ADDRESSING SOCIAL CHALLENGES IN
BELGIUM THROUGH SOCIAL & BUSINESS
CO-CREATION”
– EXECUTIVE SUMMARY
BUSINESS & IMPACT
Belgium StudySeptember 2014
2
The Challenge
EXECUTIVE SUMMARY
The Opportunity
• 15% of the Belgian Population lives in poverty and does not have access to essential products and services1.
• The needs of those populations remain unaddressed by private companies• Government and citizen sector organizations alone cannot respond to this
challenge, despite multiple innovations from Social Entrepreneurs.
The Solution
• Instead of seeing the unmet needs of the poor population as a problem, it is an opportunity for private, public and social entrepreneurs: this population segment represents an untapped market of more than €11 billion.
• This study aims to provide an overview of the main needs of poor populations when it comes to essential products and services and of the “markets” they represent in Belgium.
• Private, social entrepreneurs and governments need to co-create market innovations by sharing assets and capabilities
• Private companies will benefit from new markets, new products, new distribution channels and a pioneering corporate image
• The social sector will benefit from new funding sources and accelerated social impact
3
+
DEFINITIONS OF POVERTY
Income-poor populations
Poverty is much more complex
than material poverty. It is a
state of mind, a lack of
resources and opportunities. It is
about social exclusion**
* Definition used by Eurostat, the INSEE and throughout Europe. The US and Canada use an absolute value
** Description used by Caritas
This study focuses on
“Vulnerable populations”
which refers to populations
who are missing basic
needs in one of the
identified poverty areas,
independently of their
income.
People in households living
below the poverty line, set at
60% of the median national
household income*
Social Exclusion
Vulnerability
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1.7 MILLION INCOME-POOR PEOPLE IN BELGIUM
…OR MORE THAN 15% OF THE POPULATION
Percentage of the Total Population
%
Number of Poor People 1
10.515%
10%
19%
32%
618,000
676,000
366,000
Source: FOD Economie 2
in Flanders
in Brussels
in Wallonia
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PRIORITIZED « MOST BASIC NEEDS »
* Are included in most basic needs: Health, Energy, Housing, Nutrition
** Accenture estimates, on the basis of FOD Economie’s huishoudbudgetonderzoek 2
*** Are included in other: alcohol and tobacco, white goods, education, financial costs, clothing, leisure goods and other goods and services
which have not been mentioned.
Expenses of income-poor populations**
Income-poor people spend 75% of their budget on 5 most
basic needs*
Health & Insurance11%
Energy8%
Other***25%
Housing32%
Nutrition17%
Mobility7%
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A REALITY: LIVING ON 20€ PER DAY OR LESS
Example for a 3 person family with 1800€ per month, i.e. 20€ per
day and per household member*
6€for housing
2€
for
he
atin
g
2€for health care
and insurance
1€for clothing
2€for
transportation
3€for food
1€for
communication
1€for
entertainment
for household goods1€
1€
Oth
er e
xp
en
ses
(ed
uc
atio
n, d
eb
t, etc
.)
Source: Accenture Estimation based on Eurostat 1 and FOD Economie 2. See appendices for more details.
* 20€ per day per person corresponds to the income level at the poverty threshold for a family of 3. By definition, incomes of poor populations are below
this line: a poor person’s average income has been estimated at €16.7 per day in Belgium (cf. Appendix).
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LOW INCOME DOES NOT MEAN NO INCOME
Source: See details in appendix - Accenture analysis based on Eurostat data and the « huishoudbudgetonderzoek » from FOD Economie (2012)2
* Poor populations with mortgage loans(9% of poor adults) are on average indebted 5 times their annual gross income (source: HFCS, BNB, see chapter on
credit poverty for more details); assuming 4% interest rate on mortgage: 4% x 5 times incomes = 20% of income. Note: potential market of people with credit
constraints not included.
PRIVATE EXPENSES OF POOR POPULATIONS (Mio €)
A market of more than €11 billion
Tota
l
Oth
ers
530
Edu
cati
on
24
Leis
ure
/cu
ltu
re
355
Mo
bili
ty
1,354
Ener
gy
1,073
11,898
Inte
rest
on
Deb
t
231
Alc
oh
ol a
nd
Tob
acco
227
Leis
ure
Go
od
s
231
Clo
thin
g
305
Wh
ite
Go
od
s
306
Co
mm
un
icat
ion
353
Hea
lth
, In
sura
nce
1,421
Nu
trit
ion
1,917
Ho
usi
ng
3,572
Focus of
this study
Spending of other vulnerable populations (only estimated for 5 biggest spending domains)
Spending of income-poor populations
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HOUSING POVERTY
of the
population17%
of expenses of income-poor households32% € 3.6 BIL.
market
1.9 million
people*
500.000 people live in overcrowded homes 1
184.000 applicants waitlisted for social housing**
Our homes are in a bad shape
Our homes are more expensive
The state struggles to help us
* Including income-poor populations and other vulnerable populations defined as here-above
** 107.351households in Flanders 3 , 37.983 households in Wallonia 4, 38.928 households in Brussels 5
People spending over 40% of their expenses on housing(Eurostat definition1)
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of the
population17%
of expenses of income-
poor households17% € 1.9 BIL.market
1.9 million
people*
Poor people have 11% more chance on obesity6
0,5 million people are affected by malnutrition7
Healthy food is too costly
Nearly 1 kg per person of food is wasted every day**
NUTRITION POVERTY
We need nutritional value
* Including income-poor populations and other vulnerable populations defined as here-above.
** 345 kg food per capita per year is wasted in Belgium. Of this,, 89kg is wasted by households, 210kg by the food industry and 46kg by retail & Horeca 8
People not able to afford a quality meal every other day(Eurostat definition1)
10
of thepopulation18%
of expenses of income-
poor households11% € 5.8 BIL.Market
2.0 million
people*
Vulnerable social groups live 5.5 years shorter with 17.8 healthy life
years less12
7.4% of the Belgian population needs to delay medical treatment
due to financial constraints**13
HEALTHCARE POVERTY
We prefer avoiding medication
Chronic diseases strongly affect us
30% of expenses not reimbursed
from which 4.3 BIL € is invested by the state
* Including income-poor populations and other vulnerable populations defined as here-above
** Calculation: 19% of Belgians delay treatment13 x 39% of those do this for financial reasons13 = 7.4% (see appendix for details)
People who need to delay medical treatment due to
financial constraints, or who are at risk to do so.
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of the
population16%
of expenses of income-
poor households8% € 1.1 BIL.market
80,000 families have outstanding energy bills 9
63,000 families have limited energy use through a budget
meter or power limiter 11
ENERGY POVERTY
1.8 million
people*
We cannot renovate our homes
Energy prices skyrocketHow can we save energy?
* Including income-poor populations and other vulnerable populations defined as here-above
(Eurostat definition1)
People who are not able to keep their homes at an
adequate temperature
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MOBILITY POVERTY
of the
population19%
of expenses of income-poor households7% € 1.4 BIL.
market
2.1 million
people*
67% of poor people see mobility as a barrier to find a job14
170.000 disabled and 125.000 elderly need special transport means15
Not all work locations can be reached via public transport
Mobility is key in social integration
Existing solutions of car-sharing
are still too expensive
* Including income-poor populations and other vulnerable populations defined as here-above
People for whom mobility is a key barrier in daily life (e.g.,
to find a job)
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CO-CREATION : VALUE FOR PARTNERS
Expand social impact by leveraging the assets of corporations
Generate new sources of income to reinvest in social projects
Develop new skills and
knowledge
New markets including vulnerable populations
Innovation labs for business models
Stronger CSR positioning and social footprint
Employee engagement
ROI of social programs
Savings on public spending
Reinforcing “a positive
economy”
CORPORATIONS
GOVERNMENT
SOCIAL
ENTREPRENEURS
Corporations and social entrepreneurs closely complementing their core businesses, skills and resources
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- Reduced energy costs- Improved living conditions- Employment of do-it-yourselvers
Housing Idea #1: DIY House Refurbishing
Do It Yourself (DiY) Home Refurbishing at low
cost
Private
The central partners:
- Negotiate volume rebates with DiY
store, and refurbishing contract with
home owner.
- Guarantee minimum quality
- Provide alternative living space during
works if needed
Quality housing at a low price Provide building
material
Get their property in better state
Rentees or owners living in precarious housing conditions
- Provide building material at commercial rates (with volume rebates)
- Provide DiY advise & project support- Advertise program within stores
- Pay for the materials- Are allowed to decide on the type of
refurbishment
- Organized Community of rentees- Mutual help between rentees for
restauration, hence avoiding expensive labor costs
- Pool of (professional) specialists for most technical jobs
Closing the skill gap and making people employable
Rentees do the work & learn skills in DiY/construction
Owners
- Organize trainings for DiY community to ensure quality work
- Liase with employment opportunities in the construction sector.
Community
Rentee
(Measurable) Impact
Public
Social
I rented a house in a poor state and had no money/skills to maintain it. Now my home has become a place I am proud of and in which my
children can grow up decently.
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HOUSING IDEA #2: Quality Home Ownership
Social Private
- Design low-cost (but quality) houses for the poor
- Spread the cost over time with adequate financial products
Reinforce house ownership and management capabilities of poor
Pro-poor financial product innovation
Provide energy to the poor with less defaults
- Design financial product that allows poor to be owner of house while spreading cost over time
- Add energy to the package (can be as a service provider?)
- Social partner selects poor households with biggest probability of success
- Social partner helps manage house over time and pay for the leasing
- Helpdesk service for juridical questions
Contract with clear juridical language
Rentees not able to buy a home
Provide home ownership over modular, quality
houses with cost spread over time
I have been paying for rent and energy whole my life. Now I own a passive modular house, which can easily be adapted to my needs in 20 years from
now.
Investor
- Invest in a social construction project with return
- Number of ownerships provided- Long-term stay of poor populations
(Measurable) Impact
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MOBILITY IDEA: Share Empty Cars
Platform matching supply & demand for
empty cars
Demand for Empty Cars Supply for Empty cars
- legal advice - insurance - calendar management - reservation tooling
Poor populations get a shared car solution
Companies and individuals get value out of empty cars
- Populations going to work- One-shot uses (doctor, etc.)- People with disabilities?
(Measurable) Impact
Leasing companies
School busses
Bus companies
Individuals
Design shared car-insurance, only working for trips when car is shared
Pool of certified drivers (or volunteers) get a job
- Driver is optional (for busses, etc.)- If no driver: there is a role for poor
populations to exchange keys
- Increased mobility for poor populations- Jobs created
Employers
Car rental companies
Garages
Thanks to the new matching platform for empty cars, I can use previously unused cars for my mobility.
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MAIN SOURCES OF STUDY
1 Eurostat, SILC (2011-2013), Income and living conditions, select relevant data-base. E.g., > Material
Deprivation> Economic Strain> select relevant data-base> change INCGRP> select relevant income
group, e.g., « below 60% of equivalized income »,
http://epp.eurostat.ec.europa.eu/portal/page/portal/income_social_inclusion_living_conditions/data/dat
abase
2 Federale Overheidsdienst Economie (2014). Huishoudbudgetonderzoek 2012,
http://statbel.fgov.be/nl/modules/publications/statistiques/arbeidsmarkt_levensomstandigheden/huishou
dbudgetonderzoek_2012.jsp
3 Studiedienst van de Vlaamse Regering (2013), VRIND 2013,
http://www4.vlaanderen.be/dar/svr/afbeeldingennieuwtjes/algemeen/bijlagen/vrind2013/2013-10-14-
vrind2013-4-stedengewest.pdf
4 Société wallonne du logement (2013), Rapport d'activités 2012, p.15 & p.68,
http://www.swl.be/images/swl/RA_comptes/ra2012-web.pdf
5 Observatoire de la Santé et du Social de Bruxelles-Capitale (2013), Baromètre social 2013, p. 65-66,
http://www.observatbru.be/documents/graphics/rapport-pauvrete/barometre-social-2013.pdf
6 Robertson, Lobstein and Knei, European Commission (2007)
7 Index Mundi (2005), Mundi Malnutrition Index 2005
8 Roels K., Van Gijseghem D., Vlaamse Overheid, Departement landbouw en visserij (2011) Verlies en
verspilling in de voedselketen.
9 Senat de Belgique (2010), Annales,
http://www.senate.be/www/?MIval=/consulteren/publicatie2&BLOKNR=16&COLL=H&LEG=4&NR=115&SUF
=&VOLGNR=&LANG=fr
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MAIN SOURCES OF STUDY
10 VREG (2011), aantal actieve budgetmeters (electriciteit)
http://www.vreg.be/sites/default/files/uploads/20120201_-_actieve_budgetmeters_e.pdf
11 CREG (2011), Etude relative à l’imputation par les gestionnaires de réseau de distribution des frais
résultant des obligations de service public sociales dans le marché de l'électricité , p. 33,
http://www.creg.info/pdf/Etudes/F1131FR.pdf
12 Bossuyt N., Gadeyneb S., Deboosereb P., Van Oyen H. (2004), Socio-economic inequalities in health
expectancy in Belgium, Public Health (2004) 118, 3–10,
http://www.eurohex.eu/bibliography/pdf/0309921234/Bossuyt_2004_PH.pdf
13 Deloitte (2011), 2011 Survey of Health Care Consumers,
http://www.deloitte.com/view/en_US/us/Industries/health-care-providers/center-for-health-
solutions/health-care-consumerism/97492e3712571310VgnVCM1000001a56f00aRCRD.htm
14 Mobiel 21 en het Netwerk tegen Armoede (2013), MOBIKANSEN – Duurzame mobiliteit voor mensen
in armoede. http://www.mobiel21.be/nl/content/bijna-zeven-op-tien-mensen-armoede-vindt-moeilijk-
werk-door-mobiliteitsbeperkingen
15 EnterVZW (2012), Businessplan voor een gebiedsdekkend, complementair en geïntegreerd Vlaams
toegankelijk vervoersysteem in Vlaanderen en het Brussels Hoofdstedelijk Gewest
16 National Bank of Belgium (2014), Centrale des crédits aux Particuliers, rapport statistique 2013,
http://www.nbb.be/DOC/CR/CCP/Publications/BRO_CKPSTAT2013F_31122013.pdf
17 Zimmer H. (2012), Labour Market Mismatches,
www.nbb.be/doc/ts/publications/EconomicReview/2012/ecorevII2012_H4.pdf
18 OECD (2013), Incidence of unemployment by duration
http://stats.oecd.org/index.aspx?queryid=38907