Social Business Entrepreneurs Are the Solution Dr. Muhammad Yunus

Capitalism is Interpreted too Narrowly Many of the problems in the world remain unresolved because we continue to interpret capitalism too narrowly. In this narrow interpretation we create a one-dimensional human being to play the role of entrepreneur. We insulate him from other dimensions of life, such as, religious, emotional, political dimensions. He is dedicated to one mission in his business life ---- to maximize profit. He is supported by masses of one-dimensional human beings who back him up with their investment money to achieve the same mission. The game of free market works out beautifully with one-dimensional investors and entrepreneurs. We have remained so mesmerised by the success of the free market that we never dared to express any doubt about it. We worked extra hard to transform ourselves, as closely as possible, into the one-dimensional human beings as conceptualised in theory to allow smooth functioning of free market mechanism. Economic theory postulates that you are contributing to the society and the world in the best possible manner if you just concentrate on squeezing out the maximum for yourself. When you get your maximum, everybody else will get their maximum. As we devotedly follow this policy sometimes doubts appear in our mind whether we are doing the right thing. Things don't look too good around us. We quickly brush off our doubts by saying all these bad things happen because of "market failures"; well-functioning market cannot produce unpleasant results. I think things are going wrong not because of "market failure". It is much deeper than that. Let us be brave and admit that it is because of "conceptualisation failure". More specifically, it is the failure to capture the essence of a human being in our theory. Everyday human beings are not one-dimensional entities, they are excitingly multi-dimensional and indeed very colourful. Their emotions, beliefs, priorities, behaviour patterns can be more aptly described by drawing analogy with the basic colours and millions of colours and shades they produce. Social Business Entrepreneurs Can Play a Big Role in the Market Suppose we postulate a world with two kinds of people, both one-dimensional, but having different objectives. One type is the existing type, i.e. profit maximizing type. Second type is a new type, who are not interested in profit-maximization. They are totally committed to make a difference to the world. They are social-objective driven. They want to give better chance in life to other people. They want to achieve their objective through creating/supporting sustainable business enterprises. Their businesses may or may not earn profit, but like any other businesses they must not incur losses. They create a new class of business which we may describe as "non-loss" business. Can we find second type of people in the real world ? Yes, we can. Aren't we familiar with "do-gooders" ? Do-gooders are the same people who are referred to as "social entrepreneurs" in formal parlance. Social entrepreneurism is an integral part of human history. Most people take pleasure in helping others. All religions encourage this quality in human beings. Governments reward them by giving tax breaks. Special legal facilities are created for them so that they can create legal entities to pursue their objectives. Some social entrepreneurs (SE) use money to achieve their objectives, some just give away their time, labour, talent, skill or such other contributions which are useful to others. Those who use money may or may not try to recover part or all of the money they put into their work by charging fee or price. We may classify the SEs, who use money, into four types : i) No cost recovery ii) Some cost recovery iii) Full cost recovery iv) More than full cost-recovery Once a SE operate at 100% or beyond the cost recovery point he has entered the business world with limitless possibilities. This is a moment worth celebrating. He has overcome the gravitational force of financial dependence and now is ready for space flight ! This is the critical moment of significant institutional transformation. He has moved from the world of philanthropy to the world of business. To distinguish him from the first two types of SEs listed above, we'll call him "social business entrepreneur" (SBE). With the introduction of SBEs, the market place becomes more interesting and competitive. Interesting because two different kinds of objectives are now at play creating two different sets of frameworks for price determination. Competitive because there are more players now than before. These new players can be equally aggressive and enterprising in achieving their goals as the other entrepreneurs. SBEs can become very powerful players in the national and international economy. Today if we add up the assets of all the SBEs of the world, it would not add up to even an ultra-thin slice of the global economy. It is not because they basically lack growth potential, but because conceptually we neither recognised their existence, nor made any room for them in the market. They are considered freaks, and kept outside the mainstream economy. We do not pay any attention to them, because our eyes are blinded by the theories taught in our schools. If SBEs exist in the real world, it makes no sense why we should not make room for them in our conceptual framework. Once we recognise them supportive institutions, policies, regulations, norms, and rules will come into being to help them become mainstream. Market is always considered to be an utterly incapable institution to address social problems. To the contrary, market is recognised as an institution significantly contributing to creating social problems (environmental hazards, inequality, health, unemployment, ghettoes, crimes, etc.). Since market has no capacity to solve social problem, this responsibility is handed over to the State. This arrangement was considered as the only solution until command economies were created where State took over everything, abolishing market. But this did not last long. With command economies gone we are back to the artificial division of work between the market and the State. In this arrangement market is turned into an exclusive playground of the personal gain seekers, overwhelmingly ignoring the common interest of communities and the world as a whole. With the economy expanding at an unforeseen speed, personal wealth reaching unimaginable heights, technological innovations making this speed faster and faster, globalisation threatening to wipe out the weak economies and the poor people from the economic map, it is time to consider the case of SBEs more seriously than we did ever before. Not only is it not necessary to leave the market solely to the personal-gain seekers, it is extremely harmful to mankind as a whole to do that. It is time to move away from the narrow interpretation of capitalism and broaden the concept of market by giving full recognition to SBEs. Once this is done SBEs can flood the market and make the market work for social goals as efficiently as it does for personal goals. Social Stock Market How do we encourage creation of SBEs ? What are the steps that we need to take to facilitate the SBEs to take up bigger and bigger chunks of market share ? First, we must recognise the SBEs in our theory. Students must learn that businesses are of two kinds : a) business to make money, and b) business to do good to others. Young people must learn that they have a choice to make --- which kind of entrepreneur they would like to be ? If we broaden the interpretation of capitalism even more, they'll have wider choice of mixing these two basic types in proportions just right for their own taste. Second, we must make the SBEs and social business investors visible in the market place. As long as SBEs operate within the cultural environment of present stock markets they'll remain restricted by the existing norms and lingo of trading. SBEs must develop their own norms, standards, measurements, evaluation criteria, and terminology. This can be achieved only if we create a separate stockmarket for social business enterprises and investors. We can call it Social Stock Market. Investors will come here to invest their money for the cause they believe in, and in the company they think is doing the best in achieving a particular mission. There may be some companies listed in this social stock market who are excellent in achieving their mission at the same time making very attractive profit on the side. Obviously these companies will attract both kinds of investors, social-goal oriented as well as personal-gain oriented. Making profit will not disqualify an enterprise to be a social business enterprise. Basic deciding factor for this will be whether the social goal remains to be enterprise's over-arching goal, and it is clearly reflected in its decision-making. There will be well-defined stringent entry and exit criteria for a company to qualify to be listed in the social stock market and to lose that status. Soon companies will emerge which will succeed in mixing both social goal and personal goal. There will be decision-rules to decide upto what point they still qualify to enter the social stock market, and at what point they must leave it. Investors must remain convinced that companies listed in the social stock market are truly social business enterprises. Along with the creation of the Social Stock Market we'll need to create rating agencies, appropriate impact assessment tools, indices to understand which social business enterprise is doing more and/or better than others --- so that social investors are correctly guided. This industry will need its Social Wall Street Journal and Social Financial Times to bring out all the exciting, as well as the terrible, news stories and analyses to keep the social entrepreneurs and investors properly informed and forewarned. Within business schools we can start producing social MBAs to meet the demand of the SBEs as well as preparing young people to become SBEs themselves. I think young people will respond very enthusiastically to the challenge of making serious contributions to the world by becoming SBEs. We'll need to arrange financing for SBEs. New bank branches specialising in financing social business ventures will have to come up. New "angels" will have to show up on the scene. Social Venture Capitalists will have to join hands with the SBEs. How to Make a Start One good way to get started with creating social business enterprises would be to launch a design competition for social business enterprises. There can be local competition, regional competition and global competition. Prizes for the successful designs will come in the shape of financing for the enterprises, or as partnership for implementing the projects. All submitted social business proposals can be published so that these can become the starting points for the designers in the next cycles, or ideas for someone who wants to start a social business enterprise. Social Stock Market itself can be started by a SBE as social business enterprise. One business school, or several business schools can join hands to launch this as a project and start serious business transactions. Let us not expect that a social business enterprise will come up, from its very birth, with all the answers to a social problem. Most likely, it will proceed in steps. Each step may lead to the next level of achievement. Grameen Bank is a good example in this regard. In creating Grameen Bank I never had a blue-print to follow. I moved one step at a time, always thinking this step will be my last step. But it was not. That one step led me to another step, a step which looked so interesting that it was difficult to walk away from. I faced this situation at every turn. I started my work by giving small amount of money to a few poor people without any collateral. Then I realised how good the people felt about it. I needed more money to expand the programme. To access bank money, I offered myself as a guarantor. To get support from another bank, I converted my project as the bank's project. Later, I turned it into central bank project. Over time I saw that the best strategy would be to create an independent bank to do the work that we do. So we did. We converted the project into a formal bank, borrowing money from the central bank to lend money to the borrowers. Since donors became interested in our work, and wanted to support us, we borrowed and received grants from international donors. At one stage we decided to be self-reliant. This led us to focus on generating money internally by collecting deposits. Now Grameen Bank has more money in deposits than it lends out to borrowers. It lends out half a billion dollars a year, in loans averaging under $ 200, to 4.5 million borrowers, without collateral, and maintains 99 per cent repayment record. We introduced many programmes in the bank --- housing loans, student loans, pension funds, loans to purchase mobile phones to become the village telephone ladies, loans to beggars to become door-to-door salesman. One came after another. If we create the right environment, SBEs can take up significant market share and make the market an exciting place for fighting social battles in ever innovative and effective ways. Lets get serious about social business entrepreneurs. They can brighten up this gloomy world. Source: Grameen-info

Muhammad Yunus
One Man Makes a Huge Difference
In Ending Poverty For Millions

"Poverty can be solved, declares Muhammad Yunus. Charity is not the way to help people in need; it is not a healthy basis for a relationship between people. If you want to solve poverty, you have to put people in a position to build their own life."
-- Ode Magazine interview with Muhammad Yunus, Issue 25, July 2005

Social Entrepreneurship: The Case for Definition

Social entrepreneurship is attracting growing amounts of talent, money, and attention. But along with its increasing popularity has come less certainty about what exactly a social entrepreneur is and does. As a result, all sorts of activities are now being called social entrepreneurship. Some say that a more inclusive term is all for the good, but the authors argue that it’s time for a more rigorous definition.

The nascent field of social entrepreneurship is growing rapidly and attracting increased attention from many sectors. The term itself shows up frequently in the media, is referenced by public officials, has become common on university campuses, and informs the strategy of several prominent social sector organizations, including Ashoka and the Schwab and Skoll Foundation foundations.

The reasons behind the popularity of social entrepreneurship are many. On the most basic level, there’s something inherently interesting and appealing about entrepreneurs and the stories of why and how they do what they do. People are attracted to social entrepreneurs like last year’s Nobel Peace Prize laureate Muhammad Yunus for many of the same reasons that they find business entrepreneurs like Steve Jobs so compelling – these extraordinary people come up with brilliant ideas and against all the odds succeed at creating new products and services that dramatically improve people’s lives.

But interest in social entrepreneurship transcends the phenomenon of popularity and fascination with people. Social entrepreneurship signals the imperative to drive social change, and it is that potential payoff, with its lasting, transformational benefit to society, that sets the field and its practitioners apart.

Although the potential benefits offered by social entrepreneurship are clear to many of those promoting and funding these activities, the actual definition of what social entrepreneurs do to produce this order of magnitude return is less clear. In fact, we would argue that the definition of social entrepreneurship today is anything but clear. As a result, social entrepreneurship has become so inclusive that it now has an immense tent into which all manner of socially beneficial activities fit.

In some respects this inclusiveness could be a good thing. If plenty of resources are pouring into the social sector, and if many causes that otherwise would not get sufficient funding now get support because they are regarded as social entrepreneurship, then it may be fine to have a loose definition. We are inclined to argue, however, that this is a flawed assumption and a precarious stance.

Social entrepreneurship is an appealing construct precisely because it holds such high promise. If that promise is not fulfilled because too many “nonentrepreneurial” efforts are included in the definition, then social entrepreneurship will fall into disrepute, and the kernel of true social entrepreneurship will be lost. Because of this danger, we believe that we need a much sharper definition of social entrepreneurship, one that enables us to determine the extent to which an activity is and is not “in the tent.” Our goal is not to make an invidious comparison between the contributions made by traditional social service organizations and the results of social entrepreneurship, but simply to highlight what differentiates them.

If we can achieve a rigorous definition, then those who support social entrepreneurship can focus their resources on building and strengthening a concrete and identifiable field. Absent that discipline, proponents of social entrepreneurship run the risk of giving the skeptics an ever-expanding target to shoot at, and the cynics even more reason to discount social innovation and those who drive it.

Why Should We Care?

Long shunned by economists, whose interests have gravitated toward market-based, price-driven models that submit more readily to data-driven interpretation, entrepreneurship has experienced something of a renaissance of interest in recent years. Building on the foundation laid by Schumpeter, William Baumol and a handful of other scholars have sought to restore the entrepreneur’s rightful place in “production and distribution” theory, demonstrating in that process the seminal role of entrepreneurship.⁶ According to Carl Schramm, CEO of the Ewing Marion Kauffman Foundation, entrepreneurs, “despite being overlooked or explicitly written out of our economic drama,”⁷ are the free enterprise system’s essential ingredient and absolutely indispensable to market economies.

We are concerned that serious thinkers will also overlook social entrepreneurship, and we fear that the indiscriminate use of the term may undermine its significance and potential importance to those seeking to understand how societies change and progress. Social entrepreneurship, we believe, is as vital to the progress of societies as is entrepreneurship to the progress of economies, and it merits more rigorous, serious attention than it has attracted so far.

Clearly, there is much to be learned and understood about social entrepreneurship, including why its study may not be taken seriously. Our view is that a clearer definition of social entrepreneurship will aid the development of the field. The social entrepreneur should be understood as someone who targets an unfortunate but stable equilibrium that causes the neglect, marginalization, or suffering of a segment of humanity; who brings to bear on this situation his or her inspiration, direct action, creativity, courage, and fortitude; and who aims for and ultimately affects the establishment of a new stable equilibrium that secures permanent benefit for the targeted group and society at large.

This definition helps distinguish social entrepreneurship from social service provision and social activism. That social service providers, social activists, and social entrepreneurs will often adapt one another’s strategies and develop hybrid models is, to our minds, less inherently confusing and more respectful than indiscriminate use of these terms. It’s our hope that our categorization will help clarify the distinctive value each approach brings to society and lead ultimately to a better understanding and more informed decision making among those committed to advancing positive social change.

Source: http://www.ssireview.org/articles/entry/social_entrepreneurship_the_case_for_definition/

-posted by: Julia Buco 3rd BS/BAF

Social Entrepreneurship: More Than Words

By: Connette Gayle, 04/23/04

Much has been discussed and written recently about the burgeoning arena of social entrepreneurship, broadly defined as the process of using entrepreneurial skills to create innovative solutions to social needs. While relatively new, this idea offers an effective vehicle for skilled, socially-minded individuals to pursue their desires to create for-profit and nonprofit organizations that do well while also doing good.

But social entrepreneurship is not just something people are talking about. Many people are out there doing it - and they are making a real impact on a local and global scale.

In an effort to bring together both the practitioners and the thought leaders in this sector - and to encourage prospective entrepreneurs to pursue their social goals - New York University's Stern School of Business and Wagner School of Public Service recently hosted a Social Entrepreneurship Conference. The conference called on leaders from the private and public sectors to address the theme of "Overcoming the Challenges of Early Stage Development."

The conference focused specifically on social entrepreneurship advances in the New York area. "NYU's doors open to the community," explained Sarah K. Chiles, the Director of the Program in Social Entrepreneurship at NYU's Stern School of Business. "Therefore, we had several objectives when planning this conference. We wanted to build the New York community of social entrepreneurs by bringing together nonprofit & social sector leaders; to further the discussion on the use of philanthropic dollars; and to highlight different innovations in both management and social approaches."

Chiles added, "The West coast is really pushing the envelope with social entrepreneurship, but there is a lot going on in New York City - and we want to help build this community."

The keynote speeches and panel discussions extrapolated lessons from the experiences of noted social entrepreneurs and the challenges they face every day. Julius Walls Jr., Vice President of the Greyston Foundation and CEO of the Greyston Bakery, discussed the integration of for-profit and nonprofit sectors and the tension between the two bottom lines. Greyston Bakery (http://www.800buycake.com/) is a Bronx-based company created to support the community development work of the Greyston Foundation, which includes housing, child care, health care, a computer learning center, and other services to support the surrounding community. Walls, who has a background in accounting, operations and marketing, stressed the importance of running the Bakery as a business, and explained the necessity of taking calculated risks. Walls' practical perspective reflected the spiritual and personal mission that he combines with pragmatism and business realism. All decisions weigh on the social and financial aspects, he pointed out, so the social mission might be secondary for short-term, but it will win out in the long-term.

The question, "What do you wish you had known before you started?" elicited some interesting experiences. Gillian Caldwell, Executive Director of Witness, a global organization that advances human rights advocacy through the use of video and communications technology, emphasized the importance of determining how to operationalize your mission. Her warning: "Nonprofits ignore infrastructure at their peril and must have accountability on the financial front."

Scott Berrie, co-founder of Scojo Vision, LLC, which designs and distributes reading glasses and donates 5% of its pretax profits to the distribution of reading glasses in underserved communities worldwide, explained the necessity of profits when pursuing a social mission: both components are necessary to achieve social impact.

Barbara Chang, the Executive Director of Npower NY, a nonprofit technology assistance provider that receives half of its income from fees, discussed her difficulties in pushing the envelope for charged services without denying services to those that need them most.

The conference also focused on how best to use philanthropy to support social entrepreneurship. Harvey Dale, the founding President and Director of Atlantic Philanthropies, sprinkled his discussion with some of the tough questions facing the sector, such as: What is the proper spend rate? Should perpetuity be tolerated? Should a foundation ever give to an endowment? How long should one wait to make judgments on program effectiveness and success? Should the grantor-grantee relationship be thought of as a partnership? (See the recent article, Atlantic Philanthropies Walks the Talk, /prof_inter/pi2003-09-19.html).

Rather than answering these questions outright, Dale focused on the difficulties and intricacies involved in making these tough decisions.

The conference is actually part of a larger social entrepreneurship program at NYU's Stern School of Business that includes a course in social entrepreneurship and a Business Plan Competition that will award $50,000 to the top one or two ideas or organizations on April 30, 2004. Most recently, Stern announced the launch of the Stewart Satter Entrepreneurship Fund, a philanthropy fund to support educational initiatives and foster social venture creation within the School's community, seeded with a $300,000 donation. The fund is modeled on a real world foundation or venture philanthropy fund and will award its first set of grants in Fall 2004.

Stern's Social Entrepreneurship Program began in September 2003 in response to demand from the student body. Stern's Chiles theorizes that after the cataclysmic events of September 11, 2001, people were looking for more meaning in their work. Some who were interested in social impact changed their focus from community service outside of everyday work to a career that incorporated their social interests.

The Social Entrepreneurship Program, part of the Berkley Center for Entrepreneurial Studies, focuses on helping students and alumni start social ventures or create social ventures in their existing institutions by providing them with knowledge and skills on specific management issues involved in starting a social enterprise. The program is also a resource for social sector leaders, providing them with the up-to-date information that enables them to respond to changes in this dynamic field. Chiles believes that the newly announced philanthropy fund will make the program even more agile.

Many other graduate business schools, including Harvard, Columbia, Duke's Fuqua School, Stanford, to name but a few, have programs in social enterprise and many more are getting involved every year. There is cooperation and communication between these schools, which share the common objective of benefiting the social sector. Hopefully, the increased discussion around social entrepreneurship - bolstered by a growing record of successes -- will lead to increased support and encouragement of pioneering social pursuits.

(Source:http://www.onphilanthropy.com/site/News2?JServSessionIdr007=

8zgsv8qaw1.app14a&page=NewsArticle&id=5281)

-posted by: Julia Buco 3rd BS/BAF

Social Entrepreneurship and Business Growth

Written by Tim Morral for Gaebler Ventures

We take a look at the 4 C's of social entrepreneurship, a framework that allows businesses owners to assess their potential as social entrepreneurs while considering how being cause-oriented might impact the bottom line.

But sooner or later (usually sooner), questions arise about the potential impact doing good may have on the company's ability to achieve its business goals.

How does social entrepreneurship affect business growth? It depends. Some entrepreneurs have used their social commitment to enhance company growth while others have watched it send their business into a death spiral. Owners whose social passions have derailed their companies' growth prospects often walk away disillusioned, convinced that it's impossible to build a business and make a difference at the same time.

But business owners who have experienced business growth as a result of their social concern attribute much of their success to a well-thought strategy that takes into account both the company and the cause. To keep your business on-track, you would do well to consider the four C's before you jump into the deep end of social entrepreneurship.

Compatibility

For starters, you need to consider the compatibility between your company and your cause. Not every social concern will be a good fit for your company's products, services, and business philosophy. For example, if your business specializes in creating high-fat confections, a campaign to combat obesity might be counterproductive – unless you are willing to adapt your product line to include healthier alternatives.

Connection

But even if your company is compatible with your cause, you can't effectively utilize the cause to create growth unless you clearly connect your products and services with the cause itself. Consumers and employees both want to know how purchasing your product or supporting your business actually impacts the social issue you are passionate about. If you contribute a percentage of your company's profits to a specific cause, you've started the connection process. But to reap the full benefit for your cause and your company, you'll need to constantly explore fresh ways to use your products as a tool for raising awareness and making an impact.

Communication

It's noble that you are committed to a cause. But until you adequately communicate your commitment to your customers and employees, your commitment won't do either your company or your cause much good. Successful social entrepreneurs make a serious effort to use their business as a resource for educating others about their cause. In-store displays, advertising initiatives, product packaging – these are all great places to display information about the issue you are passionate about and what your company is doing to make the world a better place.

Commitment

Although there are some things you can dabble in, social entrepreneurship isn't one of them. As a social entrepreneur, it's impossible to achieve real business growth unless you are fully committed to making your cause an integral part of your company's ethos and mission. At some point, your social commitment will enter into your decision-making process, and a tentative commitment will cause you to be perceived as hypocritical and disingenuous.

Tim Morral is a freelance writer specializing in topics related to the business and nonprofit communities. Based in Rochester, NY, he has collaborated with a diverse range of companies to produce internal and external communication materials.

(source: http://www.gaebler.com/Social-Entrepreneurship-and-Business-Growth.htm)
- posted by: Julia Buco 3rd BS/BAF)

Social Entrepreneurship as a Key to Development in the Philippines

Written by Justin Hakuta

Launched in 2001 with the brothers’ savings and a loan from Unlad Kayaban Migrant Services Foundation (Unlad), a social entrepreneurship-focused NGO, Best Choice produces two varieties of pancit (canton or bihon, thick or thin) as well as fruit preserves of coconut and different beans used to make the popular Filipino desert halo-halo, literally mix-mix.Now self-sustainable, Best Choice has a full-time staff of 22 and has managed to fill a niche market supplying supermarkets and department stores with freshly made noodles and halo-halo ingredients, all while beating off the competition’s cost undercutting by providing a superior quality product and service with a smile.

Migration Nation

The Filipino economy is heavily dependent on remittances, or money sent home from workers abroad. It is an oversimplification to say that this alone contributes to a stagnant local economy. But a dependence on international labor markets where close to a million workers per year, including many of the country’s best and brightest, seek employment elsewhere has an undeniable impact on the local economy’s productivity and ability to generate new jobs.

Studies have shown that OFW savings are generally spent fulfilling the basic needs of the family: improving housing, funding educational opportunities for children, and starting or investing in small businesses such as sari-sari stores (your local bodega shop) or money lending businesses. The issue with starting businesses is that many OFWs lack the technical or financial skills required to run a successful operation.

Best Choice is an example of a need being identified, in this case a lack of noodles and fruit preserves, and met with sound business skills and know-how. Best Choice is an example of money being used to not only generate profit for an individual and his/her family, but also to create jobs where previously there were none, and share the wealth. It is a glimmer of possibility for the Filipino economy that the billions of dollars pouring in from abroad can be used towards creating local employment opportunities, where perhaps one day Filipinos will be able to choose between staying in their country or moving abroad for work out of preference, not necessity.

A For Profit Non-Profit

Unlad Kayaban Migrant Services Foundation (Unlad) is a humble non-governmental organization (NGO) with grand ambitions. Tucked away in a quiet Metro Manila neighborhood next to the University of the Philippines, Unlad is one of the organizations at the forefront of social entrepreneurship in the Philippines.Unlad originates from migrant labor roots. In 1989 its founder and current Executive Director, May-an Villalba, a former teacher, established the Asian Migrant Centre in Hong Kong, which focused on legal assistance and crisis intervention for migrants. Invariably after each case, migrant workers would look for a new employer no matter how harrowing their experiences had been because they had no job opportunities at home and their families depended on them for income. The only option was to find a new job abroad and pray for an employer who would not abuse them.It was this lack of opportunity and vulnerability of migrant workers that spurred Ms. Villabla to build a mechanism whereby migrants could work abroad in the near-term, but create long-term opportunities in their hometowns so that they would not have to migrate for lack of work or money. In 1996, Ms. Villalba formed Unlad Kabayan to become the dedicated vehicle to develop this concept in the Philippines.

Social Entrepreneurship & Human Trafficking

You may be wondering what this has to do with human trafficking (trafficking). Why, if I am conducting a study on trafficking, would I spend my time interviewing an organization that deals not with migrants who have been enslaved, abused, and exploited but instead with those who have finished their overseas contracts and are returning home looking for ways to maximize their earnings?

Trafficking is the product of a number of factors including poverty, poor education, lack of jobs, feminization of migration, organized crime syndicates, government corruption, and low awareness of trafficking at all levels of society. One of the major factors driving migration, and as a result creating a large population that is susceptible to trafficking, is the lack of local job opportunities. Many communities in the Philippines are rife with unemployment, not from lack of demand or motivation but from lack of jobs. The urban centers such as Manila in the north and Davao in the south offer some possibilities, but the demand for jobs far outweighs the supply.

While jobs can be scarce in the Philippines, particularly to those who have not attended a big name university, the global market is hungry for low-skilled, low paying jobs such as domestic and agricultural work that may be viewed as undesirable to those living in the developed world. Globalization has brought countries and economies across the world closer together. A country like the Philippines, who’s economy is based largely on exporting labor, has reacted to this increased connectivity by meeting international demand for these low-skilled jobs.

While this provides opportunities for the unemployed, it also creates a large population of migrants who are vulnerable to trafficking and exploitation at the hands of dishonest recruiters, corrupt government officials, and scheming employers. Further, the nature of jobs like domestic work, where a woman is placed into the home of a family and potentially cut off from the outside world, creates a risky environment for the maid who can be abused by the employer away from the public eye.

Trafficking is a problem that reflects a variety of issues in a culture and an economy such as a patriarchal society and widespread corruption. This is why a holistic approach to combating trafficking that includes social entrepreneurship is needed. Anything less would be incomplete.While donations and charity are still needed to address socio-economic issues, social entrepreneurship and the services offered by Unlad are integral in stimulating the local economy and combating trafficking, potentially putting more than 10 billion dollars worth of annual remittances to productive use that could benefit individuals, communities and, if effective on a large enough scale, the country.

Transforming Waste into Profit

The material in question is coconut, the husks to be exact. Coconuts are harvested for their meat and juice, not for their hard shells, which traditionally are discarded to form heaps of what resemble brownish skulls.

Macabre imagery aside, Davao Oriental Coco Husk Social Enterprise Inc. (Davao Enterprise) is generating serious business. Processing coconut husks into fiber which is used to make anti-erosion nets (for which Unlad won an Ashoka Changemaker Award in 2005), handicrafts, wallpaper, bed fillings and more, Davao Enterprise has found a truly productive use for an abundantly cheap resource that was previously discarded and left to rot.Launched in 2004, Davao Enterprise was incubated by Unlad and a local development NGO, Kalumonan Development Foundation. It is an example of an enterprise that corresponds to Unlad’s vision of social entrepreneurship: economically sustainable, gender-fair, protects the environment, practices accountability and transparency, and promotes the community’s health and well-being.

About the Author

Justin Hakuta is a U.S. Fulbright Scholar currently studying non-governmental organizations combating human trafficking in the Philippines. A graduate of Carnegie Mellon University (2004, B.S. in Decision Science), Hakuta has worked as a researcher at the Midtown Community Court in New York City helping formulate policy to reform the criminal justice system and continues to pursue his interest in human rights and social entrepreneurship by collaborating with organizations like Unlad Kabayan.

http://traffickingproject.blogspot.com/2007/04/cooking-up-profit.html