Social Innovation: From Understanding to Positive Change

São Paulo, BrazilSocial Good Brazil

Kriss Deiglmeier, Executive Director

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The emergence of social as a modifier

Soraya SaltiINJAZ al-Arab

Bill Drayton Ashoka

Premal Shah/Matt FlanneryKIVA

Muhammad Yunus Grameen Bank; Nobel Laureate

Adalberto Verissimo and Carlos Souza Jr.Imazon

Social Entrepreneurs

Social Entrepreneurship

Social entrepreneurs play the role of change agents in the

social sector, by:

• Adopting a mission to create and sustain social value (not just private value),

• Recognizing and relentlessly pursuing new opportunities to serve that mission,

• Engaging in a process of continuous innovation, adaptation, and learning,

• Acting boldly without being limited by resources currently in hand, and

• Exhibiting heightened accountability to the constituencies served and for the outcomes created.

Source: Greg Dees, The Meaning of “Social Entrepreneurship,” J. Gregory Dees, Duke University, May 30, 2001

Contemporary Social Innovations

CharterSchools

Microfinance Fair TradeEmissions

Trading

Socially Responsible

Investing

Need to do something with this and the next slide. I like the stool metaphor, but this is a poor visual, and I have not been able to find a decent stool photo (surprisingly)

Social EntrepreneursThe Great Man or Woman Theory

Social EnterpriseSelf-Sustaining Organization Theory

Social Capital Market

Microfinance

Social Innovation Definition

A novel solution to a social problem that is moreeffective, efficient, or sustainable

than existing solutions and for which the value created accrues primarily to

society as a whole rather than private individuals.

Criteria differentiation

Innovation Criteria• Novelty- new to user, context or

application• Improvement- more effective or

efficient

Social Innovation Criteria• Sustainable• Just• Public Value

Social Innovation and Traditional Innovations

Social Innovation• Socially Responsible

Investing• Microfinance• Sustainable

Development(Amazon)

Innovation• The Internet• Hydraulic Fracking• Deep water Trolling

Stages of Innovation

Defining the Problem and Opportunity

IdeaGeneration

Piloting &Prototype

Diffusion &Scaling

Case Study – Microfinance

Lack of access to: • formal credit • financial

services• formal

financial sector

The Problem

Idea Generation

1000’s– 1500’s

1800’s 1950’s– 1960’s

• Chit Funds (India)• Mujins (Japan)• Esusu (Nigeria)

• Savings Clubs• People’s Banks• Credit Unions

• Subsidized Rural Credit

Piloting & Prototyping

Microfinance 1960’s– 1970’s

1980’s

• Target market poor women

• Microbusiness• Group Lending

• 1961- Accion Venezuela

• 1976- Grameen Bangladesh

• Failure of government initiated poverty programs

Diffusion & Scaling 1990-present

1990’s 2000’s Present

• Microfinance Decade

• Nonprofit + Emergence of For Profit

• Rise of Non-Bank Financial Institutions (NBFIs)

• 2005- UN declared the year of microcredit

• 2006- Yunus and (Grameen) received the Nobel Peace Prize

State of Microfinance - Global View• Over 12,000 MFIs • More than 94,000,000 borrowers total• 91 countries

• Data and Metrics• Organizational

Efficiency/IT Systems

• Scale and Reach

Technology’s Influence on Microfinance

The Story of M-Pesa: Problem

• Needed to deepen financial penetration into the unbanked community

The Story of M-Pesa: Idea Generation

• Utilized cross-sector community collaboration to be successful

The Story of M-Pesa: Pilot

• Adapted to practice on the ground

The Story of M-Pesa: Scaling

Established a network of agents

Set a bold goal

The Story of M-Pesa: Tipping Point

Became viral after reaching over a million customers and implementing lessons learned

• Ubiquitous distribution network

• Strong Brand• Work all the time• Agent Training• Combat Fraud

The Story of M-Pesa: Kenya Today

• Moves between $500-$700million per month (20% of Kenya’s GDP)

• 15 million active users

The Story of M-Pesa: Global Expansion

• Tanzania • Afghanistan

• South Africa• India

Commit to cross-sector collaborationSocial innovations require everyone’s involvement.

.

Save The Amazon Rainforest Organisation

Focus on your strategic lever

Social innovations grow as leverage points are identified and utilized.

Fair Trade Mainstream Markets

Never mistake a clear view for a short distance

Social innovations do not happen overnight.

Social Innovation Continuum

Source: kdeiglmeier

Stagnation Chasm

What can civil society do?

• Leverage trust, networks, and deep customer knowledge

• Ensure voice of customer is heard

• Provide long-term thinking

What can government do?

• Set effective policy, regulation, and rules

• Provide access to reach large number of customers

• Raise awareness

What can business do?

• Leverage assets, efficiencies, and resources (Financial, management, supply chain, etc.)

• Demonstrate rapid action

• Provide flexible funds

“If we want to build a stronger, more sustainable world for future generations, one with more partners and fewer enemies, we have to work together.”

@SocInnovators @kdeiglmeier

Kriss Deiglmeier

http://csi.gsb.stanford.edu