social enterprises and sustainability sem3_sustainability.… · 02/02/2012 2 i. bengo, ph.d...

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Social Social EnterprisesEnterprises and and SustainabilitySustainability

M. Arena, G. Azzone, I. Bengo, A. Conte, S. MalpezziMarika ArenaMarika Arena

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Sustainability: the concept


Policy Policy makersmakers

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Media and Media and public opinionpublic opinion


BusinessBusiness

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Some data…

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Some data…

Global Energy Statistical Yearbook 2011


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Is business doing enough?

Source: SustainAbility survey 2011 filled by 512 qualified sustainability expertsRespondents were drawn from: corporate, government, non-governmental, academic/research, and service (e.g., consulting) organizations.


Enhancing Corporate Image

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From Reactive to Proactive

SinergiesSinergiesbetween sustainability

and profitability

Sustainabilityconceived as a costcost

• Cost reduction• Market share• Improvement of company’s

relationships with stakeholders• Innovation

• Regulation setting minimunrequirements

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Cost effectiveness


Green consumers

Consumer Green Consciousness isgrowing.

Despite the economic downturn,consumers still care about greenproduct.

…Consumer demand for Green Products is still raising.

32 34

I systematicallylook for and oftenpurchase greenproducts.

20 24

A higher price forgreen products isacceptable to me.

Percentage of respondents, 2007.

Percentage of respondents, 2008.

Source : BCG/Lightspeed ResearchSurvey of more than 2,000 European adults.

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Green revenues


Key stakeholders

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Innovation

Scavolini accessibility system


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Redifining the business model

Offer

Financial viability


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The Social Enterprises

Irene BengoPhd Student in Management EngineeringStaff Cooperation for Development in the Third Countries - Politecnico di Milano

I. Bengo, Ph.D Student in Management Engineering

The Social The Social EnterprisesEnterprises (SE)(SE) 2

"The social enterprise (SE) can make a contribution of great importance to the strategic reorientation of growth towards a new model of development, more sustainable and equitable, that might focus on the work and the human person”. General Secretary of Unioncamere of Italy (2011)

“The importance to the European economy and society of cooperatives, mutual societies, associations, foundations and social enterprises (which together are sometimes referred to as the Social Economy) is now receiving greater recognition at Member State and European levels. Not only are they significant economic actors, they also play a key role in involving their members and European citizens more fully in Society. Social Economy enterprises are helping to meet the demands of a changing Europe. They are important sources of entrepreneurship and jobs in areas where traditional “investor driven" enterprise structures may not always be viable” Erkki Liikanen Member for Enterprise and Society of European Commission (2010)

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The Social The Social EnterprisesEnterprises: some : some numbersnumbers 3

Growth in social entrepreneurship globally over the last decade has been impressive

social entrepreneurship is a “good thing”

European Commission 2011: there are more than 11 million jobs in the social economy across Europe, but membership of social economy enterprises is much wider: 160 million.

Social economy enterprises represent 2 million enterprises (i.e. 10% of all European businesses) and employ over 11 million paid employees (the equivalent of 6% of the working population of the EU).

Italian case, the second report on SE (Iris Network 2010): there are over 15 thousand SEs, 350 thousand employees including social cooperatives, foundations and other organizations


Idea Idea ofof Social Social EnterprisesEnterprises 4

The Social Enterprise (SE):private, autonomous, entrepreneurial organizationsproviding goods or services with the goals of provide benefit to the community.

SEs • Have relevant expected impact in term of social value creation• Is a potential response to critical problems in the North/South of the world

The SEs aim at: • transforming the maximization of profit and wealth creation in a mean by which the “social entrepreneur” satisfies unmet social needs. • transforming the social benefit into a real “business idea”

StartSocial Needs

MeansProfit activities

GoalsSocial Benefit

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DevelopmentDevelopment ofof SESE 5

Different reasons of social economy’s development during last 20 year

Privatization of the public responsibility for public welfare:

• government’s participation decline regarding the services offered to the community• the experimentation with "new forms of solidarity and collectivity" by civil society and social movements as they enter high politics

The development of a culture better oriented to the responsibility and personal involvement towards social problems:

Increase of the entrepreneurial spirit of no profit sector (association, ONGs, Cooperatives)

• introduction a social purpose to a business company, corporation or even government

the third sector’s will to increase its entrepreneurship and the social enterprise’s interest to unify its values with the standard profit sector business’s principles

• changes occurred into the no-profit sector for increase the opportunities of funding


SE as a middle way between two extremesSE as a middle way between two extremes 6

SE represents a hybrid form, located somewhere in between the traditional non-profit and for-profit organizations

SEs pursue a broad social goal, they try to promote a new model of economic development, fostering a more democratic decision-making process

From an economic standpoint, SEs need to assure their economic sustainability: market oriented activities and fund rising are strictly “at the service” of the social goal

Compared to not for profit entities, SEs have the purpose to achieve social benefit, but their vision, organization and processes are quite different when compared to non-profits

Ses achieve social goals that meld socio-political, environmental, and financial objectives: give them a major importance compared to profit organizations (social purpose is central to the Se operation)

ensure access to basic servicesRole: contribute to

more balanced use of local resources

promotion of inclusive governance models

creation of new job opportunites

strengthening social capital

convey informal activities

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SE as a middle way between two extremesSE as a middle way between two extremes7

Hybrid Model of Social Entrepreneurship:

Alter (2004): "Hybrid Spectrum of sustainability" to underline the Ses position respect the other organizations.

On the right hand side of the spectrum are for-profit entities that create social value but whose main motives are profit-making and distribution of profit to shareholders

On the left hand side of the spectrum are nonprofits with commercial activities that generate economic value to fund social programs but whose main motive is mission realization as

dictated by stakeholder mandate. The characteristic that separates the two groups is purpose.

As a hybrid, the social enterprise is driven by two strong forces


SE as a middle way between two extremesSE as a middle way between two extremes8

4° Sector: For -benefit organizations

Figure 1 details the traditional organizations new kind of firm: for-benefit organizations.

These organizations are driven by a social purpose, they are economically self-sustaining and seek to be socially, ethically, and environmentally responsible.

Dennis A. Pitta and J. Howard Kucher,University of Baltimore, Baltimore, Maryland, USA, Journal of Product & Brand ManagementVolume 18 · Number 2 · 2009 · 154–158

Social enterprises are prime examples of for-benefit organizations

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Context : DifferentDifferent definitionsdefinitions9

SOURCE DEFINITION

DTI, Department of Trade and Industry; 2002

Businesses with primarily social objectives whose surpluses areprincipally reinvested for that purpose in the business or in thecommunity, rather than being driven by the need to maximise profit forshareholders and owners

M. Bull, H. Crompton; 2007

Enterprises with the specific purpose of addressing social issues, in favorof the community or the environment and employ a businessstructure that allows it to remain sustainable

EMES Borzaga, Defourny; 2001defines of a set of common criteria

To reflect the economic and entrepreneurial dimensions:a) A continuous activity producing goods and/or selling servicesb) A high degree of autonomyc) A significant level of economic riskd) A minimum amount of paid workTo encapsulate the social dimensions:e) An explicit aim to benefit the communityf) An initiative launched by a group of citizensg) A decision-making power not based on capital ownershiph) A participatory nature, which involves the various parties affected by theactivityi) A limited profit distribution

The academic and professional literature provides several definitions of SE


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1. SEs are multi – objective organizations

2. SEs have a multi-stakeholder governanceexternal players more relevant respect the private sector:

• Groups of citizens regarded as agents of change• Participation of stakeholders in the decision making processes • This involvement is essential (i.e SE can’t do without) to

understand the real needs of the context

SE specificitiesSE specificities

SEECONOMICENVIRONMENTAL

SOCIAL

Different definitions and different legal framework across European and non European countries exists

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Legal frameworks Legal frameworks 11

Law 155/2006 and by the decrees of2007 & 2008

The social enterprise is neither a new legal form, nor a new type of organization, but a legal category in which all eligible organizations may be included, regardless of their organizational structure.


Different typology of the activitiesDifferent typology of the activities 12

Activity Yes/no Yes/no

Work integration Agriculture

Personal services Education

Economic Development University education

Environmental Conservation

Non-formal training

Arts and Cultural Preservation

Tourism

Social Welfare and Human Development

Water management

Health Production Energy

Recycling Catering and hospitality

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Different typology of the activitiesDifferent typology of the activities 13

Activity Yes/no Yes/no

Work integration Agriculture

Personal services Education

Economic Development University education

Environmental Conservation

Non-formal training

Arts and Cultural Preservation

Tourism

Social Welfare and Human Development

Water management

Health Production Energy

Recycling Catering and hospitality

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Some Some examplesexamples14

Organization LifeGate Job FactoryBasel

Belu Water Le Relais

Year Founded 2000 2000 2002 1984

Country Italy Switzerland United Kingdom France

Aims new way of doing business that places the environment at the centre

internships and trainingprogrammesunemployed youth

to use compostable bottles, to promote PVC-free packaging and to donate all profits to clean water projects.

through the collection of second-hand textiles, creates jobs in France and Africa for people that have been excluded

Focus CommunicationsMedia, Consumer Awareness, Energy, Environment,

Children and Youth, LabourConditions and Unemployment

Environment, Water Professional Integration, Environment, Unemployment

Geographic Area Impact

Italy Switzerland Bangladesh, India, Madagascar, Mali & UK

France, Burkina Faso, Senegal, Madagascar

N°DirectBeneficiaries

300 per year 43,429 1,500

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1. Are Social enterprisesinnovative models?

2. Do Social enterprisesdevelop innovative activities?

Questions


Thanks for your attention

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November 30th, Como

“Make a Change”An overview

SOCIAL ENTERPRISE AND SUSTAINABILITY

Carlo Locatelli

Irene Bengo

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WHAT IS MAKE A CHANGE?

Make a Change is a movement that operates through an operative organization to achieve the following goals: Support the development of new social entrepreneurs in Italy . Promote among young people values of balance and social responsibility as an alternative to

the pursuit of money and power at all costs. promote social entrepreneurship as a new asset class for responsible investments.

the first Italian answer to the global movement of social business. Our founders come both from the profit and not-for-profit worlds: 3 companies and 12

individual professionals promoting new business models : businesses that aim to reach economical sustainability while

maximizing social welfare. Our mission: to change the system within the system

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• It pursues a social objective in an economically sustainable way by selling on the market services or goods of social value, in a competitive environment. The social value of the company, which must be clearly defined in its mission/business purpose, may be constituted by:

• Development of products or services dedicated to disadvantaged segments of the population

• Increase “responsible consumers”

• Creation of “upside-down enterprises”

WHAT WE CALL SOCIAL BUSINESS

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The social entrepreneur should be an enthusiastic innovator and, above all, a an excellent manager in order to guarantee – in a competitive market- the difficult trade-off between the generated social impact (specified within the social business budget) and the economic sustainability of the entrepreneurial activity

The SEs aim at: • transforming the maximization of profit and wealth creation in a mean. • transforming the social benefit into a real “business idea”

StartSocial Needs

MeansProfit activities

GoalsSocial Benefit

WHO WE CALL SOCIAL ENTREPRENEUR

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“The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man”

George Bernard Shaw

WHO’S THIS?

6Paul Newman: Newman’s Own

In 1982, Paul Newman founded Newman's Own, a company founded to commercialize his own special recipe for salad dressing that had long been a hit among his friends. After the success of the first product on the market, Newman's Own began to market a wider range of sauces, condiments and drinks that have become famous and distributed all over the world. The peculiarity of Newman's Own is that all profits are donated to various non-profit organizations (hospitals, camps for sick children ....). From 1982 to 2008 about 280 million dollars have been donated to these charities.

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Andreas Heinecke: Dialogue in the Dark

Andreas Heinecke founded Dialogue in the Dark with a twofold aim: to bring ordinary people closer to the world of the blind and sight impaired people and to offer them a job so they can better fit into society.This is exactly how he started in Germany exhibitions in complete darkness, where the visitors, led by a blind person, through various rooms, could experience the world from the perspective of a blind person.The success of these shows was huge that Dialogue in the Dark is now a global phenomenon, with exhibitions all over the world. It has not just represented a true “eye-opener” for over 6 million visitors, but also offered a job about to about 6000 blind and sight impaired people.

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Jean-Marc Borello: Groupe SOS

Jean-Marc Borello, he founded a real social business giant. In 15 years the group SOS has developed a wide range of health and social services designed mainly to the recovery of people with serious drug and alcohol dependencies. SOS also provides jobsto disadvantaged people (often the same ones that have followed a rehabilitation program at SOS). The results of SOS are astounding. With a turnover of € 150 million, 170 health facilities and 2700 employees, SOS provides every day thousands of health care services. SOS also conducts 6000 free and anonymous interviews (parents of young drug addicts, young people in difficulty, AIDS prevention) and 3000 training and vocational guidance year. Finally, about 150 employees of SOS are disadvantaged

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Reed Paget: Belu Water

Reed Paget is the founder of Belu Water, the first eco-friendly bottled water company. In fact, Belu water is extracted from natural springs and is bottled in a local English-biodegradable bottles (with plastic derived from corn).Belu Water sells in England (especially London) 500,000 units per month.

Today Reed Paget founded One Earth Innovation, an environmental business founded to create goods and services which will substantially reduce mankind’s ecological footprint.There are four cornerstones to the One Earth business: innovation, finance, marketing and consulting. Its mission is to harness the enormous power of business and apply it to creating a sustainable future.

10Jamie Oliver: Fifteen Restaurant

Jamie Oliver is a renowned chef in London who starred in several television series and is author of many cookbooks. At the height of his fame and success Jamie has decided to give something back to society.His idea was to use his talent and name to give to marginalized boys and girls (for alcohol and drugs) a second chance.Thus he founded Fifteen Restaurant. The restaurant offers two years of training as a chef to help marginalized children. After this learning experience, with a Master Chef like Jamie, some guys are now working at Fifteen Restaurant, while others found work in other London restaurants.Fifteen Restaurant was such a success that led Jamie to open similar restaurants in Amesterdam in Melbourne and Cornwall.

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Muhammad Yunus : Grameen Group

Muhammad Yunus is perhaps the most famous member of the social business world. After the 1974 famine in Bangladesh, Yunus, a professor in economics, created a system of loans to very poor based solely on trust. This is how the Grameen Bank microcredit has (founded by Yunus) its most representative institutions (with $ 7.6 billion provided from its origins to 2008). For the positive impact that microcredit has had in reducing world poverty, Yunus and Grameen Bank were awarded the Nobel Prize for Peace in 2006.Yunus founded in the same year with the French multinational Danone, a manufacturer of highly nutritious yogurt at low prices to combat malnutrition in Bangladesh (Grameen Danone Foods).The experience of Grameen Danone Foods has inspired the writing of the second book of Yunus, A World Without Poverty (2007) in which Yunus Social Business means the Prince as a tool to eradicate poverty from this world.

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Spreading the values of social entreprenurship through marketing initiatives and social activism

Contributions to projects coherent with our mission (eg social business in expo 2015, university workshops etc)

Annual event, sponsored by a “for profit” company, to award the winner of “the best job in the world” competition

Scouting , promotion and networking activity for italian social entrepreneurs.

Nominees selection for the “Social Entrepreneur of the year” award Encoding the italian Best Practices

WHAT WE DO

Observatory

Partnerships and

communication

Annual competition on a national level for new social entrepreneurs Incubation activity for the winning social enterprise (organizational,

managerial and financial support)“Best job in the world”

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ANNUAL COMPETITION : “BEST JOB IN THE WORLD” (1)

Objectives of the Competition:

to offer a genuine opportunity for managers and young entrepreneurs to realize a new social venture project.

“Best job in the world”

2 Evaluation and online screening criteria

• Social impact on the community• Economic and asset sustainability• Skills and reliability of the entrepreneurs/management team• Scalability • Innovation and media impact

Phases1 Registration: • Free registration for start ups and young social enterprise

already operational (more than 18 months )• Only team projects are allowed and they should provide a

business plan and an Executive summary

3 Field work• 2 months support by professiionals in different fields (Business analysts, HR

specialist etc.. 4 Final selection and prize giving

• Business Plans presentation in front of a “profit” jury • Winner award

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“Best job in the world”

2010 WINNER: LA LOCANDA DEI BUONI E CATTIVI

The project aims to the social and working reintegration of young people and mothers who are socially disadvantaged in a hostel with restaurant. Profits are going to be invested in communities, managed by Domus de Luna, which harbor people in need.

On November 18° 2010 Make a Change awarded the winner of the “Best job in the world” competition

• MaC provided a 30.000 Euros grant and managerial support for the following 12 months.

• The inn has been inaugurated in September 2011

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2011 FINALISTS:“Best job in the world”

Birrificio SocialeBirrificio Sociale enters the market as a productive enterprise of quality goods: homemade beer. At the same time they take the form of a community service providers through the work integration of disadvantaged people

Eye Assist

Eye assist is a device that allows patients affected by heavy motor disorders to interact with the rest of the world: the software is able to capture the eye movement allowing the patient to communicate and is distributed at a lower price if compared to the existing devices currently on the market.

Plain Ink

Plain Ink is a hybrid social enterprise: they create and sell on the Italian market children books that promote social and cultural inclusion. Profits are then re-invested in education, literacy and development programs in India and Afghanistan

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OBSERVATORY

“Observatory”

Make a Change Observatory has the goal of locate and study the Italian Best practices of social entrepreneurship to better understand the performances and the development in terms of business models.

Over 2010 the Observatory, in partnership with Cariplo Foundation, have identified some of innovative social enterprises: 40 Italian social businesses have been evaluated and linked through the creation of a network. Eventually 3 cases have been selected by the Accademy of the “Social Entrepreneur of the year” and received nominees for the award.

In 2011 Make a Change has strengthened the Observatory by partnering with Iris Network, a national network of research institutes on social enterprise.

Medium term goals (2012). The Observatory will create a shared database with European and International networks that will be available for possible venture capitals, for profit investors that might be interested and institutions.

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WHAT WE DO

Partnership and communication

ANNUAL EVENT 2011On November 15th 2011 The Only the Brave Foundation awarded the winner of the “Best job in the world competition at the Diesel Milan Headquarters

• Make a Change will provide :- managerial support for their start up

phase (12 months) through Make a Cube, the first incubator for social enterprises in Italy.

- Access to potential investors through itsnetwork

Renzo Rosso, owner of the O.T.B Group and President of the O.T.B. foundation, awarded with a 30.000 Euros grant the team Eye Assist

18Make a Cube3

Make a Cube3 is the first incubator in Italy dedicated to social and eco-innovators.

Make a Cube³ provides comprehensive advisory to start ups with high potential for creating social and environmental value.

At Make a Cube³ you can turn your ideas into action.

It provides comprehensive business support services, including back-office, governance expertise, access to knowledge and financing.

Make a Cube³ applies a stage-gate roadmap for incubation.

Make a Cube³ incubation process typically ends after 6-9 months, when the start-up is ready for the market, including capital markets.

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Evaluation criteria to define the best social enterprise:

WHAT’S THE ORDER? And WHY?

a. Social impact on the community

b. Economic and asset sustainability

c. Skills and reliability of the entrepreneurs/management team

d. Scalability

e. Innovation and media impact

QUESTIONS

CAN YOU THINK OF DIFFERENT CRITERIA?

Eye Assist Hi-Tech goes Social Alfredo Armanini – [email protected] Nicola Conci - [email protected] Mattia Daldoss – [email protected]

Eye Assist   Technically speaking it’s a vision system able to

tell where the user is looking at

 Most importantly it is a communication device that allows people suffering of neuro-degenerative diseases to have an active role in social life

The Eye Assist team… who?!  We are researchers at the University of Trento,

Italy

 Department of Information Engineering and Computer Science (DISI)

 Multimedia Lab   Computer Vision for ambient intelligence, behavior

understanding, human-machine interfaces, technologies for assisted living

  Multimedia analysis and retrieval

  Security and forensics

People   Eng. Alfredo Armanini

  Eng. Nicola Conci, Ph.D

  Eng. Mattia Daldoss

  Prof. Francesco De Natale, Ph.D

When did it all start?   Long lasting collaboration with the medical

institutions in our area

 Doctors asked us to find a solution that could address the communication needs of disabled people:   ALS

  Locked-in Syndrome

  Muscular dystrophy

  …

  The project begun approximately 4 years ago

How has the project evolved?   At the beginning it has been quite tough

  Having professional products as a benchmark made the challenge even more attractive

  Publications in international conferences and workshops

  The main issue though is funding

  We decided to participate in some competitions…

  No success

  … Until now

Yet another product?   Yes, but something different

 Current technologies are REALLY cool and advanced

  But expensive   Few people can afford buying them directly

  Need to have one through your local health system

  Requires TIME

  Budget is limited

  Doctors need to take DECISIONS

The goals   Eye Assist wants to make these communication

tools more accessible

  Similar functionalities w.r.t. current commercial solutions

 Address first of all BASIC communication NEEDS

 Not necessarily replace current products, but complement them to cover   A higher number of users

  A wider temporal range

  Possibly go directly in users’ homes

Who would need one?   Subjects that need something NOW

  Subjects that are not eligible for another system

  Subjects that have BASIC needs for communications and are not interested in very advanced functionalities

Is performance compromised?   It’s not cheap, it’s low-cost!

 We provide a good service at a lower price

  Using different technologies and a different business model

  Use the Internet as the main resource to reduce costs for updates, debugging, diagnosis, delivery

  Use as much as possible conventional hardware

177 442

884

North

55 111

221

Center

120 240

480

South

How many people

1095

15790

70000

Italy Europe World

How many people

And our target?  Work for the first 9-10 months on the finalization of

the prototype

  Exploit local infrastructure for on field testing

  Expand towards the national and international market

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48 63

79 79

0 2 5 12 25

2012 2013 2014 2015 2016

Italy

EU

The business model at a glance – Net Profit

-€ 25,000

€ 0

€ 25,000

€ 50,000

€ 75,000

€ 100,000

€ 125,000

2012 2013 2014 2015 2016

The business model at a glance – Break Even

-€ 50,000

€ 0

€ 50,000

€ 100,000

€ 150,000

€ 200,000

2012 2013 2014 2015 2016

Make a Change   46 submitted projects

  3 selected for final

  Tutorship to finalize the proposal and the business plan

  Promotional video

Made a Change   For us it has already been a change   We knew our vision had potential

  Make a Change gave us the final approval

 MaC gave us the opportunity of spreading our idea throughout the whole country

Made a Change - press

IlSole24Ore

La7 Advertiser.it

Libero.it

StartUpBusiness.it

L’Adige

FashionMagazine.it

Corriere.it Hubmilan.com

IlGiornaleDelLusso.it

Trentoblog.it

CreativaSolidale

Polkadot.it

ModaOnLive

Trentamag.com

Iban

Strill.it

MakeAChange.it

BuoneNotizie.it

Rai

LifeGate.com

FondazioneFortes.it

laSpola.com

Vita.it

What’s next?  We will still be a group of researchers

 And research is a KEY for success in ICT

 We are working on the status of Startup of UNITN

  Technology transfer would be a reality   Let researchers do their job

  Let companies focus on the market

  Let us bridge this gap and make the transition smooth

The platform has potential for…  Communication may become just one of the

features

  Interfacing with other devices would be possible   Appliances

  Doors

  Windows

  Air Conditioning/heating

 All this enhances the user’s independence to experience a better “quality of life”

Where’s the *social* part?  Apart from the category of users. That’s obvious

  The cost is a key factor

 Decreasing it by almost one order of magnitude   We can reduce the overall cost for public

administrations

  We can sell the product DIRECTLY to the patient

Can a software be sustainable?!   In our case we hope so

 We are addressing a REAL problem of REAL users with an ACCESSIBLE solution, through a platform which is   Scalable

  Reconfigurable

  Customized

 No issues with languages

 No issues with distribution

Good points from the audience…   People vs Customers   Quality vs quantity

  Target user needs

  Higher price for *social stuff*?   It would be great

  Does not work in IT, though

  Most medical equipment is a proof for this

  Quality comes first

 Collaboration with *traditional* business

Is that all?   For the moment yes.

  In the group we have been working on interfaces for quite some time and Eye Assist is priority #1

 We have though a lot of activities going on for   Gesture analysis and recognition for rehabilitation

  Cognitive games for kids

  Brain – computer interfaces

Questions?   From your side

  From my side   We have a prototype but have not established yet

as a company

  Is the “sustainability requirement” satisfied?

  Looking at the bar-graph shown in the first presentation, ICT is general quite a bad example for sustainability

social enterprises and sustainability sem3_sustainability.… · 02/02/2012 2 i. bengo, ph.d...

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