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By Deepti Chadda and Dipika Prasad

Home to 3.6 Bn people, almost every country in Asia is undergoing a profound socio-economic transformation. A region rich with people, resources and culture is growing increasingly restless in the face of multiple development shortfalls. While traditional methods of alleviating poverty continue to receive impetus, a fresh movement based on an alternative development approach is emerging. Building viable business models with affordable products and services that cater to underserved populations in sectors such as health, education, energy, is finding its place as an instrument to further sustainable and inclusive growth in Asia.

Several trends across Asian countries underline the growing popularity of this new approach, widely known as ‘social enterprise’. In Malaysia a survey of over 6000 young people showed that 75% considered themselves social entrepreneurs aiming for financial and social outcomes. Driven by Information and Communication Technologies (ICTs) and social media, budding social enterprise networks are linking investors, entrepreneurs and policy representatives across countries, such as the Social Enterprise Network Asia (SENA). Schools in Asia now include social enterprise in their curriculum and organize social business plan competitions, like iDiya by the Indian School of Business and the INSEAD Social Entrepreneurship Catalyst.

The growth of these social enterprises is also starting to attract interest from double and triple bottom-line investors (impact investors). According to a report by Avantage Ventures, the potential market size that can be captured through impact investing in Asia is estimated to be between USD52 to USD158 Bnby 2020. The report also concludes that the six key sectors that would benefit most from impact investingin Asia include affordable housing, primary education, rural and elderly healthcare, agri-business, water and sanitation and rural energy.

While social enterprise is still nascent in the region, some countries like India, Thailand, Indonesia and other South East Asian countries have emerged as front-runners in this movement. What’s interesting is that many of these countries face similar challenges of scale and sustainability. Some of the common constraints include access to the right type of funding, attracting and retaining superior talent, weak or non-existent supporting infrastructure, navigating the regulatory environment and building a collaborative approach towards market driven development.

While the policy environments, the financial services structures, the development needs and potential and geographical conditions vary widely across the region, emerging anecdotal evidence shows that some of these challenges have been tackled well in specific geographies.There is both a growing need and an opportunity to build a corridor of communication and learning between social enterprises, investors, policy-makers and other market enablers in India and South East Asia. Sharing best case practices,learnings from failures, finding solutions to common problems, speeding up the flow of funding across countries, and sharing intellectual capital are founding blocks for this Social Enterprise Corridor.

The case for building a social enterprise corridor between India and South East Asia

When it comes to innovation in technology and business models, India is one of the market leaders in the social enterprise space. A robust private sector, and focus on R&D could mean that there is an opportunity for these technologies and models to be replicated across other regions in South East Asia. For e.g. SME Renewables, a social enterprise that promotes renewable energy technologies and market biomass gasification power generation systems in Cambodia, imports its technology for rise husk powered electricity generators from India. It cites cost effectiveness, and time saved on developing indigenous technology as the primary reasons behind its buy-decision.

India has traditionally struggled when it comes to making public-private partnerships work. There are opportunities for it to learn from successful examples of these from countries like Cambodia and Indonesia. For instance, although there are millions of fully subsidized household biogas units installed in India, most are dysfunctional due to lack of maintenance and accountability from civic organizations. On the other hand, a biogas program led by Hivos with blessings from the government of Indonesia has achieved 100% functionality rate and 100% loan repayment rate. Initiated in May 2009, it aims to build a minimum of 8,000 domestic biogas plants in at least six Indonesian provinces by the end of 2012. The program is sustainable because the biodigestors are only partly subsidized, and focuses on facilitating credit in partnership with the government, NGOs, cooperatives, and MFIs. The focus on linking players, building a market and ensuring sustainablility after the grant monies run out is a clear learning for India.

There are opportunities for learning and communication to flow along the India-South East Asia corridor when it comes to policy as well. For e.g., the Thai Government has developed the Thailand Social Enterprise Master Plan 2012 – 14 to be delivered by the Thailand Social Enterprise Organization (TSEO), with the aim of furthering sustainable development.TSEO’s vision is to build a learning environment for social enterprises in Thailand, create capacity building interventions, and develop a path to capital and resources for social entrepreneurs. It is in its early days, and there are opportunities for it to learn from both successes and failures in other countries. Perhaps most importantly, there are opportunities for all countries in the region to learn from failures of policy. For instance, in Indonesia, private sector off-grid solar lighting initiatives have failed as the market was distorted by free distribution of similar products by the government, and lack of a supportive environment for the growth of the local industry.

Though the regulatory mechanisms are disparate, uncertain and ambiguous when it comes to flow of financial capital across the region, there is certainly merit in building robust deal flow pipelines across the region. Investors like Unitus Seed Fund, Aureos Capital, LGT Venture Philanthropy have a portfolio of investee companies in the regionHowever, given the nascence of the social enterprise space, the cost of aggregating, and building capacities of these businesses to create a pipeline for investors is almost prohibitively high, and there has been very little pan-region activity to create one. Philo Alto, Founder Asia Value Advisors says, “In my experience as a recent jury for the GSVC-SEA competition, the winners tend to be those who have been coached by business practitioners who are able to provide a real life sanity check on valuation, funding requirements, and expectations of potential investors that enable the social entrepreneurs to reframe or adjust their plans and organizational culture over a period of time as they scale their firm. I would say that the cost of search for viable social ventures remains elusive from the perspective of would be impact investors.”

The exchange of intellectual capital and talent is another building block for the corridor to be successful. There are opportunities for technical assistance and market building facilities/projects to be created, staffed by experts from across the region who can support idea and early stage ventures. For e.g. from a recent field visit to Cambodia, our team at Intellecap found that most social enterprises were founded and managed by expatriates, while the locals tended to focus on NGOs and non-profit models. There was a clear need for local home-grown experts in the field, but no learning environment or platform existed.

Some ways in which the Corridor can be built

Asia’s geographical and cultural diversity creates a need for platforms that can connect investors and entrepreneurs from across countries, playing the role of intermediaries. As aggregators, these platforms reduce transaction costs for investors in identifying and conducting due diligence, and improving the chances of enterprises to access funding by helping them build capacity and scale. Philo of Asia Value Advisors says, “Most social enterprises need mentorship support and advice to help them achieve the scale needed for future funders that are more commercially oriented, in addition to scaling their social impact. By engaging with intermediaries whose role it is to share with the SEs as to how they can be ‘impact investment ready’ in the coming years, social enterpriseswill be able to adapt their business models accordingly, with enough lead time and speak the same language as the more commercially oriented impact investors.” Initiatives like Sankalp Forum and Change Fusion are playing a pioneering role in building such platforms.

Creating capital markets for social good and channelling capital efficiently towards social ventures, is a significant part of building this Corridor. With access to funding identified as one of the top challenges faced by social entrepreneurs in India and South East Asia, organizations that aggregate funding sources and create enterprise-friendly processes to access this funding will be instrumental in scaling social enterprise in the region. Impact Investment Asia (IIX) is home to Asia’s first public and private platforms for social enterprises to raise capital efficiently. The Asian Venture Philanthropy Network (AVPN) aims to develop the venture philanthropy movement to meet specific enterprise requirements in Asia.

Both India and South East Asia need to appreciate each other’s local realities as well. Forging friendships and strong working relationships is critical to building any successful cooperation. Immersion programs, which provide an opportunity for both sides to interact and learn from each other, serve this purpose. AIESEC and Potencia Ventures run an immersion program for young people to learn about social enterprise through international internships and interaction with the impact investment domainacross countries. Student exchange programs through academic institutions like business schools are also a potential opportunity to build immersion programs that will found the basis of an India – SE Asia Social Enterprise Corridor.

Bridging Information Asymmetry is another critical building block and the Ayllu Initiative is a step in this direction – it aggregates processes and shares data so that funders, entrepreneurs and other sector actors in social enterprise can make informed decisions. Access to such information will make it easier to share learning, build areas of cooperation and establish a strong social enterprise corridor between India and South East Asia.

Authors’ Note:This article was written with inputs from Rashi Agarwal, Srikanth Pulavarthy, and Bharat Bongu from the Intellecap Business Consulting team, and from Philo Alto of Asia Value Advisors. The authors would like to express their thanks to all of them for sharing invaluable first-hand accounts of working in the field. The authors work on the Sankalp Forum at Intellecap, and were inspired to write this article based on their observations from extending Sankalp’s platform to 5 countries in the South East Asian region. This is also a subject that will be discussed in a special side-session at Sankalp’s upcoming Annual Summit on April 12 and 13. To find out more about how you can participate, click here.

I come from a family of well-educated engineers, doctors and civil officers. I grew up in a sheltered environment, learning about the significance of a credible education, of stability, and of planning as far ahead as possible. Most of my extended family relocated to study in the U.S, and have built comfortable lives there. If I was writing this a decade ago, I might have had a similar story to share.

But I have grown up in the “new” India, and in this land of expanding opportunity, I chose the road less traveled.

In my 26 years I have traveled the world, started a not-for-profit, spent a month in the Antarctic and have chosen a career that attempts at “good” business. Turning down several opportunities to continue working abroad, I chose to return to India. The emergence of a pulsating, dynamic new India has triggered a reverse brain drain. Indians living in different corners of the world, who had gone looking for opportunity, chose to return to a vibrant, exciting land of promise. So did I. I came back to an India ‘whose faith in success was far greater that her fear of failure’. An India that was poised as the fastest growing free-market democracy in the world. Globalization with all its challenges and opportunities had created a country of paradox, success, failure and hope. The development of a young, new India in the face of a globalized world economy has greatly influenced my thinking and life choices.

India opened its doors to the global economy, transforming the lives and aspirations of its people. This evolution came to life with A.R Rehman winning two Grammy Awards, Kalpana Chawla being the first Indian-born woman to fly in space, and Slumdog Millionaire winning an Oscar. The world was looking at India with curiosity, and inter-cultural connections multiplied exponentially. Consequently, my dream of traveling the world became a reality. I worked with an international team in Rotterdam that led a global organization to achieve 45% growth in results. Our mantra was ‘Connecting to Deliver’, and we leveraged technology that supported people across the world to learn, share and achieve. I developed programs that mobilized youth to experience new economies and cultures. Recognizing these successes, I was awarded a scholarship to participate in a sustainability leadership program in the Antarctic. This would have been unheard of for a young woman in the India that was. The world had literally become my playground, and these experiences completely changed the way I viewed my country, my future and myself.

Today, India is riding high on its so-called “demographic dividend”. While India’s youth hold significant promise, the lack of education, inadequate infrastructure and skewed employment prospects present a daunting task. Young India needs empowerment, training and access to livelihood opportunities. Being a young Indian, my work has focused on youth mobilization for social impact. Recognizing the need for ethical and sustainable leadership, my work in AIESEC was directed towards exponentially increasing the quantity of leadership experiences the organization provided young people in India and globally. While leading the Global Entrepreneurs Program, my team trained aspiring Indian entrepreneurs and gave them a platform to develop business skills by interning with growing enterprises. Today my work leverages India’s demographic dividend through social enterprise. The enterprises I support are transforming the lives of unemployed youth through door-step business training, providing technology-based interactive education to disadvantaged communities, and generating employment in rural India through BPOs.

India’s entrepreneurial spirit is being harnessed in whole new ways. The world is attempting to learn from Indian innovation or ‘jugaad’ in Hindi, as a tool to find uncommon solutions to common problems. Earlier this year, a business acquaintance from Accra experienced Dharavi, Asia’s largest ‘five-star’ slum as part of a global initiative on Urban Poverty that I managed. He reflects that ‘Dharavi’s future is different from the slums in Ghana because Dharavi has the ability to grow organically through the entrepreneurial spirit that is being nurtured there.’ This observation isn’t limited to Dharavi, but is the energy that drives India. The deep-rooted ambition, innovation and risk-taking ability of my people set them apart. As an actor in India’s entrepreneurial story, the traits that define the country, define me. I’m an innovator; I practice the art of lateral thinking, of resilient creativity and of improvisation in the face of adversity. I enjoy trial-and-error and making things work with limited resources. I’m excited by opportunities with an element of risk, which I believe is critical to unraveling the complex challenges of today’s world. India’s tryst with ‘jugaad’, as one part of its entrepreneurial success, has deeply influenced my development in recent years.

My connection to India’s complex growth story is best described in these lines – ‘There are 2 India’s in this country. One India is straining at the leash eager to spring forth and live up to all the adjectives that the world has been showering upon us. The other India is the leash. One India says give me a chance and I’ll prove myself. The other India says prove yourself first and maybe then you will have a chance….’ The two India’s are slowly drifting apart – one rich, the other poor; one living in luxury while the other struggles to sustain itself. The future of our country depends on closing this gap. My work in social enterprise aims to increase conversions from one India to the other side. I co-create sustainable solutions with grass-root innovators to transform the less advantaged to assertive customers, thus contributing to build a more sustainable growth curve for the country. I support enterprises that provide low-cost sanitary napkins to rural women, deploy easy-to-use water wheels in villages, and empower rickshaw pullers to be owners. Choosing social enterprise has been a natural career path. With all its challenges, I draw immense satisfaction and learning from my work. The India phenomenon and my choice to return to it, has been a profound influence on my thinking, learning and actions.

The AMBITION
As Vice-President of AIESEC International, I was responsible for leading 40,000 young people towards achieving AIESEC’s target of 45% growth in results (number of international internships) within 1 year with a team of 22 people from 17 countries.

AIESEC is the world’s largest youth run NGO enabling leadership development for social change.

THE CHALLENGE
Adapting – I was in a new country working with 22 strangers under high professional pressure. I missed my family, friends and India. Building a meaningful life in the Netherlands while delivering high performance is one of the toughest challenges I have faced.
Influencing – AIESEC did not believe it could achieve 45% growth as it hadn’t seen such performance in the past. Positively influencing people across the world to believe in the target while making sure everyone’s concerns were addressed, was a significant barrier I crossed.
Achieving – After generating momentum towards 45% growth, I faced the challenge of execution. How do I focus the efforts of 40000 volunteers towards one goal? I believed it was possible & persisted with new ideas & actions.
By overcoming these challenges, and more along the way, I was able to achieve 45% growth.

WHAT I LEARNED
Inner strength – The personal and professional intensity of this assignment forced me to deal confidently with complex situations. I appreciate the importance of independence and interdependence in achievement. Humility, hard work and simplicity are values I strengthened through this experience.
Skills – Not-for-profit management, team work, process enhancement & statistical analysis formed the core of my work. The environment taught me to be assertive and culturally sensitive.
The future – One of my most important learning’s is self-awareness. I understand what makes me happy and what my future goals are. I have clarity of purpose and the strength to translate my ambition to action.

LOGOYOUTHGLOBALY2B_Forum_Quick_Facts

The Global Youth to Business Forum is a unique meeting point for youth leaders from around the world and leading organizations.

More than 600 youth leaders and selected organizations will meet, share perspectives and propose possible actions around issues of global relevance. The forum will gather youth opinion around the topics of Climate change and Sustainability; Entrepreneurship in the Crisis; Mobility and Diversity.

The output of the discussions around each of those three topics will be later on presented to relevant world institutions and large businesses.

Mobility_Sustrainability_EntrepreneurshipIf your organization is working around one of the discussed topics or youth opinion in general, join the youth leaders from around the world in Kuala Lumpur, Malaysia, 25th August 2009 as a corporate delegate. Click HERE

If your organization is interested to:

* Gather global youth opinion regarding the core business/important initiative of your company
* Involve your staff in direct interaction with youth leadership from diverse cultures
* Profile your brand among 600 youth leaders from over 100 countries and thousands more online
* Co-brand a youth statement to the world institutions and business regarding the burning topics of today

Visit our Partner page , and learn more.

To get to know about the program of the event: click HERE

For further information on the events venue and host country: click HERE.

      Global_Youth_to_Business_Forum_Button

Account for 42% of the world’s population
Contribute one-third of the world’s growth since 2000
Account for 22% of the world’s economy in 2008
Emerging as key players in driving global economic decision making
Relied on by the so-called great economies to rescue the world from the financial meltdown

    Leading growth, brick by BRIC – Brazil, Russia, India and China

A few years ago if you had asked me about BRIC, it would have meant nothing more than a normal red brick! And even if you had explained it as Brazil, Russia, India and China, I would have found it hard to draw a connection. Brazil, a splash of color, beach and carnivals; Russia meant freezing cold and vodka; Chop sticks, Kim-chi and lonely one child families was my idea of China.

In 2005 this changed – One of my subjects at university was Psychology. As part of my final year project I did a cross cultural leadership study with subjects from more than 20 countries including BRIC. The study was based on the hypothesis that AIESECers across cultures have improved leadership abilities than young people who have not been through the AIESEC experience. Unknowingly this project became my first step into the fast growing and dynamic world of BRIC talent! I discovered interesting trends between the leadership characteristics of people from emerging economies compared to those of the better developed markets. I didn’t know then that in a couple of years I would get first-hand experience of working with young leaders across BRIC.

Through interactions and observations, there seem to be 3 characteristics that differentiate young people from the BRIC countries (especially Brazil, India & China):

    Ambition

Everything is possible, the sky is the limit! (The number of times I have heard “It is not possible” in the Netherlands in the last one year is more than what I heard my entire life in India!) It’s an attitude – young people from vibrant fast growing environments are born to aspire. The problems and issues surrounding these young people in daily life give them an even stronger sense of practical ambition.

    Competition

Take anything in these countries like demography, geography, politics and the scale is massive! BRIC doesn’t deal in small numbers. It all comes down to the survival of the fittest – when you’re competing with millions for one job or one position in a university, it pushes you to the limit. Competition to be the best, to constantly improve and grow is a driving factor amongst these young people.

    Intuition

When there is a starting point and a goal, you aim at achieving the goal. Young people from BRIC allow their intuition to guide them towards success. Process, structure, plan are secondary, the one thing they will focus on is efficiency – How can I reach my goal with minimum investment and maximum output? Being intuitive allows for flexibility, innovation and focus on implementation, making these young people extremely competitive in today’s market.

…To be continued.

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