Helping Social Entrepreneurs Tackle Global Development Challenges
Last Monday, in the midst of National Entrepreneurship Month and as countries around the world celebrated Global Entrepreneurship Week, the U.S. Agency for International Development (USAID) and the Government of Sweden rolled out a new $15 million competition to support entrepreneurs who are strengthening global food security and alleviating poverty through market-based solutions that reduce water scarcity in the food supply chain.
The Securing Water for Food Grand Challenge for Development offers catalytic financial support and acceleration services – such as business development services, investment facilitation, and market linkages – for entrepreneurs at either of two stages of project development. Stage 1 is for entrepreneurs with a successful prototype and pilot under their belt now looking to demonstrate the viability of their innovation and business model in an emerging market. Stage 2 is for entrepreneurs who have already demonstrated technical feasibility, market acceptance, and revenue generation in developing country markets and who need help overcoming barriers for further commercial growth.
The Securing Water for Food call for proposals is the latest milestone in the Administration’s National Impact Initiative that was launched around the 2013 G8 meeting to grow the community of investors, companies, and social entrepreneurs tackling significant national and global challenges through commercially viable, market-based solutions that intentionally generate both economic return and social impact. The President believes that social enterprise has a critical role to play as part of a holistic approach to accelerate economic recovery and boost job creation in the United States. In addition, social enterprise can leverage new capital, skills, and pathways to scale in support of the Administration’s global development commitments, including Power Africa, Feed the Future, and the Global Health Initiative. The Administration has already taken a number of steps to realize the full potential of impact investing and social enterprise, including creating the Small Business Investment Company Impact Investment Fund, clarifying the rules that allow foundations to invest in social enterprises, and increasing impact investments made by the Overseas Private Investment Corporation, which committed $333 million to impact investing in 2012 in sectors including healthcare, education, renewable resources, and water.
During this National Entrepreneurship Month, the Administration has continued to advance the global impact economy in a number of ways, including:
- De-risking Private Sector Investments. Earlier this month, the USAID Development Credit Authority (DCA) marked a major milestone—it hit the $1 billion mark for private capital catalyzed by the DCA over the past two years for market-based development solutions. DCA encourages local banks in developing countries to make loans to underserved entrepreneurs in key sectors – such as agriculture and energy – by pledging to cover 50% of any losses.
- Awarding Early-Stage Patient Capital. Last Thursday, the U.S. Africa Development Foundation and GE-Africa announced the inaugural 6 winners of the three-year, $2 million Power Africa Off-Grid Energy Challenge for market-based, renewable energy solutions in Kenya and Nigeria;
- Accelerating Entrepreneurs. Last Friday, the USAID Partnering to Accelerate Entrepreneurship (PACE) initiative – first announced at the Global Entrepreneurship Summit – invited investors, businesses, incubators and accelerators, foundations, universities, and non-profits to submit ideas for partnership and co-investment that identify and test scalable models for accelerating the growth of early-stage enterprises in developing countries, including market-based solutions for food security, health, and energy access. USAID will co-invest up to $10 million through PACE partnerships. Read the USAID fact sheet here and all the details here;
- Connecting Markets. The State Department partnered with the Aspen Institute and Agora Partnerships to lead a delegation of U.S. investors and entrepreneurs to Colombia on November 11-15, in part to explore potential impact-investing partnerships and financing for early-stage social enterprises; and
- Inspiring and Preparing the Next Generation of Social Entrepreneurs. To kick off Global Entrepreneurship Week, on November 17-18, USAID convened at TechCon 2013 students, faculty, and researchers from seven Higher Education Solutions Network universities selected to serve as USAID laboratories to test science- and tech-based development solutions, such as the non-invasive malaria diagnostic invented by Brian Gitta of Makerere University in Uganda that won the top prize in the pitch competition. Learn more here.
These are just a few of the most recent examples. Looking ahead, the Administration will continue to expand the National Impact Initiative by advocating policies that support the continued growth of impact investment and social enterprise. It is a strategy that can drive sound economic growth and strengthen communities at home and around the world.
Jonathan Greenblatt is Special Assistant to the President and Director of the Office of Social Innovation and Civic Participation in the Domestic Policy Council
Robynn Sturm Steffen is Assistant Director for Global Development at the White House Office of Science & Technology Policy
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