25 April 2007

Linking Microcredit with FairTrade: Handicrafts from FINCA Peru Exports

FINCA Peru Exports (FPX) is an interesting hybrid: It's a division of FINCA Peru, a pioneer in Microfinance for more than 10 years, and links microentrepreneurs producing handicrafts with Fair Trade distributors in Europe and North America. FPX has been established and run by young volunteers. Being part for a couple of months last year was a truly amazing and inspiring experience!

Recently FPX published their two new catalogues with beautiful designs of handmade clothing, accessories, textiles and home goods from Peru. By buying from FPX you can directly help disprivileged women and families. Have a look at their two new catalogues.

Furthermore, you can have a look at an 18-minute video about the organization we produced while I was there (in Spanish, sorry for small English subtitles). I am also featured in there ;) Watch the FPX video on YouTube.

21 April 2007

Mobile4Good Video: Social Entrepreneur Example from Kenya

Want to see an example of a Social Enterprise Business in 3 minutes? Can a mobile phone help people to find jobs?

Watch this video of Mobile4Good (interesting name analogy! ;) from Kenya which I found on Benin's "Africa is ready for Business" Blog:

20 April 2007

Free Trade or Fair Trade? The Injustice of Agricultural Subsidies

For a long time I have been thinking about free trade versus fair trade. Trying to get developing countries out of the poverty trap and believing in markets I analyzed the reasons for the collapse of the Doha development round. Key reasons?

The US and Europe are creating a massive market distortion by their agriculture subsidies. What a double standard to call for free trade but excluding one of the very few areas where developing countries have a competitive advantage. This means: In the case of agricultural products free trade would be fair trade and helping developing countries! Read the full essay.

19 April 2007

Video: Microcredit and the Future of Poverty

It's necessary being reminded that 1/3 of our world, i.e. around 2 billion (!) people around the world live in poverty. This means living of less than 2$ a day... could you live of less 2$ a day, every day?

Watch this fascinating 56-minute documentary about microcredit which is to me a prime example of business approaches working for the social good. It's very inspiring seeing ways out of the poverty trap:

18 April 2007

Harvard Business Review: "The Link Between Competitive Advantage and Corporate Social Responsibility"

Max Oliva reports that the article from Michael Porter and Mark Kramer which has been recognized as Harvard Business Review's Top Article of the Year is currently free to read!

"CSR can be much more than a cost, a constraint, or a charitable deed—it can be a source of opportunity, innovation, and competitive advantage... When a well-run business applies its vast resources, expertise, and management talent to problems it understands and in which it has a stake, it can have a greater impact on social good than any other institution or philantrhopic organization." Porter and Kramer

Read the full article: “Strategy and Society: The Link Between Competitive Advantage and Corporate Social Responsibility

15 April 2007

UN readies for its biggest-ever gathering on corporate citizenship

"More than 700 business leaders and hundreds of top representatives from government, labour and civil society are expected to attend the Global Compact Leaders Summit in Geneva in July, which will be the largest ever gathering convened by the United Nations on the issue of corporate citizenship.

Secretary-General Ban Ki-moon told a meeting yesterday in New York of the Global Compact Board, a panel of 20 leaders from business, civil society and labour which he chairs, that the two-day summit 'will be instrumental in bringing our joint vision for the future cooperation between business, the UN, governments, civil society and labour to full scale'.”

Read more on UN News. I will be there at the event in Geneva in July and blog from there.

Jeffrey Sachs answers my Question on Social Entrepreneurs

Via the 'Managing Globalization' Blog of the International Herald Tribune I posted a question to Jeffrey Sachs who I had the chance to meet briefly a few months ago at the UN in New York (photo). Read his just-published answer:

Question (Jürgen Nagler): What role do you see for social entrepreneurs and businesses subscribing to corporate social responsibility in helping to overcome poverty in Africa? How should governments in developed and developing countries work together with these agents?

Answer (Jeffrey Sachs): Social entrepreneurs are crucial in demonstrating how new technologies or management strategies can be applied in low-income settings to raise the wellbeing and productivity of the poor. For example, social entrepreneurs such as Rotary International have led the way on polio reduction. Social entrepreneurs have championed the use of improved farm practices and high-yield seed varieties. Social entrepreneurs have spread the use of small-scale irrigation systems. Social entrepreneurs have pioneered the use of micro-finance. The key for governments and other large donors is to watch the successes of social entrepreneurs and stand ready to help take those successes to scale. Usually, the novel approach requires some subsidy for the poorest of the poor, so that the good idea can spread simply on its own. It needs some kind of official or donor backing.

Read the full Q & A with Jeffrey Sachs.

The Importance of Social Entrepreneurship for Development

Especially since Muhammad Yunus, founder of the Grameen Bank and a renowned example of a social enterprise, won the Nobel Peace Price in 2006 there is increasing interest in social entrepreneurship for development yet the current academic literature does not provide is a sufficient link between social entrepreneurship and economic development policies. How important are social entrepreneurs for economic development? What value is created by social entrepreneurship?

To answer these questions I researched the work of over 20 authors from Bornstein, Schumpeter, the OECD, the World Bank and many others for a paper for the UNSW. My findings conclude that the social entrepreneur sector is increasingly important for economic (and social) development because it creates social and economic values:

1. Employment Development
The first major economic value that social entrepreneurship creates is the most obvious one because it is shared with entrepreneurs and businesses alike: job and employment creation. Estimates ranges from one to seven percent of people employed in the social entrepreneurship sector. Secondly, social enterprises provide employment opportunities and job training to segments of society at an employment disadvantage (long-term unemployed, disabled, homeless, at-risk youth and gender-discriminated women). In the case of Grameen the economic situation of six million disadvantaged women micro-entrepreneurs were improved.

2. Innovation / New Goods and Services
Social enterprises develop and apply innovation important to social and economic development and develop new goods and services. Issues addressed include some of the biggest societal problems such as HIV, mental ill-health, illiteracy, crime and drug abuse which, importantly, are confronted in innovative ways. An example showing that these new approaches in some cases are transferable to the public sector is the Brazilian social entrepreneur Veronica Khosa, who developed a home-based care model for AIDS patients which later changed government health policy.

3. Social Capital
Next to economic capital one of the most important values created by social entrepreneurship is social capital (usually understood as “the resources which are linked to possession of a durable network of ... relationships of mutual acquaintance and recognition"). Examples are the success of the German and Japanese economies, which have their roots in long-term relationships and the ethics of cooperation, in both essential innovation and industrial development. The World Bank also sees social capital as critical for poverty alleviation and sustainable human and economic development. Investments in social capital can start a virtuous cycle (for more explanation see my PDF below):

4. Equity Promotion
Social entrepreneurship fosters a more equitable society by addressing social issues and trying to achieve ongoing sustainable impact through their social mission rather than purely profit-maximization. In Yunus’s example, the Grameen Bank supports disadvantaged women. Another case is the American social entrepreneur J.B. Schramm who has helped thousands of low-income high-school students to get into tertiary education.

To sum up, social enterprises should be seen as a positive force, as change agents providing leading-edge innovation to unmet social needs. Social entrepreneurship is not a panacea because it works within the overall social and economic framework, but as it starts at the grassroots level it is often overlooked and deserves much more attention from academic theorists as well as policy makers. This is especially important in developing countries and welfare states facing increasing financial stress.

This is the executive summary from my 10 page PDF- read more: 'Is Social Entrepreneurship important for Economic Development Policies?'

06 April 2007

New Focus and Name of this Blog - Is Business good or bad?

As you might have realized, the focus of this blog has shifted significantly in the last few weeks. This is also the reason for its new name "Business4Good". Why the change? What started as my personal blog focussed on my travels around the globe, is now about how business can do good. This shift reflects the change in my life from traveling and searching for a meaning in life towards the mission in the next phase of my life. I am now at the start of this new phase: leveraging my seven years of business experience for the social good, especially to alleviate poverty of people in developing countries.

Why am I doing this? I felt that working 'only' for my money was not fulfilling me (anymore). I was looking for something to give my life a meaning, a mission. I had the dream of doing something good, of 'making a difference'. It took me over a year including volunteering in the Microfinance NGO FINCA Peru, learning in the Development Masters at UNSW working with like-minded people such as Elise, Mike and Tomas to get the confidence to really get out of the corporate rat-race and security-addicted mindset.

Is business good or bad? My opinion is that business can do good (or bad), just as humans and actually humans and businesses do both. Although I agree that exploitative behavior of corporations requires "blame & shame" responses I believe the power lies in cooperation (rather conflict), synergies and enlightenment. I feel it is important to focus on the positive potential and to nurture this because we attract what we envision.

We see already an increasing interest in concepts that try to do this: Social Entrepreneurs, Responsible Corporations and the UN Global Compact combine business approaches from the for-profit sector with social mission from the non-for profit world! This can be a force for positive change, employment and wealth creation. The mission of this blog is to foster these hybrid concepts and to inspire readers.

I hope you enjoy this new concept? I would appreciate your feedback very much, so leave a comment please!

Go for your dreams... best!

PS: I continue to share my personal endeavors in the form of photos here on Flickr.

04 April 2007

The Mali Project Video: Social Entrepreneurs building a School

Watch this heart touching video about the collaboration of young Australians who want to make a difference for a better world with the Social Entrepreneur Youchaou Traore in Mali. Together they build a school, a stepping stone into a better future for the children of one of the poorest countries in the world (rank 173 out of 177!).

This video that Elise presented at a UN conference in Sydney inspired me that much that we are now working on a proposal to scale up this great project!

02 April 2007

Social Entrepreneurs and Funding: How to reach the 'Tipping Point'

Interesting discussion must have been going on at the Skoll World Forum on Social Entrepreneurship at Oxford's Said Business School. The beginning of an article about Microfinance sounds like great encouragement for the proposal that Elise, Tomas and I am working on:

"Every social entrepreneur I've met is spending far too much of their time working to raise money." said Martin Fisher, chief executive officer of KickStart, a nonprofit organization in Nairobi that sells water pumps to poor farmers in Africa. Instead, he argued, they should be working to develop "the next big thing, the next equivalent to microfinance."

Through the work of social entrepreneurs around the world, he said, microfinance has reached a point where millions of dollars — both philanthropic and for-profit — are pouring into lending projects, enabling loans to more than 110 million of the world's poorest people. But, "we have to remember very clearly that it's taken microfinance 30 years and hundreds of millions of dollars of consistent investment to reach the place where it is today," said Mr. Fisher. "So to get to a tipping point, any of the new innovations are going to take a large amount of time and a large amount of money."

Read the full Social Entrepreneurs Seek New Investments to Reach a 'Tipping Point'