Socio-Tech Innovation: Harnessing Technology for Social Good 3030395537, 9783030395537

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Edited by Latha Poonamallee ∙ Joanne Scillitoe ∙ Simy Joy

Socio-Tech Innovation Harnessing Technology for Social Good

Socio-Tech Innovation “A key premise of this book is to understand what qualifies as a ‘socio-tech venture’ and, perhaps more importantly, what does not qualify! While exuberance to embrace all things ‘social’ can be exciting and productive, emphasizing ‘all things social’ is not and should not be the same as ‘accepting as social all things.’ Scillitoe, Poonamalle and Joy approach that distinction with an important, critical eye, such as where—as the book describes it—‘social impact is a byproduct at best’ (Introduction). This book’s efforts are a welcome and useful bridge between theory and practice by exploring experiences of a discrete and diverse collection of companies and their principals. The technology thread provides a convenient way of more easily finding similarities and differences with regard to early points of decision and the choices made. That sociotechnology thread should not discourage a more general reader from delving deeply and extrapolating how the lessons and their contexts can apply more broadly, especially to identifying those situations and approaches that result in what I call ‘differentiated social good.’” —John Tyler, General Counsel, Secretary, and Chief Ethics Officer, Kauffman Foundation “This is an important book in the social entrepreneurship conversation, emphasizing the role of technology as an addition to the usual discussions about entrepreneurial character, innovation and social incentives. We are drawn into engaging cases—many in India and Africa, but also in Mexico and the USA— where technological resources are servants in addressing social challenges in a way that is not only impressive but can inspire new and creative responses to human need. A potential textbook, but also a contribution to scholarly conversation about social entrepreneurship and social enterprise.” —Ana Maria Peredo, Professor Political Ecology, Former Director Research Centre for Co-operative and Community-Based Economies, University of Victoria, Canada

Latha Poonamallee · Joanne Scillitoe · Simy Joy Editors

Socio-Tech Innovation Harnessing Technology for Social Good

Editors Latha Poonamallee The New School New York, NY, USA

Joanne Scillitoe California State University, Northridge Northridge, CA, USA

Simy Joy Indian Institute of Management Kozhikode, Kerala, India

ISBN 978-3-030-39553-7 ISBN 978-3-030-39554-4 https://doi.org/10.1007/978-3-030-39554-4

(eBook)

© The Editor(s) (if applicable) and The Author(s), under exclusive licence to Springer Nature Switzerland AG, part of Springer Nature 2020 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Palgrave Macmillan imprint is published by the registered company Springer Nature Switzerland AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland

We dedicate this book to socio-tech entrepreneurs and the communities they serve.

Acknowledgements

We wish to acknowledge the contribution of the following people who participated in the symposium we hosted on interdisciplinary approaches to social innovation at the 2017 AOM meeting in Atlanta, GA. You helped us think through some of the key aspects in this newly emerging theoretical area. • • • • • • • • • •

Zografia Bika, University of East Anglia Cass Brewer, Georgia State University Thomas Dean, Colorado State University Maryanne Feldman, National Science Foundation Shanthi Gopalakrishnan, New Jersey Institute of Technology Avinandan Mukherjee, Clayton State University Ana Maria Peredo, University of Victoria Donald Siegel, SUNY, Albany John Tyler, Kauffman Foundation Jennifer M. Walske, UC Berkeley

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Acknowledgements

We also wish to the thank those who participated in the PDW we organized on the book topic in the 2019 AOM meeting held in Boston, MA. Finally, we want to acknowledge the support provided by the India China Center at The New School to Latha Poonamallee.

Contents

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Introduction: Socio-Tech Venturing—Theoretical Lens of Key Areas of Complexities Joanne Scillitoe, Latha Poonamallee and Simy Joy Harnessing Power at the Edge: A Case of MBISSA Energy Systems, a Socio-Tech Venture from Africa Aparna Venugopal, Dhirendra Shukla and Ana Cristina Siqueira

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How Technology Led to the Empowerment of Women Lenders and Borrowers Jennifer M. Walske and Elizabeth Foster

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The Vanishing Blue Gold—An Old Problem, a New Technology and a Big Idea—Clensta International Malavika Desai and Divisha Agrawal

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The Elusive Model of Technology, Media, Social Development, and Financial Sustainability Aaditeshwar Seth Napify: A Case of Social Innovation and Market Value Capture Guillermo J. Larios-Hernández and Lizbeth Puerta-Sierra

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Technology and Tenacity in Rural India Shantam Shukla and Shashwat Shukla

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Saving Little Lives Through Bempu TempWatch Dipti Parekh, Susmita Suggala and Sujo Thomas

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AgriApp: Enabling Social Change Through Technology Mathew J. Manimala, A. Satya Nandini and R. Ganesh Kumar

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Lifting the Lid Off the Toilet—Understanding the Indian Context and A Case on Samagra Empowerment Foundation Aparna Venugopal, David Foord and Muthu Singaram Farmers’ Producer Organization (FPO) of Kaushalya Foundation: Enabling Social Inclusion of Women Through Technology Abhishek, Richa Saxena and Rekha Kumari GoCoop: Leveraging Technology to Impact the Lives of the Rural Poor G. Sabarinathan and S. Ramakrishna Velamuri

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Building Entrepreneurial Community: A Collaborative Benefit Corporation for Women Empowering Women Louise Kelly, Sarah Kimakwa and Stacy Brecht Kindling Change: A Case for Sustainable Development Work Malavika Desai, Simona Simmons, Ryan Brinkerhoff, Brian Kam and Joshua Moon CropIn: Addressing Farmer Poverty Through “Connected” Farming Priya Nair Rajeev and Simy Joy Conclusion: Socio-Tech Enterprises, Actors, and Dynamics of Innovation Development and Implementation Simy Joy, Latha Poonamallee and Joanne Scillitoe

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Notes on Contributors

Abhishek is currently a Faculty member in the Marketing Area of IMT Ghaziabad. Prior to that he was serving IIM Ahmedabad as an Assistant Professor. He is a Fellow of IIM Ahmedabad. He has more than 15 years of working, researching, and teaching experience in Marketing domain. He has conceptual and practical understanding of issues in marketing communication, consumer behavior, and retailing. As an academic, his research interests have been in the field of marketing communications, e-commerce and digital marketing, promotion planning, and consumer behaviour in retail context. His current research work looks at role of technology in marketing communications and advertising issues with public policy implications. He is excited to learn and discover the opportunities offered by digital platforms with increasing focus on mobile platforms and technology. Divisha Agrawal is a Ph.D. Scholar at Motilal Nehru Institute of Research and Business Administration, University of Allahabad, Allahabad, India.

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Stacy Brecht is obtaining her Doctorate in Business Administration at Grenoble Ecole de Management in France with a focus on entrepreneurship, and she is an adjunct business professor at the University of La Verne and Azusa Pacific University. She also owns and operates a public relations company in the Los Angeles area. Ryan Brinkerhoff is co-founder and Chief Financial Officer of Thrive Projects. He graduated from Syracuse University in 2016 with a B.A. Degree in Policy Studies with a concentration in Government and Business. While working at the White House Office of Management and Budget and as a member of a U.S. Trade Representative’s Communication team Brinkerhoff gained the much-needed skills and knowledge that would eventually help him become the Chief Financial Officer of Thrive Projects. Malavika Desai has been a Professor of Organizational Behavior at the Indian Institute of Management, Shillong, India and Diversity and Inclusion at King’s College, Kathmandu, Nepal. In recent years, Desai is a Visiting Professor to several institutes in India and abroad and a speaker at diverse forums. Desai’s research interests are Diversity and Inclusion in multicultural groups, Emotional Intelligence, Gender Equality at Work, Socioeconomic ventures, and Decision-Making. Desai has authored several case studies, book chapters, and has publications in international journals. Desai serves as an Executive Coach and Consultant to several Indian and multinational organizations like National Insurance, Xerox, and United Nations Global Compact Network (UNGCNI). Desai is also a steering committee member with Break Glass Ceiling Leadership Private Limited (BGCL), an organization that aims to augment professional excellence of women. Dr. David Foord is an Assistant Professor in the Faculty of Management at the University of New Brunswick. His research experience is in the fields of innovation and entrepreneurship, science and technology studies, and history of science and technology. He has professional experience since 1993 in technology management, innovation, and entrepreneurship. He publishes in social science and history journals, including Energy Research & Social Science and Scientia Canadensis.

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Dr. Foord has a doctorate in interdisciplinary studies from the University of New Brunswick, a bachelor of laws degree from Dalhousie University, and a bachelor of arts (history) degree from Campion College. Elizabeth Foster is the Portfolio & Investment Manager at the Autodesk Foundation where she invests in a global portfolio of organizations using technology for positive social and environmental impact. Prior to joining the Autodesk Foundation, Beth was based in Kampala as the Investment Manager for EWB Ventures, the early-stage, impact investing arm of Engineers Without Borders Canada. She has experience analyzing, investing in, and advising social enterprises across numerous sectors and geographies. She has built fund-level strategies around gender lens investing, local investing, and impact measurement for early-stage startups. Beth began her career as a Peace Corps Volunteer in Rwanda where she developed income-generating initiatives alongside cassava farmers. She received an MBA from the Haas School of Business at UC Berkeley and a BA in Political Science from Middlebury College. R. Ganesh Kumar is a doctoral student at the Department of Management Studies, Indian Institute of Science Bangalore and Assistant Professor at the Department of Management Studies and Research Centre, BMS College of Engineering, Bangalore. With a Master’s in Business Administration, he has 10 Years of Industry experience spread across Hospitality, Banking, and Education sectors. His interests are in the areas of Services Marketing, Information Technology in Management, Hospitality, and Tourism. He has published research papers and cases in National and International Conferences as well as in Journals. Simy Joy is a Faculty Fellow at Indian Institute of Management Kozhikode, India. She holds Ph.D. in Organizational Behavior from Case Western Reserve University, USA. Her research interests include institutional and organizational sources of inequality and exclusion; actors, innovations, and organizational forms addressing inequality, with special focus on social innovations, social enterprises, socio-tech enterprises, and microenterprise; and institutional logics, institutional work, and institutional entrepreneurship.

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Brian Kam A US Marine Corps. combat veteran, Brian Kam began his involvement in humanitarian work when he was deployed to aid those affected by Hurricane Katrina in 2005. After learning about the Gorkha Earthquake in 2015, Kam found himself in Nepal within one week after the initial quake to assist with the post-disaster relief and reconstruction efforts. After coming back from Nepal, Kam graduated from Syracuse University, Class of 2016, with a B.A. Degree in both International Relations and Middle Eastern Studies. Kam now continues to pursue his dream of helping all underserved communities no matter where they are and no matter how hard it is for him to get to them. Louise Kelly is a Professor of Management and Leadership at University of La Verne. She specializes in strategy and innovation leadership research and consulting, looking at entrepreneurial top management team leadership, and with an additional specialty in women leadership. Dr. Kelly publishes widely in academic journals and has authored five books including The Dictionary of Strategy. Dr. Kelly has consulted for firms in Canada, US, Mexico, Kenya, and Vietnam and is fluent in French, Spanish, and English. Sarah Kimakwa is a doctoral candidate at the University of Texas Rio Grande Valley. Her research interests include social entrepreneurship, strategic leadership, and emerging markets. Her presentations include conferences for the Academy of Management, Babson College Entrepreneurship Research, Southern Management Association, Social Entrepreneurship, and Africa Academy of Management. She has published several journal articles. She is a co-author of Seed Security for Food Security: A Manual for Community Development Workers, which promotes and advocates food security in Africa. She is a Fellow of the California State University Chancellors Doctoral Incentive Program and a member of The Ph.D. Project. Rekha Kumari is working as Trustee & Program Head at Kaushalya Foundation (KF). Her key role involves conceptualizing, developing, fundraising, implementing, and evaluating agriculture, livelihood, and women centric programs. In diverse roles outside KF such as Shaper and Ex-curator of Global Shaper Patna Hub-A World Economic Forum

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(WEF) initiative, member of Advisory Committee of Animal Husbandry Department, Government of Bihar for Gender inclusion, Member of National Advisory Council of Tata Chemical Society for Rural Development for Kasturi initiative, and in many such leading roles she is working to build inclusive ecosystem based on gender equity for overall development. While working on grassroots she has been sharing the first-hand experience for policy advocacy for gender equality, women’s empowerment, grassroots institutions and overall development at regional, national, and global forums with research work, workshops, and representations. Her Initiatives and contributions are recognized by several national and international organizations. Guillermo J. Larios-Hernández is Professor of Entrepreneurship and Technology Transfer at Anahuac University Mexico. He chairs the Entrepreneurship research group and academic programs. He earned a Ph.D. in Economics from Mexico’s National University (UNAM), a Master’s degree in Technology Commercialization in Institute IC2 from University of Texas, and a French Masters in Satellite Communications Systems from Ecole Nationale Supérieure des Télécommunications (ENST). He has professional experience working at Siemens, AT&T-Alestra, and Global Affairs Canada. His research interest includes entrepreneurship education and policy, Fintech and social entrepreneurship, and digital transformation. His research has appeared in journals such as Business Horizons, Information Technology for Development, and Technology Management & Innovation. Mathew J. Manimala retired as Professor of Organization Behaviour and Chairperson of OBHRM Area at the Indian Institute of Management Bangalore (IIMB). Prior to that, he was Senior Faculty and Chairperson-HRM Area at Administrative Staff College of India (ASCI), Hyderabad. At IIMB he has worked closely with the N S Raghavan Centre for Entrepreneurial Learning (NSRCEL) as its Chairperson and as the Jamuna Raghavan Chair Professor of Entrepreneurship. He was a Senior Enterprise Fellow of the School of Entrepreneurship and Business (SEB), University of Essex, UK, and a member of the International Advisory Board of the Institute of Management Innovation at Kinki University, Osaka, Japan. Professor Manimala obtained M.B.A. degree from the

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University of Cochin, M.B.Sc. degree from the University of Manchester, and the Fellow in Management (doctoral) degree from Indian Institute of Management, Ahmedabad (IIMA). He is a recipient of the Heizer Award of the Academy of Management for Outstanding Research in the Field of New Enterprise Development as well as of research fellowships from the European Foundation for Management Development (EFMD) at Victoria University of Manchester, UK, and the Shastri Indo-Canadian Institute (SICI) at University of Calgary, Canada. He has carried out research projects for several national and international agencies and has been the leader of the Indian team of researchers for the Global Entrepreneurship Monitor (GEM) project for two years. Professor Manimala has done extensive research in the area of Entrepreneurship and has published more than 50 research papers in referred international journals and about 10 books through reputed international publishers in the areas of entrepreneurship and organizational behavior. The community of researchers as a pioneering work in the field acclaims his work on Entrepreneurial Heuristics. He is a member of the editorial board of a few journals and the Editor of South Asian Journal of Management (SAJM). Joshua Moon is Co-founder and COO of Thrive Projects. After graduating with a B.S. Degree in Biology from Syracuse University, Class of 2016, the Co-founder and Chief Operating Officer, Joshua Moon, reached out to Cofounder Brian Kam after Kam’s initial deployment to Nepal. Back on campus the two began recruiting fellow students and began the Thrive nation. With the drive to help the communities across the globe, Moon continues to pursue his medical degree in hopes to lead a future Thrive medical team. A. Satya Nandini is Professor in the area of Finance and Economics at the Department of Management Studies & Research Centre, BMS College of Engineering. Her area of interest is in capital markets and has a good number of research publications to her credit. She has worked on topics related to Economic Indicators and Business cycle, Post IPO Performance of Stocks, Inflation and Stock market, mutual funds, global stock fluctuations and Indian capital market, Retail Investor Behaviour, etc. She is passionate about case writing and teaching and conducts case writing workshops. Dr. Satya’s recent cases include iD Fresh Food,

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Sapna Book House, Brahmin’s coffee bar, Renaissance RTE Pvt. Ltd., Green Kitchen family Restaurant, Criyagen, Big Kidskemp, etc. Her case received the best-case award at the Academy of Indian Marketing sponsored International conference. Another case was selected among the top seven cases in the 4th edition of Edge farm CII HR case writing competition. Professor Nandini’s formal education includes a Doctorate in Business Administration, an M.B.A. in Foreign Trade, and B.Sc. in Agricultural sciences. Dipti Parekh is a faculty (Accountancy) at Nirmala Memorial Foundation College of Commerce and Science. She has over 10 years of experience in academics. She has keen interests in areas of organizational behavior such as job satisfaction, job enrichment, and organizational commitment. Latha Poonamallee is Associate Professor and Chair of Management and Social Innovation at The New School in New York City. A Fulbright Specialist in Social Entrepreneurship (Botswana), she is also the cofounder of In-Med Prognostics, an AI-based neurosciences social venture in India. She received her Ph.D. in Organizational Behavior from Case Western Reserve University. Lizbeth Puerta-Sierra holds a Ph.D. in Administrative Sciences at the Autonomous University of Baja California. She currently teaches entrepreneurship courses at the Universidad Anáhuac México. Her professional experience includes positions in companies in the food industry. Her research interests include the university–industry partnership, management of knowledge and technology transfer, and innovation ecosystems. Priya Nair Rajeev is Associate Professor of Organizational Behavior and Human Resources at the Indian Institute of Management, Kozhikode. She received her Ph.D. in Management Studies from Indian Institute of Technology, Madras. Priya co-chairs the IIM-K Center for Excellence in Social Innovation and also consults with impact organizations. G. Sabarinathan, Ph.D. is Associate Professor in the Finance and Accounting Area at Indian Institute of Management Bangalore (IIMB). He has a degree in Chemistry, followed by a Post Graduate Diploma in

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Management from IIMB, and a Ph.D. from the National Law School of India University, Bangalore. His research interests are in the area of early stage equity financing of firms, more particularly in the areas of venture capital and private equity. He is also interested in the related areas of policy with regard to incubation and entrepreneurship, growth strategy of entrepreneurial firms. His other area of academic interest is the regulation of securities markets. Richa Saxena is at present a Faculty member in the HR&OB Area of IMT Ghaziabad. She is a Fellow of IIM Ahmedabad. As a Visiting/Adjunct Faculty she has taught courses in various reputed Business schools of India including IIM Kozhikode, IIM Indore, IIM Amritsar, and IIM Ranchi also. Her research and teaching interests include issues related to Contemporary Careers, Diversity & Inclusion, Gender, and Talent Management. She has published her research work in reputed journals including Human Resource Management Journal, Journal of Organizational Behavior, and Journal of Education & Work. She has also presented her work in reputed international and national conferences. Joanne Scillitoe is the Inaugural Paul Jennings Chair in Entrepreneurship and Professor of Management in the David Nazarian College of Business and Economics at California State University, Northridge. A Fulbright Distinguished Lecturer (Philippines) and Senior Scholar (Spain), she is well known for her work in incubators and technology innovation. She received her doctorate from Rutgers University. Aaditeshwar Seth is the co-founder of Gram Vaani, a social enterprise that builds innovative participatory media technologies for poor and marginalized communities to voice their opinions and demands. Gram Vaani has been a pioneer in using voice-based technologies to build interactive applications for less literate populations, especially in the absence of Internet-based access. Aaditeshwar is also an Associate Professor in the Department of Computer Science at IIT Delhi, where he runs the ACT4D (Appropriate Computing Technologies for Development) research group which works on low-cost connectivity, data analysis, and other areas of application of information technologies for social development. He graduated with a Ph.D. degree from the University

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of Waterloo in Canada in 2008, and completed his B.Tech. from IIT Kanpur in 2002. Work by Aaditeshwar’s team at Gram Vaani and IIT Delhi is being used by over 150 organizations in India and other countries including several in Africa, Afghanistan, and Pakistan, and has influenced the use of ICTs for development within many international aid and development organizations. Dhirendra Shukla is the Professor and Chair of the Dr. J Herbert Smith Centre for Technology Management and Entrepreneurship at the University of New Brunswick. Dhirendra’s articles have appeared in the Journal of Management Studies, Strategic Management Journal, Journal of World Business, Energy & Environment, and Business Strategy and the Environment. He did his B.Eng. and M.Sc. from the University of Bradford. Dhirendra worked for several years in the Telecom Sector for Nortel Networks in various roles. Dhirendra obtained his M.B.A. from the University of Ottawa and completed his Ph.D. in Entrepreneurial Finance from the King’s College London. Shantam Shukla A strategy and innovation management professional, Shantam is a Fellow (Ph.D.) of Indian Institute of Management, Ahmedabad where he did his doctorate in Business Policy. Currently, Shantam is with Forbes Marshall as Lead Innovation Officer for the group, where he is responsible for making innovation as the bedrock for future growth plans of the firm. He has worked across diverse industries such as ITES, Automotive, Education, and Manufacturing. He is a member of the Innovation Task Force of CII—Western Region, India and also delivers academic sessions in the field of management particularly on subjects of strategy, entrepreneurship, and innovation for students at IIM as a visiting faculty. His research has been published and presented at leading academic platforms. Shashwat Shukla holds a Ph.D. in management from the University of Allahabad. He takes courses in economics, HRM, and labor law. Shashwat is an active member of the American Psychological Association (APA) and has published significantly in the area of leadership, decision-making, and psychology. He has previously worked in senior

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management positions in public sector units of Government of India. His research interests include entrepreneurship and organizational behavior. Simona Simmons is affiliated with the Thunderbird School of Global Management, USA & Kings College Nepal. Muthu Singaram is the CEO of the incubation center titled, Healthcare Technology Innovation Centre (HTIC) at the Indian Institute of Technology Madras (IITM). In addition, he is the founder of VibaZone, a business with operations across India, Malaysia, and Canada. Moreover, Muthu is a doctoral candidate with the Department of Humanities at the Indian Institute of Technology Madras (IITM). Muthu is a mentor/entrepreneur in residence at several universities across the globe. He has authored two books on Entrepreneurship: A Hands on Guide to Starting Your Business and Green Fields, Building a Stronger Ecosystem for Start-Ups and Entrepreneurs. Ana Cristina Siqueira is Assistant Professor of Management in the Cotsakos College of Business at William Paterson University. Her articles have appeared in publications such as the Journal of Social Entrepreneurship, Journal of International Management, Entrepreneurship Theory and Practice, and Journal of Business Venturing. Some of her pedagogical innovations have been published in the International Journal of Innovation and Sustainable Development and Journal of International Business Education. She is an Editorial Board Member of the journals Entrepreneurship Theory & Practice and Cross-Cultural & Strategic Management. She holds a Ph.D. in Management from the Judge Business School at the University of Cambridge. Susmita Suggala is a faculty in Marketing at LJ Integrated MBA, Gujarat Technological University, Ahmedabad. She holds a doctorate from Gujarat University, Gujarat and her Masters in Management is from Nagpur University, Maharashtra, India. She has over 10 years of experience in academics and industry. Her peer-reviewed research is majorly in the healthcare sector and she works relentlessly to understand the dynamics of Indian hospitals on digital media. She has presented papers

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in national and international conferences and also published case studies in reputed journals. Sujo Thomas is a faculty (Marketing Area) at Amrut Mody School of Management, Ahmedabad University. He has over 18 years of experience in academics and industry. His research interests are in the area of consumer behavior, specifically, he likes to work on topics related to cause related marketing and online grocery retailing. He has published in reputed journals like Journal of Marketing Communications, Journal of Nonprofit & Public Sector Marketing, International Journal of Retail & Distribution Management, and South Asian Journal of Management. S. Ramakrishna Velamuri is the Chengwei Ventures Professor of Entrepreneurship and the Chair of the Strategy and Entrepreneurship Department at the China Europe International Business School (CEIBS). He received his B.Com. degree from the Ramakrishna Mission Vivekananda College, University of Madras, M.B.A. from IESE Business School, and Ph.D. from the Darden Graduate School of Business at the University of Virginia. His research focuses on how entrepreneurs’ ethical values influence their ability to mobilize resources from stakeholders and how business models can contribute to high firm growth. Aparna Venugopal has an undergraduate degree in mechanical engineering and a Master’s in business administration. She holds a doctoral degree from the Indian Institute of Management Kozhikode. She is a Research Associate at the University of New Brunswick. She has published in journals such as the International Journal of Human Resource Management, Management Decision, Business Strategy and the Environment, Sustainable Development, and Journal of Business Research. She is also a regular reviewer for Organization and Environment, Business Strategy and the Environment, Sustainable Development, Journal of Strategy and Management, and Management Decision. Jennifer M. Walske is Adjunct Assistant Professor and Interim Faculty Director, Impact @Anderson, University of California, Los Angeles. Her published research focuses on emergent firms with an emphasis on how

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human capital, social capital, and strategy aids new firm success. She has received numerous research and teaching awards, including the best paper award from NYU Stern’s Social Entrepreneurship Conference and the Cheit Award for Teaching Excellence at UC Berkeley-Haas, as well as outstanding faculty and research awards at the University of San Francisco. Prior to her career in academia, Walske was a nationally ranked software analyst by Institutional All-American and was a regular guest commentator on both CNN and CNBC. She also spent 10 years in Silicon Valley, where she held various marketing and product marketing positions within the software industry, prior to investment banking. She is recognized for coaching future leaders of emergent social venture firms, drawing on experience as a board member of various nonprofits and for-profits, including the Fair Trade USA, Net Impact, Boston Ballet, San Francisco Ballet, the Max Warburg Courage Curriculum, and Better Ventures, where she served on the advisory board. She is co-founder and partner of Myriad Investments LLC, a venture capital firm with investments predominately in software and social startups.

List of Figures

Fig. 1.1 Fig. 2.1 Fig. 3.1 Fig. 3.2 Fig. 3.3 Fig. 4.1 Fig. 4.2 Fig. 7.1 Fig. 10.1 Fig. 10.2 Fig. 10.3 Fig. 11.1 Fig. 11.2 Fig. 11.3

Key areas of complexities for socio-tech venturing Anglophone region of Cameroon (Source: Washington Post ) Group lending model Core components of technology conversion Feature comparison Business plan Clensta’s reach (Source Clensta International) Brief timeline of efforts of Shankarrao Kolhe in Kopargaon region Samagra 1.0 model (Source Samagra) SmartLOO installation (Source Samagra) SmartLOO integration (Source Samagra) Map depicting project area in Bihar (Source Provided by Kaushalya Foundation) FPO route map (Source Provided by Kaushalya Foundation) Women engaged in various farming practices (Source Provided by Kaushalya Foundation)

3 23 30 34 39 63 64 142 192 195 196 209 211 220

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Fig. 12.1 Fig. 12.2 Fig. 14.1

Traditional handloom supply chain GoCoop’s supply chain Timeline of Thrive Project milestones

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List of Tables

Table 3.1 Table 3.2 Table 6.1 Table 6.2 Table 6.3 Table 6.4 Table 6.5 Table 11.1 Table 11.2 Table 11.3 Table 13.1

MIS technology impact Mambu migration cost components Examples of social metrics Drivers involved in fatal crashes by age, distraction, and cell phone use, 2017 Sources of distraction at work Retail m-commerce sales worldwide, 2016–2021 Examples of social entrepreneurship operational models (SEOM) Mission, vision, and goals of Kaushalya Foundation (Year 2017) Details of features available to different users of mobile app Beneficiary tracking table Technology Driven Companies from Hera Hub/Stella Labs

44 46 113 117 118 118 120 205 216 219 249

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1 Introduction: Socio-Tech Venturing—Theoretical Lens of Key Areas of Complexities Joanne Scillitoe, Latha Poonamallee and Simy Joy

According to a 2016 report by the Global Entrepreneurship Monitor, there are an increasing number of new ventures founded globally that have a social orientation, seeking to make the world a better place somehow, someway. Within this mix are several ventures utilizing technological innovations (broadly defined) in significant ways to serve the poor and marginalized or to improve society overall across the globe in areas including but not limited to healthcare, financial inclusion, food security, farm-tech, energy, and education (Gharib 2016). This new type of venture that combines a social mission with the strategic use of a J. Scillitoe California State University, Northridge, Northridge, CA, USA e-mail: [email protected] L. Poonamallee (B) The New School, New York, NY, USA e-mail: [email protected] S. Joy Indian Institute of Management Kozhikode, Kozhikode, Kerala, India © The Author(s) 2020 L. Poonamallee et al. (eds.), Socio-Tech Innovation, https://doi.org/10.1007/978-3-030-39554-4_1

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J. Scillitoe et al.

technological innovation(s) has been aptly described as a socio-tech venture (Scillitoe et al. 2016, 2018). Socio-tech ventures possess the unique ability to leverage technological innovations in ways that traditional social enterprise, nonprofits, and government agencies do not yet can also achieve their primary social goals. However, there is a very limited understanding of how these socio-tech ventures are best created, developed, supported, and sustained to generate their intended social impact. This case anthology provides an avenue where readers can engage in the detailed stories of a diverse mix of socio-tech ventures in order to gain practical insights and develop a holistic understanding of the dynamics of socio-tech venturing. Insights gleaned are valuable to a wide audience including masters and advanced undergraduate students, entrepreneurs, business development professionals, NGOs, government agencies, and others who engage and work with these socio-tech ventures. A deeper understanding of what a socio-tech venture is and what it is not, as well as some of the unique dynamics they grapple with will help uncover the complexities of these ventures and provide a valuable framework for case readers. As noted above, socio-tech ventures are socially minded ventures that are formed to create social value by employing technological innovation as a key strategic component of their value proposition to customers and/or beneficiaries. While socio-tech ventures may appear to be similar to purely social ventures due to their commonality of having a social mission, socio-tech ventures also have to develop and manage a technological innovation that is key to their output and social impact, distinguishing them from purely social ventures. In addition, socio-tech ventures may appear to be similar to technology ventures in regard to the management of a significant technological innovation, but socio-tech ventures must also be mindful of their social mission as a primary goal, distinguishing them from purely technology ventures where social impact is a byproduct at best. A socio-tech venture is unique in that it is balancing technological innovation management with social impact. In this discussion, it is also important to distinguish between an enabling technology versus a core technology. An enabling technology is one that facilitates or helps a venture complement their core operations and strategic goals such as using social media, an existing app, non-proprietary communication technology, or a purchased piece

1 Introduction: Socio-Tech Venturing …

Innovation

Strategic Orientation Market

Structure

Impact

For-Profit

Market Value

Investor Needs

Innovation Development

Market & Social

Hybrid Customer/ Beneficiary Alignment

Founder Experience

Social

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Social Value

Nonprofit

Fig. 1.1 Key areas of complexities for socio-tech venturing

of equipment or device. Enabling technologies are commonly used by many ventures and firms today, including social ventures. When discussing socio-tech ventures, it is important to note that these ventures are employing a significant and newly created or modified technological innovation that is at the core of their strategic goals and value proposition such as a newly developed software, medical technology, engineering invention, energy device, and an app (Schilling 2019). Early research suggests that trying to develop, manage, and operate a socio-tech venture using established models related to purely social ventures or purely technology ventures will result in outcomes ranging from subpar to disastrous (Scillitoe et al. 2016). Understanding how to develop, manage, and operate a socio-tech venture requires unique insights and models. Socio-tech ventures struggle to balance the tensions between technology innovation development, creating social value, and sustaining operations that can result in competing forces that ultimately influence economic and social value outcomes. Prior work to date suggests there are key areas of complexities specific to socio-tech ventures (see Fig. 1.1). Each is elaborated below.

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Innovation Development The innovation development involves the various resources allocated to securing, improving, integrating, and managing the technological innovation central to the socio-tech venture. One of the earliest decisions a firm makes regarding a relevant technological innovation to address an identified need or problem, is whether to create a new innovation, adopt an existing innovation, and/or improve an adopted innovation (Christensen et al. 2006; Gopalakrishnan and Damanpour 1997). Research suggests that while some entrepreneurial ventures generate innovations, most are more likely to adopt and improve upon existing innovations to reduce the costs, time, and risks associated with research and development (R&D) (Szirmai et al. 2011). Ventures that pursue the generation of innovations have a reduced survival rate due to a liability of newness and smallness (Hyytinen et al. 2014). Relevant to socio-tech ventures, unique dynamics associated with innovation adoption and subsequent innovation development include the experience and innovation stance of the founding team and the complexity of the innovation (Scillitoe et al. 2018). Founding team experience, whether gained prior to venture creation or via mentoring/advisement/investors during the venture development process, can leave an imprint on the best ways to invest in and develop technological innovations. Given the recent prevalence of socio-tech ventures, there are not many experienced professionals familiar with their development and the founding team members tend to have varied backgrounds with deep-rooted habits and mindsets that they tend to reproduce in new entrepreneurial ventures, where organizational practices are still evolving (Battilana and Dorado 2010; Battilana et al. 2012). This can result in ambiguity and competing approaches among the founding team on how to best manage and develop the technological innovation of the socio-tech venture. In addition, some of these founders may have a more pro-innovation stance than others. A pro-innovation founder’s personality can be demarcated into general innovativeness/degree of openness to newness and specific innovativeness or the propensity to be an early adopter of an innovation (Marmer 2012). These pro-innovation entrepreneurs tend to encourage and engage in more activities in the innovation process towards new or improved products and services in

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addition to innovative organizational systems and boundary support mechanisms (Kickul and Gundry 2002; Mercati et al. 2008). The complexity of an innovation reflects the degree to which an innovation is multifaceted, new or original, and difficult to understand and use (Damanpour and Schneider 2006; Gopalakrishnan and Damanpour 1994). Complex innovations often require investing in external partnerships where entrepreneurial ventures seek support and knowledge to increase production capacity, increase market access and performance, share expenses, gain credibility, seek financing, and overall valuable advice to enhance their innovation (Schøtt and Sedaghat 2014). However, these ventures also need to guard against opportunistic behavior, develop trust, and manage national cultural value differences with these external partners (Steensma et al. 2000). Trialability reflects the degree a technological innovation must be tested by users prior to full implementation to reduce financial, technical, and/or social risks (Damanpour and Schneider 2006). Socio-tech ventures may have customers that differ from beneficiaries and must determine which of these clients they must invest resources for their product/service trials (Scillitoe et al. 2016). Strategic Orientation The strategic orientation of a socio-tech venture can include market, social, or a combined market/social orientation. This strategic orientation reflects the strategic direction, resources, and activities conducted by a firm (Schilling 2019). A market orientation is a customer focused, market pull process, via a multi-functional, pervasive, firm-wide philosophy, culture, set of behaviors, and set of activities seeking to influence and meet the variety of buyer expectations (Kohli and Jaworsky 1990). A socially orientated firm is beneficiary-focused, and mission driven to create social value that can include consideration, collaborations, and activities associated with stakeholders, cooperation, competition, and inter-functional coordination (Liao et al. 2001). A combined social/market balanced orientation can be described as a continuum of degrees of balance among social and market orientations that is in flux throughout the development of both the venture and its core technological innovation. This balance is influenced by a host of factors including founders’ experiences in market versus social environments,

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founder innovation stance, complexity of the innovation and the management of external partnerships, initials product/service trials with customers and/or beneficiaries, legal structure, stakeholder and other social ties in the external environment, and investor/lender interests (Scillitoe et al. 2018). Venture Structure Although related to strategic orientation, a sociotech’s structure is a distinct part of socio-tech venture development. This structural decision is not a short-term nor trivial decision and can impact the trajectory of the venture well into its future influencing its legal status, financial sources, organizational culture, and the focus on customers and/or beneficiaries. All of these become intertwined over time and can create significant switching costs for the venture that reduces its ability to make significant and effective organizational structural changes in the future. Making the right structural decision upon founding can positively affect venture impact yet anecdotal evidence suggests socio-tech ventures are often pressured to change structures post founding due to emerging tensions that could be better predicted and managed (Scillitoe et al. 2018). The key structural decision is whether to establish the venture in a forprofit, nonprofit, or hybrid form. The fundamental differences among these structures are legal implications, financing, customer vs., beneficiary focus and organizational culture. A venture with a for-profit structure is able to assume debt, attract investors in exchange for equity, focus on shareholder value, earn taxable profits, distribute returns to investors, focus on customers, and has a competitive, market-oriented culture. A venture with a nonprofit structure seeks funding from philanthropists, foundations, grant agencies, and corporations in exchange for a social return is predominately tax-exempt, social beneficiary oriented, and has a culture of creating social value (Battilana et al. 2012; Chen 2013; Foster et al. 2009). A hybrid form seeks to blend the for-profit and nonprofit models in varying, more flexible ways that allows drawing from all sources of financial capital, leveraging core competencies, sales to customers, and generating profits as well as securing grants and providing

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value to beneficiaries. These integrated hybrid models facilitate the creation of social value and commercial revenue through a unified strategy where profits gained can support the social mission, but the social goal is primary and the financial returns offer a means to this end (Battilana et al. 2012; Phillips et al. 2015). Hybrid structures, when possible, offer the greatest opportunity to balance social and market goals and needs through a unified structure and strategy but are also a challenge to effectively manage. Institutional voids may also exist, further compounding challenges (Mair et al. 2012). However, hybrid structures are currently evolving legally. Currently, those allowable within the USA include the L3C, Benefit Corporation, and the Flexible Purpose Corporation (Battilana et al. 2012). The L3C (LowProfit Limited Liability Company) structure, a variation of the LLC, is legal in a handful of US states such as Illinois, Kansas, Louisiana, Maine, Michigan, North Dakota, Rhode Island, Utah, Vermont, and Wyoming with legislation pending for additional states. The L3C is a forprofit structural form that pays taxes on profits and cannot receive traditional grants or tax-deductible charitable contributions but can receive private foundation support, government funding, and traditional investment capital (Howe 2010; Hsu 2017). The Benefit Corporation is for profit structural model, legal in approximately 30 US states, that enables a positive impact on society as well as profits as per legally defined goals but is taxed similarly to a C Corporation. The Flexible Purpose Corporation is also a for-profit structure that requires boards and management to agree upon social and environmental purposes creating at least one unique purpose within its charter and protects board and management liability from shareholder value conflicts (Mac Cormac 2011; Mair et al. 2012). Alternatively, many ventures may elect to create two separate legal entities, a for-profit and a nonprofit, that separately achieve market and social goals as another hybrid model to achieve desired market and social objectives (Battilana et al. 2012; Ebrahim et al. 2014). Alternatively, in countries like India, governmental regulations instead of venture legal structure can impact sources of funding and scrutiny involved. The selection of structure is highly dependent upon the social orientation of the socio-tech venture, its balance between market and social orientation, and political/legal options. Where a predominately market

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orientation naturally leads to a for-profit structure and a predominately social orientation naturally leads to a nonprofit structure, when both market and social orientation exist within the venture, the structural decision is less clear and does not necessarily result in a hybrid form due to the complexities involved such as founder experiences and ability to manage a hybrid, government regulations, investor interests, and whether customer and beneficiaries are the same actors and, if not the same, have differing or aligned needs (Scillitoe et al. 2016). Impact Ultimately, what is important is the economic and social value that a socio-tech venture creates. While socio-tech ventures are created to achieve social goals, the various innovation development resources needed for their core technology, common investor desires for profitability, and the need to sustain operations and continue to innovate often create the need for these ventures to also achieve economic value (Scillitoe et al. 2016). Economic value is defined as the worth of a good or service that is dictated by the preference of customers in light of trade-offs given their scarce resources or the value the market places on an item. Economic value has long been associated with entrepreneurship and innovation. Schumpeter (1943) describes how entrepreneurs can serve as a vehicle for economic growth through spurts of creative destruction through innovation. In addition, successful technology ventures enable economic development through the creation of jobs and taxable profits (Birch 1981; Reynolds and White 1997). Social value is the creation of benefits or reduction in costs for society by addressing social needs and problems in a way that extends beyond private gains or benefits of market-focused activity (Phills et al. 2008). Ventures with a for-profit structure are typically focused on achieving profitable returns for investors and the repayment of debt through a customer focus, creating economic value. While we often associate nonprofits with social good, securing adequate funds is a challenge. While 80% of the largest donors desire to donate funds for social change initiatives, only 20% of these donors make large donations to nonprofits seeking social change (Santos and Eisenhardt 2009). Nonprofits can also have a market orientation, but these ventures often exhibit mixed results

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regarding social benefit provided and, consequently, often exhibit negative financial performance (Camarero and Garrido 2008). Hybrids offer the solution of achieving both economic and social value but, as noted previously, are not consistent in their structure and requirements and are difficult to manage. Scillitoe et al. (2016) argue that customer and beneficiary alignment can influence whether a nonprofit, hybrid, or for-profit structure is best employed to achieve economic and social value. Customers are typically viewed as consumers of the output of an organization whether as an end user or in a business to business transaction where the product is used to further outputs. Beneficiaries can be end users but also those who gain benefit as part of the innovation process within the supply chain such as suppliers, manufacturers (Howaldt and Schwartz 2010), employees (Battilana et al. 2015), or partners (Ebrahim et al. 2014). When customer and beneficiary needs are misaligned, a venture that has a nonprofit organizational structure will be beneficiary centric and focused on addressing societal challenges and social good through programs and activities with funding serving as a secondary, facilitating role for the venture; a for-profit organizational structure will seek the greatest value from their product and service from customers; a venture with a hybrid structure will be best positioned to meet both customers and beneficiary needs. However, when the needs of customers and beneficiaries are aligned, the need to form a hybrid structure seems no longer necessary and the socio-tech venture can avoid the challenges associated with employing these complex structures. Instead, customer and beneficiary needs can be addressed via a for-profit structure where both their needs are met simultaneously through a market-focused profit approach to achieve both economic and social value. Given the liability of newness and limited resources of entrepreneurial ventures, particularly technology focused ventures with greater innovation development costs, the need for money is greater than established or non-tech firms. Conversely, a venture with a for-profit structure will have the dual benefit of generating profits to mitigate the risks of a new venture liability of newness and limited resources as well as enabling social good. When commercial activities are tied to social needs, there can be greater social responsibility among

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firms (Dawson and Daniel 2010) and less conflict between social good and business success (Yanus 2007). Following this introductory chapter are case-based examples of sociotech ventures going through their development process. The above conceptual model and subsequent explanations are provided to serve as a framework to aid the reader in capturing and understanding the complexities found within the socio-tech ventures highlighted in each case. The cases do not reflect similar types of socio-tech ventures with similar challenges but represent a diverse group of socio-tech ventures with a diverse array of opportunities and challenges in terms of global location, structure, strategic orientation, founder background, customers and beneficiaries, types of technological innovations, and desired impact. We challenge readers to explore each case and its nuances in developing an understanding of how socio-tech ventures develop, overcome challenges, and thrive. The cases are then followed by a concluding analysis of how the cases collectively reflect the framework and insights into future steps.

References Battilana, J., & Dorado, S. (2010). Building Sustainable Hybrid Organizations: The Case of Commercial Microfinance Organizations. Academy of Management Journal, 53(6), 1419–1440. https://doi.org/10.5465/amj.2010. 57318391. Battilana, J., Lee, M., Walker, J., & Dorsey, C. (2012). In Search of the Hybrid Ideal. Stanford Social Innovation Review, 10, 51–55. Battilana, J., Sengul, M., Pache, A.-C., & Model, J. (2015). Harnessing Productive Tensions in Hybrid Organizations: The Case of Work Integration Social Enterprises. Academy of Management Journal, 58(6), 1658–1685. Birch, D. L. (1981). Who Creates Jobs? Public Interest, 65, 3–15. Camarero, C., & Garrido, M. J. (2008). The Role of Technological and Organizational Innovation in the Relation Between Market Orientation and Performance in Cultural Organizations. European Journal of Innovation Management, 11(3), 413–434. Chen, J. (2013, February). Should Your Business Be Nonprofit or For-Profit? Harvard Business Review.

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Christensen, C. M., Baumann, H., Ruggles, R., & Sadtler, T. M. (2006). Disruptive Innovation for Social Change. Harvard Business Review, 84, 94–101. Damanpour, F., & Schneider, M. (2006). Phases of the Adoption of Innovation in Organizations: Effects of Environment, Organization and Top Managers. British Journal of Management, 17 (3), 215–236. https://doi.org/10.1111/j. 1467-8551.2006.00498. Dawson, P., & Daniel, L. (2010). Understanding Social Innovation: A Provisional Framework. International Journal of Technology Management, 51(1), 9–21. Ebrahim, A., Battilana, J., & Mair, J. (2014). The Governance of Social Enterprises: Mission Drift and Accountability Challenges in Hybrid Organizations. Research in Organizational Behavior, 34, 81–100. https://doi.org/10. 1016/j.riob.2014.09.001. Foster, W. L., Kim, P., & Christiansen, B. (2009, Spring). Ten Non-profit Funding Models. Stanford Social Innovation Review. Gharib, M. (2016, December 11). Tech Awards Pick Biggest Hits from 15 Years of Anti-poverty Honorees. https://www.npr.org/sections/goatsandsoda/ 2016/12/11/503141839/techawards-pick-biggest-hitsfrom-15-years-of-antipoverty-honorees. Accessed 24 July 2018. Global Entrepreneurship Monitor (GEM). Global 2016/17 Report. https:// www.gemconsortium.org/report/49812/. Gopalakrishnan, S., & Damanpour, F. (1994). Patterns of Generation and Adoption of Innovation in Organizations: Contingency Models of Innovation Attributes. Journal of Engineering and Technology Management, 11(2), 95–116. https://doi.org/10.1016/09234748(94)90001-9. Gopalakrishnan, S., & Damanpour, F. (1997). A Review of Innovation Research in Economics, Sociology and Technology Management. Omega, 25 (1), 15–28. Howaldt, J., & Schwartz, M. (2010, May). Social Innovation: Concepts, Research Fields and International Trends. Report of ESF, EU and Aachen University, Dortmund. Howe, B. (2010). LC3’s Limited Liability Low Profit Companies. http://www. socialentrepreneurshiplaw.com/l3cs-limited-liability-low-profit-companies. html. Accessed January 2011. Hsu, T. T. (2017). Strategic Orientation and New Product Performance: The View of the Complementary Combination. Academy of Management Proceedings, 1, 13292.

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Hyytinen, A., Pajarinen, M., & Rouvinen, P. (2014). Does Innovativeness Reduce Startup Survival Rates? Journal of Business Venturing, 30 (4), 564– 581. Kickul, J., & Gundry, L. (2002). Prospecting for Strategic Advantage: The Proactive Entrepreneurial Personality and Small Firm Innovation. Journal of Small Business Management, 40 (2), 85–97. https://doi.org/10.1111/1540627X.00042. Kohli, A. K., & Jaworsky, B. J. (1990). Market Orientation: Antecedents and Consequences. Journal of Marketing, 57 (3), 53–70. Liao, M., Foreman, S., & Sargeant, A. (2001). Market Versus Social Orientation in the Nonprofit Context. International Journal of Nonprofit and Voluntary Sector Marketing, 20, 355–376. Mac Cormac, S. H. (2011). Berkeley Handout, 1182011-1. https://www.law. berkeley.edu/files/bclbe/Berkeley_Handout_1182011_1.pdf. Accessed January 2012. Mair, J., Marti, I., & Ventresca, M. J. (2012). Building Inclusive Markets in Rural Bangladesh: How Intermediaries Work Institutional Voids. Academy of Management Journal, 55 (5), 819–850. Marmer, M. (2012, April 23). Transformational Entrepreneurship: Where Technology Meets Societal Impact. Harvard Business Review. https://hbr.org/ 2012/04/transformational-entrepreneurs. Accessed 24 July 2018. Mercati, A., Guido, G., & Peluso, A. M. (2008). The Role of SME Entrepreneurs’ Innovativeness and Personality in the Adoption of Innovations. Research Policy, 37 (9), 1579–1590. Phillips, W., Lee, H., James, P., Ghobadian, A., & O’Regan, N. (2015). Social Innovation and Social Entrepreneurship: A Systematic Review. Group and Organization Management, 40 (3), 48–461. Phills, J. A., Dieglmeier, K., & Miller, D. T. (2008, Fall). Rediscovering Social Innovation. Stanford Social Innovation Review. Reynolds, P. D., & White, S. B. (1997). The Entrepreneurial Process: Economic Growth, Men, Women, and Minorities (p. 1997). Westport, CT: Quorum Books. Santos, F. M., & Eisenhardt, K. M. (2009). Constructing Markets and Shaping Boundaries: Entrepreneurial Power in Nascent Fields. Academy of Management Journal, 52, 643–671. Schilling, M. (2019). Strategic Management of Technological Innovation (6th ed.). New York: McGraw-Hill Education.

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Schøtt, T., & Sedaghat, M. (2014). Innovation Embedded in Entrepreneurs’ Networks and National Educational Systems: A Global Study. Small Business Economics, 43(2), 463–476. https://doi.org/10.1007/s11187-014-9546-8. Schumpeter, J. A. (1943). Capitalism, Socialism and Democracy. London: Routledge. Scillitoe, J. L., Poonamallee, L., & Joy, S. (2016). Venture Technological Innovation, Social Value and Economic Value: The Influence of CustomerBeneficiary Alignment. In Management of Engineering and Technology (PICMET), Portland International Conference, 978–988. IEEE. https://doi. org/10.1109/picmet.2016.7806636. Scillitoe, J. L., Poonamallee, L., & Joy, S. (2018). Balancing Market Versus Social Strategic Orientations in Socio-Tech Ventures as Part of the Technology Innovation Adoption Process—Examples from the Global Healthcare Sector. Journal of Social Entrepreneurship, 9 (3), 257–287. Shane, S. A. (2004). Academic Entrepreneurship: University Spinoffs and Wealth Creation. Cheltenham UK and Northampton, MA: Edward Elgar Publishing. Steensma, H. K., Marino, L., & Weaver, K. M. (2000). Attitudes Toward Cooperative Strategies: A Cross-Cultural Analysis of Entrepreneurs. Journal of International Business Studies, 31(4), 591–609. https://doi.org/10.1057/ palgrave.jibs.8490924. Szirmai, A., Naudé, W., & Goedhuys, M. (2011). Entrepreneurship, Innovation, and Economic Development: An Overview. In A. Szirmai, W. Naude, & M. Goedhuys (Eds.), Entrepreneurship, Innovation, and Economic Development. London: Palgrave Macmillan. Yanus, M. (2007). Creating a World Without Poverty: Social Business and the Future of Capitalism. Philadelphia, PA: Perseus Books Group.

2 Harnessing Power at the Edge: A Case of MBISSA Energy Systems, a Socio-Tech Venture from Africa Aparna Venugopal, Dhirendra Shukla and Ana Cristina Siqueira

Introduction Mbissa is an island on Lake Bamendjing. It is a part of the village of Bambalang. Bambalang is the language spoken by 20,000 people on the Ndop Plains, in rural Cameroon, Africa. It is a rural community existing on subsistence living. They manage to get food from the land and the lake and their few leftovers help them tide over the seasonal famines. Life A. Venugopal (B) Department of Strategy, International Business and Entrepreneurship, University of Liverpool Management School, Liverpool, UK e-mail: [email protected]; [email protected] D. Shukla University of New Brunswick, Fredericton, NB, Canada e-mail: [email protected] A. C. Siqueira Cotsakos College of Business, William Paterson University, Wayne, NJ, USA e-mail: [email protected] © The Author(s) 2020 L. Poonamallee et al. (eds.), Socio-Tech Innovation, https://doi.org/10.1007/978-3-030-39554-4_2

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on the island is not easy. Mbissa Energy Systems makes a difference in Bambalang. They develop and deploy sustainable and renewable energy systems for use in areas such as Mbissa. MBISSA energy systems has two goals: – To produce electricity that will act as foundations on which future development efforts in the fields of business, agriculture, education, healthcare, and communication may be built. – To empower rural Africans with the knowledge needed to use the advantages that energy brings forth and reduce their poverty.1 MBISSA Energy Systems offers low-cost homemade wind and solar solutions to remote communities in Cameroon, Africa. They target poorer off-grid areas in the region first and energy is created on microgrid scales by villagers who are given appropriate training to do so. The company aims to provide clean, affordable energy solutions and transform lives in the targeted rural communities of Africa. At present, MBISSA energy systems provides off-grid solar power solutions to the 3000 residents on the remote island of Mbissa off the coast of Cameroon. Earlier, the residents of this island like the majority in sub-Saharan Africa relied on flashlights, kerosene lamps, candles, and torches to meet their lighting needs.

Genesis Caleb Grove had grown up in Cameroon as the son of Canadian missionaries working in Africa. As a young boy, Caleb had visited the island of Mbissa off the coast of Cameroon. Caleb was deeply affected by this remote island blessed with abundant rains and winds but with zero access to electricity. As a youth, when pursuing an education in engineering in Canada, Caleb started nurturing a dream to build a renewable and sustainable power source on this remote island.

1 MBISSA

Energy Systems. Retrieved July 2019 from https://www.f6s.com/mbissaenergysystems.

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“I grew up in Cameroon, West Africa. We moved over there in 2008. I came back in 2009 after graduating from high school. During my time there, we would go down to the lake by the village where I used to live, and there was this island called MBISSA that we would see.. there is about 3000 people on the island. They live by subsistence living, just working the soil and the lake for food. But every rainy season, these great big storms would come down through..between the mountains..they would come across the lake and right over MBISSA. So, even though most of the village won’t have all the rain in rainy season, MBISSA almost always has rain and wind. I thought as I talked to other people, what if they could have wind energy? Because there is no way they would have electricity. They are very poor. The grid can’t go there because there is no way for them to get on the lake. So, I just had this dream, I guess of the people of MBISSA being able to use wind energy. This is a very remote community. There really isn’t much that goes on in the area. The grid is state owned, but it is mainly focused on urban centres. So, for them to go out into a village like that…and then go to the island…it would not happen in 10-20-50 years. So, I just thought about that.” Caleb Grove. Founder of MBISSA Energy Systems.

Product Iterations MBISSA Energy Systems’ first prototype in rural west Africa explored the option of exploring wind energy for residential use. However, Caleb soon found out that wind energy is not a reliable or efficient source of energy in his chosen context of study. He then realigned his focus on capturing solar energy via panels mounted on housetops and storing the power in batteries for small-scale residential use. MBISSA Energy Systems is a not for profit organization. While doing his engineering at the University of New Brunswick, Caleb started taking a few courses with the University’s Centre for Technology Management and Entrepreneurship (TME) just for fun. He was always excited about innovation and the idea of creating something new. Somewhere at the back of his mind, he did think that it would be great if he could do a project exploring the potential of accessing wind energy. He started exploring this idea as part of his TME course project in a

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group of four. With the encouragement of their course instructor, Prof. Dhirendra Shukla, they slowly took this project further. In 2013 they presented their idea at a pitch competition organized by TME and the Royal Bank of Canada. They received the prize for the best sustainable social entrepreneurship idea. However, after the competition, the group disbanded and everyone went their own way. The idea stuck with Caleb though. His mentor, Dr. Shukla suggested that he keep the project alive while pursuing his undergraduate degree. At first, Caleb was not really convinced about the business feasibility of the ideas. When he talked to his family members and local contacts in Cameroon, he started envisioning a path forward. He created the first prototype to harness wind energy in 2014. He continued taking several TME courses to educate himself about the different facets of entrepreneurship. Caleb traveled to the island of MBISSA in 2015 with the intent of pursuing a wind energy project. As a first step in this endeavor, he installed a 10 metre tower atop a hill on the island to measure wind speed and check the feasibility of his business idea. He went on to develop four different prototypes to capture wind energy in the subsequent years. However, having analyzed the performance of the prototypes, Caleb and his team identified that solar resource was much more readily available. Therefore, MBISSA Energy Systems started its first solar power installation pilot project on the island of MBISSA in 2016. By the end of 2017, they had implemented 7 installations on the island with 3000 inhabitants. These installations varied in their purpose. While some provided energy support to businesses so that they could extend their evening business hours, some others provided basic illumination in houses and enhanced the household’s quality of life in the evenings. Some installations were also used to aid small-scale industries. The pilot reaffirmed the viability of their business idea and the market opportunity they had anticipated. Caleb Grove, Founder of MBISSA Energy Systems: “….but I realized during my time there.many people were coming and asking ‘Will you come to my home..Will you come to my village.from all over Cameroon..even from all over Africa..and so..I realized there is an opportunity there..I want to understand how to provide people with sustainable electricity..”

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Incubator Affiliation and Venture Fund Pipeline MBISSA Energy systems was affiliated with the University of New Brunswick’s energy-based incubator, Energia Ventures. They received venture support of 15,000 CAD (11,400 USD) from Energia. This helped them further their first pilot on the island of Mbissa. Further, in the initial stages of development Caleb had received funding support of 10,000 CAD (7.600 USD) from the University of New Brunswick. Caleb has also sourced crowdfunding support with a gofundme account. In an interview given to CBC’s Ms. Catherine Harrop in 2017, Caleb says that he received over 30,000 CAD in funding support from various UNB agencies.2 To garner more local support, financial aid, and business credibility he built a micro home 8 feet wide and 12 feet long in Douglas, NB, Canada in 2017. This micro-home showcased how he could build a cheap, scalable completely solar powered power setup. He appreciates the mentorship received with his association with the incubator. Caleb Grove, Founder of MBISSA Energy Systems: “I do not yet know how to think properly. So, when I hear about market intelligence, or different topics. I become aware of what I need to be thinking about. So, I will often take the resources. I don’t know maybe by the time someone is at their 4 th or 5 th venture, maybe it won’t be as useful because I already have that knowledge, but having the connection (helps), because I often find those connections lead to others”.

Friends, Collaborators, and the Team MBISSA was incorporated in 2015 and has a tiny team of 4 people. In addition to the founder Caleb Grove, the team consists of three installation technicians on the ground in Mbissa, Africa. These are people who Caleb had known since he was a young boy growing up in Cameroon.

2 Harrop,

C. (2017). Canadian Broadcasting Corporation. Retrieved July 2019 from https://www. cbc.ca/news/canada/new-brunswick/micro-home-power-system-1.4440658.

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Caleb’s family had close ties with the local Sil at Cameroon.3 Caleb found people who operate in different capacities inside the Sils. His connections in the Sils opened doors to access varied business capacities such as legal aspects, market research, technology assessment, and personnel recruitment. He found many of his previous connections very useful in his business as well. In addition, Caleb received extensive business and technical mentorship from mentors at the University of New Brunswick and the New Brunswick Research and Productivity Council. Early on in his business, Caleb found that the local villagers called his venture “munong micra” or “the fire of the foreigner.” This led him to decide that he would always train and employ local men and women to deploy the units. He wanted his business to be a sustainable solution that the villagers would have the tools to access, the knowledge to build and implement, even if the foreigner did not exist. He insisted on calling his business “munong Mbissa” or “the fire of Mbissa.”

Impact Measurement Caleb uses several unorthodox social measures to identify the impact of his venture. Rather than counting the number of installations he has facilitated, he measures the venture’s overall impact on the standard of living in Mbissa. For instance, he speaks of the enhanced sense of security and happiness people feel in illuminated rooms in the evenings. Further, he observes how his venture affects education positively by providing internet access in homes and helping children study in the evenings. Moreover, his venture’s impact is also manifested in the ways in which they facilitate extended business hours and manufacturing in micro-enterprises. Finally, he also sees how his venture helps healthy and safe living in senior’s homes when they use the evening lights to keep wild animals away. One of the very first installations was in a health clinic.

3 Sils

are groups of people who do primarily linguistics and translation into mother tongue materials and they especially focus on the Bible.

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Before the advent of MBISSA Energy Systems on the island of Mbissa, the residents had been using kerosene lamps, candles, torches, and flashlights. These light sources resulted in higher greenhouse gas emissions, poorer quality of light, higher risks to health, sense of insecurity at night, higher fuel costs, and limited productive hours. MBISSA has enabled the residents of Mbissa to use cleaner energy sources, achieve sustainable higher quality sources of illumination in the evenings, extend their productive hours, and reduce the vulnerability of their life. “What is novel about that is that this is rural Africa, so they are going in about 5-10 years from having nothing but Kerosene lanterns and little flash lights to having solar electricity in their homes, you can have Wi-Fi, 3 G Wi-Fi in your home. I mean, it is crazy the change that is happening. What is innovative about it is how people are figuring out how to go from how to even understanding electricity like the fact that you don’t douse out a light because it is not actually a flame it is electricity, to powering their entire villages. And they are coming up with models, they are coming up with the ability to bring all the technology in, they are making it work, where before you wouldn’t think that it would work.” Caleb Grove, Founder of MBISSA Energy Systems. In 2018, Huddle listed MBISSA Energy Systems as one of the seven New Brunswick based startups to look out for.4

Competition “What I realized is that..If I don’t do it, someone else will ..but.. if I don’t do it, chances are that the someone else who does do it will not be doing a social venture. They will be trying to take every last penny they can from the people they are working with…Like many of the other efforts across Africa where it is almost ruthless business. It is very demanding on the continent itself..It takes a toll..The investment that is coming into the continent, it comes at a price. Often it is at the (cost of ) health of the people, often it is at the cost of natural resources, it is at very cheap labor. So, if I don’t do it, someone 4 Letson,

C. (2018). Huddle. Retrieved July 2019 from https://huddle.today/seven-newbrunswick-startups-to-watch/.

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else will, but if I do do it, I can guarantee that I can give people a vision to improve their own villages from where they are. They don’t have to go the city to work in the factory.” Caleb Grove, Founder of MBISSA Energy Systems. There are other players in Cameroon providing off the grid solar installations. One of the prominent ones in the area is Lighting Africa. Lighting Africa started off with pilots in Ghana and Kenya in 2009 and is part of the World Bank Group’s contribution to Sustainable Energy for All. In partnership with the Energy Sector Management Assistance Program, the Global Environment Facility and several western governments including the United States of America, Canada, and the United Kingdom. However, competitors such as Lighting Africa fail to have the in-depth contextual knowledge and local connections that Caleb has nurtured over time.5

Cameroon and the Context of Energy Cameroon is in the midst of a brutal civil war now. During World War I, the French and English forces had captured Cameroon from the German. The Francophones of Cameroon gained their independence in 1960 and a new country named “La Republique Cameroun” was founded. The anglophone regions joined the newly formed nation in 1961. At present, 80% of the population comprises of Francophone and around 20% are Anglophone. However, around 200 odd languages are spoken in Cameroon in addition to French and English. The linguistically diverse country has been brought to a violent civil war drawn on language. The roots of the present conflict can be traced to peaceful protests organized by Anglophone human rights leaders, teachers, and lawyers. They were protesting against the appointment of Francophone lawyers and teachers to English speaking courts and schools. Most of these activists were imprisoned soon after and the anglophone demands and fighting have escalated since then. With the responsible leadership jailed, the protest fell into the hands of extremist groups who demanded the formation of a new Anglophone country that they call “Ambazonia.” 5 Lighting

Africa. Retrieved July 2019 from https://www.lightingafrica.org/about/.

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Fig. 2.1 Anglophone region of Cameroon (Source: Washington Post)

The government of Cameroon claims that in the spring of 2018 the Anglophone separatist protesters started attacking the military troops and that the government was forced to retaliate. Cameroon has been governed by President Paul Biya since 1982. Paul Biya, a Francophone in his eighties was elected again to a seven-year term in October 2018 in a contested election that elicited little participation from Cameroon’s Anglophone participation (Fig. 2.1).6 Nathalie O’Neil, the outgoing Canadian high commissioner at Canada suggested that Canada would reinforce its economic cooperation and trade with Cameroon in July 2019. She said that Canada had found an important partner for its investments in water in energy in the Minister of Water Resources and Energy at Cameroon, Mr. Gaston Eloundou Essomba. Interestingly, the erstwhile high commissioner added in her parting note that Canada 6 Siobhan

O’Grady. (2019). Washington Post. Retrieved July 2019 from https:// d21rhj7n383afu.cloudfront.net/washpost-production/The_Washington_Post/20190117/ 5c40e368e4b048a6f153fef5/5c4240e4e4b06c96e32f7313_1509128713498-xfd55s_t_ 1547845874846_640_360_600.mp4.

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considered its own bilingual nature as one of its key strengths and would continue to strengthen Cameroon National Commission’s efforts toward sustaining bilingualism and multiculturalism .7

Way Forward By early 2018, Caleb had completed around 40 installations in Cameroon and estimated that he had directly impacted the lives of 250 people. However, as the civil war gained strength in the country, he decided to move temporarily back to Canada. He hopes that one day he shall be able to go back to the island of Mbissa and resume the work he had started. He aspires to develop his business throughout sub-Saharan Africa.

Brief Teaching Note (Please contact the corresponding author to receive the detailed teaching note) The case of MBISSA Energy Systems fits in nicely with the descriptions of bricolage and bottom of pyramid innovations.8 Although the relative innovativeness of the technology at hand seems trivial, the social impact that this incremental innovation has gathered in one of the remotest corners of the earth speaks volumes about its significance.

7 Cameroon Tribune. (2019). Business New Resources from Yaounde. Retrieved from https:// allafrica.com/list/aans/post/af/cat/business/pubkey/publisher:editorial:00010079.html. 8 Baker, T., & Nelson, R. E. (2005). Creating Something from Nothing: Resource Construction Through Entrepreneurial Bricolage. Administrative Science Quarterly, 50 (3), 329–366; Prahalad, C. K. (2012). Bottom of the Pyramid as a Source of Breakthrough Innovations. Journal of Product Innovation Management, 29 (1), 6–12; Siqueira, A. C. O., Mariano, S. R., & Moraes, J. (2014). Supporting Innovation Ecosystems with Microfinance: Evidence from Brazil and Implications for Social Entrepreneurship. Journal of Social Entrepreneurship, 5 (3), 318–338.

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Learning Outcomes from the Case MBISSA Energy Systems can be a perfect example of a bottom of pyramid or bricolage innovation. Under constraints, Caleb and his friends have come up with a solution that is relatively unique in their context of use to provide a clean energy solution to a remote community.

Teaching Outcomes 1. To teach the concepts of bottom of pyramid innovation in a graduate business, technology management or entrepreneurship class. 2. To teach the concept of bricolage innovation in a graduate business, technology management or entrepreneurship class.

Background Readings 1. Baker, T., & Nelson, R. E. (2005). Creating Something from Nothing: Resource Construction Through Entrepreneurial Bricolage. Administrative Science Quarterly, 50 (3), 329–366. 2. Prahalad, C. K. (2012). Bottom of the Pyramid as a Source of Breakthrough Innovations. Journal of Product Innovation Management, 29 (1), 6–12. 3. Siqueira, A. C. O., Mariano, S. R., & Moraes, J. (2014). Supporting Innovation Ecosystems with Microfinance: Evidence from Brazil and implications for Social Entrepreneurship. Journal of Social Entrepreneurship, 5 (3), 318–338.

Assignment Questions 1. What are the factors and conditions that enabled Caleb to introduce a relatively old technology as an innovative solution in Cameroon? 2. How did Caleb use his familiar innovation ecosystems in two different countries to his benefit?

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3. What are the contextual constraints that Caleb exploited to enhance the value of his business proposition?

Case Analysis Process Assignment questions What are the factors and conditions that enabled Caleb to introduce a relatively old technology as an innovative solution in Cameroon?

Case discussion

Class process

The remoteness of the context and the other PESTEL features that contribute to the lack of market forces in the area can be discussed. Caleb’s decision to employ cheap local materials, local village employees, and an inexpensive technology can be explained. At this point, discussion should also focus on comparison between wind and solar solutions and the lack of competition from Lighting Africa in Cameroon

Instructor introduces the case and invites the class to suggest if, why and how they think Caleb’s innovation can be considered as a bottom of the pyramid innovation

Duration (2 hours) 30 minutes

(continued)

2 Harnessing Power at the Edge …

(continued) Assignment questions How did Caleb use his familiar innovation ecosystems in two different countries to his benefit?

10 minute break What are the contextual constraints that Caleb exploited to enhance the value of his business proposition?

Debriefing

Duration (2 hours)

Case discussion

Class process

Having explained the concept of innovation ecosystems, the instructor goes on to differentiate between strong and weak network ties, network churn and the significance of these concepts especially in the context of social enterprises in emerging markets

Students are requested to come prepared with the background reading on innovation ecosystems and asked to draw similarities between the innovation ecosystems in Brazil, Canada, and Cameroon as described in the reading and the case respectively

30 minutes

The bricolage framework is used to explain Caleb’s business value in Cameroon

The class is asked to come prepared with the background readings and invited to present their analysis of MBISSA Energy Systems using the Bricolage framework Instructor debriefs various factors that impede and impel bottom of pyramid innovation and bricolage. The class ends on an examination of the various PESTEL factors that usually affect business sustainability, as in this case in emerging markets

30 minutes

All the key concepts on bricolage and bottom of pyramid are highlighted in the debrief on the case

20 minutes

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3 How Technology Led to the Empowerment of Women Lenders and Borrowers Jennifer M. Walske and Elizabeth Foster

Being able to convince the organization to do something it didn’t want to do was seminal and difficult. Andrea Jung, CEO, Grameen America

History of Grameen America Grameen America (GA) was founded in 2008 with a mission to fight poverty in the United States (U.S.) by providing much needed financial capital to female, small business entrepreneurs. To fulfill its mission, GA For a lengthier version of this case, and teaching notes, refer to the Berkeley-Haas case: Grameen America: The Pivotal Role of Technology in Scaling, distributed by Harvard Publishing.

J. M. Walske (B) Impact@Anderson, University of California, Los Angeles, CA, USA e-mail: [email protected] E. Foster Grameen America, New York, NY, USA © The Author(s) 2020 L. Poonamallee et al. (eds.), Socio-Tech Innovation, https://doi.org/10.1007/978-3-030-39554-4_3

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offers microloans averaging $2300 per person, training, and a supportive member network in a community-lending model, giving its borrowers asset and credit-building opportunities.1 GA is a nonprofit organization that is affiliated with, but separate from, Grameen Bank (GB), the latter of which is headquartered in Bangladesh. GB was founded in 1976 by Professor and Nobel Peace Prize recipient, Muhammad Yunus.2 Importantly, and unlike most commercial banking institutions, GA utilizes the same group-lending model made famous by GB; women first organize themselves into groups of at least five borrowers to create a “center,” guided by a GA loan officer. In return, each borrower can receive a loan of up to $1500 initially, with larger loans available after each six-month loan repayment cycle, depending on the borrower’s attendance record to the center’s weekly meetings and the approval of her lending group for additional funds (see Fig. 3.1 for more on the group lending model). To qualify, each borrower simply must have an annual income below the poverty line.3 Not required is a bank account, collateral, or a credit score. Unlike loans from a more traditional commercial bank, GA loans are not collateralized. Despite the

Fig. 3.1 Group lending model

1 http://www.grameenamerica.org/model. 2 Professor

Yunus also chairs the Board of Directors for GA as noted in http://www. grameenamerica.org/model. 3 Since GA does not require tax filings to prove income, the community vouches for the borrower, that she needs funds and fits GA’s profile.

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perceived high risk of these types of loans by traditional lenders, GA has consistently achieved a repayment rate of 99%4 against its loan portfolio. GA has now been operating for ten years and has expanded its loan operations throughout the U.S., with branches in California, Texas, Nebraska, Indiana, New York, Massachusetts, New Jersey, North Carolina, Florida, and Puerto Rico. By the end of 2017, GA had served over ninety-seven thousand women borrowers and invested more than $820 million into women-led small businesses.5 While GA’s borrowers typically begin with no prior credit history, by the time they complete their first six-month loan, they achieve an average credit score of 640.6 The savings balance of GA borrowers across the network has also grown to over $6.9 million as of 2017.7 According to GA’s Senior Director of Operations and Strategy, Alethia Mendez, a core part of GA’s strategy is to provide capital to marginalized populations as a way to build their assets and creditworthiness, in addition to helping grow their businesses, with the ultimate goal of moving their borrowers above the poverty line.8

Funding Gap for Small Business Women Entrepreneurs In the U.S., the door is often closed to financial capital for women entrepreneurs who live below the poverty line. This phenomenon is exacerbated by the fact that these women often live outside of the formal banking system, without a banking relationship in the form of a savings or checking account and little to no credit history. If these women small business owners do have a banking relationship, prior research has shown a “high level of dissatisfaction” with them.9 There are several reasons given for why this might be so. First, women small business owners are 4 Grameen

America 2015 and 2016 Annual Report. Number audited by PWC. America 2017 Annual Report. 6 http://www.grameenamerica.org/blog/building-credit-grameen-america. 7 Grameen America 2017 Annual Report. 8 Based on an interview with Alethia Mendez on January 16, 2018. 9 Coleman, S. (2002). Constraints Face by Women Small Business Owners: Evidence from the Data. Journal of Development Entrepreneurship, 7, 2. 5 Grameen

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less likely to have a formal education, making the submission process for a bank loan more arduous. They might not know how to submit forecasts for their expenses and revenues, for example, in standardized accounting format, nor how to write a business plan which is often required for bank loans. Second, historically these women entrepreneurs have tended to run companies in industries (i.e., consumer retail or service businesses) that were less attractive to commercial banks for lending purposes. Third, given the disproportionately higher number of male loan officers to female loan officers, some women entrepreneurs fear an implicit bias against them. As a consequence, women entrepreneurs are more likely to use informal or personal financing options (i.e., borrowing money from family or friends) instead of going through the commercial banking system for a business loan. In contrast to the traditional banking model, GA employs women loan officers, which research has shown are “more likely to take part in loans requested by riskier borrowers,” “have better information processing skills with respect to unobservable, soft-information factors pertaining to the character and nature of the loan applicant,” and finally “loans screened and monitored by female loan lenders tend to perform better, being 4.5% less likely to be problematic.”10 It is also helpful that GA’s loan officers are often from the same Latina communities that their borrowers are from, creating an immediate sense of trust. This “trust” is crucial for first-time borrowers, who are new to microlending, and in many cases, new to the U.S. In fact, GA doesn’t require legal residency of its borrowers. Further, the primary language spoken in center meetings is Spanish, eliminating potential language barriers introduced by English speaking only retail bank branches. On a global scale, according to the UN Secretary-General’s High-Level Panel on Women’s Economic Empowerment, there is a severe under capitalization of women-owned businesses. The lack of access to capital results in fewer women-owned businesses, with only 20% of firms located in the poorest countries having female business owners.11 The UN’s research 10 Bellucci, A., Borisov, A., & Zazzaro, A., Do Male and Female Loan Officers Differ in Small Business Lending? A Review of the Literature. MOFIR Working Paper 47. 11 www.WomensEconomicEmpowerment.org, UN Secretary-General’s High-Level Panel on Women’s Economic Empowerment 2016.

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on women’s economic empowerment shows that there are often cultural barriers that create gender pay inequity. This is in addition to the level of “informal” and “unpaid” work expected of women to support their families in comparison to men, often resulting in the overall perception that women’s work is of lesser value. Yet, women achieving greater parity economically is considered a “cornerstone” toward achieving the U.N.’s Sustainable Development Goals: Over the past two decades, there has been progress in closing gender inequalities, especially in education and health. Yet there is still much to do to achieve the full and equal participation of women in society and the economy.12 U.N. Secretary-General’s High-Level Panel on Women’s Economic Empowerment

Other issues identified by the U.N. are the lack of mobility for women in some regions, and women’s inability to own property. Yet, nations with greater gender economic equality and pay parity tend to have higher income levels per capita, faster overall economic growth, and are more economically competitive with other nations.13 So women doing well financially have a positive impact not only on their direct families but on the entire community, across all genders, as well.

Moving from Paper-Based to Cashless, Mobile Banking With a loan repayment rate of over 99% and a desire to expand its reach, GA saw an opportunity to improve transaction efficiency, data integrity, auditing capability, and the borrower experience by infusing mobile loan technology into its field operations (see Fig. 3.2 for its field operations core components). Prior to this technology conversion, a typical GA community meeting could have as many as 30 women borrowers 12The 13 Ibid.

UN Secretary-General’s High-Level Panel on Women’s Economic Empowerment 2016.

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Fig. 3.2 Core components of technology conversion

squeezing into a group member’s living room or business, each carrying cash for that week’s repayment. Each woman would also have in hand a much dog-eared “passbook” in which her loan repayment was recorded by the Center Manager—or CM. The CM would have to collect, count, and document these payments, while tracking attendance and considering group proposals of additional loans, all on separate sheets of paper. Just collecting and recording loan payments could take 45 minutes of an hour-long meeting, with receipts scattered across the floor. As a result, mistakes were made in data entry of loan information. In fact, the loan repayment data had to be entered three times: (1) in the borrower’s passbook, (2) on the CM’s collection sheet and then, later, (3) at the branch office on GA’s computers. Mistakes and delays were common, resulting in a one percent irreconcilable margin of error.14 Even if the data was recorded correctly, it still had to be exported into Salesforce, a customer relationship management software system,15 for internal GA data analysis and for reporting borrowers’ credit scores to various credit agencies (this is important in establishing the creditworthiness of GA’s borrowers, which GA does as a service to its constituency). The manual entering 14 Based

on an interview with David Gough on January 30, 2018.

15 https://www.salesforce.com/products/what-is-salesforce/.

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process, exacerbated by time constraints and the many distractions of a packed room, often led to lost paper or inaccurately recorded loan repayments. If there was an error, it could take hours or days to correct the mistake, if the mistake was caught at all. Historically, GA had relied on software custom-built16 for GB in Bangladesh. In Bangladesh, good technology is expensive and labor is abundant, but in the U.S., the opposite is true: “I can get Internet even in a basement in Brooklyn - whereas I don’t even have reliable Internet in the regional office of Bangladesh,” according to Marcus Berkowitz, Senior Director, Technology and Innovation at GA.17 So, while the legacy software was suited to GB’s unique lending model, it was better suited for the Bangladeshi context than for that of the U.S. Simultaneously, Andrea Jung, since joining GA (Andrea Jung had previously been the CEO of Avon), realized that its cash- and paper-based system was a huge impediment to the organization’s ability to scale. This was especially true given how the world was moving to cashless transactions (i.e., M-Pesa, Apple Pay, etc.)—something Avon had already migrated to several years earlier. The vulnerability of a cash-based system was made more visible by the violent robbery of a loan officer in the New York region. As a result, Jung embargoed opening any new GA branches until the organization moved its loan operations away from cash and into the digital age.

Task Force In order to establish an open dialogue and buy-in across the organization, GA created a technology task force. As David Gough, CFO for GA, emphasized: “Marcus [Berkowitz] was out on his own, and needed a way to engage with different stakeholders in this process. There was a Eureka moment when Jung recommended the task force. We decided

16 http://grameencommunications.org/products/gbanker.html. 17 Interview

with Marcus Berkowitz October 18, 2017.

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who was going to be on it, and it was the head of the different functions that needed to be involved.” The task force, made up of representatives from across the organization included Jung, Gough, as well as GA’s General Counsel (Mary Majewski), its Vice President of Development (Mindee Barham), its Senior Director of Operations and Strategy (Alethia Mendez), its Chief Program and Strategy Officer (Daniel Delehanty) and its Senior Director of Technology and Innovation (Marcus Berkowitz). Unique to this kind of project was having a development officer on the task force, but Jung believed that having Barham’s participation was key to building a compelling fundraising strategy for technology migration. This tiger team met every two weeks initially, to discuss the Brooklyn pilot (conducted close to GA’s headquarters’), its progress, and ways to overcome roadblocks, ensuring proper documentation and feedback throughout. Meeting minutes were taken, agendas were pre-published, and there was a follow-up on delegated items. According to Mendez, the fact that such careful records were created, and issues were so well documented, made it easy for the team to address issues in a holistic way. Upon reflection, Jung felt that running the meetings the way they did created greater discipline throughout the entire organization. The task force believed that even with major improvements in the new banking platform, staff would resist the technology migration if they could not see the features they were used to in the legacy system. “We didn’t want them to feel like they had ‘lost’ anything. So even if the new process in Mambu [the name of GA’s new cloud-based banking system] didn’t require a feature or reporting functionality, sometimes we would build it anyway. Some of these “features” we phased out as users realized they were superfluous, but it was worth the effort,” Berkowitz explained. Another key decision made by the task force was that if the branch operations staff did not find the new system valuable, then GA would not proceed with the system’s national rollout. In fact, GA conducted two pilots prior to the national rollout to: (1) ensure that the new system would be accepted by the frontline loan officers and borrowers (2) ensure demonstrable benefits to the field for migrating to Mambu. According to Mendez, critical for the successful adoption of the technology by the frontline employees “…. was building Mambu in a way that was open

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to feedback and where you could see concrete efforts made in the application of that feedback when you gave it.” This gave the CMs, whose day-to-day job would be most affected by the new software deployment, the confidence to make the switch. According to Gough, “They [Branch Managers] were reluctant to embrace a more advanced technological system due to the fear of the unknown, so there was a persuasion that needed to happen from the operations side.” Once both betas were successfully completed, the official national rollout took place over the course of nine months. The rollout occurred region by region, beginning with the four branches in California, then moving to a number of cities in the Midwest, then the Northeast, finishing with the four largest branches, one of which is in Charlotte, North Carolina and three in the New York region. To support the branches in quickly adopting the new system, each Branch Manager identified a “Mambu Champion,” who received training at headquarters prior to Mambu’s launch at each local branch. The goal was not to pick the most tech-savvy person, but rather someone who could help troubleshoot locally for branch colleagues, and this meant picking someone who was well respected in the branch, but also capable of training others. As such, a champion’s role was twofold: (1) spend a week in the Sunset Park branch (which by then was using Mambu) to be schooled in the day-today practicalities of the new system; (2) to be a local point of contact for updates and ongoing communication between the local branch and the technology team, as it would have been too much for a small headquarters staff to take calls from the field staff during the migration process. In this way, the headquarters staff was able to limit the number of times they had to respond to the same question and focus on more pressing issues in the field related to the system rollout. Through each stage of the rollout, the entire staff had access to a mirror image of Mambu, dubbed the “sandbox.” For the technology team, it was a tool they could use to test new applications, software, and reporting functionalities. For the finance department, it served as a vital check that all loan data from the legacy system was migrated properly to the new system. The field operations team used the sandbox as a training tool to understand how the system worked and to practice inputting data and

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navigating various applications without actually affecting the real system in real time. Transitioning to the new system at first extended the time needed to complete all transactions and take attendance during center meetings. However, within a month, loan processing time required was cut down by an average of 50%. In the past, each branch also had slightly different methods for capturing data—small differences that created challenges for the accounting and data analytics team later on when trying to reconcile loan data across all branches. When customizing Mambu, the technology team looked for ways to standardize how information was reported, like increasing the use of dropdown menus. In the Sunset Park branch, Branch Manager, Maritza Valencia explained that moving over to using Mambu was not easy, and her team of eight was at times frustrated by not being able to input information in the way they had been used to “…but now they love it. If you’d ask them ‘Do you want to go back to the old system?’ they’d say ‘Never!’”

New System Benefits The benefits of the migration to Mambu surpassed just gaining a cloudbased software system.18 They also included: improved loan processing, enhanced internal and external auditing capabilities, and an overall better borrower experience that laid the groundwork for transitioning borrowers to fully digital financial transactions. Figure 3.3 provides a comparison of the features offered by the legacy system and Mambu. For GA’s headquarters, after the new platform rollout, the team has more accurate data, leading to better data analytics. They also now have detail on each center, to conduct surprise audits, allowing headquarters’ staff to more easily detect fraud based on data irregularities. Most importantly, the new system increased the information that the field operations staff has at their fingertips, empowering the CMs responsible for verifying

18 In the past, the company was spending most of its It budget on maintaining servers. Now, since the SAS software was cloud-based, GA no longer maintained servers, and instead, invested its time on the interface between its internal personnel and its software vendor, Mambu.

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Legacy system

Mambu

N N N N N

Y Y Y Y Y

Integration, Administrative, and Technical Open APIs for new software integration Sandbox for training/testing 80+% of changes can be made on-site without asking vendor Web/cloud-based storage and backup of data

N N Y N

Y Y Y Y

User Interface and Reporting Third-party mobile app capability for simple collection processing/consistent data Feature to track performance granularly; multiple metrics at the CM level Feature to allow for remote approvals to speed up the acquisition process

N N N

Y Y Y

P N N

Y Y Y

P N N

Y Y Y

Borrower Accounts and Consumer Protection Automatic application of all payments directly to borrower’s account Borrowers can log into their own accounts independently Automatic text receipts for certain transactions Account "flagging" of info regarding problematic borrowers across system Ability to store photos and documents

Accounting Transaction-level drill down capability from the General Ledger and Trial Balance Ability to reprint daily reconciliation/closure reports Elimination of the need to manually enter items into the accounting module More granular views of the following reporting functions; a. Borrower accounting report b. Delinquency reporting by age, CM, branch, region, etc. d. Portfolio development by CM/branch/region, etc.

Note: “N” means that this was not previously available, “P” means that it was partially available, and “Y” means that it was (is) available.

Fig. 3.3 Feature comparison

loan payments, running the weekly borrower meetings, and approving new loans within their communities. There were many improvements to GA’s field operations which directly impacted loan officers and borrowers. This includes a decrease in theft by moving away from a cash-based system. In the past, borrowers made their weekly loan payments either in cash or as a money order and the CM was responsible for depositing the payments on his/her way back to the branch office. Both the borrowers and local CM were therefore sometimes targeted for theft, a risk that was exacerbated by the regularity of the meetings and the consistency of routes taken to and from the meeting locations. Mambu works seamlessly with another program called PayNearMe, which allows each borrower to repay the weekly portion of the loan at a nearby CVS or 7-11 store prior to each week’s center meeting. With the

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ease and improved safety that Mambu and PayNearMe create, borrowers rarely choose to pay back loans in cash.19 Now, when a borrower takes out a new loan, she receives a text message on her phone with key information, such as her weekly repayment amount, the interest rate, and the date and time of her weekly meeting. When making payments through PayNearMe, in addition to the paper receipt she presents to the CM, each borrower receives a text confirming the payment has gone through. Finally, the borrower also receives a weekly text with the remaining principal amount on her loan as well as the interest due. Beyond these helpful SMS updates, in the future, borrowers will be able to log in and access their loan information on Mambu at any time, a feature that the legacy system could not provide. The increased efficiency of the transaction process greatly reduced the time needed during meetings to collect, input, and reconcile loan payments. Not only has this set a more professional tone to the meetings, but also the CMs can now use this saved time to build community and go deeper into topics useful to each woman’s business. According to one borrower, “The weekly center meetings are a chance for her to exchange ideas, and everyone is full of creative advice and suggestions.”20 GA is in the midst of assessing how to make the most of these time savings to keep borrowers engaged and support the growth of their borrowers’ businesses. Likewise, CMs are now empowered to review loan and borrower information on the fly. For example, CMs can quickly detect patterns in absences or late payments loans, allowing them to flag a problem at weekly center meetings. Taking such actions in weekly meetings is crucial, as it can be difficult to contact borrowers between meetings. If a new loan is being considered for a borrower, this can also be reviewed with center meeting leaders in and around the weekly meeting.

19 GA 20 Q2

is committed to always accepting some cash in the spirit of full inclusion. 2017 Report.

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Organizational Efficiency In recent years, as GA scaled its impact and community groups grew larger in size, handling all of the transactions and managing borrowers’ paperwork became a real burden to the CMs. Additionally, the more borrowers in the meetings, the more likely the CM was to make mistakes that then took hours to later rectify. Now, with less time devoted to processing cash payments by hand, GA staff can lend to a greater number of female entrepreneurs, amplifying the organization’s impact. Since the technology rollout began, the caseload benchmark (the point of maximum efficiency) has increased from 400 to 500 borrowers per CM. Even with a 25% increase in the caseload per CM, GA CMs state that they now have more time to support each of their borrowers.21 Before Mambu, the data entry process was prone to errors and important paperwork was easily misplaced. The three-step process of inputting loan information has now been simplified to just one step. The decrease in the number of manual entries has greatly improved the integrity of the data entered into the system, as has the standardization of the response data. Furthermore, with the prior system, if a staff member wrote down the incorrect information in his/her collection sheet, it could take hours, if not days, to identify and resolve the mistake with the borrower. With the SMS capabilities of the new system, a borrower receives information directly on her phone within moments of completing a transaction and any inconsistencies can be addressed before the staff and group borrowers leave the weekly meeting. Not only has the new software improved the integrity of data, it has also allowed GA to better analyze the performance of branches, the success of its borrowers in both repayment and retention, and a myriad of other important performance-related data. Stronger data mining capabilities now aids GA in seeing irregular patterns and determining potential areas of fraud. Matthew O’Neill, Senior Manager of Finance and Impact Evaluation, explained, “We can use analytics at the branch level to see if they’re functioning properly. If loans in one loan officer’s portfolio are going delinquent, we can now quickly follow up to see why and how we 21 Interview

with Alethia Mendez January 16, 2018.

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might support that employee.” In addition to analyzing data as an important management tool, it has also allowed GA to be more responsive during crisis situations, such as in Puerto Rico when Hurricane Maria made landfall in September 2017.22 In the aftermath of the incredible devastation that occurred throughout Puerto Rico, GA was able to process emergency loans more quickly and pause repayments so that borrowers did not become delinquent.23 With improved data collection and integrity, GA also has improved its management of field operations. The GA leadership team now has the ability to better monitor each of its branches, including the ability to conduct “surprise” audits. Previously, surprise audits were difficult to administer, as calling the branch to find out community meeting times automatically alerted the region to pending audits. Now, GA team members can easily conduct audits with no advance warning to either the branch and/or CMs. The technology migration also created stronger controls around how information in the system can be manipulated or accidentally impaired. Now, if a CM wants to update member information or loan data, she must go through the branch manager. Lastly, Mambu has made it simpler to flag atypical numbers and trends in the data collected at the center, branch, and system level. The legacy system was focused on branch operations, and as a consequence, did not meet the very practical needs of the headquarters’ accounting team. Previously at GA, loan data had to first be uploaded into Salesforce and then go through a “scrub process” to get portfolio data each month cleaned up and presentable. This process, which took ten to twelve days of someone’s time, was a critical step to ensuring the data was correct, complete, and properly formatted. Mambu has made this scrub process practically unnecessary and it can be completed in a day. GA’s Director of Accounting, Andrew Horrow, said: “When we’re being audited, we can literally just give the auditors the login information if we wanted. Mambu makes it so much easier!”

22 https://www.theatlantic.com/science/archive/2017/10/what-happened-in-puerto-rico-atimeline-of-hurricane-maria/541956/. 23 Interview with Marcus Berkowitz October 20, 2017.

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The new system also resulted in improved social impact reporting. In the past, a survey that captured information about the borrower and her business was paper-based and not mandatory to receive a loan. Just like with the loan information, the survey data collected manually was prone to errors, in which case whole surveys had to be dismissed. With Mambu, surveys are now required with each loan and thus, GA personnel can track the impact its loans have on borrowers at roughly six-month intervals. By being online and organized with dropdown menus, there is little room for error. As such, the new system has dramatically improved the quantity and quality of information that the Impact Evaluation team can use. Further, the Impact Evaluation team, which used to rely on data that, by the time it could be exported and cleaned up, would be one to two months out of date, can now run reports and have workable data in moments. When reporting to current and potential funders, the team also has more confidence that what they present externally is accurate and timely. “In looking for partnerships or grant opportunities, we analyze what our portfolio looks like at each level (i.e., branch, region, national) and where the growth is going. This serves as the basis for what we present donors. Now we feel much stronger about the quality of what we’re presenting,” Matthew O’Neill, Senior Manager, Financial Analysis and Impact Evaluation, explained. The new system also improved each branch’s return on investment (ROI). For example, GA’s Jackson Heights branch became the first domestic branch to achieve 100% branch financial sustainability (i.e., the cost of processing loans is offset by revenue generated from the interest on those loans). Today, additional branches have become financially self-sustaining and the organization overall is more than 60% financially sustainable. By both decreasing the needed branch staff from ten to nine persons, and improving the caseload per CM, GA expects the number of self-sustaining branches to grow at an even faster rate, with the organization soon becoming 100% financially self-sustaining based on its operations. While GA will continue to seek donations, in the future the capital it receives can be freed up to fund more innovative, and newer initiatives, rather than supplementing ongoing operations (Table 3.1). Through open Application Programming Interfaces (APIs), Mambu can seamlessly integrate with other off-the-shelf software applications.

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Table 3.1 MIS technology impact Borrower benefits Institutional benefits Efficiency enhancement Flexibility to make all loan payments before each meeting at a local 7-11 or CVS

Faster processing of borrower repayments by GA staff

Improved safety and reduced theft by eliminating cash payments

Reduction in time and resources spent to handle security incidences Errors noted and resolved immediately rather than hours later in the branch office

Access to loan information via SMS

Support during times when struggling to make payments

Improved borrower experience due to professionalism of the meetings and loan process

Timely information so CMs can follow up with borrowers before problems grow Reduction in “lost” time to paperwork and disorganization, and more focus on building a borrower community

Cost savings

Performance improvements

Decrease in staff time spent per transaction, due to sunsetting of passbooks; decrease in paper used per borrower Decrease in lost payments due to theft or human error

Decrease in data input errors (as information is already in the system)

Staff time saved from addressing mistakes; more accurate payment amounts

Ability to grant a higher volume of loans due to more efficient loan processing (i.e., a single-entry process)

Decrease in lost morale and revenue due to theft

Delinquent loans recovered before they become “lost”

Improved retention of borrowers

Ability to have more borrowers in each center meeting if desired

(continued)

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Table 3.1 (continued) Borrower benefits Institutional benefits Efficiency enhancement Opportunity to take part in more training or spend more time on their businesses Important borrower documents are secure and organized in the cloud

Higher CM satisfaction as they can now focus on relationship building with borrowers Finance team takes 80%+ less time to prepare audited materials

Cost savings Improved staff retention

Performance improvements Higher likelihood of repayment if businesses are more successful

Auditing process requires