Klaus Schwab and Pamela Hartigan

Social Innovators with a Business Case
Facing 21st Century Challenges
One Market at a Time

If there is one thing about which public and corporate leaders around the world
today can agree, it is the ever-growing importance of innovation. The search for
innovative solutions to the world’s myriad local, national and global challenges has
become a clarion call rallying people across multiple borders defined by nation,
行业, and academic discipline. Yet policy making reflects deep ambivalence
about innovation. The cheerleading over innovation exists in contrast to the myr-
iad institutional, 合法的, 监管, and educational impediments to the work of
innovators.

While not innovation experts, we have been privileged to interact over a span
of decades with the some of the world’s most recognized innovators—from those
working at the grassroots to those at the helm of new industries. This has provid-
ed us with some perspective on the nature of innovation and the hurdles innova-
tors face daily as they search for ways to disseminate their approaches and prod-
ucts.

Education is a good place to start. A society’s capability to innovate arguably
begins, or possibly ends, in school.1 For the vast majority of primary schools,
among the qualities of a “star” pupil are tidiness, adherence to rules and directions,
and good behavior. In the later grades, outstanding achievement is measured in
grades, standardized test scores and sometimes, the number of extracurricular
activities undertaken. These constitute the ticket to acceptance to top schools pro-
ducing the world’s elite. But it is not clear that this is how to develop the talents of
tomorrow’s innovators.

The educational system is reinforced by employment policies in most govern-
ment institutions and corporations. When reviewing candidates, recruiters invari-
ably look for evidence of academic achievement and a steadiness that produces
good exam pass rates and grades rather than for experiences that might suggest a
candidate is innovative and inspired, perhaps even rebellious. This is because most
organizations have a low tolerance for mistakes. Risk-averse societies and organi-

Professor Klaus Schwab is the Founder and Executive Chairman of the World
Economic Forum and Co-Founder of
the Schwab Foundation for Social
Entrepreneurship. 博士. Pamela Hartigan is the Managing Director of the Schwab
基础.

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Klaus Schwab and Pamela Hartigan

zations keep people from failing. They also keep them from trying. And the key to
successful innovation is initial failure and persistence.2

It is hardly surprising, 然后, that among the commonly shared experiences of
successful innovators is the recollection of having been described at some point as
疯狂的, not just by acquaintances, but by family, friends and close colleagues. 几乎
by definition, innovators are mavericks. Most organizational structures and their
corresponding managers and civil servants deal with what is. Innovators do exact-
ly the opposite. They focus on creating things the world has never seen. They sys-
tematically disregard boundaries—whether of nation, academic discipline, 或者
social status—to the predictable
annoyance of those who consider
it their responsibility to keep
boundaries in place. An irony
结果: While the world clamors
for innovation, it tends to deprive
innovators of the resources and
recognition that would maximize
their potential to transform soci-
eties for the better The challenge
of innovation in the 21st century
is therefore also about reshaping
societies to be not only tolerant,
but actually welcoming, of inno-
vators.

While the world clamors for
创新, it tends to deprive
innovators of the resources
and recognition that would
maximize their potential to
transform societies for the
更好的

In the case of the innovators
using technology on which this journal focuses, past innovation heroes had their
impact on business. From the individual brilliance of Thomas Edison came the
global powerhouse that is GE; from the unique inspiration of Kiichiro Toyoda
came the car company of today that continues to be a global standard setter. 在里面
coming century, 然而, the greatest opportunities for innovation exist in
domains of public service heretofore left to governments. Social innovators who
have taken a business perspective today are pioneering new approaches and help-
ing to map out future markets where most would only see looming problems and
风险. 在这样做, they are the harbingers of the biggest market opportunities of the
世纪. And history suggests that they have at least as much chance of shaping the
twenty-first century as many of today’s great incumbent businesses. On current
趋势 75% of 2001’s Standard & Poor’s 500 will have disappeared from the S&磷
index by 2020. In their stead, companies unheard of today, using new business
型号, will be delivering products and services to new and existing markets, 迪斯-
lodging incumbents who have not been able to innovate fast enough to keep up
with 21st century needs.3

Already today, there are hundreds of such innovators who are reaching new
市场, serving unmet needs, and creating new supply chains. This journal
recently profiled KickStart and its founders, Martin Fisher and Nick Moon.

创新 / fall 2006

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Social Innovators with a Business Case

Kickstart designs, produces and sells appropriate technologies to rural entrepre-
neurs in some of the world’s poorest markets, allowing them to start small-scale
企业. 在 2005, KickStart sold over 8,400 pieces of equipment that helped start
5,964 businesses generating an additional $5.3MM in annual profits and wages for
new businesses. Martin and Nick have ventured into territory no mainstream com-
pany would dream of entering—and in doing so, they have paved the way for a
new group of producers and consumers to emerge.

博士. Devi Prasad Shetty is meeting unmet needs of a different sort through an
innovative business model in health. An Indian cardiologist, Shetty’s organization,
Narayana Hrudayalaya, strives to make sophisticated healthcare available to all in
印度. His network of hospitals is able to provide 60% of treatments below cost or
for free, thanks to drastically reduced costs resulting from high volumes, innova-
tive cost saving methods and donations. A network of 39 telemedicine centers
reaches out to patients in remote rural areas. Two health insurance programs pro-
vide coverage for 2 million farmers at Rs 120 每年 (USD 3). 再次, innovators
lead the way in coming up with business models to provide quality health care for
the poorest who cannot afford it—while sustaining and growing the enterprise.

In Nigeria, Isaac Durojaiye has both created a new product and tapped into a
new source of labor. His company, Dignified Mobile Toilets (DMT) is the first
manufacturer of mobile toilets in West Africa. DMT makes, installs and maintains
thousands of public toilets in Nigeria through a franchise system providing job
opportunities to members of youth gangs that oversee the daily maintenance of
the facilities and keep 60% of the profits. The toilets are placed in high traffic areas,
such as bus stations and markets, where there is a high demand for sanitation facil-
实体. 因此, DMT offers an alternative to current widespread and unhygienic prac-
tice of using the street as a toilet. It also aims to attack the unemployment situa-
的, particularly among youth. More than half of the population of Nigeria is
在下面 35 年龄, and many are unskilled. While Nigerian employment statis-
tics are under debate, it is believed to be in the range of 17%, with an even higher
rate among urban youth. Up to 55% of the unemployed are secondary school
graduates, underlining the fact that education and skills do not guarantee employ-
蒙特.

Sub-Saharan Africa is not the only region where new solutions are needed to
address emerging models of participation in the work force. Sara Horowitz is
spearheading a form of portable unionism to promote the interests of the growing
number of independent workers in the United States. Unlike traditional trade
unions which are limited by law to employees of workplace-based organizations,
Working Today, founded by Horowitz, provides flexible and portable benefits
applicable to an increasingly mobile and decentralized workforce adjusting to the
changing contours of the U.S. and global economy. It has built a membership of
16,000, 包括 10,000 independent workers who receive health insurance. 它是
model could be expanded to address the needs of the more than 30 million inde-
pendent workers across the U.S.—and beyond.

创新 / fall 2006

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Klaus Schwab and Pamela Hartigan

The more acute the societal challenge, the greater need for an innovation-driv-
en societal transformation. Global climate change is number one on the list in
terms of the magnitude of the challenge and in terms of the scope of the required
response. The climate challenge in this century will not be solved by changing
power plants, designing new automobiles, or reformulating gasoline. It will be
解决了, and must be solved in this generation, by people changing their behaviors
and their institutions. National policies, corporate programs, venture financing
and consumer behavior will all contribute. But if they are counted upon to be the
drivers of change, that change sim-
ply will not occur. To catalyze the
转移, the general population must
be spurred to action, in turn pres-
suring governments.

The more acute the societal
challenge, the greater need
for an innovation-driven
societal transformation.

One such catalyst is Yann
Arthus-Bertrand, a photographer
who has demonstrated through
creativity and perseverance that
there is no real North-South divide
when it comes to environmental
威胁. Bertrand produced a series
of extraordinary books, exhibitions and films introducing us to our planet from
the air. Like most innovators, he is unrelenting. He has taken over 100,000 图片
just to put together “Earth from the Air.” As one of his colleagues put it, “With him,
I learned that nothing is impossible. People will tell him ‘No’, and he hears ‘Maybe’.
And herein lies the strength of such innovators—and their common bond. 这
word “no” doesn’t exist for them. As Barry Coleman, co-founder of Riders for
健康,4 has quipped, “There is nothing as motivating as when someone tells us ‘It
can’t be done’. It is our call to action.”

What set of incentives will lead to the deep diffusion across society of the capa-
bility to innovate and the inclination to respect and value innovators? 第一个
place to start is to step beyond paying lip service to the importance of innovation
in the public interest. Acknowledging the role innovation must play in addressing
the challenges of inequity is a prerequisite. But to date, and except in a small num-
ber of wealthy countries, such as the U.S., 英国。, and the Scandinavian countries,
governments have played a modest role in financially supporting innovation, par-
ticularly when directed towards social transformation.

The vacuum has been only very partially filled by venture capitalists, 私人的
投资, and philanthropy—individual and corporate. 因此, among the exam-
ples of social innovators highlighted previously, not one of them secured national
public sector support—other than international aid—when launching their initia-
特维斯. While one might argue it is better not to be financially supported by a gov-
ernment in the early phases of the venture in particular—because it can compro-
mise the ability to be truly innovative—the existing financing vacuum evident as
these social ventures scale up cannot be filled by wealthy individuals or enlightened

创新 / fall 2006

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Social Innovators with a Business Case

business alone. Increasing recognition of the importance of social innovation and
the concomitant growth of “philanthropreneurs” may spur more funding flows to
support early stage innovative hybrids focusing on social transformation.

许多, if not most, of today’s social innovators defy traditional legal pigeonhol-
ing as “not-for-profit” or “for-profit” organizations. 相当, they “intersect” across
both—they are social innovators with a business case, so to speak, hybrids that
straddle between a charity and a profit maximizing company. 最后, 许多
find themselves maneuvering through a tangled web of legal regulations to identi-
fy what benefits and obligations exist in relation to their enterprise. 事实是
to date, no country has developed a specific legal model recognizing the hybrid
nature of such organizations and the social and economic functions they serve.

Our fascination with these pragmatic visionaries and their organizations lies
much less in the goods and services they provide than in the catalytic role they play
in triggering innovations in the social sector. Like the business innovators who
come up with major innovations for the marketplace, social innovators are the
mad scientists as it were—working away in their organizations that act like social
innovation laboratories. They test and perfect different approaches, and when
they come up with the most effective and efficient ones with the greatest impact, 它
should be government and the corporate sectors’ respective roles to celebrate the
创新, take it up, learn from it, and help scale it so that all can benefit.
最终, the innovation lies in the models devised for service and product deliv-
ery all along the supply chain—not in the provision of the good itself. It is those
models that others need to take up and replicate.

Innovators in the public interest are the flame that ignites the fire of social
转型. That flame must be fanned and nurtured by governments, 酒吧-
licly traded and private companies, academia, media and individuals working
together to achieve its promised impact.

We invite reader comments. 电子邮件 .

1. We recognize that a vast number of children in poor communities must abandon their formal
education after the primary school years. Yet patterns of learning are developed at the primary
等级.

2. Thomas Edison is oft-quoted as saying. “I have not failed. I have found 10,000 ways it won’t work.”
3. Richard Foster and Sarah Kaplan, 2001. Creative Destruction: Why Companies That Are Built to
Last Underperform the Market—And How to Successfully Transform Them (纽约: Random
房子).

4. Working with Ministries of Health and NGOs in African countries, Riders for Health builds local
capacity to maintain and manage motorcycles and other vehicles, enabling health care workers to
reliably service remote areas. 因此, RfH is able to operate fleets of vehicles in the harshest
conditions with a zero breakdown rate for five years or longer. RfH has demonstrated that a prop-
erly managed vehicle under its system will save more than 50% of costs over a six-year period,
compared to an unmanaged vehicle. RfH has been able to lower infant and maternal mortality in
targeted communities. With each motorcycle it runs, 20,000 receive primary health care every
年.

创新 / fall 2006

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