Meng Zhau, Assistant Professor in Strategy and Organization.
Social innovations are, by nature, implementation and promotion of social programmes. They can be seen everywhere: at schools, hospitals, government and even in business. In general, this is philanthropy.
Social innovations substantially belong to nonprofit institutions. But big profit companies also participate in social events. For instance, Ford takes an active part in fighting AIDS, Levi’s is fighting racism an so forth. Besides Meng Zhau mentioned that companies changed a philosophy of business conduct itself: from how to earn to how to impact. They move from stock activities to a possibility to impact shareholders’ decisions. Companies act as social change agents.
One of the most successful examples of social innovations is microfinance (granting of micro-loans to low-income clients). This approach is successfully developed in Asia. In India 40 million people who live rough are engaged in microfinance. For instance, according to one of the models people received amounts of about 10 dollars to purchase, e.g. poultry, cattle or seeds. For a year those people could improve their economy, rise to their feet, repay a loan and continue their business. In China as early as in 1998 100 million people in villages and provinces took microfinance opportunities for a total amount of about 89 million dollars!
It can be said that venture philanthropy is moving from Europe and the US to Asia. According to US National Intelligence Council, 1.5 billion people will have been able to get to the middle class by 2025.
When asked “Why is there no microfinance in Russia and is it possible on the Russian territory at all?”, Meng Zhau replied that there were no proper conditions to implement such programme. Legal base is required to regulate that process. Eventually, there has to be a bank in every village allowing everyone to make a loan. Social innovation performance in Russia, e.g. a percentage of those engaged in social entrepreneurship, is very low even as compared with other BRIC countries. It is us now that are able to encourage the appearance of more non-profit institutions in Russia and seek governmental support of such institutions, at least by reducing taxes. We can change an actual state of things and help our country to reach a new level. Do you have any idea of how to improve the situation? Or your own opinion about it? Please comment here!