Social Entrepreneurship

Entrepreneurship Development
Social Entrepreneurship Defined

 The work of a social entrepreneur.

 A social entrepreneur: Someone who recognizes a
social problem and uses entrepreneurial principles to
organize, create, and manage a venture to make social
change.
 Whereas business entrepreneurs typically measure
performance in profit and return, social entrepreneurs
assess their success in terms of the impact they have on
society.
 While social entrepreneurs often work through
nonprofits and citizen groups, many work in the
private and governmental sectors.
Social Entrepreneurship Defined

 From the 1950s to the 1990s Michael Young was

a leading promoter of social enterprise
 And in the 1980s was described by Professor
Daniel Bell at Harvard as 'the world's most
successful entrepreneur of social enterprises'
because of
 His role in creating over 60 new organizations
worldwide, including a series of Schools for
Social Entrepreneurs in the UK.
Social Entrepreneurship Defined

 A list of a few historically noteworthy people

whose work exemplifies classic "social
entrepreneurship" might include
 Florence Nightingale, founder of the first
nursing school and developer of modern nursing
practices,
 Robert Owen, founder of the cooperative
movement and
 Vinoba Bhave, the founder of India's Land Gift
Movement, etc.
A Face of Social Entrepreneurship

Mohd. Yunus
Nobel 2K6 Awardee
Founder,
Grameen Bank,
Bangladesh
Father of Micro credit
Victoria Hale

 She established her expertise in all stages

of biopharmaceutical drug development at
the USFDA, Center for Drug Evaluation
and Research; and
 At Genentech, Inc., the world's first
biotechnology company.
 An Adjunct Associate Professorship in
Biopharmaceutical Sciences at the
University of California, San Francisco
(UCSF),
 An Advisor to the World Health
Organization (WHO) for building ethical
review capacity in the developing world,
 And has served as an expert reviewer to
the National Institutes of Health (NIH) on
the topic of biodiversity.
Victoria Hale

 Ashoka Fellow by Ashoka for work in leading social

innovation (2006),
 Executive of the Year by Esquire Magazine (2005),
 The Economist Innovation Award for Social and
Economic Innovation (2005), and
 The Skoll Award for Social Entrepreneurship from the
Skoll Foundation (2005).
 Named one of the “Most Outstanding Social
Entrepreneurs” by the Schwab Foundation for Social
Entrepreneurship in Switzerland (2004).
 In 2004, Dr. Hale and OneWorld Health were included in
the Scientific American 50, the magazine’s annual list
recognizing outstanding acts of leadership in science and
technology.
Victoria Hale

 A pharmaceutical scientist who became increasingly

frustrated by the market forces dominating her
industry.
 Although big pharmaceutical companies held patents
for drugs capable of curing any number of infectious
diseases, the drugs went undeveloped for a simple
reason: The populations most in need of the drugs were
unable to afford them.
 Driven by the exigency of generating financial profits
for its shareholders, the pharmaceutical industry was
focusing on creating and marketing drugs for diseases
afflicting the well-off, living mostly in developed world
markets, who could pay for them.
Victoria Hale

 Hale became determined to challenge this stable

equilibrium, which she saw as unjust and intolerable.
 OneWorld Health, the first nonprofit pharmaceutical
company whose mission is to ensure that drugs
targeting infectious diseases in the developing world
get to the people who need them, regardless of their
ability to pay for the drugs.
 Hale’s venture has now moved beyond the proof-of-
concept stage.
 It successfully developed, tested, and secured Indian
government regulatory approval for its first drug,
paromomycin, which provides a cost-effective cure for
visceral leishmaniasis, a disease that kills more than
200,000 people each year.
Many Early Battles

 Dr. Hale first set her sights on the drug after she
attended a conference in Belgium in 1999, where
Dr. Shyam Sundar, an expert on black fever, was
railing against the world’s failure to fight the
disease.
 “The tragedy, maybe even the crime, is that we
have known that this drug is an effective treatment
for kala azar since the 1960’s,” said Dr. Sundar,
whose free clinic in Muzaffarpur was also a site
for a trial by OneWorld Health. “We could do
something, but we were choosing not to.”
 Many Early Battles

 After visiting Dr. Sundar’s clinic in 2000, Dr. Hale, (doing consulting
work at the time), hired a law firm to help her get the tax exemption
necessary to create a nonprofit drug company.
 The I.R.S. turned her down three times over 10 months, suspicious
that her plan was a scheme by the drug industry to shelter profits.
 The tax agency challenged her to find an example of an existing charity
that mirrored a for-profit business.
 “It took me five days, and then at dinner, it hit me: N.P.R. and
public television,” she said.
 “They look an awful lot like for-profit radio and television, but they
serve a different audience with programs that their for-profit
counterparts don’t provide because they can’t profit from them.”
 Two weeks later, OneWorld Health received I.R.S. approval and set out
to tackle black fever.
 Many Early Battles

 The immediate challenge was financing. Initially, survived

on the largesse of. Hale and her husband, Dr. Ahvie
Herskowitz.
 They put up $100,000, signed a $315,000 promissory note,
used the ground floor of their house as offices, and worked
without pay for two years.
 The Gates foundation, which at the time was primarily
underwriting vaccines and other preventive strategies,
eventually offered a grant of $4.2 million that grew to $47.2
million for the development of paromomycin.
 Dr. Hale also got help from others, including the Skoll
Foundation, which has provided financing to underwrite
salaries for new senior executives.
 Many Early Battles

 An initial, formal test of paromomycin, an antibiotic sold

in some countries as an oral treatment for diarrhea and as a
topical treatment for cutaneous leishmaniasis, which causes
lesions, was done in the late 1980’s in Africa, two decades
after it was identified as a simple, cheap, effective cure for
black fever.
 Through a series of company mergers it was consigned
to the corporate shelf and forgotten, ending up with the
WHO, which lacked the money to develop it beyond the
Phase II clinical trials.
 But negotiations with the WHO to hand over the data
that would allow OneWorld Health to organize the Phase
III clinical trials necessary for regulatory approval
dragged on for almost two years.
 Commerce came in the way

 At the time, the W.H.O was developing another drug for black
fever with Zentaris, a large pharmaceutical company, and
the Indian government.
 That drug, miltefosine, has the advantage of being an oral
treatment, while paromomycin is administered by injection.
 But miltefosine, an anticancer drug, also has drawbacks. In
trials, it caused gastrointestinal problems in one-third of the
patients. And patients must be strictly supervised to ensure that
they take the full 21-day course of treatment.
 By contrast, paromomycin has shown almost no side effects
in trials.

Source: http://www.oneworldhealth.org/media/details.php?prID=152
 Commerce came in the way

 With a price of $100 to $200 a treatment, miltefosine is out of

reach for most patients and government purchasing programs.
 Dr. T. K. Jha, a specialist in black fever who oversaw one of
the OneWorld Health trials, said the W.H.O. wanted to make
sure miltefosine made it onto the market before handing
over its data on paromomycin.
 Dr. Robert G. Ridley, director of the W.H.O.’s special
program for research and training in tropical diseases,
disputed that.
 Dr. Ridley wrote in an e-mail message that the “time lag” had
to do with getting financing from the Gates foundation and the
process of negotiating an agreement with OneWorld Health.
Source:
http://www.oneworldhealth.org/media/details.php?prID=152
Non-profit vs. for-profit cousins

 The subject of the commercial aspects of drugs

is a difficult one for OneWorld Health, which
is careful to avoid criticism of its for-profit
cousins, as well as competition with them.
 But given the choice of paying more than $100
for Zentaris’s miltefosine or $10 for
paromomycin, governments and most patients
will no doubt choose the cheaper drug.
 Still more difficulties

 Distribution as the next hurdle.

 Getting paromomycin to remote villages at the end of
pothole-pocked roads is difficult.
 Dr. Hale is trying to enlist a British nonprofit group,
Riders for Health, to help.
 The group uses motorcycles to connect poor people to
medical services.
 In Zimbabwe, for instance, it has taken pregnant women in
need of Caesarean sections to hospitals.
 But first, the Bihar State government and India’s central
government must create a system that encompasses
diagnosing the disease, buying and administering the
drug, keeping records and spraying to reduce the sand fly
population.
 Hale & Gates Foundation join

 Hale’s goal falls directly in line with the Gates Foundation's

mission to bring innovations in health and learning to the
global community.
 Hale approached the Gates Foundation for funding in 2001.
 Her "risky new venture," according to the foundation, was
predicated on unused intellectual property and creating
innovative opportunities.
 Her premise was to resurrect expired drug patents and
recycle abandoned research and development on drugs to
treat tropical parasitic diseases such as malaria, diarrhea,
Chagas and visceral leishmaniasis (Kala Azar or Black Fever)
—deadly infectious diseases that disproportionately affect
people in developing countries.
Victoria Hale

 First, Hale has identified a stable but unjust

equilibrium in the pharmaceutical industry;
 Second, she has seen and seized the opportunity to
intervene, applying inspiration, creativity, direct
action, and courage in launching a new venture to
provide options for a disadvantaged population; and
 Third, she is demonstrating fortitude in proving the
potential of her model with an early success.
 Time will tell whether Hale’s innovation inspires
others to replicate her efforts, or whether the Institute
for OneWorld Health itself achieves the scale necessary
to bring about that permanent equilibrium shift.
 But the signs are promising.
 Business Model – An Overview

 Assemble an experienced and dedicated team of

pharmaceutical scientists.
 Identify the most promising drug and vaccine
candidates.
 Develop them into safe, effective and affordable
medicines.
 Then partner with companies, non-profit hospitals
and organizations in the developing world to conduct
medical research on new cures, manufacture and
distribute newly approved therapies that will impact
the health of millions of people.

Source: http://www.oneworldhealth.org/business/index.php
Business Model – An Overview

 Extraordinary opportunities, inspired solutions

Business Model – An Overview

 Challenge the assumption that pharmaceutical

research and development is too expensive to
create the new medicines that the developing
world desperately needs.
 By partnering and collaborating with industry
and researchers, by securing donated
intellectual property, and by utilizing the
scientific and manufacturing capacity of the
developing world, OneWorld Health can deliver
affordable, effective and appropriate new
medicines where they are needed most.
 Core Strengths of OneWorld Health

 Core capacities lie in pharmaceutical product

development.
 Scientific expertise extends from drug and vaccine lead
identification and optimization to conducting clinical
trials and securing regulatory approval of new medicines
for patients in the developing world.
 Scientific efforts are guided by a mission that ensures their
products are safe, effective and affordable for the
populations they serve.
 In collaboration with hospitals in the US and abroad, it fills
the huge gap in the development of new medicines – that
is, bringing promising drug and vaccine research from the
lab into the clinic and onto regulatory approval and
manufacturing.
A Non-Profit Model for Drug Development

 OneWorld Health was founded to address the

wide gulf between human need, scientific
effort and the marketplace.
 Created a nonprofit model to achieve outcomes
that would otherwise not be achievable.
 And to do so in a spirit of partnership and
collaboration that capitalizes on the specific
talents and resources that each participant can
bring to this essential scientific endeavor.
 A model that benefits industry and enhances
their commitment to global health

 Serves as a global development partner, taking responsibility for

markets in the least developed countries (dual market
opportunities).
 Obtains resources from private foundations and governments to
fund the development costs of taking a new drug through to market in
the developing world.
 Provides international regulatory expertise to increase the number
of countries in which an important new drug is marketed.
 Provides a tax deduction for the projected future value of donated
intellectual property such as licenses and patents [as a US 501(c)(3)
nonprofit corporation].
 Accepts responsibility for studying challenging patient
subpopulations that would otherwise not be studied (e.g., infants and
pregnant women).
 Creates a viable path for off-patent drugs which otherwise would
not be pursued for any new uses.
 A model that benefits academia as well as
the government

 University and government researchers produce exciting

new leads for tropical infectious disease, only to be
discouraged by the lack of outlets to advance their research
into development.
 Provides the bridge between novel bench science and its
conversion to applications for the developing world.
 Advocates to government and foundation funders in support
of specific basic research that will later become new drug
development projects.
 Advisors can advise academicians in translational science.
 A bridge between academia and industry, advocating for
access to key industry resources, such as chemical libraries
or specific assay reagents.
A model that benefits the developing world

 The developing world is not only a beneficiary, but also

a tremendous resource that is often disregarded in new
drug development.
 Work with developing country partners in clinical trials,
pharmaceutical manufacturing, and distribution of new
medicines for neglected diseases.
 Advocates for increased funding for academic
laboratories in the developing world and build capacity
by training health care workers and scientists in clinical
drug development through each of their projects.
 Actively transfer knowledge and technology to
improve local efforts to address disease threats. All of
this work simultaneously fosters new avenues of
economic development.
 A unique set of partnerships and investments

 Pharmaceutical and biotechnology companies find an

appealing outlet for idle intellectual property.
 Pharmaceutical scientists, drawn to a mission of saving lives
and improving health worldwide, are eager to participate in
groundbreaking and compassionate research and development.
 International health advocates including governments, non-
government organizations (NGOs), hospitals in the US and
abroad, welcome a powerful new ally for improving global
health.
 And investors and donors recognize a strategic and
pioneering investment in the health of millions of people.
Challenges Ahead

 Navigating bureaucracies and garnering support from

governments and international organizations can be
challenging.
 Funding: To date, the Gates Foundation has been the
largest donor to OneWorld Health, providing 96 percent
of its funding. Other foundation contributors include
Artemis, Chiron, Lehman Brothers, Pfizer, Vital Spark,
Gap, Amgen, and Skoll (founded by Jeff Skoll, the first
president of eBay). And the John D. and Catherine T.
MacArthur Foundation awarded Ms. Hale an
unrestricted, five-year $500,000 fellowship.
Challenges Ahead

 Accountability: Gates’ Foundation brings

attention to organizations like OneWorld Health
by highlighting them as case studies on their
website.
 Hale: “Open and frank about what we're
learning from our grantmaking — what is
working, and what isn't."
 Keeping public and private funders aware of
their findings is helpful not only for current
project accountability, but also for future
grantmaking.
Hale to step down in 2K7 itself as CEO

 To continue in her role as Chair of the Board of

Directors and will focus on the long-term
strategic direction and governance of the
organization while pursuing broader
engagement with industry and social
entrepreneurs around global health.

Press Release: Sept. 27, 2007 on Oneworld.org

Distinguish Social Entrepreneurship from other
socially valuable activities such as

Social Service Provision

And
Social Activism
 Distinguish from other socially valuable activities

Social Service Provision

 In this case, a courageous and committed individual

identifies an unfortunate stable equilibrium – AIDS
orphans in Africa, for example – and sets up a program
to address it – for example, a school for the children to
ensure that they are cared for and educated.
 The new school would certainly help the children it
serves and may very well enable some of them to break
free from poverty and transform their lives.
 But unless it is designed to achieve large scale or is so
compelling as to launch legions of imitators and
replicators, it is not likely to lead to a new superior
equilibrium.
 Distinguish from other socially valuable activities
Social Service Provision

 These types of social service ventures never break out of

their limited frame: Their impact remains constrained,
their service area stays confined to a local population, and
their scope is determined by whatever resources they are
able to attract.
 These ventures are inherently vulnerable, which may
mean disruption or loss of service to the populations they
serve.
 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 entrepreneurship
Source: Stanford Social Innovation Review, Spring 2007 (p.37)
 Distinguish from other socially valuable activities
Social Service Provision

 The difference isn’t in the initial entrepreneurial contexts or in many

of the personal characteristics of the founders, but rather in the
outcomes.
 Imagine that Andrew Carnegie had built only one library rather than
conceiving the public library system that today serves untold millions
of American citizens.
 Carnegie’s single library would have clearly benefited the community it
served.
 But it was his vision of an entire system of libraries creating a
permanent new equilibrium – one ensuring access to information and
knowledge for all the nation’s citizens – that anchors his reputation as a
social entrepreneur.

Source: Stanford Social Innovation Review, Spring 2007 (p.37)

 Distinguish from other socially valuable activities

Social Activism
 In this case, the motivator of the activity is the same – an
unfortunate and stable equilibrium.
 And several aspects of the actor’s characteristics are the
same – inspiration, creativity, courage, and fortitude.
 What is different is the nature of the actor’s action
orientation.
 Instead of taking direct action, as the social entrepreneur
would, the social activist attempts to create change
through indirect action, by influencing others –
governments, NGOs, consumers, workers, etc. – to take
action.

Source: Stanford Social Innovation Review, Spring 2007 (p.37)

 Distinguish from other socially valuable activities

Social Activism

 Social activists may or may not create ventures or

organizations to advance the changes they seek.
 Successful activism can yield substantial improvements to
existing systems and even result in a new equilibrium,
 But the strategic nature of the action is distinct in its
emphasis on influence rather than on direct action.

Source: Stanford Social Innovation Review, Spring 2007 (p.37)

Reminds something!

Source: http://nssdc.gsfc.nasa.gov/planetary/lunar/apollo11.html
 Edwin Aldrin: “We feel this stands as a symbol
of the insatiable curiousity of all mankind to
explore the unknown”.
 Neil Armstrong: “That's one small step for man,
one giant leap for mankind”.
 NASA mooned America!
By R. Rene

 Moon's surface has no moisture whatever. So why do

we see boot prints where the astronauts have walked?
You've walked in dry dirt and sand. It takes moisture
to hold a print.
 NASA never put a man on the moon; that the whole
Apollo saga was just a Hollywood-like production
done with the help of the CIA.
 The surface of the moon is 243øF in the sun and for the
two weeks of night. Our astronauts were just there in the
daylight, so they were dealing with an environment that
was around 250ø, with nowhere near enough power to
run the cooling system needed to deal with that.
 NASA mooned America!
By R. Rene

 Government has produced a $40 billion space opera.

 One photo in the book of Aldrin and Armstrong saluting
the flag, where they claim the sun is at about 130, but
Aldrin's photo was taken when the sun was at 26.4ø and
Armstrong's was taken with the sun at 34.9ø, if one goes
by the shadows they cast. Worse, the shadows are in two
different directions, and the flag casts no shadow at all.
 And those who caused any problems were killed! Did the
"accidents" which killed 11 astronauts in 1967 raise any
questions in your mind?
 The Apollo mission data is still highly classified.
Forms of Social Engagement
 In the real world

 There are probably more hybrid models than pure forms.

 It is arguable that Yunus, for example, used social activism to accelerate
and amplify the impact of Grameen Bank, a classic example of social
entrepreneurship.
 By using a sequential hybrid – social entrepreneurship followed by
social activism – Yunus turned microcredit into a global force for
change.
 Other organizations are hybrids using both social entrepreneurship
and social activism at the same time.
 Standards-setting or certification organizations are an example of
this.
 Although the actions of the standards-setting organization itself do not
create societal change – those who are encouraged or forced to abide
by the standards take the actions that produce the actual societal
change.
 Kailash Satyarthi and RugMark:
An example of Hybrid Model

 Recognizing the inherent limitations of his work to rescue

children enslaved in India’s rug-weaving trade, Satyarthi set
his sights on the carpet-weaving industry.
 By creating the RugMark certification program and a public
relations campaign designed to educate consumers who
unwittingly perpetuate an unjust equilibrium, Satyarthi
leveraged his effectiveness as a service provider by
embracing the indirect strategy of the activist.
 Purchasing a carpet that has the RugMark label assures buyers
that their carpet has been created without child slavery and
under fair labor conditions.
 Educate enough of those prospective buyers, he reasoned, and
one has a shot at transforming the entire carpet-weaving
industry.
 From Business Entrepreneurship to Social
Entrepreneurship

 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 (determining, influential, decisive) role of
entrepreneurship.
 Social entrepreneurship, 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.
A 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.
Our Time is Now: Young People Changing the World

 The book contains the stories of more than thirty young

people in over twenty countries who are taking action to
contribute to their local and global communities.
 Spotlights the efforts of young leaders who are
addressing a host of urgent global challenges: poverty,
violence, racism, environmental destruction, and civic
apathy, to name only a few.
 Challenge, adventure, serious work and creative fun.
 Strategies that help ensure the success of an initiative
while reflecting on the rich personal rewards of giving
back.

Source: http://www.pearsonfoundation.org/IYF/ourtimeisnow//