Innovation, Enterprise and Investment to Create an Inclusive Ecosystem
Manoj Kumar moderates an informative panel with Elena Casolari, Gerry Higgins, Victoria Sabula, and Chintan Vaishnav on how to make innovation and entrepreneurship ecosystem create impact and work for the people that they are meant to serve.
Innovation, enterprise and investment are intricately related to each other because their history and origin lie in the markets. Today, there is more innovation, entrepreneurship, and investment, directed towards solving development sector problems. However, the playbook is the same as the one that was created for Silicon Valley, and evaluation benchmarks have been traditionally used for charitable projects. In the session on Finding New Momentum: Innovations, Enterprise and Investment Ecosystem, the moderator Manoj Kumar, founder of Social Alpha, pointed out the conundrum for those working on Innovation entrepreneurship and investment in the development sector. People are stuck between the two — on the one hand they have capital pools that are used to a particular playbook and on the other hand an evaluation community that’s completely used to a different world. That’s where most of the failure happens and most of the time that failure is the failure of communication and measuring the wrong matrix.
Elena Casolari is an enthusiastic believer in impact investing, and after the success of Opus Foundation, which she co-founded in 2019, the partners decided to set up an impact commercial fund to scale their experience and track record. In the rush to set up the new venture, the team stumbled along the way and Elena shared her failure candidly. “So after three years, I can tell you that I had failed. I’m the only woman on the board and all my fellow partners are men. As a result, in our deployment activity, only 20 per cent of our capital was allocated to women-led organisations. I think my personal failure mirrors to a certain extent a collective failure in the impact investing industry where everyone is pretending to emulate what has been done in Silicon Valley in private equity in venture capital and not really trying and making an effort to find its own narrative. Impact investing should have a different narrative and I’m proud to say that we had the flexibility to change the narrative and ensure that the gender lens is not just a nice narrative for fancy people but it’s really about the work and the talk.”
In a segue from Elena’s experience, Gerry Higgins, Founder of Social Enterprise World Forum, took the podium to share his decades of experience working on board and governance issues.
“Social enterprises are entities that trade but they have a social and environmental purpose so they’re not exactly like commercial businesses and they’re not exactly like charities that are non-trading. They need a board skill set and board conduct and practice that’s between those two worlds. To achieve good governance in social enterprises, we need to consider who should be in the room when big decisions are made. If you look around your boards and you don’t think that that board could withstand a crisis you probably need to think about what skill mix and experience you need in the room when those hard decisions need to be made.”
Gerry also shared with the audience the lessons he learned from his experience of failure while he was with Specialisterne, a Danish social enterprise that established a software testing enterprise that would give employment to people with autism. “When a board is spinning out or when a company is spinning out a new enterprise, it’s really important that the board members are giving direction and the leadership team of that enterprise are exactly what that industry sector and what that opportunity actually needs. We had too many people with an interest in autism as our board on our board not enough people interested or with skills and market knowledge of winning contracts and software testing.
In a powerful address, Victoria Sabula shared her perspective as the CEO of Africa Enterprise Challenge Fund (AECF). She said, “When I joined AECF about three years and some months ago it was actually at a point of failure. The governance structure that we thought would have worked collapsed during a time of crisis. It was a case of an institution that had grown rapidly but its governance systems had not advanced to be able to support that particular growth. It was our funder at the time who stood by us and declared that the mission of the institution was still valid. We are stronger today because a crisis made us realise that the organisation had to be run from a mix of competencies and really thinking about personalities — an activist out there will be an activist on the board, an investor out there will be an investor in the board. Too much crowding of a particular orientation will compromise the balance of the board.”
Chintan Vaishnav, Mission Director of the Atal Innovation Mission of the NITI Aayog, has been an academic researcher and has worked in the innovation and entrepreneurial ecosystem of MIT. He said, “The Atal Innovation Mission is tasked with the idea of creating and nurturing a culture of innovation entrepreneurship across the country. We aspire to build world-class incubators across academia, industry, and community organisations. Recently, we decided to create a framework to assess the performance of these entities And here’s what we found one in seven incubators is excellent, one in seven is a failure, and everybody else is in between these two.”
In a conversation titled — Symptoms of Incubat-itis, Chintan detailed the six behavioural pathologies — three on the incubator side and three on the government side. Among the pathologies that impair incubators was not-my-baby-itis, he explains, “This is a pathology where you award an incubator to an institution, typically an academic institution, and the faculty body says that incubators and entrepreneurship cannot be a legitimate part of academic activity. They pay no attention to it and as a result, it fails. They are essentially saying that in an academic institution, scholarship is the first class citizen and entrepreneurship is the second class citizen. We try to do as much due diligence as possible to get the intention of the team that’s being awarded the incubator but we are not fully successful yet.”
The exchange was engaging and informative and was an immense opportunity for learning. In the words of Victoria Sabula,
“Why must we learn? The people who are relying on our expertise, on our commitment, are not seated in this room today they’re at home, they are cooking with wood fuel, they’re struggling to pay their children’s school fees, and some of them are struggling to move their produce from the farm. How do we help them to be more resilient? Let’s talk about failure and let’s talk about failing, learning and really making a difference for the people who need us today.”
