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TIECON Social Enterprise Track Provides New Perspective

Raj Melville

TIECON East Social Enterprise Track 

This year for the first time TIECON EAST, the premier conference on entrepreneurship and innovation on the East Coast, had a dedicated track on Social Enterprise. The three panels in the track - 'Healthcare Innovation in a Global Village', 'IT & Communications for the Developing World' and 'Feeding 9 Billion people' - were all well attended and engaged the attentive audience with the incisive discussions.  

The panel on Health featured Dr. Dinesh Patel, Head of Arthroscopic Surgery at Massachusetts General Hospital; Joseph Ternullo

Associate Director, Partners Healthcare, Center for Connected Health; Paul Heinzelmann, Project Leader for Operations Village Health at Partners Healthcare: and Milind Antani, Chair, Life Sciences Practices, Nishith Desai Associates.  The panel focused on some of the innovations that organizations like Partners Healthcare had brought out to developing countries. Working in Cambodia, Operation Village health uses basic technology to connect Cambodian doctors in villages to Harvard doctors who serve as consultants. This helped scale up health care in Cambodia as there were less than 50 doctors in Cambodia after the massacre. A nurse at the village center emails to Partners and volunteer doctors respond. One of the lessons learnt was to keep the technology simple so as to have local help to maintain the equipment. As a result they reduced the time to deal with chronic issues from 32 months to 8 months. Surprisingly the most common diseases were not tropical diseases but diabetes and hypertension. Dr. Patel talked about how his NGO - A Leg To Stand On, ALTSO - helped train doctors to deal with techniques to address various problems with the leg. As a result they created a public private partnership that created the largest arthroscopic hospital in Asia. This provided affordable health care for poor patients who would have otherwise lost their leg to amputation.  

The IT and Communications panel  consisted of Dr. Ashok Khosla from Development Alternatives in India; Jhonatan Rotberg, Founder & Director, Next Billion Network, MIT; Nick Sullivan, Author of “You Can Hear Me Now”; and Carl Stjernfeldt, General Partner, Castile Ventures was the moderator. Nick Sullivan who had documented the story of Grameen Phone in Bangladesh in his book, observed that outside investment with outside technology and outside entrepreneurs resulted outside combustion. What was needed now was internal combustion where in-country resources provided the spark and innovation. There are many areas of opportunity. For example there are 1 billion people with mobile phones but no access to financial services. There is a tremendous potential for providing a service to this sector. In Kenya there are 6 million cell phones which is more that the number of bank accounts. Microfinance grew to around 150 million customers in 30 years; mobile banking can go to 150 million in 10. To grow the mobile banking sector you need to have trust, literacy and standardized models. Currently the Gates Foundation is promoting Mobile banking. 

Dr. Khosla observed that renewable resources become non-renewable when you overuse it like forests. His organization is one of the first sustainable non-profits and consists of a non-profit, Development Alternatives, that develops innovative ideas and then implements them through for-profit social businesses. One of these is TaraHaat, which franchises rural e-kiosks to local entrepreneurs. TaraHaat is responsible for providing with a spectrum of services, such as online learning programs, that the entrepreneur can resell and make a profit. He currently has over 180 kiosks and plans to grow to 800 all over India.  

The challenge for such organizations is that the business model confuses people when they try to raise funds. Grantors cannot support the for profit side of the business and the returns on the for-profit side are too low for traditional investors. A new breed of social investor is required that is willing to take a lower return on their investment in return for the widespread social impact such scalable organizations can make.  

Today we are using 35% more resources than the earth produces. The impact when we reach a worldwide population of 9 Billion in a few years will be even more dramatic. Dr. Khosla said people, profits and the planet areal equally important. You need to determine the impact on the planet when you consider how much profit you are going to make. Our social responsibility should be to do no harm. While the valuation of risk for a social business should be the same as any for profit, the acceptance of risk should be different. The tradeoff of risk versus benefits should take into account the social impact also. Social businesses do not have to be non-profits. The real question is what is a fair rate of return for a social business. Dr. Khosla proposed that Mother Earth lives with about 7-8 % growth rate and that is what we should expect from a social investment. The resource base can sustain up to about 10 to 15 % growth; anything more will eat into the planet's future.  

The final panel dovetailed neatly into these earlier observations as it addressed food security issues with its theme 'Feeding 9 Billion people''.  The panelists consisted of Dorothy Suput, Founder & Executive Director, The Carrot Project; Chris Reohr, Patent Freedom; Ahseen Phansey from Babson College, Dwayne Martin, Slow Money and Janice Brodman, Director, Center for Innovative Technologies, Education Development Center. Slow Money is about slowing the speed of capital - that is taking a longer term view of investments by focusing on the needs of local agricultural communities. The Carrot project provides support to sustainable agriculture and small farms. They pointed out that 92% of the farms in the US are classified as small farms. In addition over 75% of the methane produced comes from farm related activities like manure.  There is an opportunity to capture this on farms and provide a reduction in greenhouse gases while also providing an income stream to small farms. The panel pointed out that of the $500 Billion or so in charitable giving from foundations, less than 2% goes to the farm sector or farm related issues, and in particular small farms. Farmers cannot turn to VCs for funding their technological investments. The panel said that there were major opportunities in providing technology solutions to this sector. For example supply chain logistics for farm trucks that would help fill up trucks from farms which generally return empty from delivering produce to the cities. In general only about 8%of the farms are highly technical.  

The response to the overall track was extremely positive with discussions continuing in the hallways long after the panels were done.

TIE-SE  is a special interest group that provides mentoring networking and education for social entrepreneur. Please send email to contact@tie-se.org for more information.

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