For those unfamiliar with the term “social entrepreneurship,” this is a newer business model that prioritizes purpose and people alongside profit. Think TOMS’ or Warby Parker’s one-for-one business model. After years in financial services and then a non-profit organization, I was itching to explore this very same idea. At that time many of us in the work force were choosing between doing good and making money. Why couldn’t we do both?
So I stopped making money altogether, left my job in 2010 and returned to school for an MBA at the University of Michigan. There, professors like C.K. Prahalad and Ted London were redefining how to do business, specifically, to be inclusive of the “base of the pyramid,” the 3.5 billion people living off of $2.50 a day. Contemporary ideas like impact investing, “Creating Shared Value” (CSV), “Corporate Social Responsibility” (CSR), and “inclusive business,” started challenging age-old models focused on profit and growth alone (at any cost). These ideas have begun to shape a new perspective for for-profit companies as well as impact-driven organizations interested in sustainable funding. These same concepts also point to potential economic growth due to the creation of new markets. All this was fascinating to me because as a first generation immigrant, memories of extreme poverty in the homeland are still fresh on my mind.
According to recent analysis, poverty in the Philippines remains at 25%. Some reasons for this include climate change (typhoons that continue to decimate and displace communities), rising food prices, and inflation. Poverty prevents the country from reaching its economic potential and improving the standard of living for citizens across the country. Like many of you, I have been grappling with the big question – What is the solution? Social entrepreneurship, in my mind, would not only viable but replicable.
In 2013 I returned to the Philippines (after 25 years) to reconnect with my roots, understand the current economic climate, and attempt to answer the question about my participation in poverty reduction. I discovered that social entrepreneurship was at its infancy but would quickly explode due to factors unique to the country. I spent time in Palawan with Tao Philippines, a #socent eco-tourism company that hosts the most amazing island-hopping trips from El Nido to Coron. Imagine sleeping on white sand beaches every night under the stars, exploring during the day, and then interacting with locals (and yes, we even visited a karaoke island). I also met a number of social entrepreneurs at Co.Lab, a co-working space in Manila that houses and connects like-minded creative, entrepreneurs, and NGOs.
Fast forward to July 2015. I was selected as one of ten FYLPRO Delegates and granted an incredible opportunity to embark on an 8 day journey to the Philippines and meet with top leaders in government, business, and community. Admittedly I didn’t fully comprehend the privilege bestowed upon us and even now, I’m in disbelief with having met such an impressive roster of decision makers like Senators Bam Aquino and Sonny Angara, Undersecretary Austria of the Dept. of Foreign Affairs, Ruel Maranan of Ayala Foundation, US Ambassador Goldberg, and the CEOs of top global companies (Name drop, name drop, name drop. That’s right – for those of you interested in applying next year, get your application together NOW). I found it striking that there was agreement across all sectors that the solution to the poverty problem is inclusive business.
Read on for reasons why I think the Philippines, based on my FYLPRO experience, is the perfect place to become a social entrepreneur or hang out with one.
The government is in on it.
The Philippine government is prioritizing “inclusive growth,” the idea that low income segments of the population should benefit from the growing economy. One way through which this is supported is the Conditional Cash Transfer, a government program that incentivizes the most vulnerable to seek healthcare and obtain an education. Access to both improves employment preparedness and productivity and can prevent further intergenerational poverty. Another is Go Negosyo, similar to Small Business Development Centers in the U.S., which provides technical assistance and resources to support SME development all over the country.
Sadly, one of the many challenges faced by social enterprises or any business for that matter, is inefficient and non-transparent administrative procedures. Filing for a business permit/license will cause a big, fat headache, although the good news is the ability to quickly jump on a plane to a nearby island and cure said headache. An impressive initiative to combat inefficient bureaucracy, though, is bantay.ph, which mobilizes young people, all volunteers, to evaluate local government offices and the delivery of their services in order to reduce corruption. By crowdsourcing feedback real time, accountability is improved. Of course while bantay.ph is highly commendable, conditions still are not perfect.
The private sector is in on it too.
The Philippine Business for Social Progress or PBSP is the largest business-led social development program in the country committed to poverty reduction, according to their website. They support key areas such as Health, Education, Enterprise development, and they also influence companies to include Corporate Social Responsibility (CSR) within their core strategy. The Makati Business Club (MBC) is one of the most highly regarded business associations in the Philippines. And when FYLPRO takes you to a special luncheon with them, you can expect to speak with country managers or CEOs of corporations like DOW Chemicals, Philam Life, or Bank of America. One of the objectives of MBC is to facilitate the exchange of ideas to improve conditions within the business community. One such idea led to the Integrity Initiative, an agreement that commits participants to maintaining ethical practices and reducing corruption.
The land is full of opportunity.
Literally. Many social ventures are emerging in the agricultural sector where most Filipinos are already employed. During a consulting project in Vietnam I met a number of Filipino consultants and international development experts, one of whom doing capacity building work in the rice industry. This is when I first learned about IRRI or the International Rice Research Institute, “the world’s premier research organization dedicated to reducing poverty and hunger through rice science” originally founded and still headquartered in the Philippines. Agriculture is still the main use of land in the Philippines but distribution remains problematic and is one of the reasons that prevents the country from achieving scale. Thus, there are infinite opportunities to support smallholder farming and facilitate market access. How much of land is used for farming?
We have a young and skilled work force.
More than 50 percent of the current population is 24 years or below. This means a steady flow of people into the labor force. The country also boasts a 93.6% literacy rate. Many are English speaking and college educated. Our young people are specializing in areas like computer science and technology, which positions the country to be highly competitive for tech-based opportunities. As a result, their skills continue to be refined in these areas. If you’re not convinced yet, you should check out Geeks on a Beach, an annual convention of sorts for tech-focused entrepreneurs. Does geeking out get better than this? But tech isn’t the only area in which our young people excel. They continue to develop in accounting/finance, sciences, and agriculture/fishing industries. There is so much potential to partner with these bright eyed, bushy tailed young people and carry the torch of change.
We have the bayanihan spirit.
Whenever I speak with Filipinos in Los Angeles, New York, or the Philippines, I refer to the Filipino psychology and our core values. If you grew up in a Filipino household, there is no avoiding the concept of “kapwa,” the “bayanihan” spirit, in which we find our identity and strength. While I highly value individualism, I am also proud to have been acculturated through a more collectivist perspective. The idea that no one is left behind is in our core. It is why hospitality is second nature to us, why we make the best hosts at parties, and why when someone says “Tao Po” at your door, you welcome this person or “tao” as a part of you as you are of him or her. This connectedness is a real advantage to us when thinking about social enterprises because it naturally opens doors to collaboration and co-creation, both highly important when crafting solutions at the base of the pyramid.
In my next entry, I’ll share about some of the interesting social enterprises I learned about during my FYLPRO trip.