A year ago, I was sitting at the iHub in Kenya, analyzing thousands of payments made by parents of students at Bridge International Academies, trying to identify potential leading indicators of withdrawal, when Kentaro Toyama, the founder and director of Microsoft Research India, stopped in to give a lecture titled “ICT or Development: Why it’s so hard to get rich and help the poor simultaneously.” His thesis – that it is actually very, very difficult to be both financial and socially sucessful – aimed to check some of the fervor around the concept of social enterprise, which is at the forefront of a new market-led, private sector approach to international development.
I took umbrage with his premise at the time, since I was working with a social enterprise, Bridge International Academies, that had secured the backing of prominent investors and managed to scale across Kenya, with plans to move international within a year. But, more importantly, I felt the narrow definition of social enterprise offered by practitioners, academics, and Toyama himself, made it impossible for companies that fit the bill to every be successful by these standards. After the talk, I asked Toyama why he didn’t consider Celtel, the telecom company founded by the Sudanese-British Mo Ibrahim, to be a counterexample. After all, Celtel created the African telecom sector – one of the fastest growing industries in the world – out of nothing, at a time when nobody – including the father of social enterprise, CK Prahalad – thought it could be done. “Celtel is only focused on making money, so they are not truly a social enterprise,” he responded.
This is where I think he and the other critics of social enterprises are wrong. The most successful social enterprises might not have a social motive at all. Mo Ibrahim famously said “Africa is a wonderful place to make money.” in the spirit of that statement, I will take a crack at identifying the most influential social enterprises in the world.
Celtel, as I explained, is the first telecom company to identify Africa as a growth market. What followed their proof of concept was a flood of competitors, which created one of the fastest-growing and most competitive markets in the world. Vodafone, Airtel, Glo, Tigo, and other companies began offering lower and lower voice and text plans, while Nokia led (and still dominates) the market for low-cost mobile handsets. It is not uncommon for people in the rural areas and slums to have a cell phone, but no running water or electricity. Mobile penetration has increased exponentially over the last 10 years. Today, it is currently 65% and growing.
The resulting increase in communication capabilities has significantly reduced the asymmetry of information that led to widespread inefficiency. It allowed families to remain connected more easily, facilitating internal migration and loosening up the labor markets. Countless companies have leveraged the mobile platform to communicate more with customers. In a world without ATM machines or credit cards, mobile money has enabled consumers to pay bills and transfer money without having to pay exorbitant fees to pawn shops or money wire services.
Celtel started the mobile revolution in Africa. And it make a killing in the process.
Google’s organization and digitization of information has increased information access to people across the developing world. In areas where the ratio of people to libraries is a fraction of corresponding number in the U.S. and Europe, eliminating the monopoly physical references – books, newspapers, and magazines, for example – have on knowledge has enabled people to make more informed decisions about just about everything. With Google’s search functionality, autocratic and repressive leaders that inhibit economic growth and development can no longer control the information their people receive, enabling citizens to make informed decisions based on facts, rather than propaganda.
Google’s democratization of information has had a huge impact on development around the world. They too have made a killing the process.
3. Twitter / Facebook
Twitter’s role in catalyzing the Arab Spring and enabling it to spread like wildfire will have profound impacts on the development of countries in North Africa and the Middle East. It is only a matter of time before the same network effects and distributed communication enabled by social networks like Twitter and Facebook enable the same sorts of reforms in sub-Saharan Africa, in countries like Zimbabwe, where discussion of the Arab Spring is outlawed. On Fareed Zakaria’s blog, an article titled “Four ways social media could transform conflict in Africa” explains this effect:
Social media could make African states more sensitive to audience costs (that is, the benefits and drawbacks that it could accrue from lying or telling the truth), since citizens can now interact with their governments and with others in civil society in ways that they couldn’t before. An example of this trend has been the recent #SudanRevolts social movement on Twitter, in which Sudanese and global supporters have launched an unprecedented movement calling for an Arab Spring-like end to the rule of strongman Omar al-Bashir. Previously, in early 2011, other African leaders were confronted with small-scale conflicts organized via social media, including in Cameroon and Angola. Indeed, the massive uptick in cell phone users across the continent has led many to predict that the next long-term revolutions in African leadership will be launched via cell phone.
Social networks will continue to have game-changing impacts on repressed states.
Here are some honorable mentions:
It is said that you can get a Coke anywhere in the world. I have been to two dozen countries around the world and visited some of the most remote places, and have never not been able to get a Coke. The number of people who are employed at every level along the value chain is huge, and Coca-Cola deserves credit for creating such an efficient supply chain.
Wal-Mart and other big box retailers that source local produce from farmers and establish a highly-efficient storage facilities and cold chains enable significant improvements in the agriculture sector of a company. BusinessWeek discussed the impact Wal-Mart’s entrance into the Indian market could have had had politicians allowed it:
The global chains were likely to invest in trucking and distribution systems in India, where government estimates show 40 percent of fruit and vegetables rot before being sold because of the lack of cold-storage facilities and poor transport infrastructure. Farmers will have “assured business” if foreign companies were allowed to invest in multibrand retail, said Pratichee Kapoor, associate director for retail at Technopak Advisors Pvt.
These are just a few social enterprises that have had outsized social impacts.
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