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National Business and Management Conference 2015 | p. 508 Poverty alleviation through social innovation: The Gawad Kalinga Enchanted Farm Model- A case study research Teodoro S. Ocampo De La Salle University Abstract This Research study attempts to link Poverty Alleviation and Social Innovation and establish a causal relationship between social innovation initiatives and the level of poverty in the Philippine setting utilizing The Gawad Kalinga Enchanted Farm social innovation model as a point of comparison with other selected social innovation initiatives to address the Philippine poverty situation. The Case Study Research framework of Robert Yin (2009) shall be used as the main research methodology. Keywords: Social Innovation, Poverty Alleviation, Social transformation, Subsistence communities, Sustainable communities, Social business Background and Academic Context This study is about Poverty and how Social Innovation addresses this malaise which since time immemorial had been afflicting Philippine society. The research will attempt to dissect the phenomenon of Philippine poverty and see why traditional, conventional solutions had been ineffective since the beginning of Philippine society. The research is deemed worth the efforts since it intends to highlight the more relevant and up-to-date studies of poverty and poverty alleviation and how appropriate social innovation approaches could help provide a more sustainable solution to reducing poverty level in the Philippine setting. Many studies have been undertaken relating to Poverty in the Philippine setting. One such study showed that according to the World Bank, despite the drop in extreme poverty in developing regions in the world between 2005 and 2008, the Philippines has not seen the same decline where 28.6% of Filipinos were still living on less than $1.25 a day in 2009 compared to 2006 with only 0.7 per cent decrease over three years. This indicates an almost stagnant progress in addressing poverty (Welch, A., 2013). Another study highlighted that Poverty and Inequality in the Philippines remain a challenge. It indicated that in the past four decades, the proportion of households living below official poverty line has declined slowly and unevenly and efforts and programs to reduce poverty have been much slow. The study also highlighted twelve key findings and of these twelve, five findings stood out as follows: a) Economic growth did not translate into poverty reduction in recent years, b) Poverty remains a mainly rural phenomenon although urban poverty is increasing, c) There is weak local government capacity for implementing poverty reduction program, d) Multidimensional responses to poverty reduction are needed, and e) Further research on chronic poverty is needed, (ADB, 2015). Another study stressed that the much-touted

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National Business and Management Conference 2015 | p. 508

Poverty alleviation through social innovation: The Gawad Kalinga Enchanted Farm

Model- A case study research

Teodoro S. Ocampo

De La Salle University

Abstract

This Research study attempts to link Poverty Alleviation and Social Innovation and

establish a causal relationship between social innovation initiatives and the level of poverty in

the Philippine setting utilizing The Gawad Kalinga Enchanted Farm social innovation model as a

point of comparison with other selected social innovation initiatives to address the Philippine

poverty situation. The Case Study Research framework of Robert Yin (2009) shall be used as the

main research methodology.

Keywords: Social Innovation, Poverty Alleviation, Social transformation, Subsistence

communities, Sustainable communities, Social business

Background and Academic Context This study is about Poverty and how Social Innovation addresses this malaise which since time

immemorial had been afflicting Philippine society. The research will attempt to dissect the

phenomenon of Philippine poverty and see why traditional, conventional solutions had been

ineffective since the beginning of Philippine society. The research is deemed worth the efforts

since it intends to highlight the more relevant and up-to-date studies of poverty and poverty

alleviation and how appropriate social innovation approaches could help provide a more

sustainable solution to reducing poverty level in the Philippine setting.

Many studies have been undertaken relating to Poverty in the Philippine setting.

One such study showed that according to the World Bank, despite the drop in extreme poverty

in developing regions in the world between 2005 and 2008, the Philippines has not seen the

same decline where 28.6% of Filipinos were still living on less than $1.25 a day in 2009

compared to 2006 with only 0.7 per cent decrease over three years. This indicates an almost

stagnant progress in addressing poverty (Welch, A., 2013).

Another study highlighted that Poverty and Inequality in the Philippines remain a challenge.

It indicated that in the past four decades, the proportion of households living below official

poverty line has declined slowly and unevenly and efforts and programs to reduce poverty

have been much slow. The study also highlighted twelve key findings and of these

twelve, five findings stood out as follows: a) Economic growth did not translate into poverty

reduction in recent years, b) Poverty remains a mainly rural phenomenon although urban

poverty is increasing, c) There is weak local government capacity for implementing poverty

reduction program, d) Multidimensional responses to poverty reduction are needed, and e) Further

research on chronic poverty is needed, (ADB, 2015). Another study stressed that the much-touted

National Business and Management Conference 2015 | p. 509

Pantawid Pamilya Pilipino Program or 4P’s which is patterned after Conditional Cash Transfer

Programs implemented in other developing countries and involving monthly cash grants of P1,400

to the “poorest of the poor” families on condition their school-age children remain in school and

the mothers go for regular medical chech-ups has had no impact on poverty reduction at both micro

and macro levels. As of June, 2013, the program operates in 1,484 towns , 143 cities in 79

provinces and reported by DSWD to be benefiting close to 4 million Filipino families.(Social

Watch Group, 2013).

In this research, Poverty is defined as the state of human beings who are poor or they have little or

no material means of surviving- food, shelter, clothing, healthcare, education and other physical

means of living or improving one’s life. Poverty alleviation, on the other hand, is the promotion

of economic growth that will permanently lift as many people as possible over the poverty line

and Poverty reduction measures are those that raise or are intended to raise, enabling the poor to

create wealth for themselves as a means for ending poverty forever(Wikipedia.org) Social

Innovation is defined as a novel solution to an unmet social problem that is most effective, efficient

and sustainable or just than the present solutions and for which the value created accrues primarily

to society as a whole rather than private individuals (Stanford Business, 2009).

The study on social innovation as a means of addressing unmet social needs, particularly poverty,

which has since 1999 registered at 1.6B poor worldwide decreased to 1.0B poor and for the East

Asia Region registered at 661M poor in 1999 declined to 206M poor(The World Bank Group,

2001) and while the Philippine poverty, despite the average 6% GDP annual growth remained

practically unchanged standing at 27.9%( 3 out of 10) of population are poor as of 1st semester,

2012 from the 2006 figure of 28.8% in 2006 (NSCB, 2012) cannot be over emphasized.

How do we then link the idea poverty with that of social innovation? Theoretical studies on social

innovation, particularly on the diffusion of innovation by Bates (2012) and the three-fold theory

of social change by Reeler (2007) tried to show this link. However, these studies do not yet

establish a clear causal link.

With this clear weakness, this presents a need to provide a new perspective that establishes a causal

relationship between poverty and social innovation. This gap in existing literature necessitates

some further studies on social innovation concepts that enhance poverty alleviation initiatives.

Review of Related Literature

The following researches were utilized to lend appropriate framework and theoretical concepts

to the study.

Poverty and Poverty Alleviation

This literature highlighted the work of Thomas, G. (1972) who identified two causal

explanations of poverty, the genetic and the scarce resource models, which are both non-social and

representing the extremes of a continuum from the sub-individual to the ecological. According to

Thomas, the genetic explanation asserts that poverty is biologically rooted in inferior genetic traits,

National Business and Management Conference 2015 | p. 510

while the scarcity thesis contends that resources are inadequate to yield affluence or abundance for

all, at least in this historical period so that poverty for some is an unavoidable consequence. Both

these propositions, Thomas stresses place the sources of poverty beyond human intervention in the

short term. Neither theses, however, is supported by enough evidence to be taken seriously.

The literature of Jordan (2004) accentuated that there are competing theories regarding the causes

of poverty, particularly in the US , although these could be categorized into cultural/behavioral

and structural/political dimensions. The author contends that the behavioral/ cultural thesis of

poverty stemmed from the anthropological arguments of Oscar Lewis (1970) which later became

mistakenly correlated to laying blame for poverty on the poor themselves or on a government that

makes them continually dependent.(Patterson 2000). This situation, the author stresses tends to

perpetuate itself from generation to generation because of its effects on children. The author

underscores that the structural/ political school of thought contends that most poverty is ascribable

to structural factors inherent to either the economy and or to several interrelated institutional

environment that serve to favor certain groups over others generally based on gender, class or race.

At the end, the author attempted to synthesize these two competing schools of thought and

concluded that the structural variables seemed to overwhelmed the role of the behavioral/culture

variables.

Social Innovation

In the work of Bates (2012), she raised the various challenges plaguing society for generation-

poverty, hunger, terrorism, natural disasters, environmental damage, inaccessible health care, etc.

She contended that these issues are very complex and involve several different constituents with

competing objectives. These issues, therefore, defy the traditional means of solving problems

because they are caused in numerous ways, interwoven and difficult to untangle. The author called

these problems “wicked problems” and the key to solving them lies in defining them with

precision, clarity, and detail. She, then, proposed a Social Impact framework for Social Innovation

Initiative utilizing the following process: a) Define the Social Challenge, b) Understand and

Prioritize Needs, c) Examine the Opportunity, d) Devise a Workable Solution, e) Develop a

Business Model , and f) Diffusion of Innovation.

The literature of Mulgan (2007) highlighted that successful innovation thrives best when there are

effective alliances of key stakeholders and between small organizations and entrepreneurs or the

“bees” who are mobile, fast, and cross pollinate and the big organizations or the “trees” with roots,

resilience and size which can grow ideas to scale. He further accentuated that social innovation

can scale up along continuum from diffusion of ideas to organic growth of organizations.

According to Mulgan, the pattern of growth is dependent on the mix of environmental conditions

and capacities- managerial and financial. He further elaborated the “connected difference theory”

of social innovation with its three key dimensions, namely; a) Social innovations are usually new

combination of or hybrid of existing elements rather than entirely new idea, b) Putting them to

produce entails cutting across organizational, sectoral or disciplinary boundaries, and c) They

leave behind compelling new social relationships between previously disparate individuals or

groups, thus contributing to the diffusion and embedding of the social innovations. In his book,

Banker To The Poor, Yunus (2007) manifested that micro-lending for the poor, Social innovation

initiative can be much more effective than unwieldy and expensive aid program as exemplified

National Business and Management Conference 2015 | p. 511

by the phenomenal success of Grameen Bank of Bangladesh.

After his success in micro-lending and his experience with the poor in Grameen Bank, the author

is currently delving into a new social innovation initiative, a dimension where human beings want

to be of help to other people, to create a new kind of world through economic activity, According

to Yunus, this requires a new kind of business he calls Social Business, a non-loss, non-dividend

enterprise, created with the intention to do good to people and bring positive changes to the world,

without any short-term expectations of deriving money out of it. This social innovation initiative

illustrates how Social Business can change the world and end poverty.

Leadership Traits

Kriss (2013) stressed the four key traits that drive sustainably successful social

innovators, namely; a) Systems Thinking (Brains) , where the social innovation leader is driven at

a systems, wholistic level and consider the interplay of multiple factors and forces within a

complex, interdependent environment, b) Deep Collaboration (Soul), where the social innovation

leader operates based on clear values plus deep collaboration perspective based on trust and realize

that he cannot operate as an island, but must reach out, listen, understand and engage other

stakeholders. He deeply recognizes that Trust among diverse collaborators is crucial to ensure

sustainable success, c) Empathic Innovator ( Heart) The social innovator must have as his key

motivator the passion to create social change. Empathy (the ability to understand and share the

feelings of others- A real understanding and sensitivity to the experience of another person) must

play a central role in the social innovation engagement and in order for innovation to be most

appropriate and useful, and d) World Visionary (Nerve) The social innovator see opportunities

which others see as obstacles. He must be skilled in integrative thinking and the ability to hold two

opposing ideas in the minds and reach a synthesis. He must be comfortable in navigating

ambiguities and seeing possibilities in the fragmented, complex nature of social reality as he

envisions a better future.

Reynolds, C. (2013) stressed that the key insights of Ashoka, a first mover in the field of social

innovation, stipulates “if you want to predict how things will turn out for a new idea, your best bet

is to focus on the person behind the idea”. As such, he emphasized that leadership is an extremely

important driver of social innovation, though very difficult to quantify. He cited that taking a good

idea to scale requires skillful strategy and coherent vision, coupled with the ability to marshal

resources and support and identify the key points of leverage and the weak links in

in the opponents’ walls. He continued that the key traits include boldness, accountability,

resourcefulness, ambition and persistence. Mulgan (2007) that such traits of strong observation

and communication skills are highly important.

Models of Social Change

The Reeler(2007) highlighted the three theories of social change as a) Emergent Social Change

Theory, b) The Transformational Social Change Theory and c) The Projectable Change Theory.

National Business and Management Conference 2015 | p. 512

The Emergent Social Change Theory

The author describes this theory as the day-to-day unfolding of life, adaptive, uneven processes of

unconscious and conscious learnings from experience and the uneven changes that result from

those learnings as these apply to individuals, organizations, families, communities and societies

when they adopt to shifting realities as they try to improve and enhance what they have and do and

of building on what there is, step-by-step, uncertainly, but still learning and adopting however

well or badly.

According to the author Emergent Social Change is paradoxical, where perceptions, feelings, and

intentions are as powerful as the facts they engage with. He continued that there are two types of

Emergent Social Change. One is the less conscious Emergent Social Change which there is

unformed and unclear relationships, structures and leadership. This describes, in some ways, the

early stages of the existence of GK Enchanted Farm, where structures were unclear and

relationships were yet emerging. The other form is the more conscious Emergent Social

Change.

Here, the author stresses, identity, relationships, structures and leadership are more formed. The

environment is relatively stable and less contradictory.

The Transformative Social Change Theory

The author accentuates that in the development of all social beings there reaches a stage where

crisis or stuckness tend to develop through the natural process of inner development. He said this

happens for instance when a pioneer organization like GK Enchanted Farm starts to grow beyond

the limits of its informal structuring and relationship enters into a tense or contradictory

relationships with their world prompted by shifts in external, political, economic, cultural or

environmental context. He stresses crisis or stuckness sets the stage for transformative social

change and unlike Emergent Social Change, Transformative Social Change is characterized as a

learning process, in fact, more of the unlearning process.

The Projectable Social Change

The author accentuates that human beings identify and solve problems and imagine different

possibilities-think of themselves and their present stories into preferred future(in the case of Mr,

Tony Meloto, his dream to eradicate Poverty) and being able to project possible Vision or

Outcomes and formulate conscious plans to bring about change toward this Vision- transforming

the poor subsistence communities into sustainable communities. Projectable Social Change,

through appropriate, viable and doable projects, succeed where problems, needs, possibilities are

more visible, under relatively stable conditions relationships- where relationships are coherent,

stable and predictable enough and where relationships are coherent, stable and predictable enough

where unpredictable outcomes don’t threaten desired results. Projectable Social Change, according

to the author has two orientations, namely; a) Problem-based approach, and b) Creative approach.

In the problem-based approach, it involves identifying the problem and seeking a Fix. For

National Business and Management Conference 2015 | p. 513

instance, in the Poverty problem, problem of low income is identified and ‘the Fix is the Cash

Transfer Program, a short-lived, non-sustainable approach. While the Creative approach involves

imagining and visioning desired results. (Eliminating Poverty by creating 500,000 social

entrepreneurs from the poor). It involves a leap of imagination into the future, rather than a direct

fix- A new source of water, rather than fixing the broken water tap. It starts from the future plan,

the desired results and backward to the present.

Stakeholders Participation

Hillman & Keim (2011) argued that investing in relationships with primary stakeholders can lead

to valuable, intangible competencies, which are important in gaining and maintaining competitive

as well as social advantage. This is further by the authors’ hypothesis that stakeholder management

lead to improved value creation.

In the work of Purvis et al.(2015), the authors underscored how expectancy theory explains that

motivation on the degree to which an effort is perceived leads to performance, performance leads

to rewards and the rewards offered are perceived to be desirable. Specifically, this explains how

understanding whether and to what degree stakeholders will participate in the implementation of

project management systems or other initiatives- social innovation, etc. The authors research

results supported that stakeholders assess the direction and strength of the psychological climate

and that their assessments shape their motivation to participate in active support, token support or

counter-implementation behavior and actions.

Research Problem

The problem that this Research attempts to address is the poverty situation in the Philippines and

why current approaches are hardly working, if at all, to address this.

Put in another way, how do social innovation initiatives reduce poverty level asapplied in the

Philippine situation?

The following hypotheses were crafted to answer the above question:

H1: Social innovation initiatives positively influences the reduction of poverty level. Yunus (2007)

strongly supported this hypothesis as manifested by his micro-lending social innovation initiative

in Bangladesh through his Grameen bank success in providing easy, accessible credit to the poor

that progressively elevated many of them out of poverty.

H2: Social innovation initiatives positively influence poverty level reduction if key leaders

possess strong social innovator traits. Reynolds, C.(2013) substantiates this hypothesis by

emphasizing that leadership is an extremely important driver of social innovation. This was further

supported by Ocampo (2014) in his interviews with the key associates of GK Enchanted Farm

ascribing to the phenomenal success of the GK Enchanted Farm to the notable leadership traits of

National Business and Management Conference 2015 | p. 514

Mr. Meloto, the organization’s founder.

H3:The desirable leadership traits directly mediate social innovation in the reduction of poverty

level.

H4: The degree of stakeholders’ participation and commitment to social innovation initiatives

positively moderates achieving poverty level reduction. Purvis, et. Al (2015) corroborated this

hypothesis as these authors explained how understanding whether or to what degree stakeholders

will participate in the implementation of social innovation initiatives and that stakeholders assess

the direction and strength of the psychological climate and their assessment shape their motivation

to participate, either in active support, token support or counter-implementation behavior and

action.

The Conceptual framework being proposed in the study is as follows:

The above Conceptual Framework will be supported by the following Theoretical framework

SOCIAL INNOVATION

STAKEHOLDERS PARTICIPATION

LEADERSHIP TRAITS

POVERTY LEVEL

SOCIAL INNOVATION

Bates, S. (2012) Mulgan, G. (2007) Yunus, M.(2007)

POVERTY LEVEL Thomas, S. (1972) Jordan, G. (2004) Yunus, M. (2007)

MODELS OF SOCIAL CHANGE

Reeler, D. (2007) Valentine, C.(1968)

STAKEHOLDERS PARTICIPATION

Hillman,A. & Keim G.(2001)

Purvis , R et. Al(2015) Mulgan, G.(2007)

LEAIDERSHIP TRAITS Deiglmeier, K(2011) Reynolds, C.(2013)

Kriss, (2013)

National Business and Management Conference 2015 | p. 515

National Business and Management Conference 2015 | p. 516

Research Objectives

From existing literature and validated through surveys, interviews and observations of key

respondents of subject organization, GK Enchanted Farm and selected comparable social

innovation organization, the research study hopes to understand the positive influence of social

innovation in reducing poverty level in the Philippine situation.

Specifically, The research shall attempt a) To evaluate if the social innovation model of the

GK Enchanted Farm model is an appropriate model to utilize in order to effectively reduce

Philippine poverty, b) To propose the appropriate poverty reduction model/framework of social

innovation deem effective for Philippine setting.

Methodology and Methods of Inquiry

This study intends to utilize the Case Study Research Method of Yin (2009) following the

subsequent protocols, namely; a) The careful selection of the research subject of relevance, b) The

Planning and Design of how to address the research study & determination of relevant data to be

collected, c) Ensure unbiasness in the surveys & questionnaires, d) Treat each case individually

and then cross case the conclusions to be drawn, and e) Use analytic generalization rather than

statistically generalization.

The research will be primarily based on primary and secondary data using the following strategies,

namely;

1) Case study

2) Interviews of key participants combined with survey, and

3) Actual observations of key participants processes

The rationale of these strategies is to obtain first hand information and validate these

through a triangulation process based on one major organization, Gawad Kalinga Enchanted farm

and will be compared with other social innovation organizations- Go Negosyo, Echo Store,

Human Nature, Liter of Light.

The Unit of Analysis is the Founder of GK Enchanted Farm and his key associates and triangulated

with key personalities of other social innovation organizations. As earlier said, the data will be

obtained through surveys and interviews and actual observations as this approach will enable the

researcher to delve deep into the various nuances of social practices of comparable organizations

in the Philippine setting.

National Business and Management Conference 2015 | p. 517

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