The William Davidson Institute

WDI’s Mission To create, aggregate, and disseminate intellectual capital on business and policy issues in emerging market economies

WDI’s Major Activities Research –Base of the Pyramid –Social Enterprise –Globalization of Services Executive Education Development Consulting Services Educators’ Outreach Promoting International Activities at U-M –Business School –Supporting key international activities at other schools School of Public Health Medical School School of Natural Resources

Knowledge Creation Experiences Teaching/ Dissemination Research Initiatives Support for Int’l Activities - - Students - - Faculty - - Exec Education - - Educators Outreach Research Support Development Consulting Conferences

Convergence of the Sectors: Social Innovation

Traditional Value Creation For Profit Non-Profit Government

For Profit Blended Value Creation= Innovation Non-Profit Government

Causes of Convergence Supply Side New Wealth/Philanthropists Increased Visibility (popular press coverage, celebrities Technology Attempt to reach new markets Improved transportation and communication Demand Side: Traditional Development Failures Increasingly Complex Social Problems Inability of government to provide public goods Foundations Requiring more Accountability/Innovation Scarcity of traditional resources (grants)

The Social Entrepreneurship Landscape Has Become More Complex Community Development Corporations Corporate Social Responsibility Venture Philanthropy Social Stock Markets Social EnterpriseThe Micros Business/Social Hybrids Community Foundations Bottom of the Pyramid Social Investing Public Private Partnerships Fair Trade Social Entrepreneurs Nonprofits (NGOs,CSOs) Socially Responsible Business Leaders Activists Thought Leaders The Landscape Social Entrepreneurship Foundations/Multilats Governments

Results of Convergence: Hybrid Spectrum NGO w/Income- Generating Activities Nonprofit Enterprise BoP Enterprise Social Venture Socially Responsible Business Corporate Social Responsibility Corporate Strategy Mission Motive Stakeholder Accountability Income reinvested in social programs or overhead Profit-making Motive Profit redistributed to shareholders Shareholder Accountability

Results of Convergence: New Sector Motivations Characteristics and/or Perceptions For ProfitHYBRIDNot for Profit CompetitiveCollaborative Private GoodSocial Good Market BasedOutside Market Financial MotivationSocial Motivation AdvantagedDisadvantaged IndependentDependent IndividualCollective Risk-takingRisk-averse Create WealthDistribute Wealth

Results of Convergence: Social Entrepreneurship/Innovation New Structures New and Adapted Business Models New Methods to Mobilize Capital New Sector Stakeholders New Fields and Terminology

Social Innovation: Why? Exciting Inspiring Opportunities Abound High Impact Possibilities Fast Moving Constantly Evolving

QUESTIONS?QUESTIONS?

Social Innovation: New Structures Partnerships/Strategic Alliances For-profits with Embedded Social Mission Non-profits Generating Revenue Non-profit Consulting

Social Innovation: Adapted Business Models for Enhanced Social Value Micros: finance, enterprise, franchise Social Franchising Non-profit Incubators Base of the Pyramid Fair Trade

Social Innovation: New Methods of Mobilizing Social and Financial Capital Foundations Supporting For-profits Market Driven Philanthropy Social Venture Capital/Investing Venture Philanthropy Adapted Private Sector Tools Community Foundations Corporate Volunteerism Community Development Corporations

Social Innovation: New Stakeholders For-profits  Employees, Customers, Suppliers, Distributors, Communities, Non-profits Governments (Outsourced Services)  Non-profits, For-profits, Communities Non-profits  Donors (with expectations of higher, more accountable returns), Individual Investors, For-profits, Government

Social Innovation: New Fields/Terminology Social Entrepreneurship Social Enterprise Base of the Pyramid Micros Social Investing Venture Philanthropy Fair Trade