Revitalize the Economy

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For over 100 years, technological innovation has been the center of attention around the world: be it through R&D, invention, creation of dedicated private or public structures, nothing has been neglected in fostering it. In contrast, social innovation is a practice at once ancient and very recent in the sense that its value has only been noticed in recent years. Institutions and economic tools liable to support its development are still of an undeveloped nature. For a long time, the distinction between profit and non-profit has had the trappings of obviousness: it was so naturally self-evident that questioning it made no sense. However, new forms of social entrepreneurship that are emerging today need to be scrutinized because they may well prefigure some of the aspects of Egypt’s future economy.

Social Innovation is defined as new ways of doing things in order to meet social needs.” It can involve two types of stakeholders: activists and entrepreneurs. Activists have a commitment with charity or with social emancipation. As for Entrepreneurs it is quite the opposite: their ambition is to expand the market by bringing their business to it, either by competing with existing players, by offering new services or new products, or by targeting new customers.

If your organization is for profit, can they intertwine social activities with their business cycle, as a catalyst for development?

On the other hand if you are a non-profit can you become for profit to become sustainable without losing focus of your vision?

More recently, the development of open source systems and the fascinating economic uses of free services have shown how the profit economy could revitalize itself by incorporating non-profit exchange. Organizations operating in Egypt have a growing need for business devolvement in the midst of an unstable economic market and large underdeveloped community.  Organizations find the Egyptian market to have a potential of 90 million customers and/or employees, unfortunately they are unable to capitalize on this opportunity. The fact is at least 40% of the population cannot be employed due to lack of education, health or suitability neither can they be a potential customer as they cannot afford any of the products or services provided.  The solution is in developing these communities, not only for the benefit of the communities but for the benefit of business development. Yet we approach community development in a conventional method through, CSR programs established, which are terminated in the effort of cost reduction. On the other hand nonprofits are suffering from either lack of funding or structure to constitute a true change. Can the solution be in the integration of social need and business need?

All things considered, it would not be the first time. The mutual insurance companies historically founded by the workers of the nineteenth century were the very womb where social insurance systems of the present day were born – the latter being one of the pillars of modern capitalism. Absorbing significant financial flows to pay millions of people, they provide healthcare safety. In India, an NGO which funded cataract surgery suddenly saw its funds dry up. While not very expensive, many families were unable to afford it. Then an American volunteer had the idea to have them pay anyway, but based on what they could give: it appeared that they could afford a budget of about fifty dollars, and on that basis the NGO was able to sustainably build and not rely on aid or charity. This volunteer turned into a contractor, manufacturing intraocular lenses in large quantities. He now runs a profitable company and has contributed to restore sight to four million people. So, at once, one has profit and non-profit.

Yet the distinction between business entrepreneurs and social entrepreneurs was precisely based on the differentiation between profit and non-profit. What happens with such a differentiation, if the creation of social ties is to become the core for new economic activities growth and development in Egypt?

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