A New Alliance for Global Change

Topics: Strategic management, Business model, Business Pages: 16 (5174 words) Published: September 29, 2010


ARTWORK Josh Keyes, Burst I, 2009 acrylic on panel, 30" x 80"

A New Alliance
56 Harvard Business Review September 2010


Bill Drayton is the CEO of Ashoka: Innovators for the Public, a global organization with headquarters in Arlington, Virginia.

Valeria Budinich is the founder and chief entrepreneur of Ashoka’s Full Economic Citizenship Initiative.

Working together, corporations and social entrepreneurs can reshape industries and solve the world’s toughest problems. by Bill Drayton and Valeria Budinich

for Global Change
September 2010 Harvard Business Review 57


Social Ch Change

Making Emergency Care More Efficient

Medical Care

In India, many lives are lost for want of timely medical care. Not acceptable, decided a group of young Indian professionals, who started Dial 1298 for Ambulance. This initiative makes ambulances simple to access through an easy-toremember four-digit telephone number and provides service regardless of a person’s ability to pay, charging on a sliding scale. With the help of global positioning and realtime tracking systems, the quick dispatch of 1298 ambulances has so far saved some 50,000 lives in Mumbai. —Rasika Welankiwar

work is performed, and businesses grow. Collaborations between corporations and social entrepreneurs can create and expand markets on a scale not seen since the Industrial Revolution. These markets will reach everyone, but especially the 4 billion people who are not yet part of the world’s formal economy. They will offer new and remarkable products and services in sectors as diverse as education, transportation, and finance. You may be skeptical of this claim, and with good reason. The citizen sector—the term we use to define the millions of groups established and run by mission-minded individuals across the globe who are attempting to address critical social needs—has long been regarded as understaffed and inefficient. But that has changed. We work with some 3,000 social entrepreneurs worldwide, and over the past 30 years we’ve seen the citizen sector catch up with business as it has increased its productivity, size, and reach. Its organizations are attracting talented and creative leaders, and their work is changing the game in critical industries and areas such as energy and health care. For-profit organizations today have an opportunity to collaborate with citizen-sector organizations (CSOs) on large-scale problems that neither group has been able to solve on its own. The power of such partnerships lies in the complementary strengths of the participants: Businesses offer scale, expertise in manufacturing and operations, and financing. Social entrepreneurs and organizations contribute lower costs, strong social networks, and deep insights into customers and communities. But to work together effectively, they must focus on creating real economic as well as social value. We believe they can do so by forming what we call hybrid value chains (HVCs), which capitalize on those complementary strengths to increase benefits and lower costs.

We are witnessing a sea change in the way society’s problems are solved, This trend has been developing for years, and we’ve participated in pilot projects that have delivered impressive results and promise extraordinary growth. HVCs can now be found in many industries all over the world. Collaboration between corporations and CSOs has reached a tipping point: It is becoming standard operating procedure. Indeed, we believe that if you’re not thinking about such collaboration, you’ll soon be guilty of strategy malpractice.

The Vibrancy of the Citizen Sector
Before we explore the inner workings of hybrid value chains, it may be helpful to look at how we got here. In the 1700s business became entrepreneurial. Upstarts devising faster and more-efficient ways to produce goods ushered in the...
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