Impact Forum 2012 – Igniting Capital Markets for Social Good
Sunny Yi-Han Lin is Associate at Social Enterprise Associates. Based in Taiwan, she is also Founder and Managing Editor of Social Enterprise Insights (www.seinsights.asia), the first Mandarin language social enterprise information website and database in the world.
The Impact Forum 2012 was a global conference presented by Impact Investment Exchange Asia and Impact Investment Shujog this past June in Singapore. The two-day conference was dedicated to the evolution of sustainable development in Asia and focused on connecting impact and innovations with investment.
Social Enterprise & Impact Investing
Sustainable development has typically been the domain of governments and non-profit / non-governmental organizations. Yet traditional public service or philanthropy programs have high dependency on government budgets or foundation grants, which is not very sustainable. In recent decades, social enterprises - organizations that apply business strategies to solve social and/or environmental problems - have begun to fill the gap. With investment and sales revenue, social enterprises have more financial independence and self-sufficiency, and therefore, create stronger capacity to respond to community needs, grow and scale up.
On the other hand, impact investing refers to investments made based on the practice of assessing not only the financial return on investment, but also the social and environmental impacts of the investment that happen in the course of the operations of the business and the consumption of the product or service which the business creates. Impact investments have been seen as a major financing channel for social enterprises seeking capital.
Biggest Gathering in Asia
It was a great pleasure to represent Social Enterprise Associates to join the Forum. It was the biggest gathering in Asia for practitioners from the field of social enterprise, with 400+ delegates from 45 countries. Three tracks - Impact Investing, Social Entrepreneurship, and Ecosystem Development - in 21 sessions were held addressed the changing landscape of capital markets for social good, inspiring, informing and igniting attendees to make ideas come alive.
Distinctive Make-up of Asian Social Entrepreneurship
It was truly eye-opening for me to observe and learn the distinctive make-up of social entrepreneurship across Asia. There was consensus that development of social enterprise varies by country. For instance, Bangladesh and the Philippines have strong social innovations in health, agriculture, and renewable energy, but fall behind on education, water, and social justice. Thailand has strong social enterprises in community development and regards social entrepreneurship as part of the social, economic, and liberalization program. Social enterprises in India, on the other hand, are mostly structured as for-profit companies and focused on the Bottom of the Pyramid market.
Common Challenges for Scaling Up
When it comes to success factors allowing social enterprises to flourish and scale, the top three in priority order presented by ANDE (Aspen Network of Development Entrepreneurs)'s Executive Director Randall Kempner were: talent (human capital), market, and capital. This trend was exactly corresponding to my observation. Some people would think that capital is the biggest challenge for social enterprises to scale up, yet most SEs are small-scale, in early stage, and not ready for super investments. From my first-hands interaction with social entrepreneurs, most of them identify human capital as the most challenging factor. Even if you raise millions of dollars, you still need to find the right people to work together, leveraging the money to expand the good cause.
Government, Butt In or Hands Off?
I also had conversations with practitioners from different countries about what role the government should play in the ecosystem. Interestingly, for Singapore, Korea, the Philippines, and Hong Kong where the governments have heavy hands in fostering the sector through policies, regulations and financing capital, some practitioners thought it was good and effective for social enterprises to build capacity and scale up, yet some also thought government intervention was a bother with top-down limitations coming along. On the contrary, people felt that India, Bangladesh, and Taiwan where the governments are hands off and have no official definition or recognition on social enterprise, tend to have stronger bottom-up innovation and entrepreneurship. Anurag Agrawal, Co-Founder of Intellecap, even said "Social enterprises are happy to see governments stay away!"
Throughout the Forum, participants agreed that the social enterprise sector is still in a smaller scale and growing and the impact investing space is nascent in Asia, regardless of country. Yet social enterprises in Asia are realizing the need to switch from donor funds to receiving investments, for more sustainable development. Funding a business rather than giving out a grant has been regarded as a more effective, accountable, and sustainable way to foster triple bottom line efforts.
Social Enterprise Associates, on the other hand, had worked with Asian Development Bank, authoring paper and speaking at its Social Enterprise Summit on capital sources for scaling up social enterprises. We also worked with the Small Enterprise Education and Promotion (SEEP) Network to link their investments in social enterprises in India, Pakistan, and the Philippines to sources of investment capital to achieve sustainability and scale.
Get Involved & Stayed Tuned
We will continue contributing to the social enterprise and impact investing space in Asia, drawing upon our 10+ years of experience in the U.S. to link the West to the East. Keep us posted if you come cross to see any good relevant information, or join the events we'll participate in! It is important for us to see friends, hear what others are doing, exchange ideas, and foster a community to increase impact investing towards a bigger marketplace and a better world.
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