Why social enterprise is a good idea, and how we can get more of it: Alex Hannant at TEDxTeAro

Why social enterprise is a good idea, and how we can get more of it: Alex Hannant at TEDxTeAro

this is Julia Anna and Julia is about to start a journey with a venture called rekindle and the idea of rekindle is to divert wood waste from demolition sites from landfill and turn it into beautiful New Zealand design and crafted furniture and then she wants to use that process to equip disadvantaged youth with skills and jobs and also find a way to reinvest some of the profit from that back into the community so I think this is a really really good idea and I also think it's a really good example of what social enterprises so what I want to talk about it's why social enterprise is a good idea and how we can get more of it so to make the case for social enterprise I think I just want to take some time to think about where we are right now we live in an incredible world we live at an incredible time we never had any so much choice so much opportunity and such capability so we can travel anywhere in the world pretty much in 24 hours we can look back in time to the start of the universe we can purchase for more than 10 billion products from an integrated global economy individually we can choose many career interests profession and in New Zealand we've got health clean water and energy on tap we're starting to make the things that we thought were impossible the stuff of science fiction possible teleport okay we're not moving people around yet but they're moving molecules invisibility done they're bending lights around objects but amidst all this I think it's easy to forget or perhaps take for granted how quickly things are changing and how interconnected things have become and how complex they are so who knows what this is yeah well it's the first website in the world who knows when he went live look at 21 years ago I'm not an old man but I was smoking again against 20 years ago and in 20 years this is turned from a curiosity to something which has fundamentally changed the way we do things the way we connect the way we talk to each other the way we think the world's changing in other ways as well this year in March our global population tipped over 7 billion that's twice as many people that were in the world when I was born twice half the world lives in cities half the world is under 25 and the important thing here is it means we're consuming resources a rate which is completely unprecedented simplistically this plays out in two ways one we're becoming more extreme in the way that we capture and exploit resources and this is risky and you kind of see this with deep water at Water Horizon the other thing is we're taking so much out of the system that we're starting to undermine the basic support systems that enable us to get by and do what we want so the systems which purify air and water the systems which provide biodiversity pollination resistance the protectors from natural hazards pest disease the systems that provide basic materials and basic food systems to sustain us and we don't know where the breaking points are and we really don't know what the impacts are going to be either but we are starting to see the climate system flex its muscles so this year only a couple of months ago the Arctic sea ice got to the lowest level on records the orange line is the average low point for the last 30 years and you can see it's considerably less than that since the middle of last century incidents of weather-related natural disasters have increased by over a thousand percent we can argue about climate change and we can discuss where the safe limits safe are but this reminds us that we just simply can't negotiate with planet it doesn't speak English it's much bigger than us so it's not just in the physical world that we've got trauma we're also in the middle of a global financial crisis and no one really knows how this is going to play out not least because the theory that we use to constructor is proven to front inequality 80% of countries around the world income gaps are growing 1 billion children half the children in the world grow up in poverty this diagram gives a crude representation of how the wealth in the world is distributed the richest fifth about 75% the bottom one and a half credit Swiss reckon the top wealthiest the thousand individuals have a well for crippling to the bottom two and a half billion that's nuts it's a common sense you says that this is unstable its unsustainable and to be honest it's downright unacceptable here in New Zealand inequality is growing then faster than any other developed country so to many of the vital indicators which will ensure us to have a healthy stable sustainable future a tracking in the wrong way and to top it all we're just not as smart as we think we are we're really good at the geeky stuff we can do warp drives we can print cars the complex relationships not so good but we consistently overestimate our ability to predict and manage the monsters were created so there's this guy called Philip tetlock who basically wanted to understand how often experts get things right okay we live in an expert dominated world how often do they actually really get things right and he really wanted to know and he did a research piece over 20 years looks at 28,000 predictions from experts guess how often experts get it right in short they don't marginally above a random random outcome other studies show us that what we think we know on what we do know are completely out of sync if you want evidence for that just go down to a pop quiz so we're living in a very complex world we're too damn cocky and we're starting to become dangerous and we're starting to see this gap a gap between what we want and I generally believe it's what we all want but where we're actually going where our attitudes and behaviors are taking us throught Matthew Taylor from The Voice Science Society of the Arts in London is called the aspiration gap and I believe if we want to bridge this gap we've got to start rethinking our relationship to the world and specifically we've got to rework the way that we define create and retain value and this is where social enterprise comes in because it gives us a real indefinite model of how we can do things very differently sacrificing very little and gaining much and this is how it works so social enterprise gives us a platform to be completely unreasonable we can challenge the assumptions about how the world works not just do things differently in terms of being smarter but just turning paradigms upside down so this is Muhammad Yunus the grandfather of microfinance and his unreasonable idea was to bring people out in trench poverty by lending the money without guarantees completely different from the way the banking system works and it was so unreasonable that he had to do the first loans out of his own pocket he gave 27 US Dollars away Grameen Bank has now lent more than 11 billion u.s. dollars this brought millions of people out of poverty it's diversified into education technology housing social enterprises focus on a genuine need they don't just manufacture it so does anybody hit one have a guess about what this is clearly a football but it's also a power plant socket it dresses the need that 25% of the children of the world don't have access to electricity they don't get access for light to read or do their homework so what for undergraduate students from Harvard University have done is they know all children love to play and return for 15 minutes of kicking a football around they get three hours of power ingenious fun but certainly not frivolous social enterprises focus on creating value rather than merely profit which means they can go to places where conventional businesses don't so this is one World Health Institute and Mayor address in the failure the only 10% of the total global health research and development budget goes into addressing the conditions which generate 90% of the world's disease burden in short the medical game serves the rich and not the poor but because they've got no competition in working with or for the poor it means they can do other things and they specialize in taking off patent drugs and going through rapid development and rolling the mount very cost-effectively they've sacrificed margin for market scale and because they focus on their stakeholders rather than their shareholders it means they can provide value to the majority of people rather than the privileged Floop view social enterprise is instinct if you think holistically they know how to play the system this story is much closer to home and it's one that we can be proud of because it's Willington started conscious consumers what conscious consumers do is they work with retail businesses to improve their environmental ethical performance and beyond the the intrinsic benefits of those businesses get from being more efficient conscious consumers then market those businesses to a growing network of people who want to buy from businesses they're doing the right thing then they get more businesses and board and they go up the supply chain they get stuff for cheaper and they introduce new products it's not so much a win-win but a win win win win win win win okay thinking holistically and understanding that value can be shared social enterprises are also fundamentally built on collaboration and empowerment okay so it's about maximizing participation rather than just managing performance Cafe Direct is a business built on collaboration it's also the fifth biggest coffee brand in the UK they see Fairtrade is an absolute minimum standard and they invest a huge amount of their profits back into the communities that supply them with the product beyond it'd been a good thing to do it's also a sensible thing to do because they are secure in supply they're guaranteeing a high quality crop and because of the relationship they built with the communities they understand very quickly about where the opportunities for innovation are the social capital the cafe Direct have generated is so strong that the German development agency now run their development programs through Cafe directs networks so business based on collaboration has now come a platform for wider development open source solutions some social enterprises usually most of the time have a very different relationship to intellectual property they just want to get the job done so they don't mind sharing it with others who can do it and get the job done quicker another one that's just lunch closer to home this is Bevin and Bevin is about to pilot the first on-demand public transport system in the country we gained an area of New Zealand no public transport you have to get around in cars or you don't get around at all but by intelligently using simple technology this bus rather than just go from A to B conserve a much wider community customers go up subsidies go down if this works it could be big news for a lot of areas in New Zealand by nô Bevin he's not after a gloater an ashen Alfredo's he just wants to get the job done and like all game-changing ideas social enterprise use models which can be scaled or can be replicated we're becoming increasingly excited about the opportunity around community energy it's taken off all around the world it's just starting to happen here so this is a story about energy about clean energy but it's also an organizing principle it brings communities together and strengthens local governance and when it works it provides a sustainable revenue stream which they can use to invest in what they ever like if you want to get an idea about the potential of this there's a town in Germany of about two and a half thousand people the export four million euros worth of energy a year and it's completely changed the makeup of their skills jobs and go he's if nough surround family stand together so social enterprise is a hybrid model that provides us new opportunities to create value and retain it in different ways and there's a heap of opportunities and challenges out there as we've seen but why don't we have more of them well largely it's an issue around we just don't have the support and infrastructure for them it's a new idea so we haven't built the supporting infrastructure particularly around finance and funding to enable them to really grow social enterprises usually don't get traction from the business community because the rates of return aren't what they are expected or business investors might get frightened of the fact that they want to reinvest their profits to deliver mission or share it with the people they serve on the other side will ruled out from public and philanthropic funds sometimes if you're simply not a charity and beyond that those funds can be oversubscribed bureaucratic periodic not really suited if you're an entrepreneur trying to do something very quickly and beyond that they don't like risk you know they're not going to use public money on things which haven't been proven before so a whole heap of ideas are out there but they're falling by the wayside because we don't have the infrastructure to support them right from the early stage where seed funding is so important advice and the right networks right up to the point of securing larger blocks of capital to to grow things and take things to scale but that's okay because we can build that infrastructure and it's not perfect and taking the point earlier it won't be appropriate for New Zealand we'll have to do our own way but by looking at the infrastructure which has being developed in the UK around social enterprise we can at least see some of the components which make some P coherent and work right from the early stage up to the larger stay of their stages at scale so firstly government does have a role but it's an office which works across government that understands and advocates for social enterprise you have arms-length organizations which provide long term funding for partnerships education social innovation you have a legal form which works for social enterprise Enterprise rather than against it you have things like social return on investment we new forms of new currency which enable the value which is created by social enterprises to be traded incubators unlimited intelligent in seed funding but also providing the right advice and mentoring later on impact investment funds social finance and then even above that social finance wholesalers lovely story about Big Society capital that they raise four hundred million pounds by finding dormant bank accounts bank accounts that hadn't been used 15 years and they put it to work so there's ways to actually find money within the system with valid necessary having to be a cost and even right at the top mainstream institutions like the co-operative bank understanding how these things work and getting involved and the work they're doing around community energy is breathtaking so we've got a bit of work to do and we can't do it all at once but we have to start somewhere it has to be in my belief focusing on the incubators and freeing up seed funding to get things going by doing that we mobilize talent we create a pipeline of ventures we drive all the other elements that start to be formed around those elements and this is what we're looking to do we're looking to work with government and business and anyone here that's interested to raise a seed fund a New Zealand seed fund of social enterprise of at least ten million dollars next year so there's a fair bit of work to do there and I best shut up and get on with it but in summary okay this TEDx was about cool and what I think is really cool is people looking after the place and looking after each other and finding ways to create wealth which sustain us rather than divide us I hope social enterprises in cause social enterprises in 20 years I hope central enterprise is called Enterprise I was never an environmentalist and I even call myself the reluctant environmentalist now but I work with these issues because for me it's just a point of common sense the economy exists within society which exists from fiscal limits if we break those boundaries if we saw the nest everything else becomes really really difficult we live in an absolutely wonderful world we live an incredibly exciting time and how it goes from here is fundamentally our choice your choice and decisions we make and I think it's a really sensible idea to start being a little bit more thoughtful a little bit more humble stop wrecking the place be kinder and start acting like we want to stick around what do you think thank you you

10 thoughts on “Why social enterprise is a good idea, and how we can get more of it: Alex Hannant at TEDxTeAro”

  1. How great video…We need more changemakers in the world this is why our social enterprise is making the difference by forming entrepreneurs and creating sustainable businesses for good.

  2. A lot of people think locally when starting a social enterprise, or a business. A lot of businesses could do something global if they have that in their minds from the get-go.. Anyway, starting, is the main thing.

  3. I think social enterprises must first ask the government and the company to clean up that land fill and not take the wastes to make some profits out of it! Social enterprises in the Philippines do a lot of working at the root causes of problems.

  4. For those who believe sports should be owned by the community go to: https://www.crowdtilt.com/campaigns/buy-the-clippers

  5. On MakeChangeTV we're also focusing on social innovation and social enterprises where we share inspiring stories from all around the world. Check out our channel to learn more 🙂

  6. inspiring..lots of alarming stats at beginning, and great ideas in the body. NZ aim to raise $10m seed fund in 2013.

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