such as blocking streets or giving out leaflets. It also offered new hope to Thailand’s many skilled and unskilled workers who feel their needs are rarely taken seriously. Our message was communicated through positive action- producing and selling real, high quality garments in order to demonstrate their skills and the unfairness of their dismissal. The name of the new company- Try Arm- also poked fun at their previous employer (Triumph), which helped win support. Moreover, Try Arm garments sell at a third of the price of the original previous brand, using the same standard of materials and workmanship. This innovative method of protest was covered by the media and Try Arm obtained its first order, worth 20,000 Euros from Switzerland. Additional orders soon followed, including from many domestic customers who had heard our story.”

Q: What tools and mechanisms were important in communicating Try Arm’s standpoint? “This fight derived its advantage from the broader communicative space in modern society. This fact gave “Try Arm” a strong network of supporters, including interested academics and human rights advocates. Volunteer student groups offered to help write articles and spreading the story, and other college students reported on the group’s movement while developing mutual ties and relations. Others helped translate information into English and maintain the website. We also chose to leverage on technology and social networks to tell our story and promote the firm as well as communicate stories. This resulted in a very positive feedback, and the moral boost was as important as the additional sales generated. Another step forward was the decision to enhance value added of the group and its products by building the “Try Arm” brand. We didn’t want the group to be just another collective association because we wanted to avoid the old working cycle that is usually associated with exploitation, and that would not have brought any significant change.”

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Q: What principles does Try Arm follow in doing business? “The collective group of Try Arm is in a form of cooperative that involves everybody’s equal participation. It began with an association of 35 former employees who pooled their efforts to raise funds. The group never imagined building a large business. All they did was to fight and persevere to run the firm on the philosophy of sufficiency; they never once thought about expansion through borrowing. Even though an American investor offered major financial support for expansion of factories, they declined this offer, because they feared a return to the old working system. In the beginning, they happily worked without remuneration, but as Try Arm’s popularity increased, orders started to come in, and now all members earn 300 baht per day. Though this was less than they earned with the old company, this was compensated by the lower stress level, better quality of life, and friendly, non-exploitative working environment. The workers are satisfied and proud.”

Q: What social initiatives has Try Arm introduced? “What is interesting about the Try Arm business is not its organization as a profit-making collective, but its retention of social values. How can a business provide mutual support among colleagues and increase social equity within the community? The group is confident that its creative power can change society for the better. For example, the group initiated a “FairFair” project to assist various labor organizations, selling Try Arm garments at a 20% discount; it also donates to relevant activities of these unions, and supports activities such as labor strikes to demand better employment status. We also send representatives to work with different organizations demanding higher minimum wages or other basic benefits. We are also setting up a work safety institute. This has all been made possible by the steady flow of orders which gave us financial stability. In the near future, the group plans to establish a fund to support union issues, help other labor groups establish new unions, and help other unions negotiate with their employers on equity issues.” Evidently, Try Arm sets an ideal example and sends the powerful and positive message that profits and social responsibility can co-exist. When people work with happiness and contribute economic value, it stabilizes our society and strengthens our economy.

“Kam Paka”, a famous thai columnist support this group of ex-factory female workers by being a celebrity model for Try Arm lingery product

TRENDNOVATION SOUTHEAST NEWSLETTER

TREND TOOLS Road mapping as a Strategic Tool to Survive Today’s Marketplace By Dr. Nathasit Gerdsri and Ronald S. Vatananan

About The authors: Dr. Nathasit Gerdsri is Assistant Professor of Technology and Innovation Management and Program Chairs of New Technology Venture and Management & Strategy at College of Management, Mahidol University, Thailand. He is also a visiting faculty at Europa Institut of MBA, Saarland University, Germany where he regularly visits every summer to offer a course on Strategic Management of Change. Ronald S. Vatananan is a Ph.D. student at the College of Management, Mahidol University (CMMU) Thailand. His research interest is in the area of technology roadmapping with a focus on measuring the changes of market and technology drivers and mapping them into the TRM process.

Sustainable growth and development have become the cornerstones for organizational survival on the competitive battlefield of today’s global economy. As markets become more consumer-driven, competitive pressure intensifies and even the most successful business struggles to keep up. To obtain and maintain an edge over the competition, organizations need strategies to build a competitive advantage. Roadmapping has become a strategic tool of choice to link technology development into business strategy.

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Competencies such as knowledge, innovativeness and technologies have thus become important weapons for businesses to develop or maintain their competitive advantage. In the face of fast and constant change, it is extremely difficult for most businesses to adjust and adapt their strategy to achieve sustainable growth and development. Agility - the ability to anticipate and build the capabilities to meet the changing needs of consumers and markets is therefore a vital survival skill for any organization that seeks long-term sustainability.

What is Roadmapping? Used as a strategic tool, the roadmapping process can identify, evaluate, and select strategic alternatives to achieve a better competitive position. The main objective of roadmapping process is to link requirements with capabilities and to connect business with technology strategies. Implementation of a roadmapping process can be executed in three stages (Figure 1) where each stage comes with its own objectives and challenges. The roadmapping process generates a consensus view or vision of a future strategic landscape available to decision makers. A roadmap identifies critical requirements, performance targets, and alternatives for the development of capabilities necessary to meet requirements, targets or policy goals. A roadmap also identifies precise objectives and provides a rationale for efficient and cost-effective resource allocation to support critical enabling technologies. The objective or reason for an organization to develop and implement a roadmapping process is to anticipate social, market and technological changes as a means to develop an effective long-term corporate survival strategy. To be successful, an organization needs not only to be able to forecast such changes, but also must be able to integrate them into planning processes. Roadmapping objectives are generally customer–driven, focusing on developing an understanding of industry, markets and customer problems. The intended function of roadmapping determines the degree of detail displayed by a roadmap document. As a visual communication medium a roadmap is aimed at specific groups (e.g. management, administration, engineers, and marketing) all of which may have different perspectives, priorities and expertise. Naturally, the level of interest of the target audience defines the optimal level of detail contained within any roadmap, and it is important for an organization to understand the different levels of detail to suit any target audience. Some common functions and uses of roadmapping are to enhance decisionmaking, provide strategy and direction, assist forecasting and foresight, improve planning and coordination, support knowledge and innovation management, integrate the internal and external business environment, as well as management tools, organizational processes and technologies. The graphical architecture of a roadmap document is a time-based diagram that visually portrays links and relationships among capabilities and requirements. The roadmap presents an extended glimpse at a potential future, focusing on the specific knowledge of a chosen field.

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The ability to display and connect time-based knowledge makes roadmapping a powerful strategic planning tool. Roadmaps may be represented in many graphical formats, but the most common roadmap architecture is a multilayered approach, acknowledging the need to link capabilities such as technologies to requirements such as market needs. A generic format for a roadmap is a two-dimensional diagram, representing its components on a vertical axis and a timeframe on a horizontal axis (Figure 2). The vertical axis of a roadmap comprises several layers and sub-layers customized to meet the particular needs associated with a roadmapping activity. The horizontal axis represents the timeframe of the roadmap, displaying the past, present and possible futures to reflect the evolution and anticipated changes in business drivers and technologies. The time span displayed on the horizontal axis depends on the degree of change to which an organization is exposed. Each industry follows its own distinct ‘clockspeed’, representing the industry’s evolutionary life cycle; an industry’s clockspeed is determined by the rate of introduction of new products, processes and organizational structures. A multilayer roadmap will typically comprise three major layers: upper, middle, and lower. The upper layer shows the market and business aspects of an organization, representing requirements that reflect business drivers and trends. The middle- or context layer is the focal point around which a roadmap is built, and connects the upper with the lower layer. The middlelayer is essential as it bridges the technical and commercial perspectives of a roadmap. It can also represent constructs such as product and service development, innovation and knowledge creating/sharing, program and project planning, technology planning, and policy planning. The lower layer of a roadmap illustrates an organization’s existing or potential capabilities, including knowledge, skills, resources and technologies.

Why should an organization implement a roadmapping process? Firms can benefit from roadmapping processes on both individual and organizational levels. On the individual level, roadmapping improves communication and information sharing amongst teams and across the organization. As a communication medium, a roadmap offers a high-level, long-term perspective of an organization’s direction, objectives and targets. In addition, creating a roadmap document brings together members from different departments and levels of the organization to engage in constructive discussions. This open cross-functional and cross-level communication helps integrate processes and policies across departments, aligning departments and individuals with organizational objectives. In addition, the roadmapping process can develop external links to markets, suppliers, business partners and competitors. This ‘link to the real world’ enables the organization to connect business and technology strate-

Fig. 1: Stages of the roadmapping process

Fig. 2: Generic Roadmap Architecture

gies to fine-tune allocation of organizational resources with market needs.

Challenges in implementation Organizations face several challenges developing and implementing technology roadmapping (TRM) into their existing processes and operations. Perhaps the most important of these is the need to keep the roadmapping process alive throughout its development and subsequent integration into existing business processes. Because implementing a roadmapping process can have seismic implications for an organization’s structure and culture, resistance is all but inevitable. Though change management techniques can oil the wheels, maintaining and updating a roadmapping process is constantly constrained by path dependency as well as a constantly changing external market environment.

References Gerdsri, N., & Vatananan, R. S. (2007). Dynamics of Technology Roadmapping (TRM) Implementation. Portland International Conference on Management of Engineering and Technology PICMET (pp. 1577-1583).

Mr. Pred Evans Ms. Sumalee Amnuaiporn Dr. Aida Licaros Velasco Dr. Pun-Arj Chairatana Ms. Jittra Kochdech Dr. Nathasit Gerdsri Mr. Ronald S. Vatananan Writers / Information Specialists Preeda Chaiyanajit Nartrapee Wongseangchundr Project co-ordinators William Wyn Ellis Chief Editor Pinchathana Atthiwatthana Graphic Designer Regional Horizon / Environment Scanning (HS/ES) and trend monitoring for issues relevant to people, life, and regional transformation across the Southeast Asian region.

Trendnovation Southeast Newsletter is published by

Noviscape Consulting Group (NCG) www.noviscape.com