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Ashoka publically launched the Globalizer website today, part of an exciting new initiative that will enable the world's leading social entrepreneurs to scale their businesses and reach new markets. In the first year of the Globilizer initiative, Ashoka will work with 25 selected social entrepreneurs to build their capacity and concertedly address the challenges of "going global." The website will become a dynamic platform for collaboration, knowledge dissemination, and key findings coming out of the program.

This initiative is made possible by the Essl Foundation, an Austrian family foundation. Bill Drayton, C.E.O. and Founder of Ashoka, is the 2010 winner of the Essl Social Prize which is the biggest prize for Social Entrepreneurs in the world at 1 million Euro (this prize currently represents the sole funding of the program). The Essls gave Ashoka the freedom (or mandate through another lens) to launch a crazy, ambitious new project that they have been dreaming of for years. Naturally, Bill wanted to build upon their successful business model and introduce a new program that would help their most promising fellows reach their potential, and pave the way for others while doing so.

The initiative has three immediate goals: 1) create a platform (website) for fellows to share their learnings; 2) build a tight community of social entrepreneurs; and 3) move the community of scalable social entrepreneurs forward by developing a deep pool of publically available knowledge. This is a significant investment in action-research that will help the development community understand how to enable social enterprises to go global. The contributions to the knowledge base and applicability to BoP entrepreneurs will be closely watched by NextBillion.

During a conference yesterday I heard from three of the 25 Ashoka Fellows chosen to take part in the Globalizer. My immediate impressions were that the individual projects were boldly innovative and unique. Caroline Casey of Ireland, for example, is changing the way businesses look at and deal with people with disabilities by building a network of "ability confident" companies and spurring the market to recognize the significant contributions this segment of the population makes (3.3 billion euro of spending power, for example). Gary Slutkin of the United States, on the other hand, is funneling his decades of knowledge around battling infectious diseases into an effort to eradicate urban violence by training former perpetrators to disrupt armed conflicts and educate communities.

During the first year (which began in October 2009), Ashoka will be working closely with these twenty-five Fellows to prepare their scaling strategies and pushing them to go global. Ashoka will also be mobilizing a network of supporters and partners to provide resources to help these Fellows grow their plans to fruition. In April, the 25 Fellows will convene in Vienna to meet with a panel of top-tier consultants, advisors and international partners. They will present their strategies, get personal feedback, and then emerge with a robust international scaling strategy that bears the seal of approval and support of leading global entrepreneurs.

We'll pay close attention to how this platform develops and report on NextBillion.

On behalf of the NextBillion Team, I'm happy to welcome seven development through enterprise professionals who will join the group of Staff Writers. Together with the current cohort of five, they will share their rich and diverse perspectives, enabling NextBillion to chronicle the development of this idea from the most relevant regions and industries.

Nilima, Josh, Heathers, Sriram, Diana and Tilak: Welcome! We look forward to your contributions and to working with you in the development of NextBillion and our field.

To our readers: Stay tuned for more announcements. They're on the way!  

Nilima Achwal (Ann Arbor, MI) is a Research Associate at the William Davidson Institute, where she conducts primary and secondary research and writes case studies related to business in emerging global economies. She is particularly interested in the economics of development and businesses that create meaningful social impact in developing countries. Read more about Nilima. 

Josh Cleveland (San Francisco, CA) is the Impact Programs Manager at Net Impact where he oversees the organization's programs focused on community, campus, and workplace change and hosts Net Impact's Issues in Depth call series. Read more about Josh. 

Heather Esper (Ann Arbor, MI) is a Research Associate at the William Davidson Institute at the University of Michigan. She is part of the Base of the Pyramid (BoP) Initiative team, which addresses the intersection of business strategy and poverty alleviation. Read more about Heather.

Heather Fleming (San Francisco, CA) is the CEO and co-founder of Catapult Design, a non-profit product design firm serving developing world markets. Catapult's clients are organizations working in impoverished communities around the world with design and technology needs, including: rural electrification, water purification and transport, food security, and health. Read more about Heather

Sriram Gutta (Bangalore, India) is part of the Operations Advisory team at Unitus India. He is currently working on the Ultra Poor Initiative (UPI) and provides support to partners in areas such as program design, project planning, and impact assessment, among others.Read more about Sriram.

Diana Hollmann (Cairo, Egypt) is a Mercator Fellow on International Affairs focusing on topics concerning the interface between business and development. In the course of the one-year fellowship, she works on issues related to the advancement of inclusive and sustainable entrepreneurship. Read more about Diana.

Tilak Mishra (Chennai, India) is a social entrepreneur in residence and an impact investor at IFMR Ventures, an asset management company that exists to ensure that every enterprise has complete access to financial services.  At IFMR Ventures, Tilak is working on building solutions that ensures India's rural and semi-urban youth have improved choices to completely access employability enhancing resources and opportunities. Read more about Tilak.

In a recent weekly roundup I highlighted an Oxfam "Brief for Business" (pdf) on their Poverty Footprint Methodology.   This methodology - a truly intelligent and comprehensive approach to "corporate social responsibility" is important for several reasons that I want to highlight, especially as more and more multinationals begin targeting the base of the pyramid segment with affordable products.

To me, the bottom line is that even as multinationals choose to seek out base of the pyramid customers with products to improve their lives, there is an equal responsibility (and opportunity for positive impact!) by ensuring that getting those products to poor people does not hurt or impoverish other people in the process. 

As examples from the Oxfam report hightlight, in ensuring this businesses may improve their operations all around, and increase their ability to sell products to the base of the pyramid.

The footprint analogy, borrowed from the use of the term for carbon and climate change, is one that I think will have greater efficacy with the corporate decision-makers who must enable any evaluation of their company's operations, then make changes. 

In my view a key weakness of many CSR efforts is that, if they relate to a company's core operations at all, they are cherry-picked according to pet interests or fads - or what a company would prefer to have the spotlight on to the exclusion of something else.  It's quite likely in fact that the business's social impacts that are most difficult to deal with will be ignored - because they can be.

The footprint concept itself emphasizes that multinationals must be comprehensive and inclusive when looking at their operations. The Oxfam methodology looks at supply  chains, of course, but also:

• Value chains including product distribution
• Macro-economic impact - how a company operates with society vis a vis its taxes, distribution of profits, employment, etc.
• Institutions and policy - how a company's interactions with government and civil society affect the poor
• Social implications of environmental policies
• How their product development and marketing affects a community's culture, health, and ability to obtain essential goods and services.

These are all obvious hallmarks of good corporate citizenship.  But when grouped together it becomes more clear how hollow it is to look at one area but not another.

But the footprint concept also gains increased power and currency because it can help a company understand the parts of its own operations into which it has  poor visibility.  Especially when companies are oriented around marketing to the base of the pyramid. 

As the Oxfam report reveals, when Unilever piloted a footprint study in Indonesia, they discovered they were employing twice as many distributors as they realized, most of whom were working part time.  This knowledge allowed them to hone  and improve their distribution. 

Meanwhile, a footprint analysis for Harian Kissan Bazaar forced the company to analyze its impacts and operations in terms of gender, whereupon they discovered that 70% of their customers and clients were women.

Understanding how purchasing practices impact base of the pyramid suppliers may lead to undersatnding of how to improve relationships, impact, and ultimately the supply chain itself. Similarly, understanding how company practices impact sub-contracted distributors might allow them to create happier, and more effective, distributors. 

It hasn't been until companies started looking at the base of the pyramid as potential customers that they realized they could design and sell new helpful products to them.  It's not until they look into all the aspects of their operations, including the ones they may not want to, that they'll understand how to make their operations better for all involved.

And if they don't... Oxfam's campaigning arm will probably point it out before too long. 

This year will see several gatherings and discussions around the role of the private sector and social enterprise in the development of Latin America; following the Miami Social Enterprise/ Social Venture Capital Conference, Granada, Nicaragua, will welcome the first ANDE Latin America Conference to discuss the role of small and growing businesses in Latin America's fight against poverty.

It's interesting to see such conferences taking place closer to where the action is, where entrepreneurs are working to get their ventures off the ground and where the challenges of poverty are most acute. There is yet a second reason that makes the Granada conference special, and that is its focus on collaboration and coordination among the organizations supporting the SGB movement in the region.

To be more specific, this will not be a conference open for discussion among entrepreneurs and investors/funders. Neither is it a high level venue, designed for the leaders of investment funds and technical assistance providers. Instead, it's designed to address the needs and challenges of organizations like those affiliated to ANDE, which share a common goal but face challenges making collaboration and cooperation happen on the ground. Several training modules and sessions on specific sectors and areas of interest will be available. The agenda is explicitly designed to make something happen and have a list of clear action items once the venue comes to an end.

Early registration expires this coming Friday. If your work revolves anywhere close to the role of enterprise markets in Latin America's development, register now. 

We just heard from the E4SI folks that they have started accepting applications to select their third batch of fellows.

Engineers for Social Impact E4SI (which we covered here and was started by former Nextbillion staff writer Nitin Rao) is a unique fellowship opportunity for Indian youth from some of the most prestigious technical schools to spend their summers working in dynamic responsible businesses. These include renewable energy companies, such as SELCO that provide sustainable energy solutions, to the rural homes and businesses. My two personal favorites over the last couple of months:

• Husk Power Systems, which provides energy to thousands of homes in Bihar using micro power plants that makes use of discarded rice husk and has some big names backing it and;
• Sarvajal, which is a Piramal backed startup providing pure water at just 25p per litre to the BoP. 

Visit this page to see the complete list of partening enterprises. E4SI fellowships promise to be highly e ntrepreneurial as it combines the best of consulting, technology, and social innovation. 

Apart from the fellowship, the fellows gather together for an orientation session to interact amongst themselves as well as with industry representatives. Past speakers have included business leaders such as Gurcharan Das (ex CEO P&G India turned author), Harish Hande (CEO, SELCO), Laura Parkin (Co-Founder, Wadhwani Foundation & NEN), and representatives from Acumen Fund, Unitus, Ashoka, SONG Advisors (a Soros, Omidyar, and Google.org Investment Fund) and IFMR Trust.

The competition is tough but the reward is something worth fighting for.

If you're sold to the idea of comitting 8 weeks or more of your time this summer to any one ofthese champion enterprises, then head over to the registration page.

Deadline for submitting your application is the 7th of March 2010. 

This past week saw a fantastic Tech4Society conference take place in Hyderabad, India, focused on the worthy goal of how to build systems that maximize the social value of technology.  When I came to understand the thrust of the conference in this way, I became that much more enthusiastic about it.  This is a particularly valuable approach to take because while technology is often conceived in a relative vacuum, imagined with a very specific audience or market in mind, it of course exists within a broader context.  From Google's business decisions vis a vis China to the countless simple low-cost improvements to basic tools used globally like more efficient cookstoves or drip irrigation, the systems in which technology is used and propagated determine more of its impact than any particular aspect of its design.  A good example of the sensitivity of technology interacting with business models and human proclivities is here.

I was not, unfortunately, in Hyderabad, but I followed the Twitter feed from the conference, #tech4soc, which you can still peruse.  Not surprisingly, a popular topic was scale, because it is difficult for technology to make an impact if it doesn't get out of the garage in which it's put together, and systems for scale are essential.  But building systems for scaling technology deployment requires a very different set of skills than building a technology, and the tweets I caught included discussion of this need for organizational change by technology companies that hope to reach any modicum of real market penetration.

You can read full coverage of this uniquely oriented conference on Tech4Society's blog and the website of the Lemelson Foundation.

Two recent reports that caught my eye:

• The 2009/2010 Beyond Grey Pinstripes report from the Aspen Business and Society Program (a report initiated in the past by Next Billion managing partner World Resources Institute) came out recently, highlighting what's behind the hype when it comes to business school curricula and courses on social and environmental topics.  Lots of schools talk a good game, but who's actually got the content to back it up?  Topping the global ranking by Aspen's measurement is the Schulich School of Business at York University in Canada, followed by the Ross School at Michigan (wonder if Next Billion managing partner the William Davidson Institute has anything to do with it?), the Yale School of Management, and the Stanford Graduate School of Business. 
• To follow on my post from last week on mobile money, I've finally gotten the chance to look at a scenario analysis done by CGAP and the UK's Department for International Development (DFID) for "branchless banking" looking out to 2020.  This is from November 2009, but should still be relevant giving it's intended to look ahead for ten years still.

Many BoP ventures are beginning to think hard about metrics, more so than ever before. There has been much written recently about the importance of measuring impact and the large number of new tools and frameworks that have emerged, including many posts here on NextBillion which can be found by searching "metrics." These posts, along with many other continuing conversations in the field are helping us all navigate the same questions around collecting meaningful metrics.

Measuring outputs and reiterating anecdotes isn't sufficient in order to truly evaluate an intervention's impact. Measuring outputs only indicates how well an organization implements what it has set out to do.  This is certainly important for donors, who want to know how and where their funds have been used. But what if this implementation is wasting resources, or actually making the situation worse? It's impossible to tell by only evaluating data on outputs.

Take the example of mosquito bed nets. By measuring number of nets distributed by an organization to a population (an output), you don't know how or if the population is using the nets. The nets could still be in their packaging or being used as fishing net. I'm not saying ventures shouldn't measure outputs, but there is no point measuring them unless they also consider the outcomes - the broader impact on their target population such as the influences of bed nets on  locals income, education, health and relationships.

Most experts seem to agree that it makes intuitive sense to measure outcomes.  Well why aren't more organizations measuring outcomes? Based on observations and conversations we've had with numerous organizations, I've come up with three different reasons that highlight the underlying constraints:

1. Confusion - Many organizations don't know where or how to start. This is mostly a result of lack of time dedicated to impact assessment at an organization. There is plenty of information out there on how to measure outcomes.
2. Uncertainty - Organizations don't know what their outcomes will be, and they are nervous about hearing anything other than positive news. However, you can't improve without understanding your weak points!  The development community as a whole needs to emphasize and reward learning from mistakes. Ultimately, this will benefit everyone.
3. Apathy - Some program managers won't do it until they are forced, and instead will continue using anecdotes and outputs in attempts to show their influence in alleviating poverty. As the attention around impact investing grows, soon these organizations will be "forced" by donors to measure outcomes. As more take the step to measuring outcomes, it will soon become the norm.

It will be interesting to see how these organizations evolve their thinking and action as the pressure to measure metrics increases both from funders and other organizations doing so. At the same time even some of the organizations currently measuring outcomes end up frustrated and without quality data due to poor methodology. At WDI we have developed a robust and straightforward data collection process for collecting impact data at the project level. My next post will focus on recapping outcomes from our upcoming BoP Impact Assessment Workshop which will share our framework and data collection process with participants.

I look forward to exploring the area of metrics, sharing our latest thinking at WDI, and continuing the conversation around metrics with you all. 

Editor's Note: This post is Part 3 of a 6-part series exploring new business models for linking small farmers to global markets being analyzed through an international collaborative effort that can be read about here.  Read an introductory post, catch up on part 1 part 2, and find out more about our work with the Center for International Tropical Agriculture at CIAT's blog.

In our last post we remarked how chain-wide collaboration was essential to creating shared goals amongst chain actors and  to making real progress towards small farmer inclusion.  Interdependency between chain actors appears key for weathering risk, meeting new standards of quality, complying with regulations, and promoting innovation and increased product value. This post explores the issue of transparency in chain governance, and the role it plays in meeting expectations, standards and commitments to buy and sell  volumes of a certain grade, as well as equitable processes of risk management across a supply chain with multiple participants. 

Transparent Chain Governance

Governance refers to the setting, monitoring, and enforcement of formal and informal rules along the value chain. Governance patterns in global value chains vary, and global-scale industrial organization affects not only the fortunes of firms and the structure of industries, but also how and why countries advance -or fail to do so-  in the global economy (Gereffi, Humphrey, Strugeon, 2005).

Continue reading this article

Even before I fully knew what mobile money was, I could tell it was going to be huge. One look at the size of immigrant remittance flows that have become the largest source of funds flowing into many developing economies (and are more stable than FDI), and you can tell that innovative ways to move money with lower transaction costs would quickly find scale.

Add to this the cumulative economic turnover at the base of the pyramid - 4 billion people without bank accounts and often any non-cash monetary instruments - and innovative ways to store money and make payments loom even larger.

Estimates for the size of the mobile money market range from $27 to $202 billion within 4 years. So I'm not the only one who thinks this will be big but doesn't know how big.

To get a handle on all this buzz and walk through what mobile payments really look like, I sat down for a tutorial with Ben Lyon of FrontlineSMS Credit while he was in the Bay Area to speak at Google. As someone accustomed to debit cards and PayPal and the like, I had to take a step back to get a feel for what the ability to send and receive money through a mobile phone - or really, a SIM card - means for someone with no other easy way to move money or convert cash into electronic form.

Continue reading this article

When my co-worker Moses Lee at the William Davidson Institute asked me to write a blog post about my experience last year as a Kiva Fellow in Bolivia, I did not even know where to start or what to encompass. Living and breathing Kiva for three months implied me getting involved with microfinance in every sense-with laypeople that l end in hopes of making an impact, the energetic brains at the Kiva headquarters, the ambitious executives at the local microfinance institution, the underrated loan officers that work tirelessly to overcome the many obstacles in lending to the poor, the proud and driven borrowers themselves, and, equally importantly, the other Kiva Fellows that constantly collaborated on best practices, supported each other, and shared an excited, passionate energy online. Each of these interactions supplied me with so many different types of insights and inspirations that I did not know what I would even attempt to communicate to NextBillion.

At the end of the day, I just knew that I wanted to communicate the energy that every one of those interactions lent me. No matter how conversant (or not) the people at any given level were about the processes, difficulties, and possibilities of microfinance, I was struck by the way that a giant multitude of very different people had come together for something that, in fact, was functioning well and impacting thousands of lives across the globe. When one is only a tiny part of a movement, it is extremely easy to doubt its real and potential impact.  What allows this particular chain of people to shake the earth and create real change is simply their understanding that their small part of the link is not just valuable, but indispensable to the whole. They are all driven by the realization that the "whole" sums down to the simple concept of a vegetable seller's ability to feed her children or a seamstress' chance to leave her abusive husband and be self-sufficient, which they deem important enough to tackle the various difficulties one encounters when trying to create change at the base of the pyramid.

For those that are not familiar with Kiva, it is a person-to-person micro-lending website on which anyone can lend as little as $25 to an entrepreneur in the developing world. Kiva loans have a 98% repayment rate with 0% interest, but the lenders do receive a summary of the impact of the loan (a "Journal" update) on the entrepreneur's business and quality of life. These Journal entries are fundamental to the Kiva model because they take the place of the interest a lender would receive on a loan, instead providing them with the satisfaction of having had a positive impact on another individual. That is not to say that there is no interest charged to the entrepreneurs. After a lender sends their money by PayPal to Kiva, Kiva funds the microfinance institution, which charges interest to its borrowers. Kiva currently has 108 partner microfinance institutions (MFIs) in 52 countries.

Fundación Agrocapital, the MFI with which I worked in Bolivia, charges 30% interest on most micro-loans, which the institution uses to sustain and expand their own operations, repaying only the principal amount back to Kiva to be disbursed back to lenders. Though this may seem like a high interest rate, in the world of microfinance it is relatively standard. Microfinance institutions must cover many extra costs that a mainstream financial institution does not have to, like compensation for the time and money involved in travelling to borrowers' homes in far-flung locations. In addition, these interest rates are much lower than the entrepreneurs' alternative: borrowing from local moneylenders or "loan sharks" for rates up to 150%! Many women I spoke with were grateful to have access to capital at a manageable interest rate.  

With this model, Kiva revolutionized capital flows to MFIs around the world because for the first time, there are hundreds of small capital streams supporting many credible MFIs around the world, as opposed to in the past, when there were infrequent, very large investments producing a bottleneck effect in just a few localized MFIs. Kiva monitors their partner MFIs' administrative capacities and restricts its funding limits accordingly in order to avoid bottlenecks. Kiva recognizes itself as an administrative burden as well, since loan officers must write borrower profiles (a personal synopsis of the borrower and her business) and periodic Journal updates, and therefore sends Kiva Fellows to partner institutions in order to assist with administrative tasks and implement sustainable and efficient processes at the MFI in working with Kiva.

That is how I was given the opportunity to speak with hundreds of borrowers in Bolivia about their experience with micro-loans. The women and men I interviewed for Journal updates had a variety of businesses, the most common being ambulatory clothing/cosmetics/food sales, market stalls (more expensive), small stores (even more expensive), and small "cocinas," or simple lunch or dinner joints outside of their homes. The majority of the borrowers were positive about its effects; the micro-loans had allowed them to incrementally keep growing their businesses.

Most borrowers started out with very small businesses, and after a series of loans had grown their businesses substantially. The borrowing process works like this: borrowers take out short-term (think 6 months) loans to buy capital, they pay back the whole loan, and then take out another, usually slightly larger amount to buy even more capital. The borrowers normally go through a series of loans before one can see the impact on their businesses, but the businesses do grow substantially, and the majority of borrowers I spoke with had a more stable economic situation after a few years because of the micro-loans.

Stay tuned for personal stories of the driven, assiduous Bolivian borrowers and their innovative businesses.