Green or social recovery? What we can learn from others to turn the COVID-19 crisis into an opportunity
How to rebuild our economy? These three initiatives from Nigeria, the USA and Great Britain should be known by all policy-makers.
Green recovery. And where is the “social”?
The COVID-19 crisis is making many of us think. What kind of world do we actually want to live in? The economy has crashed – do we want to rebuild it the same way as it was before? Or maybe we do it a bit differently this time?
The current discussion about the planned trillion-dollar packages to support the economy in Europe focuses on “green recovery” – the strengthening of green economic sectors coupled with ambitious climate protection targets. It is remarkable how many leaders of major corporates publicly show their support. In the run-up to the Petersberger Climate Dialogues at the end of April, 68 companies had drafted a joint call to action for the German government, asking for a more ambitious climate policy. In France, a similar initiative of over 90 companies called in an open letter to LeMonde for an ecological transformation of the economy. In addition to companies such as Danone, which have already launched many social-ecological initiatives, or insurers such as Generali or Allianz, which at some point will have to bear a disproportionately high share of the costs of a misguided policy, there are surprisingly many companies for whom an ambitious climate policy represents a major challenge, such as HeidelbergCement, Thyssenkrupp or the French energy giant Total. There is quite some positive momentum.
To seize the opportunity for a “green recovery” is important, but it falls short of the opportunity which we have. There is more to do than just boosting green technology or an e-mobility infrastructure. What we miss is to reflect the enormous potential of the social impact sector as well as of all the inspiring, social or green business models, which the younger generations are capable to design and implement. It’s their future!
We need the diversity of ideas of the younger generation
What we call for: Let the younger generation get on with developing and implementing the business models of the future! What we need is empowerment for people who take the initiative with fresh ideas and develop a variety of impact-oriented business models. Entrepreneurship as an educational content in schools could be an important element. The promotion of social entrepreneurship business models, which are sometimes less profitable but which specifically solve a social or societal problem that would otherwise not be solved or financed by public funds, could be a second element. A “green recovery” decreed by politicians, perhaps even narrowed down to clean tech and electromobility, would be a missed opportunity and would misjudge the diversity of the 17 Global Goals, the UN sustainability goals.
«Let the younger generation get on with developing and implementing the business models of the future! What we need is empowerment for people who take the initiative with fresh ideas and develop a variety of impact-oriented business models.»
There are enough studies that show that the younger generations are looking for jobs with meaning or are looking for products and services that are in line with their values. Politics should trust the younger generation and create a space in which new concepts and ideas can develop. The digital participation process WirVsVirus, initiated by the Social Entrepreneurship Network Germany (SEND), among others, has impressively shown how agile and powerful the social entrepreneurship sector in Germany is. 28,361 people were involved in March with contributions to overcome the COVID-19 crisis. Within days, more than 1,500 solutions were developed, 130 of which are currently being developed into concrete products and business models.
We have ventured to look beyond the horizon and have identified three initiatives which, in our view, can stimulate the discussion about a “green + social” recovery. These have been developed in Nigeria, the USA and England. Their impact, however, goes far beyond that.
How to create a major wave of young startups – Tony Elumelu
Tony Elumelu is a successful entrepreneur from Nigeria. He has bought and converted several banks and accumulated a huge fortune. What does he do with it? Through his foundation, established in 2010, he supports 1,000 start-up entrepreneurs in Africa every year with 10,000 dollars – for 10 years. That means 100 million dollars altogether. The support includes mentoring services as well as a start-up capital in the form of a non-repayable grant of 5,000 dollars.
Launched in 2014, the TEF – Tony Elumelu Foundation Entrepreneurship Programme is likely to be the world’s largest privately funded start-up initiative. Tony Elumelu is even ahead of his plan. After six years, he has already supported 9,172 African start-ups from 54 African countries, selected from over 300,000 applications. The huge interest in his programme shows that innovative ideas from African entrepreneurs are only just sprouting and that the network has huge potential to grow even further. Through partnerships with African companies, the Foundation is able to expand its support for entrepreneurs even further, for example by arranging follow-up financing. Tony Elumelu expects his initiative to generate an additional 10 billion in revenue for the African economy and create one million new jobs.
«We are committed to entrepreneurship as the key to accelerating Africa’s social and economic development» Tony Elumelu, Founder TEF
While political advances for a sustainable transformation of the economy – whether here or in Africa – are bogged down in bureaucracy or party disputes, Elumelu is unwaveringly pushing through the project financed with his own money.
Digital tools are playing an increasingly important role. With TEF Connect, a digital platform with already more than 800,000 users, Elumelu has created a powerful networking platform for African entrepreneurs. In a 12-week programme of e-learning courses, mentoring coaching and meet-ups, entrepreneurs are empowered and mutually inspired within their companies. An annual forum brings together the most important decision makers in the African economy as well as global and African entrepreneurs.
Elumelu is convinced that a wave of entrepreneurs not only strengthens income and job markets, but also contributes to many other goals of sustainable development (SDGs). Start-ups that do not solve socially relevant problems are finding it increasingly difficult. A look at the supported start-ups shows how agile the start-up scene in Africa is. Quite a few of the supported start-ups are facing the new challenges posed by COVID-19.
For example, the company of Mohammed Akamera in Sierra Leone. To stop the spread of the virus by touching taps, he invented a tap that can be switched with the foot. The tap is made with locally available and recyclable materials and, with the support of the government of Sierra Leone, is now being introduced into communities, homes, offices, shops, markets and schools.
How to boost a positive, entrepreneurial mindset among the youth – NFTE
The Tony Elumelus Foundation mainly supports young founders – because of the young average age of the population. The non-profit organisation NFTE – Network For Teaching Entrepreneurship goes a significant step further and is aimed at young people between the ages of 13 and 18.
Their conviction: We need an entrepreneurial mindset and a profound understanding of what entrepreneurship can do for society so that the upcoming generation can solve the problems that arise – whether climate protection, financial security or strengthening social cohesion in society.
True to this motto, NFTE has been committed to the integration of entrepreneurship as an educational content in schools since 1987. First in the USA, and later internationally. NFTE is active in 15 countries, since 2004 also in Germany. A total of 1.1 million students were accompanied, 27,900 of them in Germany.
«Teaching entrepreneurship changes the way people think, changes their lives, changes the world. We must equip young people with the vision of an innovator and the courage of a founder – the skills to excel in an innovative economy.» NFTE
The aim of the NFTE association is to strengthen self-confidence, initiative, and entrepreneurial thinking and acting among young people, especially among schoolchildren* with rather poor starting opportunities, who are strengthened in their personality by the NFTE programme and are thus better equipped to overcome their social disadvantage.
NFTE USA developed 8 modules in which the students learn to think like an entrepreneur and in which they develop their own business idea for a product or service. The courses take place partly online and partly in the schools. The culmination is the local and then national competition, where the students present their projects in presentations. The winners receive seed capital, which they can either invest in the implementation of the business project or use for their further education. The German NFTE has adopted the programme in this way, and organises an annual European competition together with the European NFTE organisations. In Europe, there is the Youthstart network, which unites the European national NFTE organisations and other entrepreneurship initiatives.
In a three-day training for teachers, they can distinguish themselves from NFTE to Certified Entrepreneurship Teachers, who carry out the NFTE course material with the students. Further advanced courses are possible. In Germany, the association works with more than 800 schools and supports about 2,200 teachers. Given the 750,000 or so teachers employed in Germany, there is still plenty of room for improvement.
With its “World Series of Innovation” programme, the organisation has also developed a series of online challenges for schoolchildren, the aim of which is to develop business models that make a targeted contribution to the 17 UN sustainability goals. The digital program is partly supported by company partnerships that contribute their own impulses or mentoring services.
How to give the entire social impact sector a major boost – Big Society Capital
Tony Elumelu’s and NFTE’s programmes are broadly based and aim to strengthen the overall entrepreneurial spirit. They promote the 17 Sustainable Development Goals (SDGs); however, the focus is on the own entrepreneurial idea and its successful implementation.
However, there is a wealth of business models that specifically address a social or societal challenge and often cannot operate as profitably as a traditional company. This social entrepreneurship sector has enormous potential, but will remain underdeveloped if it is not supported by politics. This is because investment capital is largely geared to financial returns and only to a limited extent to “social” returns.
With Big Society Capital, the British government has created a fund that specifically strengthens this new, social economic sector. And it has done so with concentrated force: 1.9 billion pounds are available for this purpose. 1,251 social enterprises and charities have been supported by Big Society Capital to date.
The aim is not just to support individual companies, but to have a positive impact on the entire system and to create space for hybrid models that combine the best of both worlds: solving social problems and doing so through a self-sustaining business model.
With the Access project, Big Society Capital is working to make charities and social enterprises in England more financially resilient and self-sustaining. Through Good Finance, Big Society Capital provides training and workshops to help charities work on an equal footing with social investors, potentially increasing the impact of their organisation. Webinars, new case study content and videos are available on the website. It also provides a network to connect entrepreneurs with social investors.
Strategic and long-term changes are the focus of Big Investment Capital. With a strategic investment, Big Society Capital supports e.g. charities in buying apartments to make them available to the homeless, which is financially more sustainable for the charities than renting apartments. They also developed a one-year pilot project in collaboration with two social investment funds and an Impact Leader Academy, during which 12 companies received research grants to test the impact of their products and services. These companies work largely with digital tools and address issues such as perinatal and child mental health, workplace solutions for employee well-being and peer support platforms around mindful drinking and self harm prevention for young people.
The money for Big Society Capital comes from so-called dormant or dormant accounts, i.e. bank accounts whose owners could not be identified for many decades. It is to be welcomed that the idea is now also being intensively discussed in Germany.