"Social enterprise" has become a tech buzzword in recent years as Silicon Valley has woken up to the fact that real opportunity exists in young emerging markets. No surprise that this realization occurs in lock step with the emergence of mobile digital solutions. Facebook sees its next billion ad targets, but its trials and travails with Internet.org (now Free Basics) is well publicized. So just how do you find success in emerging markets?
I recently talked to Janet Longmore, the founder and CEO of Digital Opportunity Trust. DOT, a Canadian non-governmental organization, works around the world to help young adults develop the skills they need for employment or self-employment. We talked about what makes a genuine social enterprise and what DOT has learned operating in emerging markets for the past 15 years.
MG: How do you define "social enterprise"?
JL: A social enterprise is a company working in the nonprofit sector that employs a businesslike approach to its management and a social objective to its purpose. Social enterprises use a market-based approach to focus on people and their needs. In the past the nonprofit charitable sector was typically driven by a business model that emphasized donor funding. Social enterprises believe there is another way to achieve a responsible contribution: draw on lessons from the private sector and market-based solutions, and then innovate and create services and products that are more sustainable.
MG: Where are we with the development of social enterprise?
JL: I think there's been an evolution to thinking about social enterprise as more as social innovation. And if we think about it as social innovation, then it can be embraced in multiple ways. Venture capital activity exists but it is not significant. So, positively, the larger corporate world has stepped in under the rubric of "you can do well by doing good". However, it is more than that for those that get it. The path to today has been long and bumpy, but I believe that most now realize we need to collaborate and get onboard and solve some of the really pressing challenges that our world is facing. And if social enterprise did it bit by bit by getting businesses to think as social innovators, well, kudos then, right?
MG: What lessons might any enterprise learn from DOT in their approach to emerging markets?
JL: We believe strongly in local ownership and local solutions - i.e. in mobilizing untapped talent. We believe in youth as change makers and we believe in the enabling power of technology to mobilize marginalized communities as economic and social contributors. We've created a process that allows for young people in particular to be fully engaged in the matters that affect them the most. This means building from the ground up, listening and understanding different cultures and how we communicate differently. We have validated this approach in our work. It's being lived and breathed every day by people across Sub-Saharan Africa, The Middle East, and North Africa. We put the user at the center from the beginning, we listen and learn.
MG: As an outsider, you must hear all the time from a business standpoint: "Do what you know, stay in a market that you know." What do you take away from going into markets that you do not necessarily know?
JL: Here's a story that speaks to that. We have an interesting partnership with a large technology company who came to us because their efforts at moving into emerging markets were not working. They could not connect or get to the core of the local context, or in other words, how people in a different market were living. What DOT brought into the collaboration was feet on the ground -- local people who have deep knowledge of their local communities and who can help understand technical and digital solutions and local relevance. Whenever we go into new markets, as DOT or in collaboration with a partner, we listen to the local community and we engage local leadership.
MG: In this context, how do you think Facebook's initiative will fare in emerging markets?
JL: Facebook's story is not a good story right now in terms of how they're trying to push out what they've already built from afar. I personally feel that digital solutions must emerge from the local markets themselves. Too often what you think might be a solution that works in a North American market, will not work in a developing market. From dropped calls as a way of sending messages, to Kenya's M-Pesa showing the rest of the world how to do mobile banking, the impactful digital disruptions that are happening in developing economies is all about local creativity.
MG: What are the things that you lean on from DOT when it looks at emerging markets?
JL: We try to listen very carefully and understand what is going on in communities. We support local solutions; we don't import solutions. We encourage local self-confidence and resilience. I believe we are more creative if we're more inclusive of diverse thinking and diverse populations. We have access to this through our network of young leaders. By listening to the young women and men across these countries, you understand how they're using different solutions that address local needs and are delivered in local contexts. If you are considering expansion into these markets, you need to listen, do the research and respect the diversity of populations and cultures.