What is the proper role of the haves in helping the have-nots? That age-old debate is only recently coming into focus in the world of social entrepreneurship. A few weeks ago I wrote a post for Harvard Business Reviews blog asserting that the US is a laggard and not a leader in social innovation. With remarkable synchronicity, Bruce Nussbaum, a leading light in the design world wrote a post for Fast Company Design asking, “Is Humanitarian Design the New Imperialism?” a few weeks later. 

Our posts, similar in nature, obviously touched a nerve, as evident in the comments (there’s also a good round-up of various blogosphere reactions here). While many people agreed, dissenters accused both Bruce and I of ignoring positive examples, denying that the haves can do any good, and championing a defeatist “do-nothing” ethic.

I’d like to answer some of the charges by amplifying on my perspective.

The problem as I see it is a great number of social entrepreneurs (though by no means all), who ignore two fundamental rules of entrepreneurship, 1) Know your customer, and 2) Maximize your competitive/comparative advantage.

In the first case, I think we should be inherently skeptical (though not dismissive) of the developed world entrepreneurs’ understanding of customers/beneficiaries living in poverty elsewhere, no matter what their training or experience here. Too often we’re seeing “solutions” designed from afar based on a cursory understanding of the lives of the poor gleaned from simple statistics or quick field visits. When that happens, we see failures of the sort common in international aid recently epitomized by OLPC and PlayPumps. A great example of how distance from customers affects the way an entrepreneur thinks is evident in this “conversation” between Iqbal Quadir, founder of GrameenPhone and father of the cellphone revolution in the developing world, and Nick Negroponte, founder of OLPC. A close reading reveals plenty of the “Imperialist” mindset Bruce called out in his post. The core of imperialist thinking is the belief that “we” know better than “they.” The fact that the organizations making the biggest impact worldwide today, as I noted in my HBR post, are coming from “them” is powerful testament to the absolute requirement for knowing your customers. On a side note, the importance of local knowledge also means we should never run voting contests for social entrepreneurs.

The second rule applies not only to an entrepreneur’s company but to themselves. What is the competitive advantage of developed world social entrepreneurs and of the people who support them? Given that they are unlikely to have the best knowledge of customers, it’s almost certain that competitive advantage isn’t going to be in idea generation, at least of ideas that will work rather than just look elegant. It’s far more likely to be in supporting local people with ideas and helping them turn their ideas into companies, and growing those companies. That’s why I argued in the original piece that the US social entrepreneurship community should be far more focused on finding and funding ideas there than running contests and training people here. Though even this needs to be done with caution—plenty of entrepreneurs have learned the dangers of becoming too close to funders and too distant from customers.

None of this means that the haves don’t have a role in global social entrepreneurship or that it’s impossible for them to gain local knowledge and generate good ideas—it certainly doesn’t mean we in the developed countries should do nothing. It is an argument for partnership and collaboration between the haves and have-nots—but partnerships that recognize that the leadership must come from those who are closest to the customers. 

There are good examples of such thinking already in practice—take for example the Legatum Center for Entrepreneurship and Development at MIT or the percentage of Unreasonable Ventures from the developing world. Like elsewhere in philanthropy, we need more good examples and fewer good intentions in social entrepreneurship and humanitarian design.

Read more stories by Timothy Ogden.

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