Wolves in sheep’s clothing

by March 19, 2020 0 comments

An increasing number of purely business ideas is being masqueraded as social innovation. Thus several false trappings of innovation are being embraced over truly innovative ideas

The field of social entrepreneurship has attracted great global interest on account of its role in providing sustainable solutions for addressing a diverse range of complex and stubborn environmental and social problems and the systems that perpetuate them. Social entrepreneurs are drawn by a variety of social missions and are passionate about tackling a problem, have an idea for a solution and the determination to make that solution happen. This fertile field has given rise to extraordinarily ingenious people, who have conjured brilliant ideas and used them with operational prowess to dramatically improve people’s lives. At the core of social entrepreneurship is the recognition of a new mindset — that believes in an agenda oriented around making the world a more just and equal place.

Social entrepreneurship is an appealing construct precisely because it gives primacy to social benefits while at the same time remaining firmly grounded in sound financial principles. Finding the balance between social purpose and commercial viability remains the toughest challenge for any social entrepreneur.

The social entrepreneurship community has now a big tent and a major challenge is to protect the purity of its mission. It is tragic that we are witnessing an unsavory and disconcerting trend which is muddying the waters and putting this noble field under strain. An increasing number of purely business ideas is being masqueraded as social innovation. Thus several false trappings of innovation are being embraced over truly innovative ideas. Resources are squandered when the innovation’s actual capabilities fall short of its promise. We now have so many “lost Einsteins” because the proliferation of so many so-called social innovations is obscuring  several genuine ones who are left to  languish.

Several so-called entrepreneurs are being hailed as saviours and game changers when the impact and outcome of their work is nowhere near proven — still less studied are the damaging, unintended consequences of their enterprise. In many cases, their mission is not their work — but they themselves. There is a huge mismatch between rhetoric and reality — as is the misalignment between their personal lifestyle and the public stance about the poor, leading to a pervasive loss of trust.

Trust is the currency that facilitates every social transaction. Without trust, society risks moral bankruptcy. We cannot take trust for granted. It must be earned in all we do, every day. These new social climbers must be made to understand that the poor cannot be used as raw material for individual or corporate salvation. Microfinance was once hailed as one of the most revolutionary ideas of the century. But rigorous studies have demonstrated that microfinance, more particularly microcredit, has only a modest role in improving the lives of the poor. Microcredit is so longer an ally in a social entrepreneur’s toolbox.

Since the term social innovation is still quite amorphous, several business leaders are conflating it to cover even purely profit-driven inventions. One of the prime determiners of meaningfulness and relevance of the innovations is their affordability to end-users while being sustainable for the providers also. An initial subsidy for training support is alright but in the long run the providers must be able to meet costs .

Technology is an unmixed blessing. All technological change is a trade-off and may be better termed as a Faustian bargain. Alan Moore once said, “Technology is always a two-edged sword. It will bring in many benefits but also many disasters. For every advantage a new technology offers, there is always a corresponding disadvantage. These are unevenly distributed among the population. Some benefit, while some others are harmed. The consequences of the changes are vast and unpredictable and often irreversible. It is in this context that Bertrand Russell warned that “unless men increase in wisdom as much as in knowledge, increase of knowledge will be increase of sorrow”.

Poor societies have long been used as guinea pigs by development scientists. This is perfectly alright as long as the objectives are fair and rational. But the emergence of a tribe that sees the world through a business lens and wants to use vulnerable communities as a constituency for furthering its commercial goals has set the activist camps on fire. The avowed social mission of these self-serving entrepreneurs is meant to camouflage their rapacious business interests. In this pursuit, they are using their semantic skills to justify their action by garbing the wolfish acts in sheep’s clothing. Social science tends to focus on average outcomes and makes little allowance for negative tail-end effects. Most modern entrepreneurs are products of business schools where the training is focussed on maximising shareholder value with limited understanding of ethical and social considerations essential to a truly visionary leadership.

The key to compassionate and sustainable capitalism is reasonable profits as opposed to maximisation of profits.  In the present  system, one section  of society is trying to maximise profits, totally unconcerned with the  consequences it is having on the well-being of the larger society, while one section is investing its time and effort  in dealing  with the fallout. The system is not working. There are now people, particularly among the socially conscious ones, who are embracing the notion of “entrepreneurship for society” rather than “commercial” or “social” entrepreneurship. 

 There is no that doubt that millions of people lack access to basic services but there are ethical questions when products and services are tested and sold in the guise of a public service. Everyone has heard depressingly familiar tales of poor and uneducated people saying how privileged they were made to feel as they were suddenly offered the chance to receive medicines and nutritious food they couldn’t usually afford. Such interventions are in many cases part of clinical or field trials. These people are chosen because they do not understand their implications and agree to them without any fuss.

Every social innovation normally involves an unsettling of the status quo and reordering of the social ecosystem — and these disruptions may impose new costs for some members of a community or elements of an ecosystem. Yet, when the impact is measured, there’s a tendency to avoid assessing the full range of positive and negative impacts and to only focus on measurable effects within the “good part of the impact spectrum”, which is what is crucial  to mobilise investment. Much less effort is put in for measuring the potential negatives, which are critical to the perspective of the user community. While it is true that several innovations become useful after a period of refinement, the final impact can only be measured by understanding the damage caused during the transition. Innovators must give importance to this window before scaling up and take measures to minimise the negative consequences.

Ideas that generate commercial dividends along with even bare social dividends charm investors — the investors and political actors who are now important players in the ecosystem. Most innovations are measured in terms of their business worth and how effectively they can be pitched to the investment world. The language of innovation is getting increasingly grounded in financial logic. 

In their book Poor Economics, Esther Duflo and Abhijit Banerjee have listed hundreds of “common sense” development projects — micro insurance, housing, food aid, microcredit — those either don’t help poor people or make them poorer. Many of the serious problems of farmers and the rural poor are largely a result of misguided projects that have severely impaired the local ecology, leading to soil degradation, acute shortage of water, and resistant pests. There are several policies which have novel features that are not organically integrated. They have excellent ingredients but have to be meshed in proper proportions so that they make an effective recipe. A policy must be seen as a living organism where each organ has its own unique role 

Every society is going through different stages of development and the necessary solutions and interventions must be appropriate for its unique cultural and economic context. By respecting the cultural outlook of the people and embracing their concerns we enlist their buy-in and that is what paves the way for enduring and sustainable success.

(Writer: Moin Qazi; Courtesy: The Pioneer)

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