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Letter from Zurich, Day 2

When I left the hotel this morning around 7:45am, it was still pitch black outside. Yet the Summit already was buzzing almost an hour before the official program kicked in. Delegates were swarming into the spacious Swiss RE Center which hosted the two-day event. We swarmed around the staff who manned enormous Italian espresso machines the size of small SUVs. Apparently even social entrepreneurs need their caffeine to start the day.

It’s quite a crowd – commercial bankers from institutions like Triodos and Shorebank, educational and social activists from Pakistan, Indonesia and Ecuador; management consultants, journalists and a smattering of others. Big brother Davos hosts more than 2300 people while the Summit has a more comfortable crowd of 300 or so. This might seem small in relative terms, but I have found that the hardest challenge is how to meet everyone. Unlike TED or some other power gathering, the Summit doesn’t use the social networking software to facilitate connections between participants. This might be a great addition for future sessions.

Claudia Schwab opened the event by congratulating Summit board member Muhammad Yunus on his recent Nobel Prize. This seemed an apt symbol of the curious tension swirling about the conference. There is a sense that the world finally has awoken and appreciated the efforts of the seasoned activists who have been laboring down this path for years. But is the sector ready for the attention?

Definitions were a recurring theme throughout the panels. In a morning session moderated by Duke Professor Greg Dees, one of the pioneering academics in the field, Bill Drayton of Ashoka talked about social entrepreneurship, not as a societal exception, but as the rule in grand historical terms. He foresaw a future state in which all people act as ‘changemakers,’ learning the skills of smart activism at a young age, perhaps in primary school, and driving future revolutions in their respective fields. Roger Martin, dean of the Rotman School of Management in Toronto, talked about the failure of the MBA education to understand entrepreneurship and his efforts to develop the theoretical research to underpin a richer understanding of the sector. Matthew Bishop, chief business writer for The Economist, played the spoiler and questioned the prevailing dogma. He roiled the audience when he insisted that Bangladesh, home of BRAC and Grameen, among the few media darlings in the field, should not be used as a model for other countries because of its rampant corruption and governance challenges.

We wandered off midday into breakout groups to hear different social entrepreneurs make the business case for their organizations. Several talks were quite compelling, particularly Gillian Caldwell from WITNESS who laid out a powerful vision for their Hub project slated to launch mid-2007. Think YouTube for human rights managed Wiki-style by its community of users. WITNESS always has been a breakthrough group in the human rights space, doing very meaningful work by empowering activists with the ability to use media to tell their stories. If the Hub can cross the chasm, it’s not hard to imagine that Caldwell and her organization might follow in Yunis’ footsteps in the years to come.

Bunker Roy, founder of the Barefoot College, gave an impressive presentation. He shared his work to create an educational institution that trains 35-45 year old women in solar engineering and rainwater harvesting. His objectives seemed to fly in the face of development theory: he prioritizes the education of the middle-aged, rather than the young. Roy also focuses on giving people the minimum skills to allow them to remain in their local villages, rather than to empowering them with broader tools to enable migration or self-determination on a broader scale. He also has a series of night schools that educates children and these are actually self-managed by the students themselves, headed up a 12 year old ‘prime minister’ elected by his/her peers. It’s a model that would seem impossible to get right. Yet with over 100,000 students spread among 20 colleges in 13 states throughout India and analogs emerging in Afghanistan and other countries, Roy is an inspiration.

Another trailblazer who I met while walking the halls was Vikram Akula, founder of SKS India. SKS is one of the fastest growing microfinance institutions in the world, a for-profit financial services company whose success seems to lie in Akula’s East-West point of view. Akula is from South Asia but was raised in upstate New York. He manages to balance heartfelt empathy for the impoverished with a savvy sense of Western business practices that he is using to scale up his organization. His rates of return are astounding, thus SKS has attracted the support of world class entities like Citigroup and Omidyar Network, fairly capable judges of talent.

During the afternoon session, I was particularly struck by two sets of comments. Will Rosenzweig, most recently of Great Spirit Ventures who has started a new socially minded fund, Physic Ventures, lamented the lack of attention among social entrepreneurs on exit strategies for their ventures. Paul Fletcher, senior managing partner for Actis Capital, a UK-based private equity firm focused on emerging markets, discussed the remarkable success of Mo Ibrahim, the Sudanese entrepreneur who founded CellTel, the provider of mobile telephony services for 30% of Africa. Actis’ small and patient investment in his company resulted in a $4.5 billion payout some years later.

The dichotomy of their remarks underscored a challenge that Bishop raised earlier in the day. Many in the for-profit world talk about insights in innovation learned from the social sector. We frequently read reports about how companies can gain by evaluating the extraordinary strategies of dynamic and trailblazing social ventures. But have the social entrepreneurs learned the right lessons from the for-profit world?

I am not talking about obvious issues like income generation and scale-up but more subtle, structural topics. Exit strategy could be seen as one example of a critical determinant of success in a business context that is not often considered in the non-profit realm. Organizational design, recruitment and retention, succession planning, mergers and acquisition – these indisputably are key success factors for successful businesses. However, these topics rarely make the agenda in a discussion on social ventures. More attention to these topics might facilitate the ability of social entrepreneurs to ramp their operations and achieve the systemic change to which they aspire.

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I would be interested to know why this event isn't streamed or recorded and made available later. This is not difficult to do and there are so many reasons why it would be beneficial. For all the wonderful rhetoric about using open source IT for information sharing the sad fact is this conference might as well be taking place on another planet.

Posted by: GarySeattle on 23 Jan 07



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