Brands race to balance profits and social good

If you think only millennials and Generation Z support brands associated with societal impact as Industry 4.0 penetrates its roots into most business spaces, think again.

Across the globe, there is a mindful movement of consumers and prospective employees who are becoming increasingly interested in engaging with businesses that support worthy causes and that understand the role they play in solving societal issues.

Recently, more than 1,200 social enterprises, activists, politicians, and advocates from 70 countries gathered in Addis Ababa, Ethiopia for the 12th annual Social Enterprise World Forum (SEWF).

Among them, SAP hosted 48 entrepreneurs from across the world in support of connecting global innovators and growing the social entrepreneurship movement.

Several takeaways from the SEWF that can help drive growth in developing nations arose.

Through various testimonies at the event, it was clear that many social enterprise startups fail. In fact, global startup failure rates range from 80-90percent in the Fourth Industrial Revolution (4IR) according to Forbes.

Sometimes, barriers to market outnumber opportunities to market. Sometimes failure is purely as a result of the additional layer of complexity - societal impact.

For social entrepreneurs, the situation might be that capital is limited – both human and cashflow, the demand for offering is abundant and the community need is high.

One critical questions was posed. As a social enterprise, should you first focus on commercial viability and revenue so that you can deliver greater impact in support of your purpose? Or – should you instead focus on delivering on your promise of societal impact that, in turn, will attract and retain customers?

This chicken and egg scenario was highly debated, with entrepreneurs being advised to always offer superior products or services to lead the market. Holding the designation of social enterprise or entrepreneur doesn’t mean they can offer substandard offerings, it was stressed.

“Customers demand excellence regardless of the social element of this endeavour. Keep your standards high and your costs low,” asserted Nikki Germany, Chief Growth Officer of mobile commerce provider Copia Global.

Tenacity was identified as a key element to survival. Several of the social entrepreneurs testified that they were only successful at their second or third attempt in establishing their business.

If you’re part of the majority whose organisation has failed, Bernard Kirk, Founder and CEO of The Camden Education Trust urges you not to give up. “You might fail now, but that will lead to success later on down the road.”

According to the United Nations (UN), Africa’s population will double by 2050, with sub-Saharan Africa making up as much as a quarter of the world’s population.

More than half of the estimated 2.4 billion people will be under the age of 25 and without education, training, or employment.

This problem is not isolated to Africa, but rather an opportunity for the world to sustainably integrate a large population of change makers into the global economy.

While governments may be responsible for creating the right conditions and legislation to address the UN's Sustainable Development Goals, business is in a unique position to help.

The concept of building capacity simply means one organisation helping another to operate better, expanding their capabilities.

SAP, for example, has sent more than 1,000 employees to more than 350 organisations worldwide through the SAP Social Sabbatical to help social enterprises and non-profits overcome strategic business challenges.

As of 2018, this global pro bono programme implemented by PYXERA Global delivered an in-kind contribution of Sh1.7 billion and 279,000 service hours, impacting 4.9 million lives.

Specifically, organisations like Dream Oval Foundation in Ghana reported a 100percent growth in its ICT education following a Social Sabbatical engagement which sparked the introduction of a new programme, Females in Tech Initiatives.

But questions still linger – how can the world build capacity at scale? How do we use technology platforms, skilled talent and access to markets to create that one big break for organizations to succeed?

There is complexity in the problems facing the planet. They are all interconnected. “We can’t solve a problem like quality education without understanding poverty, food scarcity and gender equality, to name a few. We’re standing on a burning platform and it’s triangular,” said Lord Victor Adebowale, Chairman of Social Enterprise UK board.

“The community has to create a common understanding of our brand, and our brand is about understanding society,” Adebowale added. “We also need a credible economic model.”

Although social enterprise plays a role, based on the sector’s best practices, “it can drag the rest of business into the future.

And world governments can’t expect politicians to understand or care about this movement. “We just need to understand why they don’t. We have to talk to people that don’t agree with us - otherwise we are working in an echo chamber.”

Corporates were urged to partner across the global social entrepreneurship sector, and across all sectors (public, private and social) to create change. Simply connecting the dots can have a massive impact, it was observed.

“We see corporates playing a greater role in social enterprise. This is the future. Responsible growth of corporate companies is the driving force that can generate more entrepreneurs, generate more jobs, and generate much more movement in society,” said Dr Ephrem Tekle Lemango, Commissioner at Jobs Creation Commission, Federal Democratic Republic of Ethiopia, FDRE

Gathering over 1000 players from the sector worldwide, lands you to the conclusion that organizations are at varying stages of maturity.

“In addition to capacity building, if we want ‘to create real socioeconomic impact, we need to invest in scalable solutions globally. The key to scalable solutions is tech, tech, tech!” affirmed Yves Moury, founder and CEO of Fundación Capital.

One way technology can help, is through corporate procurement since all social enterprises rely on markets to drive revenues that enable them to create social impact.

“Remember, social enterprise is a verb representing business trying to deliver social value,” shared Jonathan Coburn, Managing Director, Social Enterprise Institute.

“We need to open markets for activity to happen, create an open social value marketplace. Suppliers offer the social value. Buyers use purchasing to create healthy communities.”

A Sh300 trillion business to business (B2B) revenue opportunity is ripe for social enterprises to tap into, it was revealed.

However, technology isn’t the silver bullet. Investors must consider supply-side capability which scales both ways. An enterprise can’t produce more than the market demands. Vice versa, an enterprise shouldn’t be limited if it gets its big break. But ultimately, technology remains a key enabler to scale though.

Visionary James Okina said you must ask yourself one question: ‘How do you scale hope?’ Leaders said the answer is - together.

“There is a phrase ‘Laptops and Lederhosen’ coined by a German politician,” offered Ludwig Bayern, Founder and CEO, Learning Lions. “Its meaning underscores that cultural identity and being on the forefront of innovation can go hand in hand.”

This topic hit home for Bayern who, like many entrepreneurs, looks for ways to foster economic growth in underserved, remote populations without disrupting what makes these rural communities unique.

“Living in a remote location like Turkana, Kenya, where we operate, does not mean there is a lack of internet connectivity,” added Bayern.

“People there are completely connected to the web via mobile phones, and yet they are not connected to the global workforce infrastructure.” Mobile and cloud technology can connect people to global markets that need their skills.

“In India, 70 percent of the population live in rural areas. The biggest sectors include agriculture and artisan work. We must continue to support manual efforts and artisans and use technology to help these individuals scale by giving them access to new markets,” said Deirdre White, CEO, PYXERA Global.

Social entrepreneurs should also embrace technology as their enabler to be change agents and create new markets.

Yash Ranga of Jaipur Rugs agreed. “Technology isn’t about changing the industries people are in, but rather about empowering them to move up the value chain by gaining access to a broader market of consumers.”

Jaipur Rugs started in a tiny village in Rajasthan, India, and is now known the world over for its inclusive carpet value chain that links grassroots artisans with global markets.

Urbanization is not the answer. Using technology infrastructure and building digital skills to connect people wherever they are to global markets, is.

“SAP can lead the way by bringing other corporations along with us,” said Alexandra van der Ploeg, Global Head of SAP Corporate Social Responsibility.

“The world is looking to technology to help create sustainable solutions that help the world run better and improve people’s lives. While technology cannot replace culture, capacity building, and partnership, it can definitely accelerate impact.”

“You don’t have to be a social entrepreneur to practice social entrepreneurship. You need only understand the realities of the world we live in. Find time to listen. Find champions who are already engaging on the ground. “

At Industry 4.0, there is so much change that can happen if individuals, organisations and governments come together to identify solutions and put them into practice together.

“None of us will ever truly know the entire circumstances of the people we are trying to help, but we must still engage,” remarked Amonge Sinxoto, Founder of Blackboard Africa.