th
SUMMIT REPORT
7 SOCIAL ENTREPRENEURS SUMMIT 2008
Connecting Markets and Meaning
20-22 January, 2008 R端schlikon, Switzerland
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Table of Contents Introduction ................................................................................... 3 Day 1 – Social Entrepreneurs Community ................................................. 4 Day 2 - Welcoming resource providers and other participants ........................ 8 Session I - Showcasing entrepreneurial approaches: Issues............................... 10 Issue 1 - Sustaining and Strengthening Rural Communities.................................................. Issue 2 - Improving Infrastructure for Health and Access to it .............................................. Issue 3 - Transforming Information and Learning Systems and Practices.................................. Issue 4 – Revolutionizing Financial Access and Market Opportunities ...................................... Issue 5 – Preparing Young People for Full and Purposeful Employment ................................... Issue 6 - Beyond Good Intentions: Increasing Opportunities for Women .................................. Issue 7 - Saving the Planet one Individual at a Time ......................................................... Issue 8 - Approaches to Unleash the Power of the Conscious Consumer ..................................
10 10 11 12 13 13 14 14
Session II - Showcasing entrepreneurial approaches: Regions............................ 15 Region 1 - Asia ..................................................................................................... Region 2 – Europe.................................................................................................. Region 3 – Latin America ......................................................................................... Region 4 – North America......................................................................................... Region 5 – Sub-Saharan Africa ................................................................................... Region 6 – Middle East and North Africa........................................................................ Region 7 - Global ..................................................................................................
15 15 16 17 18 18 19
Session III - Showcasing the Resource Providers............................................. 21
Day 3 – More Learning and Networking Time............................................24 Special Thanks ...............................................................................26
Photo collage pages New members of the Schwab Foundation Community ...................................... ..5 Networking among Social Entrepreneurs ........................................................ 8 Faces of Change ................................................................................... 20 Faces Accelerating Change ...................................................................... 23 Networking among Social Entrepreneurs and Resource Providers ........................ 26
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Introduction Approximately 250 invited participants gathered at the Swiss Re Centre for Global Dialogue on the shores of Lake Zurich for the Seventh Global Summit on Social Entrepreneurship organized by the Schwab Foundation for Social Entrepreneurship. Participants included accomplished social entrepreneurs selected to the Schwab Foundation’s community and leaders and senior managers of foundations, investment banks, private equity firms, global corporations, media companies and academic institutions. The theme of the Summit, Connecting Markets and Meaning, reviewed the ways “resource providers” engage and learn from social entrepreneurs, and how social entrepreneurs make the most of the opportunity arising from increased interest in social entrepreneurship to advance their respective missions. The term “resource provider” encompassed a broad spectrum of individuals and organizations offering a diverse array of support from capital to advice on areas of critical importance to social entrepreneurs. The Summit sought to test an entirely new design for a gathering of this nature and size. The concept was based on input received from social entrepreneurs themselves who challenged the Foundation to design an event underpinned by two organizing principles: First, set aside the plenary speakers, panels and speeches delivered from podiums and platforms by well-meaning experts. Create a level playing field where all participants have the same opportunity to listen to the insights and knowledge of everyone in the group by designing a program where “everyone is a learner, and everyone is a teacher”, to borrow a phrase from Barefoot College’s Bunker Roy. Second, turn the usual into the unusual. Instead of social entrepreneurs trying to seduce, persuade and cajole resource providers into falling in love with what they do – how about flipping it around? Create a situation where resource providers showcase what they are doing to support social entrepreneurs, and how and where they are operating. The Schwab Foundation considered these recommendations with some initial trepidation. Was it possible to design a Summit without plenary speakers, panel presentations and similar formats that are part and parcel of every conference across the globe? How would the Summit attract non-social entrepreneurs to come if the program did not list a host of readily visible and widely recognizable names? Would resource providers be willing to do the “pitching” to social entrepreneurs? Based on the feedback received from Summit participants, the answer to these questions is a resounding “yes”. Many noted that this was the best Summit yet– indeed, some claimed it was the best conference they had been to. This report attempts to capture the content and spirit of the discussions held over the course of just over two days, from January 20th to 22nd.
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Day 1 – Social Entrepreneurs Community The first day was open only to social entrepreneurs in the Schwab Foundation’s community, today comprising 140 members and 131 organizations (some are co-founded) from 44 countries. Attending were approximately 63% of the community members (88) chosen since 2001 when the Foundation began selecting them. Objective: To continue to build the community of accomplished social entrepreneurs by creating opportunities where they learn from one another and identify areas where mutual collaboration can increase the effectiveness of their respective efforts. The morning began with a formal introduction of the social entrepreneurs most recently selected to the community. These 25 individuals and their 24 respective organizations are: • • • • • • • • • • • • • • • • • • • • • • • •
Taffy Adler – Johannesburg Housing Company - South Africa Geoffrey Cape – Evergreen – Canada Anne Cotton – Camfed – UK Macarena Currín – Rodelillo – Chile Alvaro Dávila – Fundación Social - Colombia Gustavo Gennuso – Gente Nueva - Argentina Ron Grzywinski & Mary Houghton – ShoreBank Corporation – USA Harish Hande – Selco – India Andreas Heinecke – Dialogue in the Dark - Germany Kenny Low – City Harvest Education Center and O School - Singapore Mary Anne Muller – Fundación Origen – Chile Fernando Nilo – Recycla Chile - Chile Peter Orban – Napra Forgó Kht – Hungary Reed Paget – Belu – United Kingdom Bilha Pimenta – Kav-Or – Israel Marco Roveda – LifeGate Group - Italy Amitabha Sadangi – International Development Enterprises (IDE) – India Mustafa Sari – Doga Gözculeri Dernegi - Turkey JB Schramm – College Summit – USA Anton Soedjarwo – Yayasan Dian Desa - Indonesia Anne-Karine Stocchetti – Gepetto and Optimômes – France Rose Volz-Schmidt – Wellcome - Germany Bart Weetjens – Apopo – Belgium Ariel Zylbersztejn – Cinepop – Mexico
Following the formal presentation, social entrepreneurs gathered in groups of ten, combining new community members with more seasoned ones. For over an hour, social entrepreneurs exchanged information about the mission and activities of their organizations, the geographical regions where they operated, the number of beneficiaries directly impacted by their actions, their business model and annual budget (including the percent of revenues coming from earned income). They shared their most important achievements, biggest hurdles and three year plans. This initial group discussion provided an important “ice-breaker”, particularly for new members but also to reconnect and update long-standing members on recent advances and challenges.
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Some of the newest members of the Schwab Foundation community
Kenny Low from Singapore
Mary Anne M端ller from Chile
Bilha Pimenta from Israel
Harish Hande from India
Reed Paget from the United Kingdom
Taffy Adler from South Africa
Bart Weetjens from Tanzania
Ariel Zylbersztejn from Mexico
Ann Cotton from the United Kingdom
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After a break, the groups focused on self-assessment – which was captured in the session title: “Mirror Mirror on the Wall: The Perils of Self-Deception”. The session was introduced by Pamela Hartigan, Managing Director of the Schwab Foundation, noting that as mission-driven organizations have mushroomed around the world, many are doing the same thing, in the same place, with the same communities – and vying for the same resources. A few are highly effective and efficient, developing monitoring and evaluation tools to benchmark their progress and impact. Many live in a fairy tale, convinced through isolated anecdotes from a few beneficiaries that what they are doing deserves to be supported on an ongoing basis by external resources. While this pattern is changing with the advent of measurement rigor in mission-driven enterprises – the following questions still arise for every social entrepreneur: Who else – whether public or private - is delivering what my organization delivers to the groups we have targeted? How do we know what we are doing is at least as effective as our competition? How do we prove our impact to ourselves, to our communities and to our investors? Do we perhaps have blind spots that are inhibiting us from coming to grips with a decision to close programs down that aren’t working, or merge with other organizations that are doing better?
Social Entrepreneurs listen and share
…. and learn from one another
Following lunch, social entrepreneurs met again in groups, this time to discuss the theme: “Balancing Management Needs, Money Needs and my Own”. For social entrepreneurs, managing multiple and varied demands is an ongoing and unique process, similar and yet different from the demands faced by mainstream small, medium and large business enterprises. The afternoon discussion revolved around sharing how each entrepreneur and his/her organization balanced – or not – these different aspects. Some of the topics included • • • • • •
Strategies for protecting the enterprise from dependence on the leader/founder Experiences and frustrations with recruiting top talent: the market gap and how each organization addresses the situation through different incentives Staff assessment strategies and policies, implementing “exit” strategies and protecting staff from “burn out” Strategies for building a top team and lessons learned The fleeting dream of having a great Board – and taking their advice How exposed is my organization to political risk? To reputational risk?
Included in the afternoon discussion was a session on Managing Financial Needs, a key issue for all entrepreneurs and a recurring theme in their gatherings across the globe. The last session of the day focused on a theme that is too seldom openly acknowledged: “Balancing Passion & Achievement Drive with the Rest of your Life: How Well are You Doing?” Results of a survey of social entrepreneurs in advance of the Summit were presented so the community could take a good hard look at their personal sustainability in balancing their lives and drive for achievement. Questions in the survey addressed personal effectiveness, communication, concentration, exercise, diet, sleep, family time and feelings related to work and other important individual dimensions.
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On the whole, social entrepreneurs tended to do very well, with startling contrasts to results of surveys in the corporate world, particularly when it comes to personal fulfillment and the new corporate disease of “bore-out” (de-motivating and unchallenging work environments). Soaring high…
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95% of social entrepreneurs find their work meaningful 95% also are mostly stimulated and excited by their work. 80% report to being mostly healthy and free of illness. 70% report having a good sex life 80% avoid using drugs or alcohol to de-stress
But clouds do appear…
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55% of social entrepreneurs don’t get sufficient exercise 60% find feelings about work significantly interfere in their personal life
However, other evidence indicated that social entrepreneurs may be a little too optimistic when it comes to how they view their own lives. Out of the 15 cancellations received in the weeks before the Summit, more than half were due to reasons of poor health and another quarter were having to manage the stresses of their work environment. After presenting these provocative results, social entrepreneurs took time to map out their own individual balance plots and share the best tricks of the trade to achieve significant and multiple impacts with only one life.
Pulled in different directions? Joe Madiath balances between Kristine Pearson and Garth Japhet.
The day ended with a celebratory dinner that brought together the Co-Founders, Professor Klaus Schwab and his wife, Hilde, also the Chair of the Foundation and the rest of the Foundation Board with the social entrepreneurs.
Hilde and Marcela reconnect
Klaus and Hilde greet old friends
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Networking among Social Entrepreneurs
Geoff (Canada) and Pierre (Cambodia)
Ron and Mary (USA) and Harish (India)
Mel (Scotland) and Safia (UK and Japan)
Fabio, Vera and Marta (Brazil)
Wu Qing (China) Bilha (Israel) and Kyle (USA)
Victoria, David and Barry (all work in health)
Marcela (Argentina) and Fernando (Chile)
Participants browse the models of their fellow social entrepreneurs
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Day 2 - Welcoming Resource Providers and other Participants The second day and third morning of the Summit included approximately 120 additional invited participants from all continents, with a focus on “resource providers” who offer a diverse array of support from capital to advice on areas of critical importance to social entrepreneurs. Objectives: • To create a dynamic exchange among participants and social entrepreneurs around key local, national and global challenges where all contribute to the discussion drawing on their expertise • To provide a platform where social entrepreneurs can hear from resource providers (leaders in business, foundations, universities and media) about their respective missions and interests with a view to identifying areas of collaboration. The day started with a welcome from Jacques Aigrain, CEO of Swiss Re, and a presentation from Hilde Schwab, Co-Founder and Chair of the Schwab Foundation. In her presentation, she noted the significantly greater awareness of social entrepreneurship over the last 7 years since the Foundation had initiated its operations. Over the next year, the Foundation would seek a closer working relationship with the World Economic Forum, integrating social entrepreneurs to an even greater degree into its strategies and activities. Mrs. Schwab thanked all Board members for their continued support in the evolution of the Foundation – Stephen Brenninkmeijer, David Gergen, David Puttnam, Paulo Coelho, Zanele Mbeki and Muhammad Yunus.
Hilde Schwab is delighted to greet participants
as is our host, Jacques Aigrain, CEO, Swiss Re
Managing Director Pamela Hartigan proceeded to outline the methodology for the day – a day of no presentations or panels – a day where over 100 discussion groups had been organized over five sessions. To facilitate participants’ involvement in these groups, each had received his/her personal program detailing to which group s/he was assigned for each of those five sessions. The group composition changed at each session, allowing maximum networking and contact with a diversity of participants at the Summit.
Pamela explains the day’s proceedings – as Board members, David, Zanele and Stephen listen
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Session I - Showcasing Entrepreneurial Approaches: Issues A total of 19 issue groups took place. To capture the discussion, we asked for the collaboration of a number of participants to act as session recorders. We attempt to summarize below the highlights of the discussion on each of the issues: Issue 1 - Sustaining and Strengthening Rural Communities Highlights of group discussion • Rural development is about integrated development, linking robust local economies with larger ones. • Need to focus on where poor people live – eg. in Africa, 80% are in rural areas with cash economies. Subsistence agriculture hardly exists anymore, their needs are monetary. • The market is not designing and producing products that the rural poor need or desire. Social entrepreneurs have learned in the last 20 years that these needs include: - Cutting-edge technology: design and delivery of innovations with good to great results - Approaches that will stimulate the economy and keep money in the local community, eg. in providing affordable housing, use local labour and materials to the greatest extent possible - Linkages to external markets, intrapreneurs and intermediaries, as small farmers don’t have access to export markets and need to be linked to them and assisted to stay in these markets - Focus first on the local market, then on connections with urban markets, then on export market.
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There has been little research conducted to date on Base of the Pyramid (BOP) markets other than the World Resource Institute Report on the Next 4 Billion. BOP is currently treated as an undifferentiated consumer mass. But how do poor people act as consumers? What drives their purchasing decisions and how are they segmented? Lack of research on these issues has been an impediment in developing and marketing products that the poor need. Some in the group abhorred the idea of multi-national corporations seeing BOP markets as targets. Why entice the poor to spend their scarce resources on things they don’t need?
Points of convergence or divergence in group • Reliance on export markets may not be sustainable and may lead farmers to produce things that are not best for them, their land, and their communities (mono-cropping, out-ofseason production, etc.) • Most of the poor are not entrepreneurs. Solutions that require everyone to be an entrepreneur are faulty. We also need solutions that produce large numbers of jobs • Technology innovation is not the most critical kind of innovation for the rural poor. A more powerful one could be a financing innovation, and operations innovation, or others Role of social entrepreneurs • Social entrepreneurs are the key solution providers • Should identify blockages where big companies can’t make money providing a good or service and so social entrepreneurs can meet this market failure Issue 2 - Improving Infrastructure for Health and Access to it Highlights of group discussion: • Key advances made:
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- Emerging new business models based on radical redesign of technology cost structures; new cross-subsidization models that create scale and financial sustainability; creative financing - Paradigm changes around PPPs – old clichés have changed but still require new thinking and new ways on how to collaborate efficiently
Major challenges remaining - Luxury still drives innovation – 80% of the efforts are made to meet the needs of 20% - How can the incentive structures change so that priority is given to the fundamental needs of the many, particularly in the primary healthcare sphere?
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- Task seems overwhelming – treat 10,000 and then realize there are 100,000 more. Scaling is a burning issue, but prototyping and demonstrating are important before thinking about scale - Power of influence is an important barrier to change and progress - Need to train human resources at more “appropriate” levels of skills and not only at advanced levels as important ingredient for “scaling up” - No shortcuts to changing local mindsets within communities - crucial to achieve success
Points of convergence or divergence in group - Learn about new business models that can grow and be sustainable. What are the key ingredients of such models? - Provide people who want to get involved but don’t know how, with a better understanding of where they can have an impact - There are challenges in specific contexts which need to be better documented and disseminated
Role of Social Entrepreneurs • They recognize the complexity of the issue, and the importance of the multiple constituencies involved, their respective power and influence and key differences in economic, social, political and cultural contexts. Making progress on health challenges requires cross-sectoral collaboration and often a radical rethinking of established structures and processes Issue 3 - Transforming Information and Learning Systems and Practices Highlights of group discussion: • Beyond reading, writing and arithmetic - Social and emotional skills for coping with life are at least as important, but most school systems neglect these “softer” critical skills. Development of these skills would need (i) a shift of emphasis from teaching to learning; (ii) activities/approaches that encourage students to take initiative; (iii) opportunities that enhance students’ sense of empowerment and self-esteem; (iv) approaches that promote learning in the absence of fear of failure; – all on a national system
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Uses of technology - Technology is a powerful tool, but social connections and person-to-person contact and sharing (often facilitated by technology) are critical for achieving educational impact - Need to find ways to connect school system data with data that are more relevant to students’ development, as exemplified by what College Summit is doing in the USA, to support low income students to access and complete their college education - Use technology to help school personnel manage data. Salesforce.com has supported 20 schools in New York to implement this system - How can technology support learning in rural areas? How can it be used to teach children basics? - Group predicts that in the future, greatest advances will shift from technology innovation to innovation on the “soft end” - creating valuable interfaces between users and tech platforms
Effectiveness - Need to change what is measured and rewarded – children’s well-being should be the goal, and securing the agreement among relevant ministries and ICT and media groups in a country is key. Need to find ways to work with teachers’ colleges to ensure that same problems aren’t repeated - Escuela Nueva in Colombia (and replicated in other countries around the world) had to figure out how to demonstrate effectiveness and efficiency before going to scale - In some cases, collaboration with governments or multi bilateral agencies is counterproductive, and private solutions can better address specific needs. For example, James Tooley has created private schools for the poor in India. For between USD 2 and 4 a month, his schools are able to out-perform public schools where teachers are frequently absent and curriculum is weak
Role of Social Entrepreneurs • Designing, testing and refining information and learning systems, documenting their effectiveness, and working with local, state and national education systems to scale the system for wider benefit. But the process of linking all stakeholders and engaging them in a joint effort is often the most difficult challenge. One tactic is to identify “champions” in each of these sectors who are committed to the transformational change, driving it from within their respective organizations
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A setting that lends itself to community building
Outside the Swiss Re Centre for Global Dialogue
… and inside
Issue 4 – Revolutionizing Financial Access and Market Opportunities Highlights of group discussion • “Social investing – Too little or already facing a bubble?“ The bankers, Venture Capitalists and insurance representatives in this group approached the topic from a business perspective: - Rod Schwartz, Catalyst Fund (UK), mentioned that he is starting a fund in the order of USD 0.5 to 10 million to invest in social businesses and close the financing gap. He is looking to pick the “low hanging fruit” in health, ethical consumption, environment etc., without looking at a blended value proposition - Melchior de Muralt (Switzerland) raised the question of risk-return balance. If you ask investors to forego a big financial investment for some undefined social return, how can this be justified? - Peter Blom from Triodos (The Netherlands) noted that its recent 20 million Euro fund was several times oversubscribed, despite the fact that Triodos only offers a 5-6% return, when typically 10-12% can be obtained. He did not attribute this to the social appeal of the Bank, but rather to the fact that institutional investors are attracted by non-listed, stable dividends that are not subject to short-term greed that cause risks such as the recent sub-prime mortgage crash. Triodos is perceived as having a lower risk because of its mission; investors are therefore willing to take a lower financial return - The top tier banks, funds and microfinance institutions (MFI) are currently facing a massive wave in capital. Compartamos, the Mexican MFI that recently completed a highly successful IPO, has leveraged its initial equity investment from donors 8 years ago through credit lines and bonds - Vikram Akula of SKS Microfinance (India) noted that this capital still comes at a high price point of 12% and the goal should be to lower this - Christina Ulardic from Swiss Re noted that top tier MFI institutions do not seem to be interested in risk insurance products. Some MFIs seem to be confident enough that they can shoulder the risks on their own. The question is whether they are able to fully assess the risks. - There is a clear gap between top tier “blue chip” institutions and second tier MFIs, who are struggling to find capital. Strong demand exists for credible advisory services from these MFIs. - Bruce McNamer from Technoserve added that their clients, small and medium enterprises, find it impossible to access credit in the order of USD 20,000 to 1 Million, not because of their own credit worthiness, but because the local banks are not skilled in providing these products. Again, advisory or consulting services to these banks could greatly enable this local flow of credit.
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Issue 5 – Preparing Young People for Full and Purposeful Employment Highlights of group discussion • Key advances made - In the rural sector, Martin Burt (Fundación Paraguaya) described a new curriculum for young rural entrepreneurs that includes developing income-generating projects that earn money while on campus, through a learning-by-doing approach. Part of the income goes to support the school - Sherman Teichman of Tuft’s Institute for Global Leadership has been supporting undergraduate students, proving them with practical working experience with social entrepreneurs addressing poverty around the world. The goal is to help prepare future problem-solvers to focus their skills on addressing poverty and related issues - Awareness of the need to partner with others to achieve scale and of the delicate balance needed to maintain quality of impact whilst growing
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Major challenges - Greater awareness needed among business and the private sector of their responsibility to build and develop the skills of young people in their societies. Governments are failing in this respect - Lack of schools and access to schools is endemic to poor communities, as is the lack of relevance of the curriculum to the needs of the poor - Funding remains a critical aspect for innovative programs addressing youth and employment - Partnerships between companies and social entrepreneurs need to be strengthened, but often there is a failure to connect because of lack of commonly understood concepts and “language” - Too many great ideas with little evidence that these work in the field. - Weak management structures in many innovative, leader-focused, mission-driven organizations
Key conclusions - A clear framework of accountability in social enterprises is of the essence - Social entrepreneurs and their organizations must develop succession plans so that longer term programs and partnerships can be forged - Market-based rather than charity-focused programs must increase
Issue 6 - Beyond Good Intentions: Increasing Opportunities for Women Highlights of group discussion: • Key advances made
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- There is a change in the mind set of young women from acceptance of a subordinate role in society to seeking to develop themselves personally and professionally - Wide acknowledgement of the fact that providing girls ages 16 to 20 with opportunities for empowerment, results in them having fewer, healthier, and better educated children, and women themselves advance their own economic status and sense of self-worth
Major Challenges - Large income and geographical disparities remain, with poorer rural women on one end of the spectrum and better off, urban women on the other. Eg. in Turkey, the average number of children per women in urban areas is 0.5 in comparison to 7.9 children in the rural east - Trafficking of women and children is still a problem. In Cambodia, for example, there is more violence now than before with thousands of women and girls disappearing in brothels - Setting up mechanisms whereby illiterate women in rural areas have opportunities to engage in education, microfinance, and community activities remains an ongoing task in emerging markets
Key Conclusions: - Media has a key role in enabling change and highlighting the work that individuals, including social entrepreneurs, are spearheading to improve conditions for women and girls.
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Issue 7 - Saving the Planet one Individual at a Time Highlights of group discussion • Key advances made
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- Significantly increased awareness among leaders in business and government of the threat posed by climate change - Mushrooming activities around climate change - Clean Development Mechanism established by the Kyoto Protocol is an additional source of financing for social entrepreneurs working in the field of organic waste management or renewable energy
Major challenges - Awareness is not translating fast enough to massive collective action to address climate change. Currently, huge monopolies control natural resources and all have a vested interest in preserving the status quo, undertaking cosmetic changes but not bringing significant resources to bear - Need to transform the manner in which our economy functions, which requires political and cultural shift as well as technological and financial changes - The way youth are educated needs to be altered radically if we are to engage them and develop new environmental leaders - People living in poverty have difficulty recognizing the ecosystem services of their natural resources and altering their exploitation patterns. Until there is justice and peace, this will continue - Failure of the conservation movement – what will be different in the next 50 years? - Shifting perceptions in multilateral organizations and Western culture are an obstacle to social entrepreneurs and their initiatives. For example, in Egypt, Laila Iskandar and her organization, CID, engages school children in collecting and recycling empty containers such as shampoo bottles thus preventing their reuse for fraudulent purposes (repackaging bottles, filling with soapy liquid, and selling as branded shampoo). However, she faces resistance in her attempt to expand to other countries as international corporations fear they may be accused of supporting child labor
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Key conclusions - It was encouraging to hear so many people from such different backgrounds speak so eloquently about the challenges and transformations need to address them. The consensus was striking
Issue 8 - Approaches to Unleash the Power of the Conscious Consumer Highlights of group discussion • Key Advances made
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- Growing awareness among certain groups of the connection between the values they want to uphold and their purchasing choices - Branding/labeling has become a significant aid to empower consumers to make wise purchase choices - With a host of choices of goods and services competing for consumers, the consumer is king. Companies are increasingly aware of this shift and marketing products to the “ethical” consumer
Key Challenges - Getting the consumer to understand that they can be the engine of change - Developing a worldwide communications network - Expansion of the “fair trade” market from agricultural products into other markets including clothing and crafts. Safia Minney of People Tree (UK and Japan) discussed the challenges of building the clothing market, as “fair trade” clothing has a negative image in the mind of the consumer. To mitigate this image, People Tree has advertised in high end magazines and sold in up-market clothing stores - Little money is going into the manufacturing of fair trade products. The money is focused on labeling and distribution.
Issue 9 - Enabling the “Disabled” and Issue 10 - “Catalyzing Civic Engagement for Social Transformation”, were discussed each by two groups, but no reports were available.
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Session II - Showcasing Entrepreneurial Approaches: Regions Participants were assigned to one of the following geographical regions of their choice: Asia, Europe, Latin America, Africa, Middle East & North Africa, North America and Global. A total of 20 geographical regional discussion groups took place. To capture the proceedings, we asked for the collaboration of a number of participants to act as session recorders. Below are their summaries of the highlights of the discussions in at least one of the regional groups. Region 1 - Asia A total of 4 groups discussed Asia. A summary of one follows.
Highlights of group discussion: • Overview
- From the outset, it was evident that perceptions in Europe, as evidenced by corporate participants in this group, and those of social entrepreneurs working in Asia differed in terms of their perception of the issues needing to be addressed. For example, for social entrepreneurs, topics such as environment are considered a luxury. Moreover, some of them highlighted that the developed world is making unrealistic demands on developing countries. In the case of European sponsors, these expect a return on their investment as well as solutions that are socially and environmentally transformational – and in the short term.
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Key challenges - Fast growing economies – BUT – although Asia has 65% of the world’s population, only 10% of Indians for example, benefit from the economic boom - Survival is top priority, and the basic fundamentals to support people’s lives have to be in place before talking about financial return on investment - Building capacity in rural communities is an imperative need - Addressing corruption is a much more critical need for social entrepreneurs in Asia than issues such as environment, as corruption barriers are at the core of social entrepreneurs’ capacity to initiate and sustain their activities
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Overall conclusions - Partnerships at all levels are critical. Governments provide important endorsements validating the issue the social entrepreneurs are trying to address. Likewise, partnerships at the local village level are key to moving ahead - Partnerships that provide know-how to social entrepreneurs as they grow are as important as funding. Likewise peer partnerships among social entrepreneurs are instrumental to support one another in what can be a lonely endeavor - Back the winners – support social entrepreneurs that have identified sustainable solutions and need to scale. Investors need to take the long view, and social entrepreneurs, in turn, need to show they have a long term plan - Social entrepreneurs need to be in control of the process, and ownership should be local. Clarify terms of engagement for all stakeholders, including the local community as well as contributors and partners
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Region 2 – Europe Two groups discussed this region. A summary of one follows.
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Overview - The concept of social entrepreneurship is a new one in Western Europe, even if the practice is not. Yet the notion that business and social needs must be compatible is a longstanding one in this region. In contrast to social enterprises in the US or the UK where the emphasis is on the business model, in Western Europe, the governance structure in particular the balance on Boards of multiple stakeholders receives much more emphasis. In East and Central Europe, the primary goal of the economic transition has been the institutionalization of a market economy. Social entrepreneurship has offered innovative solutions to transform welfare systems towards production of services, especially those focused on mitigating the dramatic increase in poverty and unemployment.
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Key challenges - Narrow range of services offered by social enterprises, with a heavy focus on work integration and personal social service provision – in part because of reliance on government funding that narrowly defines the work of these ventures - Much work needs to be done in changing mind sets of investors who have yet to see social investment as an alternative to investing in bonds and funds - Need to develop metrics to assess the impact of social enterprise - Many social enterprises are still dependent on government grants so being innovative and challenging the status quo is problematic. Innovation does not seem to be a paramount component of the definition of social entrepreneurship in Europe as a whole
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Overall conclusions - Professionals are needed to manage social enterprises. They need to be paid well and not treated as “voluntary” workers - New models should be created where social ventures pay for themselves, dramatically decreasing dependence of government funding - Greater awareness of social entrepreneurship and how it is different from other third sector organizations must be aggressively pursued - Companies should bring their knowledge and expertise to social enterprise
Region 3 – Latin America A total of 5 groups focused on Latin America. A summary of two groups follows.
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Overview - Latin America is innovation rich. Moreover, there is a strength that comes from the people and their commitment and engagement in the communities in which they live. However, this is a region that also has a history of confrontation between government and civil society, a region characterized by enormous income disparities and top-down paternalistic attitudes towards addressing issues of poverty, when more strategic approaches to the problem are needed. The notion that one can combine social mission and business approaches to achieve social and economic transformation is a difficult one for both business and civil society to imagine. Moreover, in many countries, social entrepreneurs are still describing themselves as “NGOs”, which does not advance the spread of the concept and practice of social entrepreneurship as opposed to donor-dependent, palliative approaches to poverty.
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Key challenges - Economic cycles from boom to bust promote short-term thinking - Corruption is a serious problem for the region. The lack of accountability, transparency and good governance are serious problems in all sectors. People do not trust the public sector - There is a disconnect between availability of natural resources and their finite capacity to sustaining current consumption patterns in the region. For example, massive urbanization creates many social, economic and environmental problems. Integrated solutions are critically needed - The private sector has a very narrow view of its role and responsibilities- an emerging corporate social responsibility agenda is still very narrowly defined by companies
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Overall conclusions - Social entrepreneurs have to figure out who influences whom, and who needs to be influenced to get things done. This will require them often to assume the role of a broker between sectors - Social entrepreneurs are looking for change, not profit. They need to understand the psychology that operates in each sector and how “the game” is played - Identify ways to work with multiple stakeholders, and to take advantage of the resources and knowledge of the community more effectively - Tap into centers of innovation that exist locally and use these as a base from which to scale their approaches for greater benefit
Region 4 – North America Two groups discussed this region. A summary of one follows.
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Overview - The group did not specifically discuss how social entrepreneurship is practiced and supported in this region. The focus was more generally on trends in the practice of social entrepreneurship . All participants, save one, were based in the US.
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Summary of discussion - The first topic raised by Michael Johnston, the discussion catalyst, was whether social entrepreneurs competed with the private sector. There was widespread agreement that: - Social entrepreneurs do not compete with the private sector, they serve to challenge it as the private sector needs to be engaged - Social entrepreneurs are in new markets and/or addressing market failures; therefore, there is no market initially in which to compete - If a social enterprise reaches scale so it does compete with private sector companies, as with Mozilla, for example, the key is to pull in others in a way that the success of social entrepreneurs becomes their success as well - The public sector is not keeping pace with change. They may have money and power, but they do not have the delivery mechanisms for social change - JB Schramm of College Summit related how others in the social sector are used to dealing with multiple stakeholders. Thus, they have much to teach for-profits. For example, College Summit’s success is often due to the fact that it pulls together all stakeholders in the communities it enters. This approach and subsequent relationships act as a “competitive advantage” - Some participants did not agree with the idea that social entrepreneurs were better at stakeholder collaboration, arguing that the private sector has much to teach social entrepreneurs - The second topic revolved around corporate social responsibility (CSR) and its effectiveness. There was agreement that - The notion that a corporation exists to maximize shareholder value is a socially destructive concept. All corporations must act in a socially responsible manner - CSR programs, like corporations, are rarely entrepreneurial. They need to do a much better job of aligning business interests with skill sets and resources
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Overall Conclusions: - Throughout the discussion there was consensus that poverty is the core issue that leads to many of the social issues social entrepreneurs are trying to address. Moreover, passion is a powerful commodity in this sector.
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Region 5 – Sub-Saharan Africa •
Overview - It is difficult to generalize about how social entrepreneurship is practiced and supported in Africa due to the diverse nature of the enterprises represented – from real estate development to media to educating girls to the disabled, as well as the variety of countries. In addition, the majority of social entrepreneurs in this group were working in South Africa which has very different characteristics from the other African countries – more large businesses, more capital - The major topic of discussion was whether or not to work with governments, and if so, how. There was general agreement that governments were almost always a key stakeholder, especially local players and civil servants, who needed to be brought into projects as partners. Elected officials were also mentioned, but seen as less critical, as they come and go - A pragmatic approach often works, i.e., develop and perfect the initiative and then pass it to the government that will be happy to have it. There was agreement that working successfully with any institution always boils down to relationships with individual people
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Key challenges - Fewer SE’s from Africa than other regions represented at the Summit; it is difficult to identify the SE’s in Africa and we need more ways of finding them - Lack of infrastructure, especially transport, adds significantly to the cost and complexity of doing anything - Cultural barriers to women hinder their getting education, exacerbating poverty and limiting their participation in the economy - Crises, like the current political one in Kenya, are always a potential disruption in Africa, so SE’s must be prepared (in Kenya there has been communications interference by the government)
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Overall conclusions - People want to make a living, and this is a major driver of opportunity and success - There are numerous entrepreneurial opportunities in Africa which can make money and make the SE’s at least in part self-sustaining - Markets can be major enabler for scalability – e.g. Johannesburg Housing Company and Kickstart’s irrigation pumps - Creative people in local situations can produce unique, cost effective solutions for local problems – APOPO using rats to find land mines or screen for disease.
Region 6 – Middle East and North Africa •
Overview
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- The Middle East region remains threatened by instability and seriously needs to address education and youth development for the coming decades for political and economic stability - Research shows changing trends of giving in the region from more traditional philanthropy (the main form until recently) to more value-added investments -
Key challenges - Biggest threat remains political instability in the region as a whole – this affects markets, economies as well as progress on social development goals - 1 million youth enter the job market every year and there will not be sufficient jobs for them all. Yet the corporate sector is thirsting for skilled, talented youth, but don't find them. Youth on margins of society are at highest risk of contributing to instability. They need opportunities
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- Yet even those who get higher education cannot get jobs. The quality and relevance of education is thus key in developing competent individuals who can work in the job market and also be self-employed if necessary - Social entrepreneurship is still discussed in isolated circles, although other forms of social investment are getting increased attention
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Overall conclusions - Businesses in the region have realized they have a larger role to play in instability in the region and in social development, not only in an ideological, but more importantly in an economic and market sense - social entrepreneurs can help to provide models and partnerships for business. - There are very interesting developments in the world of Arab philanthropy that could benefit social entrepreneurs over the coming years - Social Entrepreneurship is a budding field in islands of activity in the region, but more needs to be done to link these networks
Region 7 - Global Given that there is an important minority of social entrepreneurs whose organizations are global in reach, even if they are primarily based in the USA or in Western Europe, two discussion groups focused on the particular challenges of working globally but having to deal with historical, geographic, political, economic and cultural specificities. Each addressed how such specificities influence the innovative approaches being deployed.
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Overview - The most important aspects highlighted in going global were finding the right talent, finding the right partners at the local level, and accelerating financial capital to support the scale. Information technology is a key tool that facilitates global reach for global issues.
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Summary of Discussion - While there were some participants who singled out the lack of coordination among social entrepreneurial ventures as a liability, others questioned whether the fragmentation was a negative. For example, business entrepreneurship is “poorly organized” and lacks a “systemic and coordinated” approach, but it gets the job done. - Talent is a critical element in all ventures, but has specific challenges for social ventures. In the case of those that are multi-country in their reach, the question arises as to how to cope with the flight of talent from developing to developed countries. How can social entrepreneurs create the incentives to keep their best people in the places where they can most directly contribute to achieve social impact? - Most critical for growing enterprises, aside from talent, is securing working capital or innovation capital. Chris Elias from PATH (USA) noted that currently, about 2% of PATH’s budget is working capital and that needs to be raised to about 5 to 10%. The third issue he focused on was building capabilities in developing countries and giving people options other than the UN.
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Overall conclusions - There are common challenges faced by global social ventures regardless of the field in which they operate. Again, these boil down to securing operating capital and identifying, developing and retaining local managerial and entrepreneurial talent, necessitating the creation of incentives to keep these people in their countries where they are needed most.
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Faces of Change
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Session III - Showcasing the Resource Providers The afternoon of the first day focused on providing social entrepreneurs with three different opportunities to hear from resource providers. A “resource provider” can offer funding in the form of grants, loans or equity. But as we know, capital is necessary, but certainly not sufficient for strengthening and growing social ventures. Some of these “cash equivalent” resources include pro bono or reduced rate services by professionals in a company, foundation or university, including • market research • strategic and financial planning • organizational management including creation of internal and external monitoring and evaluation systems • identification, recruitment, assessment and retention of talent • legal advice • auditing • design and implementation of appropriate information systems • setting up and implementing transparent government processes • access to media channels to get the stories of social entrepreneurs out to specific and general audiences Perhaps the best way to describe the way the afternoon sessions were structured is to envisage “Speed Dating with 10 people”. During the course of the afternoon, three rounds of “Showcasing Resource Providers” took place. There was a mix of 50% resource providers and 50% social entrepreneurs in each group, with some matching of requests by social entrepreneurs. Each resource provider had 5 minutes to “pitch” his/her organization, its mission, priorities, and how it works with social entrepreneurs. Following each resource provider’s presentation, other group members posed questions, clarifications and made relevant connections before proceeding to the next resource provider. At the end of each round, a loud bell was rung signaling that it was time to move to the next table where a new group of resource providers and a different group of social entrepreneurs came together and followed the same process. The system worked surprisingly well, and every fifty minutes, the bell would sound and participants would emerge from one group and scamper off to their next group located on the Swiss Re Global Dialogue Centre campus. By the end of the day, each participant had participated in five different groups and heard from at least 50 different people. And as they went through the day and found people they wanted to spend more time with on a one-to-one basis, they “made a date” for the following day’s session, “Facebook Off-Line: Connecting You to the People you want to meet”. The participants’ guide to the Summit offered a page for noting the times and meeting place for these bilateral meetings. Thus, the following morning started off with meetings set up among the participants themselves.
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After an exhausting day of meeting, sharing and learning, participants gathered together in one spot for a drink – and to hear the announcement of the “Leapfrog Initiative” winners. The Leapfrog Fund, spearheaded by the Schwab Foundation together with the US based Lemelson Foundation, seeks to stimulate the transfer and adaptation of technological innovations developed by accomplished social entrepreneurs and their organizations that address the following broad areas: • Basic human needs such as access to clear water, energy, sanitation and health services • Empowerment of people living in poverty to elevate their incomes and improve their lives Additionally, the Leapfrog Fund seeks to document the most effective ways of supporting innovation transfer among two or more social entrepreneurs and their respective organizations working with the poor. At least one of the social entrepreneurs had to belong to the Schwab Foundation’s community. To initiate the process, the Schwab Foundation put out a call for proposals through its community. Thirty-one joint proposals from more than 60 social entrepreneurs were received in the first round, and 16 went to a second review. A panel of external and Schwab Foundation reviewers selected five proposals that will support the work of 11 social entrepreneurs. The five technology replication projects that will be supported by the Leapfrog Fund are: • • • • •
Development Alternatives in India (Ashok Khosla)* and Sewa Lanka in Sri Lanka Gram Vikas in Orissa, India (Joe Madiath)* and the Comprehensive Rural Health Project (CRHP) in Jamkeh, Rajasthan –India (Shobha Arole)* Waste Concern in Bangladesh (Maqsood Sinha and Iftekhar Enayetullah)* and Saiban in Pakistan (Tasneem Siddiqui)* Aravind Eye Hospital in India (Thulsiraj Ravilla) * and Fundación Paraguaya in Paraguay (Martin Burt)* IDEAAS in Porto Alegre, Brazil (Fabio Rosa)* and Instituto Serão Vivo in Goias, Brazil (Carlos Simão) * Social Entrepreneurs who are part of the Schwab Foundation’s community
The following comment from Robert Katz (World Resources Institute) attests to the pioneering nature of the Leapfrog initiative. “The Schwab Foundation for Social Entrepreneurship has joined forces with the Lemelson Foundation to establish the Leapfrog Fund, designed to spur the transfer of successful innovations between entrepreneurs in different parts of the world. I hadn’t heard about this, but it is long overdue. The tools, models and ideas that work should be replicated – but that requires serious technical assistance and favorable financing.” (WRI, The Next 4 Billion)
the $100 laptop is demonstrated
… while Andreas and David try to figure out what the next big leap will be
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Faces Accelerating Change
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Day 3 – More Learning and Networking Time For the first few hours of the day, the Swiss Re Centre hummed with the buzz of conversations taking place between two and three people who had agreed to meet the previous day during this session called Facebook Off-Line. Simultaneously, for those who had had enough of the conversations, they were able to sit and enjoy watching short films on social entrepreneurs. Filmed by Germany’s leading public broadcasting company, Deutsche Welle, these recently completed portraits included eight members of the Schwab Foundation’s community around the world. Deutsche Welle has been an important partner in disseminating internationally the work of the Schwab Foundation and its selected social entrepreneurs and to date close to 20 such films have been produced and shown. The next hour’s session was a chance for group gatherings on specific topics of interest to a small group of people. Prior to the Summit, participants were asked to indicate their wish to organize such a group discussion. The “Plan it, Post it, Do it” session ended up with an offering of 18 different topics. Some of these included: • • • • • • •
Base of the Pyramid Opportunities Facilitating Change through Laws and Policies Impact and Investment Poverty and Energy Child Social and Financial Education Financial Instruments: Beyond Grant-making Stanford and Social Innovation
And then it was time to wrap up the Summit. So the Schwab Foundation turned to a Board member and the world’s favorite storyteller – Paulo Coelho. Closing the Summit for the seventh time, Paulo shared the following: The evolution of society and people’s search for meaning can be traced to five Jews who, at different points in history, contributed their insights and guided us as we sought happiness and fulfillment. The first was Moses who descended from Mt. Sinai with the tablets on which were inscribed the 10 Commandments – and so he gave the first insight - to function, societies need rules that govern behavior. But then along came the second Jew, Jesus Christ, who pointed out that people’s happiness did not only depend on following rules, but that love was a fundamental element underpinning all peaceful and cohesive societies. However, hundreds of years later, Karl Marx, emphasized that rules and love would never be sufficient for societies to function if there was no money. Sigmund Freud, the fourth Jew, played down the importance of rules, love and money and emphasized that sex was the key element in people’s wellbeing and happiness. And so we as a human race had come to the conclusion that our happiness hinged on rules, love, money and sex. Until a fifth Jew, Albert Einstein, pointed out that everything is relative.
Working across different contexts around the world, social entrepreneurs have become the masters of the “relative”. What is a priority in one context is not in another. What will work in one place will not necessarily have the same impact in another. And so social entrepreneurs must adapt their innovative approaches to take account of the specific rules, relations and culture of each place they work in. There is no “one-size-fits-all” in that sense. And therein lies their greatest advantage – in understanding what has meaning for people in different contexts, and how to tap into that search for meaning to improve their lives.
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On behalf of the Board, Paulo Coelho went on to celebrate the Foundation’s initial seven years and the recognition it has received globally as a pioneer in disseminating the concept and practice of social entrepreneurship – under the leadership of Pamela Hartigan, its first Managing Director. Pamela would be moving on to pursue a new initiative designed to support social entrepreneurs, and the Foundation and its community showed a deep gratitude for her commitment, vision and support during the organization’s formative years.
“Thank you Pamela” Paulo Coelho pays tribute to the visionary leadership and achievements of Pamela Hartigan
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Networking among Social Entrepreneurs and Resource Providers
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Special Thanks
In concluding this report, we would like to thank our hosts and Summit sponsors, the Swiss Re Centre for Global Dialogue, for its superb and gracious hospitality – no doubt a significant reason behind the success of the Summit. Financing for the Summit was made possible thanks to generous contributions from Microsoft, the Skoll Foundation and the Goldman Sachs Foundation. We would also like to thank our lead partner, Boston Consulting Group and global partners, Ernst & Young and Deutsche Welle for their unstinting support throughout the year.
In addition to all the social entrepreneurs who participated actively and contributed as facilitators on the first day, further thanks also goes to those important individuals who made this summit come alive and stay alive for the roles as discussion catalysts and session recorders on the Issue and Region discussion topics. Discussion catalysts included: • Philip Auerswald, Editor, Innovations Journal • Akhtar Badshah, Senior Director, Microsoft Corporation • Nancy Barry, President, Enterprise Solutions to Poverty • Marc Benioff, Chairman and Chief Executive Officer, Salesforce.com • Seth F. Berkley, Founder, President & Chief Executive Officer, International AIDS Vaccine Initiative • Bella Berns, Head, Philanthropy, Credit Suisse • Brizio Biondi-Morra, President, AVINA • Peter Blom, Chief Executive Officer and Chairman of the Board of Management, Triodos Bank Group • Stephen Brenninkmeijer, Private Investor, Anthos • Elim Chew, Founder and President, 77th Street, Singapore • Greg Dees, Professor, Practice of Social Entrepreneurship, Fuqua School of Business, Duke • • • • • • • • •
University Youssef Dib, Global Coordinator, Personal Wealth Management, PNB Paribas Group Peggy Dulany, Chair, The Synergos Institute John Elkington, Founder and Chief Entrepreneur, Sustainability Ximena Escobar de Nogales, Acting Director, Center for Applied Studies in International Negotiations Barbara Fiorito, Board Chair, FairTrade Labelling Organizations (FLO) David Gergen, Director, Center for Public Leadership, John F. Kennedy School of Government, Harvard University Fadi Ghandour, Founder and Chief Executive Officer, Aramex International Roberto Gutierrez, Associate Professor and Coordinator, Social Enterprise Knowledge Network Deborah Holmes, Director, Corporate Social Responsibility, Ernst & Young
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• • • • • • • • • • • • • • • • • •
Michael Johnston, Executive Vice-President, Capital Group Companies William Kramer, President, Global Challenge Network Steve Lawrence, Founder, WorkVentures Australia Penny Low, Member of Parliament, Singapore Johanna Mair, Professor, IESE Business School Jamie McAuliffe, Portfolio Manager, Edna McConnell Clark Foundation Ivo Menzinger, Managing Director, Risk Management, Swiss Reinsurance Company Don Mohanlal, President and Chief Executive Officer, The Nand and Jeet Khemka Foundation Melchior de Muralt, Managing Partner, De Pury, Pictet, Turretini & Cie Giuseppe Nicolosi, Chief Executive Officer, Ernst & Young Sally Osberg, President and Chief Executive Officer, Skoll Foundation Kojo M. Parris, Director, Social Private Equity South Africa (SPESA) Ryszard Praszkier, Director, Ashoka Poland Cliff Prior, Chief Executive Officer, UnLtd Sophia Tickell, Chair, Sustainability James Tooley, President, The Education Fund, Orient Global Nana Watanabe, journalist and author on social entrepreneurship Richard Young Silva, President, Ethos Institute
Session recorders included (some already mentioned above): • Philip Auerswald, Editor, Innovations Journal • Francois Bonnici, Head, Africa and Middle East, Schwab Foundation for Social Enterpreneurship • Peggy Dulany, Chair, The Synergos Institute • Jesse Hartigan, Transfield Holdings • Suki Hoagland, Consulting Associate Professor, Stanford University • Ivo Menzinger, Managing Director, Risk Management, Swiss Re • Doris S. Michaels, President, DSM Agency • Christine O'Connell, Senior Manager, Business Development, Reuters • Peggy Reid, Director, MBA Programs, Center for Social Innovation, Stanford Graduate School of • • • •
Business Mirjam Schöning, Director, Schwab Foundation for Social Entrepreneurship Christian Seelos, Director, Platform for Strategy and Sustainability, IESE Business School Charity Shumway, Program Associate, The Goldman Sachs Foundation Laura Vais, Vice-President, Marketing, Skoll Foundation
Thank you also to the photographer Gian Vaitl for capturing the passion and the people. The City Tour after the Summit was supported by the AlphaMundi Group, and we would also like to thank Tim Radjy for making that happen.
The Schwab Foundation would like to thank you all for your active contributions to the Seventh Social Entrepreneurs Summit
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The views expressed in the summary feedback of sessions in this publication do not necessarily reflect the views of the Schwab Foundation for Social Entrepreneurship. 91-93 route de la Capite CH-1223 Cologny/Geneva, Switzerland Tel.: +41 (0)22 869 1212 Fax: +41 (0)22 8691 396 E-mail: info@schwabfound.org www.schwabfound.org Š 2008 Schwab Foundation for Social Entrepreneurship
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