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Designing Sustainable, Inclusive Cities of the Future

Forging Common Ground – Series of Oxford Student Insights to the Skoll World Forum 2017.

Oxford MBA Candidate 2016-17 at the Saïd Business School, Devin Rebello, gives her perspective on the  Skoll World Forum session “Designing Sustainable, Inclusive Cities of the Future”.

The story of a broken city began as a fault line of inequity and exclusion ripped apart the urban centre of Medellin, Colombia. Faced with rapid urbanisation and population growth, the city was sent into extreme economic upheaval spurred by lack of jobs, failing infrastructure, and inadequate city services.  The most disenfranchised and vulnerable populations fled into the mountains where they were soon preyed upon by drug cartels and caught in cycle of violence and extreme poverty that made Medellin the most dangerous city in the world.  As Liz Agbor-Tabi, Associate Director of 100 Resilient Cities, tells it, Medellin was a city with a master plan. Local leaders had gone through the exercise and set a vision. Unfortunately, they had planned for the city they had, not for the city they would need. This story, though extreme, is all too familiar to those working to design sustainable, inclusive cities of the future.

As I sat in the room and listened to the tragic impact of failing systems and the hope for a better way forward, I was struck by the conflict between formal and informal communities and the role of government in creating their own problems. The outstanding, passionate panellists drove a resounding point home:  there are social structures, laws, and physical spaces within growing cities that inherently expel people to the fringes. The more a city treats the marginalised like a problem, the larger the problem becomes. A city cannot ignore the pain and suffering of those existing in informal spaces, such as slums, nor can it take a wrecking ball to these informal communities and expect them to go away. The marginalised will not disappear by being ignored or physically threatened; instead, like in the example of Medellin, they will find ways to try to survive that can be devastating to formal structures.

The big question is, how do you change this? How can cities get out ahead and build something that will grow with a surging population? The overall sentiment in the room was that we need to break through silos and take a systems approach to building more inclusive cities. This starts by bring those living in informal spaces to the table and including them in the planning process. It starts when we demand governments change arbitrary laws that lock the marginalised into poverty by disallowing them from being entrepreneurial. It starts when we recognise that natural disasters disproportionately devastate the marginalised and fight to change systems that currently make them ineligible for aide. It starts when we design cities that focus on creating easy access to education, health care, and transportation for everyone. And it continues when we constantly remember that design is not neutral – it can help or it can hurt.

What is most inspiring is that this can be done. Looking back to Medellin as our example, it is an amazing story of a phoenix rising. Liz Agbor-Tabi told us that from the ashes of violence and extreme poverty, the city was able to turn things around by bringing marginalised citizens into the planning process along with NGOs, businesses, and civil society. Medellin built infrastructure to physically connect those living in the mountains to the main city allowing easy and safe passage between locations, which led to more employment and more spending that would boost the overall economy. They also put a deliberate emphasis on creating community spaces to rebuild the connectivity and trust between and among citizen. Medellin is now a rising hub of social entrepreneurship that has an intentional focus on poverty alleviation and inclusion.

This last thought is an interesting one – with the government taking the first steps to build an inclusive foundation to alleviate violence and poverty, local businesses are emerging that are determined to take care of the community. But does it really have to get that bad for businesses to take responsibility for the communities in which they work? Do we really have to rely exclusively on NGOs and social entrepreneurs to be the ones to take action to prevent another city from falling?

I think back to the opening plenary of the Forum when Hamdi Ulukaya, Founder and CEO of Chobani spoke about employing refugees within his factories well before the current refugee crisis hit. In the process of employing those in need of a job, he built critical foundations that enabled his employees to become thriving citizens. Hamdi learned that transportation was a challenge, so he provided buses. He learned that language was a barrier, so he provided translators. He learned that factory skills were lacking, so he provided training. And in doing all of this, he removed large numbers of refugees from the fringes and helped them integrate into the formal economy. This, in turn, supports the job markets and overall health of the cities in which his factories operate. We applaud Hamdi for his work because it is truly remarkable. But we cannot simply view Hamdi as a caring heart amongst stone-cold corporates. His actions made economic sense to his business and, even with the additional expenses of transportation, training, translators, and paying his staff twice as much as what his competitors were paying, he is still making a profit. Chobani is the example that we need to point to and demand that all businesses responsibly participate in the health and safety of their communities. This is critical to the design of sustainable, inclusive cities of the future. We cannot speak about an inclusive planning process for the future of our cities and give big businesses a pass from sitting at the table side by side with those most in need of employment.

Follow Devin: @DRebell0

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From Guadalajara to Oxford

Macarena Hernandez de Obeso is passionate about the economic opportunity for Mexico’s deprived communities. She is also our 2016-17 Skoll Scholar and Oxford MBA student. Her journey from Guadalajara started with a simple Skype call. Macarena shares the story.

Two years ago I had the luck to have a conversation by Skype with Pamela Hartigan. At that moment I had no idea this call will change my life to the point that today I’m writing this blog from Saïd Business School, at the University of Oxford, 5,605 miles away from the place I was born and raised, Guadalajara, Mexico.

Macerena

Macerena joined Prospera in 2011, the first social enterprise in Guadalajara, Mexico.

 

One would think that it is almost impossible to build a social enterprise in a conservative region, in a country that has not been growing strongly for the past 30 years. But, in spite of all this I have not allowed the circumstances to define what I can or cannot achieve. To the point that in 2014, Prospera, the social enterprise I was leading, was recognised as one of the top 10 favourite social enterprises in Mexico, according to Forbes, and the best social enterprise in Mexico according to the Suzie Bank UBS.

Prospera became my passion. But, passion alone gets you nowhere.

My unconformity and the pursuit of challenge and intellectual growth led me to join the team of Gabriela Enrigue to build Prospera, the first social enterprise in Guadalajara. At that moment, I did not know anything about entrepreneurship or social enterprises. But a hunch and a desire to learn made me spend all my time building Prospera from the beginning. At Prospera, our mission is to serve single moms in poor communities who start small businesses from home. Our vision is to disrupt the entrenched male-dominated social structures that have been in place for the past 500 years in Mexico. We have trained more than 7,500 women and increased their incomes eight times. Prospera became my passion. But, passion alone gets you nowhere.

Generating opportunities for women is a profound reason that deserves my time and work. But if I fail to better combine the social mission with a sustainable business model, I will be designing solutions that nobody will pay for and the impact will never scale. I came to this awareness after I led a Prospera project as part of a Fund developed by Alsea Foundation and Starbucks Mexico. This project changed the way I see the world.

Startbuck Project - Prospera

Alsea Foundation and Starbucks Mexico Project at Prospera [Photo source: Prospera]

The project’s goal was to add a productivity component to Alsea Foundation. It was the first project of this kind done in Latin America and we expected it to be scaled to six more countries. We trained 33 poor, single moms from one marginalised slum around Mexico City. They were recipients of philanthropic aid and the purpose of the project I designed was aimed at transforming them into small vendors at Starbucks. The women produced 3,300 customized notebooks that were then sold in 80 Starbucks. These women improved their income by 700%. Despite that the notebooks were sold to Starbucks consumers in less than a month, Starbucks only made this one purchase. Why? Neither the notebooks sales nor the productivity of these women were related the Starbucks core business model and the Foundation could not drive the corporate goals.

I decided to start looking for MBA programmes that would help me design business to solve the most challenging social problems that we face today.

As a result of this project I have been studying start-up business methodologies and working on the development of Prospera’s business model. I want to generate benefit for both the community and enterprises. If an enterprise increases income while solving social problems, they are willing to pay for this solution. That’s why two years ago I decided to start looking for MBA programmes that would help me design business to solve the most challenging social problems that we face today.

Talking with Pamela Hartigan not only helped me to understand how the Skoll Centre supports social entrepreneurs inside Saïd Business School, but she also made me believe that one day I could become an Oxford MBA student. The day has come I am grateful and ready for the challenge.

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What one solar business means to three Kenyan women

Yeoh

After finishing his Oxford MBA, Energy, Environment & Resources OBN Chair, Neil Yeoh, took a trip to Kenya where he spent time with a for-profit social venture, M-KOPA Solar.

Co-Founded by Skoll Scholar, Jesse Moore and London Business School graduate, Nick Hughes in 2009 with Oxford Saïd alumnus, Chad Larson joining in 2010, M-KOPA has gone from strength to strength; winning awards and rising to be one of the leading solar-power providers in East Africa. 

Ever since deciding to reconcile my interest in business with my passion for social impact I have asked myself the question: can for-profit businesses really do social good?NYeoh_M-Kopa_Blog_Pic1To help answer this question, I travelled east from Nairobi to Machakos, Kenya with M-KOPA Solar – the leading ‘pay-as-you-go’ energy provider to off grid homes. Along with Suraj Patel, MBA/MPH at UC Berkeley, Deenah Kawira, M-KOPA Solar Business Manager, and Felix Kyalo, M-KOPA Solar Field Sales Manager (pictured above from left to right), I got the opportunity to meet and hear the stories of three remarkable Kenyan women:

  1. Christine the shop-owner
  2. Eunice the side-hustler
  3. Jane the home-keeper

NYeoh_M-Kopa_Blog_Pic2

But firstly, what are customers buying from M-KOPA? M-KOPA customers make a deposit of $30 followed by 365 daily payments of $0.50, paid using their mobile money. The solar home system comes with three lights, mobile phone-charging and a solar powered radio. Customers who complete their payment plans on time can acquire additional lights, solar TVs, energy-efficient cooking stoves, internet-enabled smartphones and water storage tanks.

Christine the shop-owner

NYeoh_M-Kopa_Blog_ChristineChristine is a proud roadside shop-owner selling fruit and vegetables, among other products. She is a born businesswoman with a personality that could overflow a room. After hearing about M-KOPA over the radio, she waited eagerly and waved down an M-KOPA vehicle passing the area in order to buy one.

Before buying M-KOPA, Christine used two kerosene lamps to light up her store – a significant business expense. When her phone, used to order stock and make sales, ran out of battery, she would lock up shop for three hours to walk to her neighbour’s, hoping they were home to help charge her phone.   The kerosene lamps, which have now gathered dust in the corner of her store, have been replaced by M-KOPA. Her torch helps her to walk home safely at night, her radio blasting during the day attracts customers and her phone charger means she never has to leave her shop, giving her time to sell more. As a true businesswoman, she now charges customers’ phones for $0.10 per charge, helping people in the area and helping her pay off the device.

After six months with her M-KOPA Solar device, Christine has saved and made enough money to renovate and expand her store, as well as support her two children and their families. Although this was largely a result of Christine’s individual business savvy, M-KOPA provided her with the platform to grow her business and improve her livelihood.

Eunice the side-hustler

NYeoh_M-Kopa_Blog_EuniceEunice is a struggling single mother of three who is forced to run a series of side-businesses (aka “side-hustles” in Kenya) to make enough money for the basics of food, water, and shelter.

Living in the isolated eastern foothills of Machakos, where getting clean water means travelling 5km across mountainous terrain, Eunice does what she can from breaking quarry stones and making mud bricks for construction, to growing herbs and crops for sale.

Through a woman’s chama, an informal finance vehicle where individuals pull funds together, Eunice was able to buy an M-KOPA device.

For Eunice there was no electricity where she lives and providing lighting for her family was a costly luxury. When night comes her home would become “lifeless,” quiet and inactive waiting for the light of day.

M-KOPA’s home system gives her family the simple luxury of a common lit area where they eat, talk and laugh together. It also gives her children the confidence to go to the bathroom alone.

Despite the fact that Eunice does not have a stable income, she is committed to make her daily payments to keep the lights on in her home.  Far from ideal, this highlights the challenge M-KOPA faces as a social business managing the tension between profits and impact.

Jane the home-keeper

Jane is a wife and mother of four children. Her family lives in an isolated North-Eastern village in Kangundo – an hour from Machakos along a rocky dirt road. Her husband works at a local quarry and she tends to their two cows and chickens to supplement their livelihoods.NYeoh_M-Kopa_Blog_Jane

For Jane, M-KOPA initially meant a device for affordable solar power. But after paying off the solar device, she found another opportunity through the company to purchase a 1000L water tank.

The closest watering hole for Jane is 1.5km across rocky terrain. Providing water for her family normally requires her to make the trip every 2-3 days – back-breaking work that she is becoming too old to manage.

Now with the water tank from M-KOPA, which she is paying for using the same daily rate of $0.50, Jane only needs to make the trips to the watering hole once every two weeks or over the weekends when her children can help. She can rest her back, knowing that she has enough water to wash clothes, drink, cook and feed her cattle. The water tank has also given her the opportunity to help her neighbours when they are short of water, which she does regularly. She credits M-KOPA’s payment system for allowing her to afford a water tank like this and giving her the security of a sufficient water supply.

Closing remarks…

This weekend in Machakos was a remarkable and an eye-opening experience for me. It became evident that M-KOPA is an example of a social business that undoubtedly operates at the nexus of profit-making and impact-generating. However, operating at this nexus also generates its own set of challenges – even for these three women. For instance, Christine has since had to fend off people looking to steal her M-KOPA device jealous of her success. Eunice has had to deal with the shame from family and friends of owning a device that she occasionally cannot pay off and Jane has had to trust that her family can maintain payments to pay-off the water tank over the long run, whilst taking care of a large family.

However,  there is no doubt that this one solar business, established on an innovative for-profit business model, means a lot to these three women and has had a positive impact on their livelihoods overall. Now revisiting my initial question I have more confidence in knowing that despite the challenges that exist in social business, for-profit businesses can really do social good.

 

Follow Neil: @neil_yeoh

Read Neil’s Skoll World Forum session blog: Post-Paris Global Sustainability: how do we get there

 

EcoEnterprises Fund: Growth capital for sustainable businesses

There is no denying the prevalence and prominence of the impact investing discourse these days.  A hot topic? Absolutely.  A brand new conversation?  Not even close.

So, when you can hear from one of the early pioneers of the industry, it is always insightful.

This week we hosted Tammy Newmark and Michele Pena of EcoEnterprises Fund who joined us as part of the Skoll Centre Speakers Series.  They have been investing growth capital in sustainable businesses in Latin America for over a decade – and have the battle wounds to prove it.

Not that it’s been all setbacks and scars — but because they simply are open and transparent about the challenges they (and other risk-taking impact investors) have faced over the past 10 years.

Set up in 2000, EcoEnterprises Fund provides long-term investment capital and business advisory services – one without the other would be ineffectual and downright bad business, they say.   The Fund has invested in 23 companies from ecolodges to organics, sustainable forestry to aquaculture. Most of these investments have been wildly successful (20 companies still in operation, 11% p.a. return, and most importantly, measurable social and environmental impact) but of course, there have been challenges.

Which is no surprise, seeing that they are injecting risk capital into companies that are, well, risky.  They bet on the companies that are first-movers and market makers, whose products and services have yet to gain market acceptance.  As such, they are cultivating new demand and a vibrant marketplace that moves these eco-enterprises from the outskirt to the mainstream.

What’s next for EcoEnterprises Fund? Be on the look out for their book  this fall called “Portfolio for the Planet”, which is an open playbook to their tools, indicators and investment cases.  Also, they are currently raising $30 million for a new fund EcoE II, which will target 10-12 small and growing community-based businesses via mezzanine investment instruments.

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Pro Mujer: Making Development Work for Women

This post was written by Nereyda Esparza, a second year MPhil student in Latin American Studies at the University of Oxford, St. Cross College.

“There’s a growing recognition…that focusing on women and girls is the most effective way to fight global poverty and extremism…The world is awakening to a powerful truth: Women and girls aren’t the problem, they are the solution.”
–    Nicolas Kristoph & Sheryl WuDunn, The New York Times

Last week, I attended a Skoll Centre Speaker Series talk hosted Lynne Patterson of Pro Mujer.

Pro Mujer is an international women’s development organization that uses microfinance to give Latin America’s poor women tools to create livelihoods for themselves and their families through business training and healthcare support.    Started in 1990 in Bolivia by Lynne  Patterson, an American schoolteacher, and Carmen Velasco, a Bolivian professor, Pro Mujer today has fully operating programmes in Bolivia, Peru, Nicaragua, Argentina and Mexico. Over the past 20 years, the organization has disbursed over US$950 million in small loans averaging US$309.

Over the course of the talk, it became clear the power Pro Mujer has to transform women’s lives. The company gives small loans to women to start up profitable business and turn the most impoverished and marginalized of women in these communities into small-scale entrepreneurs.

Not only do these loans help women become financially independent, they remind women of their value and intelligence, they raise self-esteem and create confidence.  Pro Mujer shares stories about women being too shy to speak before their business training and by the end had taken up leadership positions and became advocates of the company.

Pro Mujer in Peru Client Ana Alicia Cruz de Flores. Courtesy of Pro Mujer

Pro Mujer also saw the link between healthcare and women’s vulnerablity towards poverty.  To address this, Pro Mujer also offers women access to health care and has saved the lives of thousands of women by providing essential care like pap smears for cervical cancer testing.

Yet, with so much focus on women in microfinance, and the presence of the widely popular conditional cash transfer (CCTs) programmes in Latin America whose claim to innovation is rooted in an integrated approach to poverty alleviation combining education, health and nutrition in a single intervention – what sets Pro Mujer apart?

I would argue that Pro Mujer is different in two ways.

1. Pro Mujer is truly an organization for women by women.

It not only gives women the tools necessary to become financially sustainable, it also encourages women to believe in their strengths and their abilities.  In other words, it helps “empower” women, as defined by Maxine Molyneux: empowerment is “the acquisition of capabilities which have the potential to assist women in achieving autonomy (legal and material), equality (social and personal) and voice and influence (over decisions that affect their lives).”  The women of Proj Mujer gains agency over decisions that affect their lives and even promote greater gender equality through generational changes (i.e. girls growing up in better homes and with positive role models).

CCTs, on the other hand, use women as “vehicles” for development using a traditional view of the household, where women are homemakers whose sole purpose is to provide for the family and children at home.  Women in CCT programmes have to meet “co-responsibilities” that take time away from their ability to find a job or focusing on other income generating opportunities.  In other words,  women end up working for development instead of development working for them.

2. Pro Mujer acknowledges that education is the greatest enabler in life, an essential tool for women to bring dignity and success to their lives. 

Lynne Paterson said it best in her talk: “Education is in everything that we do.  We are teachers and we wanted Pro Mujer to have education in mind in all its initiatives.” Not only does Pro Mujer teach women about financial literacy, it teaches women about the values of being a leader and the expertise that woman can bring to the table on all walks of life.

By focusing on women’s gains, health and education, Pro Mujer is setting a great example of how business has the ability to truly empower women in the developing world.
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Diving Deep, Crossing Boundaries: A SOCAP WrapUp

This post was written by SBS MBA Nikhil Neelakantan, who has just returned to Oxford after 3 days at SOCAP/Europe.

Courtesy of twentytwentystudios

Last night’s six-member panel brought SOCAP/Europe to an appropriate end.

The panel consisted of social entrepreneurs, volunteers and the founding members of SOCAP/Europe, Kevin Jones and Frank van Beuningen. This was typical of the conference: people from all backgrounds brought together by an interest and passion for impact investing.

This resulted in conversations that frequently needed translation (No, structured banking does not deal with the architecture of banks!) but it also meant that people were exposed to different points of view.

This also meant that there was space for a deep-dive into the details of impact investing as well as an opportunity to learn about innovative organizations using SMS technology in developing countries.

Another feature of the conference were the participant-driven Open Space sessions. I was able to attend two of these sessions, which were “held” in an Unconference format. The first described the work of the World Bank in creating the Development Marketplace. The World Bank Institute created the Development Marketplace over 12 years ago to provide grants to innovative social ventures. Now it is looking to help these social entrepreneurs get commercial investments.

The second Open Space session that I attended was built around the question of providing financing to SME’s trying to build businesses in rural India. We had participants who were eager to start asking questions of those who had already built these links in India. The consensus was that there was lots of opportunity but that one had to proceed by developing partnerships with Indians who were already working in this space (this includes government agencies such as IDBI).

The conference also brought some reflection on the future of SOCAP/Europe. Where is it going next? It seems logical that it will stay physically in Amsterdam (The Dutch have $7bn invested by retail investors in social enterprises through organizations like Triodos Bank and Oikocredit. They are surely the world’s epicenter in social investment).

However will the format remain the same? Will more policy makers and government entities get involved? Despite the lingering questions, we left the conference buoyed by the fact that we were setting the foundation for a larger group of people who were willing to venture forward into the brave new world of impact investing.