Most cages are no bigger than the size of a standard North American bathtub. Cubicle dwellings are seldom any more spacious. A 450-square-foot apartment could be partitioned and shared by 22 men. Residents in these cramped spaces include low-income workers, refugees, and people with mental illness, and they often share their scarce living area with cockroaches, lizards, and other creatures that decide to move in.
Among those without a home, Oxfam Hong Kong reported this year that over 70 percent of poor, private tenant households not under the Comprehensive Social Security Assistance Scheme have not received any offer of public rental housing after four years on the waiting list.
Poverty and the effects of income inequality are recognized issues by the government, but those working in the social innovation sector believe more can be done to create a bigger impact.
Kevin Au, professor at the Chinese University of Hong Kong and member of the Social Innovation and Entrepreneurship Development Fund (SIEDF) Task Force, one of six task forces set up by the government in November of 2012 to address poverty, penned an article demanding funding to encourage social innovation rather than allocating money directly to the poor or nonprofits.
“The public does not fully understand the spillover effects of social innovation and thus is skeptical of its benefits,” writes Au. He explains that social innovation has not progressed much in Hong Kong because the public is worried that private individuals are not capable of creating “trickle-down” benefits to greater society, as they have witnessed many using their freedom to solely profit personally. As a result, social innovators fear receiving government support, causing the sector to remain nascent.
The government has allocated HK$500 million for the SIEDF to develop an ecosystem for addressing Hong Kong’s social problems, but at this time that money is yet to be spent. It’s estimated that 20 percent will be spent in its first year of implementation.
As of late, Au sees that more people understand the concept of innovation to address deep-rooted problems, but he hopes to witness broken barriers and additional progress to social innovation, such as more ideas, talent, knowledge, and capital mobilized. “Given the potential benefits, it’s worth taking a risk by spending a limited amount of public money to spur social innovation,” he said.
“I broadly agree with his views but implementation will be slow and we need to be patient,” said the co-founder of Asia Community Ventures, Ming Wong, responding to Au’s article.
Following 18 months of research, Wong, who spent over 20 years in investment banking before becoming a financial consultant for impact investing, co-authored the report EngageHK to map Hong Kong’s social ecosystem.
The report, not unlike Au’s views, reveals significant hindrances to the progress of social innovation. Namely, there is a lack of cross-sector collaboration, funding, awareness, legal and policy framework, and shared goals. The authors report that Hong Kong lacks a culture of knowledge sharing and collaboration, and there is no real leader in pushing any agenda forward.
Meanwhile, although collaboration does not resonate well in the culture, competition does, and it seems to be a selling point for supporting social innovation in Hong Kong. For instance, Au writes that social enterprises have become a “potential strength for Hong Kong” and wishes to “take the competitiveness of Hong Kong to another dimension”. The authors of EngageHK emphasize the “need to move quickly forward” otherwise “Hong Kong will risk losing its competitiveness, falling behind other global cities.”
Despite experts calling to forge ahead, there are a number of ongoing initiatives that paint a not-so-bleak picture. Last Friday, the Jockey Club Design Institute for Social Innovation (JCDISI) of the The Hong Kong Polytechnic University, which is one of the city’s several social innovation hubs in academia, kicked off a 10-day Social Innovation Festival.
“As a powerhouse of research with impact, PolyU positions itself in the community to promote positive social change and help those whose quality of life could be improved. I hope you will be as excited as I am about this Social Innovation Festival – a unique ten days for conversation, exchange of knowledge and celebration,” said Timothy W. Tong, the university’s president.
Through workshops, exhibitions, concerts, and movie screenings, to name a few, the free festival gives visitors a chance to familiarize with social innovation activities and projects.
“It is important for Hong Kong to nurture creative young talents who can be inspired to develop innovational solutions to tackle the challenges the city faces, and I am confident the Jockey Club Design Institute for Social Innovation will provide inspiration and prove to be a great asset in this regard,” said T. Brian Stevenson, Chairman of The Hong Kong Jockey Club. JCDISI was set up thanks to a HK$249 million donation from the Hong Kong Jockey Club Charities Trust.
While some advocate to dump the prizes or at least the bad ones, there is still a lack of funding for early-stage social enterprises and many remain reliant on competitions to build up raw ideas. The Asia Social Innovation Award is one of these competitions. Based in Hong Kong, the competition is currently seeking social enterprise solutions from all across Asia that address common issues in the region, specifically aging population, poverty, and improving parent-child relationships.
Whether to enhance competitiveness, avoid falling behind, or address pressing issues, notably poverty, social innovation initiatives in Hong Kong are alive and well. If not completely to Au or Wong’s liking, the surface has at minimum been scratched, albeit slowly. As Wong urges, patience will be required.
]]>The SGII Center was created to facilitate participation in the impact investing field by training and allowing students to work directly with social enterprises, corporations, family offices, impact funds, and private family foundations.
What has the Center been working on lately? Together with funding from the Sorenson Impact Foundation, they will invest approximately US $2 million in five Africa- and India-based early-stage social enterprises. Students were involved in conducting due diligence for these impact investments.
“The opportunity to play an active role in combating these crucial societal issues is very rewarding,” said Brandon Koch, a student studying finance and computer science at the David Eccles School of Business who spent three months in India working for Kinara Capital. “The hands-on experience I gained at the SGII Center has been invaluable, and I look forward to continuing to apply these skills in the real world to create sustainable change.”
“These investments will serve to close funding gaps, helping social enterprises to prove out their businesses, with the additional benefit of cultivating impact investing expertise in students,” said Sorenson. “I hope that our efforts will accelerate the growth of the sector at-large and help lead to improved societal change on a global scale.”
The companies who have received investments from the Sorenson Impact Foundation are:
Copia – Kenya-based consumer catalog and rural distribution company
Kinara Capital – India-based financing company for micro and small enterprises
Liberty & Justice – Fair-trade apparel manufacturing company with offices in Liberia and Ghana
Simpa Networks – India-based pay-as-you-go solar financing company
World Haus – India-based affordable housing construction company
Today, 15 social enterprises chosen from 116 applicants have been announced as finalists. They are:
Aakar Innovations Pvt. Ltd
Arogya Finance
Avani Bio Energy
Banka BioLoo
Boond Engineering & Development Pvt. Ltd
Edubridge Learning Pvt. Ltd
Jackonblock Facility Services Pvt. Ltd
KNIDS GREEN Pvt. Ltd
NextDrop
MicroGraam Marketplace Pvt. Ltd
Sanchayan Suraksha Solutions Pvt. Ltd
Sevamob
Sakhi Unique Rural Enterprise
Tamul Plates Marketing Pvt. Ltd
Villgro Innovation Marketing Pvt. Ltd
“It was an interesting learning experience,” said Pradeep Kashyap, who is the founder of MART and was on the jury panel. “Some of the plans from the ventures were of the highest order.”
As a finalist, the businesses will receive capacity building support from innovation accelerators Ennovent and Villgro to take their ventures to the next level. If the ventures are able to secure an investment in the form of grant, equity, or debt within the next eight months, they will also get the opportunity to access Rs 25 lakh (approximately US $37,000) of matched equity funding as part of the Challenge award.
Seeing as many ventures fail because of the inability to access funding and resources required to grow, the AVC was created to invite entrepreneurs who have completed a proof of concept and are looking for growth investment. The Challenge aims to address the missing middle in impact investing by providing high-risk patient capital and customized business support.
“The Artha Venture Challenge is a pioneering initiative for early-stage social ventures in India. We are excited to be announcing this final cohort and providing them the capacity building support they require to secure their lead investors, which will in turn trigger our matched round of Rs 25 lakh,” said Audrey Selian, Director of the Artha Platform.
“Our goal is to shift the center of gravity in this space, to empower the entrepreneurs through our process, and then to encourage our peer impact investors to take action. This is indeed an opportunity for us all to replace talk with action.”
The AVC was inspired by the UnLtd Big Venture Challenge where 10 early-stage co-investment deals were closed within 10 months.
]]>A new portal released by the Tohoku 1000 Project (in Japanese) called the “Team of 600 entrepreneurs” gathers new initiatives and businesses that help create employment opportunities and reconstruct the Tohoku area, which was largely damaged by an earthquake and tsunami back in 2011.
Rising Tohoku reports that most of the businesses on the portal are located in the Miyagi prefecture (39 percent), followed by the Iwate (32 percent) and Fukushima (29 percent) prefectures. The most common type of activity involves community formation, followed by medical care, welfare and health, town planning, shopping mall promotion, agriculture, forestry, and animal husbandry.
The “Team of 600 entrepreneurs” is part of the Japanese Cabinet Office’s scheme announced in 2012 to assist reconstruction by selecting 600 entrepreneurs to support, as it recognizes the importance of business activity or more specifically, 社会的企業 (social enterprise), in revitalizing communities in the affected areas.
The purpose is to support the start-up and nurturing of social enterprises.
Kazuma Watanabe, who leads the Tohoku 1000 Project and manages the portal, tells Rising Tohoku that he was amazed to see Tohoku “have this much of new business in quite a short period of time”.
Currently, there are 569 businesses listed on the portal with more expected to come.
]]>SK Group’s strategy, led by Chairman Chey Tae-won, was to convert its MRO business, named MRO Korea, into a new social enterprise called Happynarae, thus allowing SK Group to continue supplying its subsidiary businesses with office supplies and other materials.
Today, The Korea Economic Daily issued a release that SK Group’s Happynarae held a board of directors meeting and passed a proposal to create a limited liability company in Suzhou, near Shanghai, with contributed capital of 1 billion won.
The company will establish the Chinese affiliate by the end of this year and it will be the supplier for SK Group companies such as SK China, SK Hynix, and SK Innovation. There are plans to expand its customer base to include non-affiliated Korean companies and local Chinese companies.
Happynarae also received a certification as a social enterprise from the government on July 12, which requires that they hire underprivileged members of society and spend two thirds of its annual earnings on public purposes.
Senior citizens, children from single-parent families, North Korean defectors, and low-income families currently make up 10 percent of its employees.
In 2012, the company recorded annual sales revenue of 154.2 billion won, making it the biggest social enterprise in Korea.
Chairman Chey has previously shown interest in pushing for social enterprises in China. At the Boao Forum for Asia in China last year, he spoke about SK Group’s own experiences in social enterprises and proposed knowledge sharing with Chinese partners.
]]>The challenge invites Indian nonprofits to illustrate how they would use technology to improve people’s lives. Four nonprofits will receive a Rs 3 crore (around $500,000) Global Impact Award and technical assistance from Google to bring their projects to life.
Until September 5, registered Indian nonprofits can apply online. Googlers from India and around the world will review the applications and announce 10 finalists on October 21.
Fans can also casts votes then on who they think should win the Fan Favorite award.
On October 31, judges Ram Shriram, Jacquelline Fuller, Anu Aga, Jayant Sinha, and Nikesh Arora will hear the 10 finalists pitch live in Delhi. Three will be awarded based on their potential impact, scalability, and ingenuity. At that time, a Fan Favorite will also be announced based on fan votes.
Source: Google
]]>When asked whether they purchase products or services from social enterprises, among the 155 respondents, only 13 percent were current buyers, 21 percent said they were ready to buy, and 66 percent said they were “non-buyers”.
Corporations have stated that the top factors influencing corporate purchasing decisions for both social enterprises and regular businesses are “quality of product or service”, “price”, and “need for product or service”.
The wake-up call for social enterprises is that over 60 percent of non-buyers felt the products and services of social enterprises did not fulfill their company’s needs, revealing a certain level of misalignment.
Among those who are currently buying or ready to buy from social enterprises, 94 percent indicated that “contribute back to society” was a motivating factor to purchase while 75 percent indicated they were motivated because they “believed in the mission of a social enterprise”, neither of which are among the top factors influencing purchasing decisions.
The surveys were conducted between December 2012 and March 2013 to analyze the understanding and attitudes towards social enterprises among business corporations in Singapore.
]]>Founded in 2009, ARUN describes itself as a social investment fund. It has offices in Tokyo and Phnom Penh, and for good reason. ARUN invests in social entrepreneurs in developing countries using capital from Japanese individuals and corporate partners. Currently, they only invest in Cambodia but are planning to expand into other countries. So far, they’ve made investments supporting small farmers, employment for women and students, and marginalized communities.
With offices in Hong Kong and Beijing, Avantage Ventures invests in Asia’s healthcare, rural development, education, clean energy, and disenfranchised community sectors. Their approach is to find high-potential entrepreneurs and businesses that address issues in these areas using innovative business models. Their Avantage Ventures Impact Fund is an investment fund vehicle that supports Asian companies tackling key issues in China and Southeast Asia, where there is tremendous demand for critical products and services. Avantage Ventures was founded in 2008.
EcoAsia Southeast Asia Agriculture Fund
As the name suggests, EcoAsia’s US$100 million fund supports Southeast Asian businesses across the agricultural value chain, addressing food security and climate change issues in a region where expanding populations are pushing demand for more food. The fund was established in 2012 to help financially viable businesses improve crop yields, operational efficiencies, build internal capacity, and upgrade infrastructure. EcoAsia is based in Hong Kong and Thailand.
Insitor Management is based in Phnom Penh, Cambodia, but also has offices in New Delhi, India and Yangon, Myanmar. They work specifically with startups and early-stage businesses, with hopes of priming the social enterprise pump. Their focus is on the Mekong Region and Indian subcontinent because they believe a two-region approach will help manage regional risks. Insitor Management has two main funds – one for poverty alleviation and the other for access to energy – through which they make equity and loan investments.
Not exactly a typical impact investment fund, Transist nonetheless provides US$10,000 to US$1 million to young, growing social enterprises that focus particularly on disruptive technology. They are based in Shanghai and have most to offer for those in the Greater China Region, but investees can be based anywhere. Since 2009, they have invested in over 100 high-potential entrepreneurs, nurturing them from the very early stages of research and development to building outstanding companies.
]]>Grameen Uniqlo is a joint venture social business aiming to produce affordable quality clothing from locally-sourced materials, generate new employment opportunities for locals, and reinvest profits into the business while solving issues such as poverty, hygiene, and gender inequality.
Before opening the two stores, Grameen Uniqlo had focused on door-to-door sales in farming villages, offering people living below the poverty line an affordable quality product.
Rural sales are undertaken by the borrowers of the Grameen Bank, widely known as the Grameen Ladies. Grameen Uniqlo supplies the product on a consignment basis and the Grameen Ladies earn a commission from sales.
In a related initiative, Fast Retailing collaborated with student volunteers of the St. Luke’s College of Nursing in Japan to organize a health education program for 450 junior high school girls in Dhaka. The program taught them about menstruation and how to use a sanitary napkin. For many it was a first.
Grameen Uniqlo has been selling a reusable sanitary napkin they had developed since 2011.
According to Fast Retailing, the new stores offer over 30 items for men and 10 items for women priced between US$2.50 and $15.50.
“We are pleased to announce today our next step in our long-term commitment to the rapidly developing nation of Bangladesh,” said founder and president of Fast Retailing, Tadashi Yanai, on the announcement of the new stores.
“We reinvest any profits to grow the business, and help to address challenges related to poverty, hygiene, and education. Our aim is to nurture independence and self-sufficiency, and to contribute toward raising the standard of living in Bangladesh.”
Photo from Grameen Uniqlo.
]]>Each startup may receive a grant of up to 80% of the total projected capital expenditure and first year operating expenditure, capped at S$50,000.
The project, with NUS Entrepreneurship Centre and SMU Institute of Innovation and Entrepreneurship as mentors and administrating partners, aims to continue MSF’s efforts to raise awareness of social entrepreneurship among students.
YSEP Start-Ups is a new tier of funding under the ComCare Enterprise Fund, which gives grants of up to $300,000 to social enterprise startups as funding.
To be eligible for YSEP Start-Ups, social enterprises should have sustainable business models, organizational capabilities and growth potential, and committed and passionate management teams with strong entrepreneurial spirit.
“Young people have a lot of energy and ideas and they are inspired by social causes,” said Acting Minister for MSF, Chan Chun Sing. “Supporting young people to start social enterprises will help inject vibrancy and creativity for the development of our local social enterprise sector. With YSEP Start-Ups, I look forward to seeing more youths taking the initiative to address social needs in local communities.”
Interested youths must apply to MSF through either NUS Enterprise or SMU Institute of Innovation and Entrepreneurship.
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