SOCIAL ENTREPRENEURS: LEADERS FOR THE 21ST CENTURY

By Klaus Schwab and - - Reprint | | Print |

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GENEVA, Jan 1 2003 (IPS) - Progress depends on more than high-level cooperation among global decision-takers, writes Klaus Schwab, founder and president of the World Economic Forum. It also requires a different kind of leader, Schwab writes in this article for IPS — one that has contributed to social transformation by applying entrepreneurial skills to address a wide array of social challenges at the local level. These leaders are called social entrepreneurs. Social entrepreneurs enter the scene precisely where markets have failed to deliver critical public goods and services, particularly to those who cannot pay. Without market assistance, social entrepreneurs create the social value underpinning the productive healthy societies upon which sustainable development depends. The World Economic Forum uses its leverage such that the scalable solutions of social entrepreneurs can be replicated, improved, and expanded, so that their practical insights can be incorporated into government policy and business initiatives, Schwab writes.

Thirty-three years ago, I founded the World Economic Forum with the purpose of building a global community of business leaders that search for joint solutions to challenges at the macroeconomic and geopolitical level. As the Forum evolved over the years, we invited political and academic leaders as well as representatives from the media to contribute to our discussions and widen our perspectives.

With the recent emergence of thousands of citizens’ organisations, a new global political context has been created characterised by more collaborative ways of relating among the state, the market actors, and these citizens’ organisations. The World Economic Forum has welcomed the presence of strong civil sector organisations, for they are linked inextricably to democratic governance and sustainable development.

And so every year, the participation of representatives from the citizen sector increases at the Annual Meeting in Davos. Today, the Forum is committed to improving the state of the world by providing a non-partisan and independent framework enabling world leaders to address global issues in a collaborative manner. The Forum has always, since its inception, promoted entrepreneurship in the global public interest.

But the Forum by nature operates at the macro level. Over the years, it has become all too evident that progress depends on more than high-level cooperation among global decision-takers. It also requires a different kind of leader — one that has contributed to social transformation by applying entrepreneurial skills to address a wide array of social challenges at the local level. These leaders are called social entrepreneurs.

Similar to business entrepreneurs, social entrepreneurs combine innovation and resourcefulness to create value. But the value they seek to generate is primarily social. Whereas business entrepreneurs are constrained by the market from operating where financial profits cannot be generated, social entrepreneurs enter the scene precisely where markets have failed to deliver critical public goods and services, particularly to those who cannot pay.

Without market rewards or assistance, social entrepreneurs create the social value underpinning the productive healthy societies upon which sustainable development depends.

Muhammad Yunus is the world’s best-known social entrepreneur. Thirty years ago, he was a professor of economics in his native Bangladesh. He was driven to find a way to convince banks to loan to the poorest people in his country. He was thought to be mad. The poor have no collateral, he was told. Loaning them money is folly as they cannot repay. Undaunted, Yunus decided to start a bank for the poor. The first loan was for about USD 30. With that loan, he single-handedly revolutionised traditional banking policies and developed the concept of micro-credit. Today, micro-credit is mainstreamed even into the most conservative institutions. Yunus changed forever the myth that being poor was synonymous with being a high-risk investment.

Social entrepreneurs are pattern-breakers. They challenge the way things have been done, often finding unique ways of combining proven practice with innovation to address complex social problems. Vera Cordeiro was a paediatrician at the Hospital da Lagoa, a large public hospital in Rio de Janeiro. Every day, she saw the same children re-admitted, trapped in the cycle of poverty and ill health. She founded Renascer in 1991 to provide families, particularly mothers, with job training, housing improvements, psychological and nutritional support, day care, and medicine. Since Renascer’s inception, the number of paediatric cases re-admitted to the hospital has decreased by 60 percent. Today, the Renascer model has been replicated in 14 hospitals throughout Brazil. Vera Cordeiro is one of the sixty outstanding social entrepreneurs that have been selected by the Schwab Foundation for Social Entrepreneurship. She, along with seven others from Brazil, will be attending the Annual Meeting in Davos.

Social entrepreneurs share underlying core values independent of whether they work in renewable energy, micro-finance, food security, health, education, or other arenas. Among those values is an unwavering belief in the innate capacity of all people to contribute meaningfully to economic and social development. Gisele Yitamben from Cameroon founded ASAFE based on her belief that African women could develop into successful business entrepreneurs if provided training and development support, alternative financing and access to e-commerce. ASAFE today supports thousands of women entrepreneurs in Cameroon, Guinea, Benin, Chad, and the Democratic Republic of Congo.

But too often the work of social entrepreneurs and their organisations falls short of what it could be. They often lack the legitimacy, credibility, and the resources to achieve wider impact. While they have hundreds of years of accumulated practical experience in solving problems related to sustainable development, they are seldom given the platform to share with the world their methods and results so that others can emulate what they have done.

The World Economic Forum uses its leverage to attract the notice of governments and business people so that the scalable solutions of social entrepreneurs can be replicated, improved, and expanded, so that their practical insights can be incorporated into government policy and business initiatives. Social entrepreneurs are the heroes and heroines of the 21st century. Their perseverance, ingenuity and pursuit of noble goals set new standards of value, hope and inspiration for all of us. (END/COPYRIGHT IPS)