social business

On the 12th of May, a plan for setting up a Business Process Outsourcing (BPO) centre in a prison was announced in India. Cherlapally Central Jail near Hyderabad, Andhra Pradesh will be the first prison in India, and probably the first prison in the world, to have such a facility. A private company will set up necessary infrastructure and run the operations; the prison would provide the space. The public-private partnership initiative is being launched to help prisoners assimilate easily into the society after serving their terms. The operations are expected to be started in about three months. Initially the centre would handle non-voice operations like data entry.

Close to 40% of the 2100 inmates in the Cherlapally Central Jail are educated.  About 200 of these prisoners will be selected, trained and employed in the BPO centre. These prisoners would get an opportunity to earn Rs.100 – Rs.150 ($2.2 – $3.3) per day, ten times their current income.

In the past two months, I had the privilege of participating in various meetings in Sao Paulo, Mexico City, Buenos Aires, where social entrepreneurs and potential investors in social business-Vox Capital, Ventura Institute, IJPartners, Kellogg Foundation  , Ignia Fund , Banco Columbia, among others, discussed about social investment.  While individuals and organizations were different in each session1, it is not a surprise that when we talk about investment in social enterprises in Latin America, more or less the same questions, arguments and tensions between entrepreneurs and potential investors arise.

An interesting challenge that social businesses face when they reach a certain scale, is how to maintain a product or service quality as they are distributed are a more massive scale. This is why this was one of the themes discussed in September 2009 at Sao Paolo Ashoka Fellow gathering.

Some questions that emerged included: Which are the strategies that work to reach scale? What mechanisms should be put in place to insure that the product or service continue having the same quality - and have the same positive social impact - as its distribution is scaled? Are periodical control and monitoring required? How do the new production units interact and create synergies with one another? What is the role of training? What are the biggest and most important challenges in this expansion process?

This post contributed Vivianne Naigeborin

One of the greatest challenges for entrepreneurs developing social businesses is to define their enterprise’s governance model - that is, the processes, agreements, policies, and laws that will regulate the way in which the enterprise (whether a business or a social sector organization) will be managed, the relationship with fellow shareholders, and the division of power among its various stakeholders.

This is why the Latin American entrepreneurs who participated in the 2009 Ashoka-Lemelson-Artemisia gathering in Sao Paulo chose governance as one of the topics to address. During the morning of September 16th, a group of around 12 entrepreneurs shared experiences and insights in a debate that generated reflections which may serve as inspiration to those who work in this field. Among the tenets shared by the group, I would highlight:

This post contributed by Paula Cardenau.

Today, what are the opportunities for social businesses? In theory, most of the population's basic necessities are not satisfied, and social businesses are profiled like a tool that has high potential to increase incomes, access to education, to health, to water, to housing and other basic rights for thousands of people. In this group of particular entrepreneurs, another opportunity is that they have a very specialized knowledge, validated by years of experience, to achieve opportunity equality.  The 23 social entrepreneurs gathered in Sao Paolo also talked about the trends of Just Commerce and Responsible Consumption as emerging opportunities.

This post contributed by Paula Cardenau.

Our meeting around social business (which had 23 Ashoka, Ashoka-Lemelson, and Artemisia social entrepreneurs, in addition to staff from Ashoka and Artemisia Foundation) focused on the dilemmas and opportunities facing social businesses in Latin America.

On the first day of the Sao Paolo event, which gathered 23 social entrepreneurs and investors, we focused on Social Technologies and the barriers to distributing them (if you are interested, you can read this post which summarizes what the group discussed and this article by Ashoka-Lemelson Fellow's Gustavo Gennuso on his perspective on why technologies don't reach end users).

We also addressed the question of how Fellows dealt with parnterships and distribution strategies to reach beneficiaries at a massive scale. For instance many of the Fellows worked with their governments to reach a large number of people quickly, but as Ashoka-Lemelson Fellow Carlos Simão pointed out, re-negotiating the partnership when the political party in government changes is challenging so it may not be the best strategy for a long-term plan.