‘Social entrepreneurship was an oxymoron, today it is different’

‘Social entrepreneurship was an oxymoron, today it is different’ 


Interview with William Drayton of Ashoka

Financial Express




To Nannu, 2006 wasn’t the year of the stock market boom or the economy’s march towards an unprecedented 9% growth rate. For this resident of Welcome Mazdoor Colony, a slum habitation in East Delhi, it was the year of realising something more vital – his right to information and action from a callous government machinery. And that prerogative was granted to him by the Right to Information (RTI) Act, which gives citizens the right to question their governments, inspect government records, take copies thereof and participate in day-to-day governance.


The Act, now a part of freedom folklore in India, was created by a small, dedicated band of people led by sometime bureaucrat Arvind Kejriwal, a mechanical engineer from IIT Kharagpur, who was selected the Ashoka fellow for 2006. Kejriwal and Balaji Sampath, who did his engineering at IIT Chennai and his doctorate in the US before coming back to India to run a programme to reform science education in schools, are a growing tribe of social entrepreneurs from across the globe leading the marriage of social objectives and business.


Bandied together under the umbrella of Ashoka: Innovators for the Public, a global non-profit based in Arlington, these men and women are change makers in a new social order. The association Ashoka aims to find and support such change-making leaders around the world, and help them transform ingrained institutions and improve lives exponentially. Leading this system-changing worldwide organisation is an equally unusual man, William Drayton, a former civil rights activist who has been a professor at Stanford Law School before pursuing a career with McKinsey and later the US Environmental Agency where he launched emissions trading. In Bangalore last week for an event to induct leading social entrepreneurs to the Ashoka fellowship, Drayton spoke with Sundeep Khanna of FE. Excerpts:


Q: Twenty-six years, and 1,700 fellows in 60 countries. Do you have a model or is Ashoka the model for social entrepreneur organisations?


A: Ashoka has over the last 26 years pioneered the field of social entrepreneurship. Given how rapid our development has been, neither the government nor business can afford to neglect us. Those who do so are going to be as startled as Europe was by the rise of India and China. The citizen sector is the fastest growing sector in the OECD. It is providing jobs at three times the rate of the rest of the economy. It brings with it the promise of lower costs, and closer-to-the-customer organisational skills—it’s a model that is the future.


We only have to see how the pieces stack up in the next five years. For me, the Jesuit model is the only real global network of people with a common aim that has worked so successfully all these years and in so many different countries.


Q: Can social intrapreneuring be seeded into the notoriously callous and closed government bureaucracies?


A: In certain operating areas like education, the citizen sector has taken over from the government. The faster the world changes, huge energies are released and you need to empower people. As governments stop seeing the world as a static place, they will get more insights from the citizen sector, which is constantly nagging them to change things.


When we started 26 years ago, it was local. Now it is widespread. Brazil went from 5,000 social entrepreneurs to one million in 20 years. In fact, 70% of Brazilians spend some time every week on a socially relevant project.


Today, in fact, there is competition among citizen groups. The best and the most competent people are moving into this sector. Once you get this dynamic going, it will have an impact on government. Even the financial sector has been cockeyed. The transaction cost of dealing with government is 20-40%.


On the other hand you have this wonderful opportunity of using the distribution network created by the citizen sector, which goes a begging. The problem is the guy in the suit has never talked to the women in the fields. But it is beginning to happen. In Bangladesh, Grameen is tied in third place with the biggest groups in the country.


Q: And you are making an impact… even in India?


A: In India when we started, ‘social entrepreneurship’ was an oxymoron. Today, it is very different. In 1982 we elected the first group of Ashoka fellows and today it has grown into a rich fellowship of 300 fellows working in diverse fields. India is only the second country where an Ashoka fellow (Arvind Kejriwal) has won the Ramon Magsasay Award. Now, the second generation of Ashoka fellows is coming into its own. We have the core architecture for the next phase. We are now getting into hybrid value chains, global partnerships between social entrepreneurs and business. The reintegration of the two is very important for the health of both. Business must use social networks to reach new markets. And the citizen sector needs the marketplace to gain financial sustainability. The last two centuries saw two different streams – business and social. But since 1980, we have been closing the productivity gap. Now the two can be put together.


There are millions of small farmers who could benefit from the work we’ve done in Mexico with respect to drip irrigation. We worked there in collaboration with Amanco. Now the company wants to go into other countries. This is what a business strategist needs to know and understand. I believe that in five years all business schools will be teaching hybrid value chains as a part of the curriculum.


Q: Give us some examples of how it works on the ground.


A: We had great success with Cemex in Mexico. (Cemex, a large Mexican cement producer came up with a plan for people living in slums. As part of this, those who saved up to buy cement to rebuild their homes would receive engineering services at lower rates from the company. The scheme works both ways, helping the community as well as allowing Cemex to enter a market they would otherwise find inaccessible.) But what’s more important, Cemex’s success encouraged Lafarge to come to us for similar projects. And two other construction companies have also shown interest. Clearly, socially relevant projects are also good business now. The jujitsu point is when the competitive dynamic takes off and you have multiple industries involved, all making money.


Ashoka: www.ashoka.org