It Takes More than Social Entrepreneurs to Change the World

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September 24, 2014; Bloomberg Businessweek

The $1 million Hult prize for social entrepreneurs was awarded at the Clinton Global Initiative annual meeting in New York last week to NanoHealth and their “Doc-in-a-Box.” Doc-in-a-box, in fact, is a component of a larger project intended to improve medical care in the slums of India. The project is the initiative of five graduates of the Indian School of Business in Hyderabad, who shared an interest in healthcare and a concern for those at the bottom of the pyramid.

The Hult prize itself is the brainchild of Ahmad Ashkar, a Palestinian-American MBA alumnus of Hult International Business School in Cambridge, Massachusetts. It is funded by Swedish education entrepreneur Bertil Hult and operates in partnership with the Clinton Global Initiative. Competition is restricted to students and recent graduates because young people, Ashkar says, are “audacious.”

“I give a challenge to a CEO of a development company or a charity, he tells me it’s impossible. My [Hult Prize] entrepreneurs don’t just tell me it’s possible, they shorten the time frame,” Ashkar adds.

However, Charles Kenny, writing for Bloomberg BusinessWeek, argues that social entrepreneurship “in its own way [is] simply a new brand of naiveté.” While he respects the vision, he is concerned that no amount of innovation and social enterprise can make a difference “without functional governments to provide basic services and infrastructure.”

He notes that, “Small startups rarely go global. Not, at least, without governmental buy-in.” And he gives a slew of examples of social innovations launched with a fanfare that have not achieved their objectives. Amongst these, he points to the record of cookstoves, aimed at improving the health and environment of many of the world’s poorest people. The Global Alliance for Clean Cookstoves was itself launched at a Clinton Global Initiative meeting in 2010. Yet such studies as “Up in Smoke” point to the failure of a number of cookstove initiatives.

The paradox, according to Kenny, is that social entrepreneurs and innovators are often responding to what they see as “the snail’s pace of institutional change”:

“Forget bureaucracies, charities, foreign aid, and big multinationals, they might say, the best way to fight global poverty is through the right blend of innovation and business savvy.”

Yet the real issue, Kenny argues, is that it requires functioning governmental institutions to achieve solutions to the developing world’s problems of low-quality health and education. He gives as an example the success of vaccines. In 1980, only 17 percent of the world’s children had been vaccinated against diphtheria, pertussis, and tetanus (DPT). Today, 83 percent have been vaccinated, thanks to a rollout that involved thousands of government workers.

So how do we fix failing and failed government institutions? Kenny concludes that perhaps it’s time to establish a $1 million prize for aspiring state bureaucrats as well as for entrepreneurs, civil society campaigners and community organisers.—John Godfrey