The $2 Trillion Economy in Hidden View
It pays to know where enterprise grow.
Peter Drucker noted: “Every single social and environmental issue of our day is a business opportunity in disguise.”
Nice. Yet this raises important questions:
Who is seizing these opportunities while social and environmental challenges continue to escalate worldwide?
And, are the challenges merely accumulating, or is there a balancing of the equation?
Who, if anyone, is winning?
The latest Global Innovation Index (GII) 20241 by the World Intellectual Property Organization (WIPO) confirms a contribution by up to 11 million social enterprises and 30 million social entrepreneurs, who collectively contribute approximately USD 2 trillion to global GDP.
These figures indicate a significant shift in the global business environment, where entrepreneurs around the world are tapping into global talent and resources, and leveraging technology to address widespread problems.
This evolution presents valuable lessons and commercial opportunities for business leaders around the world.
Success Beyond Big Tech
The GII 2024 report confirms that social enterprises contribute meaningfully to the global economy while addressing issues such as poverty, environmental sustainability, and social injustice. These enterprises showcase innovation, value creation, and capture beyond typically cited examples of big tech, offering invaluable lessons that have global applications.
Here is a high-level overview of examples of such enterprises from around the world:
Bandhu Tech2
Location: Based in India, operating across various urban centers.
Problem Addressed: Housing insecurity among migrant workers.
Innovative Solution: Bandhu Tech utilizes an AI-enhanced platform to match migrant workers with affordable housing options, optimizing the search process based on proximity to work, affordability, and community resources.
Impact: By providing stable housing solutions, Bandhu Tech improves the quality of life for migrant workers, enhances their job stability, and contributes to urban economic development.
Green Bio Energy3
Location: Based in Uganda, operating primarily in rural and urban areas.
Problem Addressed: Deforestation and pollution from traditional cooking fuels like wood and charcoal.
Innovative Solution: Green Bio Energy produces eco-friendly briquettes from organic waste materials, offering a cleaner burning alternative.
Impact: This initiative contributes to environmental sustainability and fosters local employment and provides more sustainable cooking fuel alternatives.
Peek Vision4
Location: Based in the UK, operating across Africa and Asia.
Problem Addressed: Lack of access to eye care in remote and underserved areas.
Innovative Solution: Peek Vision offers mobile eye-health services using smartphone-based technology that enables screenings and basic diagnostics, accessible by non-specialists.
Impact: This approach allows for early detection and intervention, significantly reducing the burden of blindness and vision impairment in communities where access to healthcare is limited.
Thaki5
Location: Based in the USA, operating primarily in the Middle East.
Problem Addressed: Educational disparities, particularly affecting refugee children.
Innovative Solution: Thaki refurbishes donated laptops, equipped with educational software, to bridge the digital divide.
Impact: This initiative reduces electronic waste and enhances educational opportunities for children in refugee camps and underserved communities, aiding them in developing essential skills for their future.
Community Design Agency6
Location: Based in India, operating in various low-income regions.
Problem Addressed: Lack of suitable and sustainable housing for low-income communities.
Innovative Solution: The agency involves communities directly in the planning and design process of housing projects, fostering a participatory approach.
Impact: This method ensures housing meets residents’ needs and fosters community cohesion, with projects more likely to be sustainably maintained.
Innovation > Development
The GII 2024 report highlights a significant trend: several developing economies are surpassing expectations in innovation relative to their economic development levels.
This year, 19 economies are recognized as innovation overperformers, predominantly located in Sub-Saharan Africa, Southeast Asia, East Asia, and Oceania. India, the Republic of Moldova (ranked 68th), and Vietnam lead this group for the fourteenth consecutive year. These countries have consistently demonstrated their ability to foster innovation despite economic constraints.
Additionally, Indonesia, Pakistan, and Uzbekistan continue to maintain their status as innovation overperformers for the third consecutive year, with Brazil marking its fourth year.
This pattern confirms the capacity of entrepreneurs and enterprises within these nations to effectively innovate and create value. Consequently, these economies are likely to witness enhanced economic opportunities, increased international purchasing power, and the pursuit of ambitious goals by enterprises and entrepreneurs both locally and globally.
The Shift
This shift is enabled by several concurrent factors:
Adapting Innovation for Local and Global Impact
The evolution of social entrepreneurship marks a shift in how businesses approach innovation and impact. Innovations in this sector often involve processes and products specifically designed to meet local needs while being globally scalable. This focus reflects a deeper understanding of the challenges different communities face and the opportunities that arise when solutions are tailored to these unique contexts.
Emphasis on Collaboration and Open-Source Strategies
The shift in social entrepreneurship is characterized by a stronger emphasis on collaboration and open-source strategies. Social entrepreneurs are increasingly leveraging collaborative networks to enhance their impact and reach. By sharing knowledge, resources, and technologies openly, they speed up the innovation process and increase its efficacy. This ensures that successful solutions can be adapted and implemented across different regions.
Leveraging Technology and Networks
Additionally, the accessibility of advanced technologies and robust networks plays a crucial role in reducing the cost and complexity of launching and scaling social enterprises. Modern technology platforms enable entrepreneurs to reach wider audiences, streamline operations, and manage resources more efficiently. For instance, cloud computing allows for cost-effective data management and analytics, mobile technology facilitates communication and transaction in remote areas, and social media platforms provide powerful tools for marketing and community engagement.
Enhanced Agility and Responsiveness
This technological empowerment, combined with global connectivity, means that social enterprises can operate with greater agility and responsiveness. They are better equipped to identify needs, prototype solutions, implement feedback, and scale successful models across different geographies. The result is a more dynamic, inclusive, and sustainable approach to addressing global challenges through local solutions.
What to Expect Next
The landscape and collective impact of social entrepreneurship is set to continue to grow, driven by the scaling of local solutions to global challenges and technological advancements. Key developments to watch include:
Deeper Integration of Technology: Enhanced use of AI, blockchain, and IoT will streamline operations and increase the impact of social enterprises.
Increased Cross-Sector Collaborations: Partnerships across businesses, non-profits, and governments will pool resources and extend the reach of social initiatives.
Supportive Government Policies: Expect more incentives, such as tax benefits and grants, to encourage the growth and sustainability of social enterprises.
These trends suggest a future where socially focused business models are increasingly recognized for their ability to drive sustainable development and inclusive growth, attracting more entrepreneurs and enterprises to this vibrant sector.
Next Steps for Business Leaders
Here are two practical and actionable steps for business leaders to take heading into 2025:
Assess lower middle-income and low-income innovation hubs: Consider the first- and second-order implications of the social outcomes and economic activity in these parts of the world. Do they represent new clients, customers, collaborators, or possibly competitors?
Identify gaps in networks: If it would be beneficial to learn more about commercial or collaborative opportunities in these parts of the world, or to leverage successes achieved in these regions, start by bringing key individuals into your professional network. It begins with a simple email or direct message, followed by an exploratory conversation.
The Signal
When we see the bigger picture, we can play a bigger game.
At times, innovation at home may seem underwhelming or may be criticized for its cost and complexity relative to the return on investment. Yet, innovation is thriving in various parts of the world.
What is disguised today - challenges and the opportunities being seized - may become tomorrow’s disruption.
For business leaders globally, the approach taken by 11 million social enterprises and 30 million social entrepreneurs presents a blueprint for merging profitability with purpose. It also signals where economic opportunities are strengthening around the world.
Do You See Problem or Possibility? Why Changing Your Focus Can Change Your World
“I always think about the family members and the friendships we lost because we were on the move. I miss the evenings when we used to sit together. I miss the Euphrates River. I often think about the bridge I had to cross to go to work. Every time I walked on this bridge, I closed my eyes because I was afraid. It was hanging on strong ropes, and it wasn…
https://www.wipo.int/web-publications/global-innovation-index-2024/assets/67729/2000%20Global%20Innovation%20Index%202024_WEB2.pdf
https://www.bandhu.work/
https://greenbioenergy.org/
https://peekvision.org/
https://thaki.org/
https://communitydesignagency.com/
Great post. Many of these people can be future collaborators and their needs served can change how we all use products.
I enjoyed this post Sophie, and have learned from it too, thank you for this.
I’ve seen many videos recently about underserved or what people call “third world” countries (I personally dislike the term) coming up with extremely intelligent and innovative ideas to repurpose things they already have plenty of. Whether it’s coconut husks that serve as insulation for the ice bags and cold bags, or plastic being used as bricks.
They generate these business ideas out of necessity, almost, which is based on needing a solution due to lack of resources but a lot of resourcefulness, not really just because they want yet another subscription to a TV channel or something like that.
I also enjoyed the post of yours you reference from September. We should celebrate and promote more of these companies.
One that I saw in Europe is Lunettes pour Tous (Glasses for all) which has a bus you can “book” for your council or smaller towns and communities and they’ll sell glasses for 1/10 of the usual cost, and within 10-30 minutes, including a consultation that will tell you your needs as per the measures with an optometrist.
Very much needed in rural areas where people might not have access to transports and stores such as those. I wonder if there’s something similar for refugees and other communities apart from Europe. I’ll take a look!