Collaboration innovation

Catalysing change through social entrepreneurship

Companies, governments and social innovators are driving development across the globe through collaboration, but what does it involve?

Companies, governments and social innovators are driving development across the globe through collaboration, but what does it involve?

When the COVID-19 pandemic hit Paraguay, the government acted quickly and rolled out an app in cooperation with Fundación Capital to assist people with the situation. They then launched a virtual assistant in April 2020, which helped people economically and provided them with useful information about the disease – even reaching people in remote areas.

“We provided them with tools to sell online, set up their Facebook pages and use WhatsApp and YouTube for their business,” explains Nelly Ramirez, Vice President and Head of Advanced Digital Services at Fundación Capital. The organisation is a classic not-for-profit NGO also providing services to clients such as governments or companies in a more entrepreneurial way. It aims to generate sustainable livelihoods through digital technologies for people who do not enjoy full economic citizenship. 

“We have now sophisticated the virtual assistant to help people manage their finances in times of crisis, specifically for small shop owners,” Ramirez elaborates. “It has also been specifically deployed for women to prevent gender-based violence.” 

Fundación Capital has since extended its use to Mozambique, where they partnered with a local gig economy platform that has the potential to reach 55,000 workers.

“Through our evaluation programmes, we know that people have changed their financial and saving habits and even managed to achieve their life goals by using our digital solutions,” she adds.

Joining forces on social innovation

The idea of fostering change through social enterprises is gaining traction. Under the umbrella of Catalyst 2030, many social entrepreneurs, intermediaries, funders, and NGOs have come together with the bold target of achieving the United Nations Sustainable Development Goals by 2030.

The movement recognises that “much of the Global North and South are governed by a set of values that prioritise exploitation for short-term profit, unsustainable perpetual growth, and individual over collective prosperity.” To overcome the current system, it focuses on transforming corporations and governments by engaging them instead of other movements critical of shareholder capitalism.

Catalyst 2030 also receives academic advice from various institutes focused on improving the global economic system and society at large. One of them is the Rutgers Institute for Corporate Social Innovation (RICSI,) which aims to shape business leaders who practice concepts that achieve both commercial and societal goals. Besides conducting academic research, it offers courses for businesses to improve their corporate social innovation.

Bringing together profit and purpose

RICSI Executive Director Noa Gafni has conducted extensive research on how companies can drive social innovation, resulting in four key pillars – aligning profit and purpose, giving back to the society, advocating for social issues, and responsible business practices.

“Companies that embed and integrate these four pillars are the ones that will really succeed and evolve,” says Gafni.

This means, for example, creating products that generate both a profit and a positive impact on society, corporate philanthropy, partnering with other sectors to drive change, and making businesses more sustainable by paying a living wage or making supply chains greener.

But to be able to set up businesses that can achieve these goals, it is crucial for governments to create the right conditions for them to blossom.

“There are places with amazing ecosystems around social innovation. I am thinking of places like Accra in Ghana or Nairobi in Kenya, which have many start-ups and social enterprises,” notes Gafni.

One Kenyan success story is Safaricom’s M-Pesa, a mobile phone-based money transfer and micro-financing service that quickly became successful across Africa around 2010, leapfrogging various financial development steps.

That said, this is harder to achieve in countries with established legacy sectors and systems. Like many Western societies, the challenge is about creating a suitable environment for innovation and transforming existing structures around massive companies.

Gafni believes that creating the right political ecosystem is just one step on the journey to creating a more inclusive and sustainable economy. “We need to hold companies responsible to take action and we need organisations from across the spectrum to support impact because governments are not necessarily the only ones who can drive change.” 

Written by

Oliver Imhof