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Transcript of Spring 2013 Chull-Young Lee 1. Founder & Chairman, Social Enterprise Network(SEN) Visiting...
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Social Entrepreneurship:
The Power of Changing the World
Spring 2013
Chull-Young Lee
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Chull-Young Lee
Founder & Chairman, Social Enterprise Network(SEN)
Visiting Professor(SE), Sookmyung Women’s University
Adjunct Professor(SE), Ewha Womans University
Chairman, ARK Private Fund (Value Investing + SRI)
Co-Chairman, Bausch & Lomb Korea
Seoul National University Business College(BA)
Columbia Business School (MBA)
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Social Enterprise Network
Mission: Study and education of Social Enterprise.
Help youths grow to responsible leaders of the society.
Partner: Fourteen(14) Business Schools, KDI, British Council Korea,
Foundation and Corporations
Program: (1) Social Venture Competition Asia
(2) Social Enterprise Forum
(3) SEN Student Club
Topic: Social Entrepreneurship, CSR&SRI, Global Poverty & Emerging
Markets(BOP),
Environmental Sustainability, Social Capital Market & Impact In-
vesting, Non-Profit Management & Governance, ACE*, Strategic
Philanthropy
*ACE: Arts, Culture, Entertainment(Education)
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Contents
I. Emergence of Social Entrepreneur
II. Social Entrepreneurship
III. Strategy and Practice
IV. Summary
Appendix: Social Enterprise Enlarged
•Social Entrepreneur: 5
Cases
•Social Entrepreneurship
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I. Emergence of Social Entrepreneur
Public Sector and Private Sector
- Industrial Revolution: 18 – 19C
Private Sec-tor(Business Sector)
Public Sector
-Social Problems: Concentration of wealth, Suppressed Hu-man Rights,
Destruction of Environments
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- Gov’t and market neglect or fail to cure social problems
- Emergence of NGO/NPO: in mid 19C
- Explosion of NGO, NPO numbers: from 1970
Emergence of Social Sector and NGO/ NPO
Public SectorPrivate Sec-tor(Business Sector)
Social Sector(Civil Society)
NGO, NPO
NGO, NPO:
Indonesia 2,000, Bangladesh
20,000
India 2,000,000, Europe
1,000,000,
U.S. 1,000,000, Korea 20,000
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○ Social Service Provider: Social Enterprise
- Charity-based approach
- Ex: Rainbow Cookie: Employs 40 mentally retarded youths. Produces
cookie.
○ Cooperative, Community Business: Social Enterprise
- Employee and Community ownership
- Ex: Mondragon Cooperative Corporation(MCC), Late 1950’s, Spain
Coin Street Community Builders(CSCB), 1984, South Bank, Lon-
don
○ Social Innovator: Social Entrepreneur, Social Enterprise
- Market-based approach
- Bill Drayton, Ashoka: Founded 1980. Fostered 2,700
social entrepreneurs in sixty countries.
Emergence of Social Entrepreneur
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Social Enterprise Institution
• Social Entrepreneurship
– Ashoka Innovator for the Public(1980)
– Schwab Foundation for Social En-
trepreneurship(1999)
– Skoll Center for Social Entrepreneur-
ship, Oxford University(2003)
• Social Enterprise Program
– Social Enterprise Initiative (1993)
Harvard Business School
– Social Enterprise Program (1998)
Columbia Business School
Skoll World Forum
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II. Social Entrepreneurship
Social Entrepreneur: 5 Cases
Case 1 : Muhammad Yunus
- Started 1976 with USD 27 loan to each of 42 women in
Bangladesh. Bank founded 1983.
- Micro loan of USD 6.6 Billion (5.9 Billion paid-back) to
8.1 million poor women by 2,100 branches in
Bangladesh 2007.
- Grameen’s business model(micro loan) exported to 40
countries. Helped 100 million poor women in the world
get out of poverty.
GRAMEEN BANK
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Case 2 : Paul Polak, IDE
- IDE founded in 1981, with $30,000 seed money.
- Helped 19 million poorest farmers get out of poverty
in Africa and Asia.
- Appropriate Technology
- Grant of USD 41 million from Bill & Melinda Gates
Foundation
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Case 3 : Robert Redford,
- Disappointed with money, violence & sex overly dominating Hollywood.
- Founded 1980: Movie “Butch Cassidy and the Sundance Kid” 1969
- Indie film movement: Sundance Film Festival
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Case 4: Mary Gor-don,
- Started in a class room, Toronto, Canada, 1996.
- Empathy teaching program for children:
Children observe interactions between a baby(“teacher”) and a
mother. Develops social skills.
- For 10 years since 1996, bullying was reduced by 90% in Canada.
- Program affected 325,000 children and spreaded to U.S. ,
New Zealand , Ireland, Scotland and Germany.
- Ashoka Fellow 2002, Invited by OECD and WHO.
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Case 5 : Jacqueline Novo-gratz,
- Founded 2001 by Jagueline Novogratz (Stan-
ford MBA: worked at World Bank, Rockefeller
Foundation).
- Seed capital from Rockfeller Foundation, Cisco
Systems Foundation and three individuals.
- Patient capital(equity or loan) invested in
small & growing businesses for Water, Health,
Housing, Energy, Agriculture: 26 enterprises,
36 million people in India, Pakistan and Africa
- Fund Size : USD 40 million, Investment per
project: USD 250,000-3 million, Pay-back: 5-7
years.
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- Social Entrepreneur’s characters & doings
- See social problems as opportunities.
- Use business skills to solve social problems: Market-based Approach
- Start-up business (For-Profit, Non-Profit) and change the world: Social Innovation
- Pursue Social(Environmental) and Financial values simultaneously: Blended Val-
ues
Social Entrepreneurship
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III. Strategy and Practice
• Social Mission (Social Value Proposition): Primacy
• Social Innovation
• Max Social Impact (Social benefits created)
Purpose
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• Scalability
- Replication
- Economy of Scale
• Sustainability
- Systemize∙Organize
- Financial performance
Max Social Impact
Social Innovation: Replication or Economy of Scale, Mass-Market Adoption, Imitation, Ecosystem
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Social Service Provider vs Social Entre-preneur
“Social entrepreneurs are not content to give a fish,
or teach how to fish. They will not rest until they
have revolutionized the fishing industry.” , Bill Dray-
ton
* Alleviation of the pain vs Solution to the pain
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“Almost all governments seek to work with social en-
trepreneurs and their organizations. Basically
they(governments) confuse them(social entrepreneurs) with
service delivery providers to be subcontracted, much the
same way they relate to charities and NGOs to carry out
the work the state cannot do or does not choose to.” ,
Pamela Hartigan
* Social Enterprise Promotion Act, July 2007, Korea
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“Social service provisions never break out of their limited
frame: Their impact remains constrained and their service
area stays confined to a local population ∙∙∙. Millions of
such organizations exist around the world – well intended,
noble in purpose, and frequently exemplary in execution –
but they should not be confused with social entrepreneur-
ship.” , Roger Martin
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• Application to market
- Technologies- Ideas
• Mobilize market power- Target market- Different interest groups
*Appropriate technologies*Use feet
Market Application
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• Start small
• See large issue (opportunity)
*Use feet
Prac-tice
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Market Sur-vey
- Existing cases
- Potential competitors
*Use feet
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Alliance and Partnership
PPP Model:Gunpo English Language School
Hybrid Value Chain (HVC)
Partnership: Corporation + Social En-terprise
*Use feet
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Entry Barrier: Competitive Advantage
- Build
- Open
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Chemical Integration
- Social value + Financial value
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Replication, Economy of Scale
- Cooperative
- Community development
- Global perspective
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Hybrid Model
• Social Service + Social Activism + Social Entrepreneurship
Ex: Florence Nightingale
• Standard Setting or Certification (Social Activism)+Social En-
trepreneurship
Ex: Fair Trade USA, Cafedirect UK
• Social Activism + Social Entrepreneurship
Ex: DiD(Dialogue in the Dark)
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Social Impact
- Quantify & Monetize
- Impact Value Chain
- Social Return on Investment: SROI
- Qualitative assessment
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Impact Value Chain
Inputs
Activities
Outcomes
Outputs
SROI
: Social Indicators
: Social Impacts (Social benefits cre-ated)
: Social Return on Invest-ment
Social Mis-sion
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- Make breads to employ?
- Teach how to catch fish?
- Distribute profit to giving-back?
- Higher Social, Lower Financial Values?
- Social Entrepreneurs are born?
- Social Venture is a growth without employment?
Misunderstandings & Truths
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Key Words
• Social Mission
• Social Innovation
• Scalability & Sustainability
• Market Application
“Doing Good, Doing Well”
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Market
Social Mis-sion
“Put Horse before Cart”
IV. Summary
“Doing Good, Doing Well”
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Appendix: Social Enterprise Enlarged
Strategic
Philanthropy
Non-Profit
Management
& Governance,
ACE*
Social Entrepreneurship
Corporate
Social
Responsibility
Global Poverty,
Emerging Markets
&
Int’l Development
Environmental
Sustainability
Social Capital Market & Impact Investing
Social Blended Value Spectrum Financial
Sustainable Development
Socially
Responsible
Investment
*ACE: Arts, Culture, Entertainment(Education)
CooperativeCommunity Busi-
ness