Social Innovation in Action / DAVOS 2025

Summary

This discussion focused on the growing importance of social innovation and social business in addressing global challenges. Professor Muhammad Yunus, a pioneer in social business, emphasized the need for a new civilization based on selflessness and entrepreneurship. He highlighted the concept of social business as a self-sustaining alternative to charity, capable of solving societal problems while generating profits for expansion.

The panel explored how social innovation is being integrated into both public and private sectors. Nicola Galombik from Yellowwoods Holdings discussed their efforts to create economic opportunities for young people in South Africa through deliberate collective action and partnerships between business and government. Minister Parks Tau of South Africa emphasized the importance of reinforcing existing social and solidarity economy ecosystems rather than imposing new systems.

Barbara Frei from Schneider Electric shared how her company has integrated social innovation into its core business, investing in inclusive energy transition projects and collaborating with startups. The discussion highlighted the need for businesses to see people as customers rather than beneficiaries, and for governments to create enabling environments for social enterprises.

The conversation touched on the role of the G20 in promoting social innovation, with suggestions to use the platform to raise standards for corporate and government engagement in social business. Participants agreed on the importance of creating practical examples of successful social innovation to inspire wider adoption. The discussion concluded with a call for shifting relationships between sectors from donation-based to co-creation and transactional partnerships with existing social enterprises.

Keypoints

Major discussion points:

– The growth and importance of social innovation and social business in addressing global challenges

– The need for collaboration between government, business, and social enterprises to create inclusive economic opportunities

– The role of large corporations in supporting and integrating social innovation into their business models

– The potential for the G20 to advance social innovation and inclusive economic policies

– The importance of building on existing community-based social and solidarity economy initiatives

Overall purpose:

The discussion aimed to highlight the increasing prominence of social innovation and explore how different sectors can work together to scale its impact, particularly in creating economic opportunities for marginalized groups and addressing environmental challenges.

Tone:

The tone was largely optimistic and forward-looking, with speakers expressing enthusiasm about the potential of social innovation. There was also a sense of urgency and call to action, particularly regarding the need for more collaboration and systemic change. The tone became more practical and solution-oriented as speakers discussed specific initiatives and policy recommendations.

Speakers

– Raj Kumar: President and Editor-in-Chief of DevX

– Daniel Nowak: Head of Social Innovation at the World Economic Forum

– Muhammad Yunus: Chief Advisor to the Government of Bangladesh, founder of Grameen Bank

– Nicola Galombik: Executive Director of Yellowwoods Holdings

– Parks Tau: Minister of Industry and Trade in South Africa

– Barbara Frei: Executive Vice President at Schneider Electric, CEO of Industrial Automation

Additional speakers:

– Chantal Lyon-Carpentier: Works at UN’s Trade and Development Agency on sustainable development and climate issues

The discussion focused on the growing importance of social innovation and social business in addressing global challenges, bringing together perspectives from various sectors and regions. The panel explored how social innovation is being integrated into both public and private sectors, emphasising the need for collaboration and systemic change.

Key Themes and Arguments:

1. The Growth and Importance of Social Innovation and Social Business

Daniel Nowak from the World Economic Forum opened the discussion by highlighting the work of the Schwab Foundation, which has supported over 450 social entrepreneurs impacting 722 million lives across 190 countries. He noted that social enterprises have become a significant economic force, generating $2 trillion annually and employing 200 million people globally. Nowak also mentioned the Rise Ahead Pledge, signed by over 50 companies committed to integrating social innovation into their core business strategies.

Professor Muhammad Yunus, a pioneer in social business, emphasised the need for a new civilisation based on selflessness and entrepreneurship. He highlighted social business as a self-sustaining alternative to charity, capable of solving societal problems while generating profits for expansion. Yunus argued that social business allows money to be reused endlessly, unlike charity which has only one-time use. He also pointed out that major companies like Danone, Credit Agricole, McCain, and Uniqlo are now engaging in social business, and universities are creating social business centres and degrees, indicating a growing trend.

2. The Concept of a 3-0 World and New Civilisation

Muhammad Yunus introduced the concept of a “3-0 world”: zero net carbon emission, zero wealth concentration, and zero unemployment. He argued that the current civilisation is self-destructive and that a new civilisation centred on social business is needed. Yunus emphasized the importance of 3-0 clubs, which are being established globally to promote these goals and encourage young people to become job creators rather than job seekers. He also stressed the need for changes in the education system to produce entrepreneurs instead of job seekers.

3. Corporate Integration of Social Innovation

Barbara Frei from Schneider Electric shared how her company has integrated social innovation into its core business, investing €90 million in inclusive energy transition projects through impact investing. These investments have provided access to green and reliable electricity for 40 million people and trained 500,000 underprivileged people in energy management. Frei emphasized the need for freedom to act and do business, as well as the importance of reducing bureaucracy to enable social innovation.

4. Social Innovation in Developing Economies: Challenges and Opportunities

Nicola Galombik from Yellowwoods Holdings discussed their efforts to create economic opportunities for young people in South Africa through the Harambee Youth Employment Accelerator. She emphasised the need for businesses to be deliberate about their social value creation and contribution to creating opportunities, viewing people as customers rather than beneficiaries.

Minister Parks Tau of South Africa highlighted the importance of reinforcing existing social and solidarity economy ecosystems rather than imposing new systems. He provided examples of existing social enterprises in South Africa, such as burial schemes, which could be developed further. Tau argued that government policy and investor appetite need to change to respond to what people are already doing, suggesting a shift from donating to co-creating and entering transactional relationships with existing social enterprises.

5. The Role of Businesses and Governments in Promoting Social Innovation

The panel agreed on the crucial role that businesses and governments play in promoting social innovation. Barbara Frei explained how large companies can provide knowledge, capability, and coaching to social entrepreneurs and startups. Parks Tau suggested that the G20 presidency could be an opportunity to lead a process of changing investor and government policy orientation towards social innovation.

An audience member, Chantal Lyon-Carpentier, mentioned the recent UN General Assembly resolution on social and solidarity economy, highlighting the growing global recognition of this sector.

Key Takeaways and Action Items:

1. Use the G20 presidency to lead a process of changing investor and government policy orientation towards social innovation.

2. Create more examples and social organisations that help coordinate the ecosystem of businesses, government, and social sector players.

3. Shift procurement practices to enter into transactional relationships with existing social enterprises.

4. Integrate social innovation into core business practices beyond just foundation or CSR activities.

5. Promote the concept of a 3-0 world and establish 3-0 clubs globally to engage young people in social innovation.

6. Reform education systems to produce more entrepreneurs rather than job seekers.

The discussion concluded with a call for shifting relationships between sectors from donation-based to co-creation and transactional partnerships with existing social enterprises. The overall tone was optimistic and forward-looking, with speakers expressing enthusiasm about the potential of social innovation, while also acknowledging the urgency and need for more collaboration and systemic change to address global challenges effectively.

Raj Kumar: Kumar, I’m the President, Editor-in-Chief of DevX. We are thrilled to be media partners with the World Economic Forum to bring you, okay, we’re biased, the most important event of your week here in Davos. Why is it important? It’s important because social innovation, the theme that we have been covering as journalists at DevX, you have been working on, many of you in the room, for a lifetime, that theme, that story has become bigger and bigger every year. You can see it in this room. Those of you who are watching this at home know there’s so much energy around this space. And so we are delighted it once again comes back to this stage and we can talk about the progress that is happening in social innovation. So to get us started, I want to ask Daniel Nowak, who is the Head of Social Innovation at the World Economic Forum, the fact that such a title exists tells you something, to come and give us some opening remarks. Daniel, please join us.

Daniel Nowak : Thank you, Raj, for the kind introduction. Thank you, Raj, for the kind introduction. As you said, for over a quarter century now, the Schwab Foundation has been recognizing and awarding social entrepreneurs and brought them to the table with business and policy leaders. Just yesterday, we welcomed 50 new awardees to the community. It now counts almost 500 social innovators worldwide, which have improved the lives of 931 million people in 190 country. Social enterprises have always inspired us to rethink business as a force for good, but it’s also become an economic force. We now know that there is 10 million social enterprises worldwide, generating $2 trillion in annual revenue, which is more than the apparel industry. And they’re employing 200 million jobs, 6% of the formal workforce. Half of them, most importantly, are led by women. And in so many ways, this week might become the week we remember for a long time, to reshape the foundations of our global economy and our society. And for many people, including me, that is somewhat scary. With uncertainty on the rise, it is difficult for them to see a future for themselves and their families in this transition. We will continue to see technological disruption in the digital transition, and in one way or another, we will see an ecological transition as we either address climate change or grapple with its effects. These transitions create risks to worsen social issues that we see today. In all of this, social enterprises are becoming more important now than ever. Today we look at opportunities for government and business to engage with these social enterprises to support a more equitable transition, and a new report unlocking the social economy today highlights how social innovators are providing jobs for marginalized groups, how they’re making green and digital products more accessible and more affordable, and how they’re providing access to financing. The report highlights policy options of how governments can engage with these social entrepreneurs. Fortunately, both business leaders and policy leaders have already been getting active and working with social entrepreneurs. The Rise Ahead Pledge, a corporate commitment to increase investments into social innovation, was signed by 25 signatories since its inauguration last year, and collectively invested over 270 million in social innovation in the first reporting year, committing themselves to increase it by 25 per cent in the next. Schneider Electric, a company that has been contributing to the Just Transitions for years, is the latest signatory of the pledge, and we will hear from Barbara Fy in a minute here in the panel. A key component of corporate engagement is social procurement, buying from social enterprises. So the State of Social Procurement 2025 launched on Monday, highlighting many, many examples of that. It tracks 150,000 material supply chain issues, understanding where the issues are in supply chains globally, and 19 per cent of those are related to social concerns, outpacing environmental issues. The public sector is also increasingly getting active. In 2024 alone, the UN General Assembly adopted a second resolution on the social and solidarity economy. The African Union endorsed a ten-year strategy on the social and solidarity economy, and late in 2024, also Brazil put social innovation on its G20 presidency. Late in 2024, we also had the chance to come to South Africa for a high-level roundtable on the social and solidarity economy, and his Excellency Minister Patao will tell you a bit more about South Africa’s focus on the social and solidarity economy and its role in the G20 presidency this year. And together with Nicola de Galombic, they will talk about how corporates and public sector can collaborate. And of course, I’m very pleased to welcome the Honourable Professor Mohamed Yunus, the Chief Advisor to the Government of Bangladesh. For many, many years, he’s been engaged with social businesses, social entrepreneurs worldwide. He’s a father of microcredit, and many would say of social business himself. He’s been a former board member of the Schwab Foundation, has inspired many social entrepreneurs, and is also a dear mentor to myself. So let me close by inviting you all to draw on the inspiration from everybody here on stage today, from the social entrepreneurs, the actors in the room, and I wish you a very, very inspiring session.

Raj Kumar: Thank you. Thank you. Thank you so much, Daniel. And in a moment, we are going to dig in as a panel into this issue of social innovation at the cutting edge. But first, we do have a special guest. Our special guest, had we met one year ago, had just received some news, and that news was he was to be imprisoned for six months. Not exactly happy news to get. We now meet one year later, and he is the chief executive, he’s leading the government of Bangladesh. He is a real mentor to this whole community on social business, social entrepreneurship. Much of this would not exist without you, sir. And so it is a real honor and privilege to have you give us some welcoming remarks. Thank you. Professor Muhammad Yunus, everyone. Thank you. Woo! Thank you. Thank you. Thank you. Well, thank you very much. In the beginning, Kumar half-jokingly said, this is the best thing that’s happening in Davos.

Muhammad Yunus: I’m saying that full seriously, this is the best thing happening in Davos right now. Woo! I think so, I believe so. Because this is the future. What you do, what you’ll be doing, is what world would be, would be very different. One way I try to sum it up by saying that we have created a wrong civilization. It’s a self-destructive civilization that we are going through. We have no escape route within the framework of this civilization. If you want to survive as human beings, if you want to survive as a global community of all life forms, only way out is to create a new civilization. And in that new civilization, the idea, the concept of social business will be in the front, not in the back or in the middle. And that’s what you’re opening up. Human beings are depicted or assumed in the present civilization, as a selfish people. And that’s a very wrong description of human being. Only thing they do where they have interest in making money, getting rich and so on, that’s what the whole structure is built. We forget human beings. not only selfish being that also selfless being That part is completely ignored Because the voice is so loud on the other side The people who’ve discovered their selfless part It’s never opened or never shared So what you’re doing through social business Is to open it up and say publicly we’re doing it. We enjoy it People tell me it won’t work Because making money is the success Major of success is how much money you made Making money is the happiness You make happy you get happy the more money you make more happy you get so you cannot undo that I Said that’s the way you think My thinking is slightly different I Keep saying that making money may be happiness Making other people happy is super happiness And that’s all we don’t think so I Don’t feel that way I said because you never tried it I Said try it you’ll love it It’s a very intoxicating experience to touching people’s lives It’s amazing thing. You cannot get it any other way that happiness So that super happiness is what social business is all about we are super happy when we did that I Have been a regular participant participant in the doubles Dialogues and discussions and That kind of Creators idea that maybe we should take it seriously, the social business. At that time, social business was not a common word. It’s some remote place, remote few people, young people we talk about, addressing them. And that deliberations led to creation of a foundation. Twenty-five years back, Schwab Foundation for Social Entrepreneurship. It’s an amazing thing. At that time, nobody paid any attention. You have to be very kind of out of the way people in a little corner talking about some social business. Today is the front and the center. And it will lead the world because we have no other option. We have to build a new civilization. Otherwise, we don’t survive. In this current civilization, we destroy the planet, no matter what you do, because that’s the way it has been designed. So we have to undo that, turn it around. Once we turn it around, the world becomes a very happy place. We did a lot of things, started with microcredit, tiny loans, etc., etc. You’re familiar with that. But along the way, we addressed other problems. People hardly paid any attention to that. But we got very excited about it. And we started doing healthcare alongside of microcredit. We started doing education alongside of microcredit. We started housing alongside of microcredit. We started building toilets alongside microcredit. And then we turned them into separate businesses. Each one is a separate business. And people keep asking us, why do you do that? You’re supposed to lend money. I said, yes, we’re supposed to lend money. We do that. We’re not compromising on that. At the same time, we see a lot of other opportunities. People suffer. So we want to address those problems and create it as a business, not as a charity. All the things I said beyond microcredit are treated all around the world as charity. I said we are treating it as a business. Why do you want to do healthcare as a business? I said it’s a business, but a different kind of business. We don’t want to make personal money out of it. So that created a controversy. Is it a business? If you’re not making money, is it a business? So we had to define what a business is. I said self-sustaining ability is the core of business, not the profit part of it. Profit you may take, you may not take. No, no, unless you make profit, you’re not a business. I said why not? I’m selling things, goods and services. People pay. I got my money back. I’m going to blow it back again. All I do, I don’t want to make money out of it personally. But the company wants to make money so that it creates surplus, it can expand itself. Though there’s a controversy whether they should call it a business or not. We said it’s not only business, it’s the best part of business. We are moving away from the charity. Charity is a wonderful thing, but it has a serious limitation. Limitation is charity money goes out, does a wonderful thing, never comes back. You have one time use of your money. The moment you transform the whole thing into business, social business money goes out, does the same thing as a charity would do, it comes back. You can’t put it back again. So I made it simple, I said charity money has one life, but social business money has endless life. That’s the power of social business. It takes time.

Raj Kumar: It took Klaus Schwab to recognize that, finally, and Kilda Schwab to come forward, be the chair of the foundation, got me into the board, and I continued the board. An amazing experience. Talk about 10 million social entrepreneurs. Amazing. 10 million is a big number. But when you talk about the global need, it’s a tiny, tiny number. So the need is so much. And then we thought we are doing it. Some crazy people do it, like you. They do it. But serious people will never touch it. Surprise, surprise. Danone chairman comes up, said, I want to do social business. I thought he doesn’t. He thought he make money out of social business. Why should he be interested? I explained the social business. Oh, I know. I know you. I heard your speech. So long story short, we joined together and create Grameen Danone Company in Bangladesh to solve the problem of malnutrition among the children. And it’s still functioning. That opened the door. Credit Agricole came forward. They want to do social business. McCain came forward. They want to do social business. Uniqlo came forward. They want to do social business. You know what? I don’t know any one of them. I never heard of Uniqlo, because I’m not in that world. I never heard of Danone, because I’m not in part of that world. I had nothing to do with Credit Agricole. But they’re all serious. So that was the beginning of this. If Danone is doing that, we can do it too. Other businesses, they started inviting me to talk about it. So new wave come. This is in the business world. I didn’t realize what an impact it will make in the academic world. Because you get challenged in the academic world, redefining everything. University after university started creating social business centers to teach students about social business.

Muhammad Yunus: Give degrees on social business, bachelor degree, master degree. So now there are 107, 111 social business centers around the world. In 39, 40 countries. It keeps increasing. So it keeps increasing. It’s an amazing experience. We have nothing to do with those businesses. I don’t even know those universities. But they followed us. They saw the content of it, designed it, created a social business center. It keeps increasing. Then came the idea of 3-0 world. We said in order to create a new civilization, you start small. With the theme of 3-0s. Zero net carbon emission. Zero wealth concentration. Zero unemployment. Because I believe and I try to promote, all human beings are born as entrepreneurs. Job is the wrong direction. Absolutely wrong direction. Human beings are not born to work for anybody. That’s part of slavery. Humans being destiny is not slavery. Destiny is a creation. It’s packed with creative power. So social business turned into another direction. Becoming entrepreneurs. So the social business entrepreneurship became another. I said education system has to be changed completely. Today education system is producing job seekers. How many of the students getting job, that is their pride. I said that’s the wrong pride. You should be taking pride in seeing how many of the young people get out. and do businesses, whatever business they want. I would be very happy to do social business, because that’s where the world problem will be solved. Conventional business, money-making business cannot solve. It creates only wealth concentration, and wealth concentration will destroy the whole planet. You cannot stop it. All the money you earn, it goes to the top. We have to reverse that process completely. So these are the challenges you want to make, and I’m very happy the 3-0 clubs are coming up, and now it’s going into countries after countries, more than how many countries now? 56 countries have 3-0 clubs. Latest figures coming up. I lost track of it. Simple thing. 3-0 club, zero net carbon emission, et cetera. Five young people get together, create a club. Very simple idea. What do you do? You transform yourself as a 3-0 person. I, as a person, I will not contribute in global warming. You cannot create a world without global warming, to remove global warming, unless we, as an individual, change ourselves. World is not something there. We are us, is the world. We fight for having safe environment. Go in the street, and go home, destroy the planet. Create waste. And create life miserable by fossil fuel and all that. We continue. So we have a disconnection. I said we have to turn ourselves as a 3-0 person ourselves. So young people love it. So it’s spreading around the world, and we are very happy. So we, now talking about social business, it leads to a very fundamental question. What kind of world we want? Can we save this planet? Yes, we can, but we have to make a beginning. And you have made that beginning to social business. We have to go up to the 3-0. We have to create a 3-0 world at the same time. Thank you very much for giving this opportunity.

Raj Kumar: Thanks a lot. Thank you so much. Thank you. I’m very excited to see, you know, you find yourself in this position now as almost a founding father in a new era in Bangladesh. I’m very excited to see how social business becomes a key element of the new phase of growth of your country. It’s an exciting moment. Many of us in the world are going to be paying a lot of attention to this. Thank you so much, Professor Yunus. I want to turn to our panel now to continue this discussion because exactly as Professor Yunus says, this is a theme that has become really mainstreamed across all kinds of business. Nicola Golombic is with me. She’s the Executive Director of Yellowwoods Holdings, probably known to many of you because you were awarded the Schwab Foundation Fellowship for your work. When I think of your company, I get hungry because I think of Nando’s Chicken. I think some of you may know Nando’s. One of the many businesses you own in insurance and tourism. It’s a big business in South Africa. And you are also investing and incubating in a portfolio of social businesses, social enterprise. Tell us more about that work. Thanks. Thanks very much. So, yeah, I mean, our businesses born in South Africa are global businesses now.

Nicola Galombik: But we are really seized with the fact that when we take a long-term view on value and we think intergenerationally, there are young South Africans and young Africans who are growing in number who currently do not participate or have entry points into the economy that we are operating in. And we have a sense of urgency to make sure that as our businesses grow, as South Africa… Seeks investment and grows our economy and other African countries do that We are extremely deliberate about ensuring that as many young as many young South Africans and Africans as possible Find their way into the opportunities that are being generated in the existing economy and the new economies that are emerging in the transforming economy And that is requires really deliberate collective action. It’s not something that is happening organically in the market It’s not something that even our businesses with us as a shareholder with this intent naturally do There needs to be a very deliberate and concerted process to make corporate organizations focus on their social value creation to be deliberate about How they are contributing to creating opportunities multiple pathways. There’s no one answer for how young people are going to participate more in the economy Some will participate through finding their way into formal sector jobs at the moment a million young people Exit our schooling system every year about 40 percent find their way into any kind of earning, right? 60% are finding themselves outside the economy completely and We whether that’s through self enterprise. It’s I mean sort of self Employment whether that’s through starting social businesses and solving problems in their communities whether that is Through new and innovative ways of skilling them We need to open what we call the pathways of young people into the opportunity in our economy and to do that We’ve had to be very deliberate not as a firm not as a business But as a collective in South Africa, and I’m sure Minister Tau will will talk more about this but we have been engaging in collective business and collective business government partnerships to address this issue and Some key themes emerge in that. The first is we’ve had to agree amongst ourselves collectively of what problems are actually possible to solve, solving together where we can find common ground and know and agree then amongst ourselves. What are the things that need to change to pull that off? Because if we just keep doing business as usual and government as usual, the system is not changing. And there are some quite radical shifts that we’ve had to agree on that are needed, right? How employers hire and the kind of behaviors and values that apply when they hire, how our skilling system works, our resources, redirecting the resources of our government and our private sector to focus our skilling initiatives on real live opportunities for young people, not a broken system where the link between learning and earning no longer works, right? And this requires tough choices. It requires tough decisions to be made on regulation, on policy and on corporate behavior and corporate spending. And what we, I think, are trying to do in South Africa now and hopefully we’ll bring into our B20 and G20 a year is this joint collective effort. It’s how we, our president spoke yesterday about that is how we ended apartheid and it is how we need to face in to this new economy to make sure that it is inclusive. We have to do it together. We have to do it through deliberate collective action. And then everybody’s got to hold each other co-accountable because we can’t have free riders as we take on some of these challenges.

Raj Kumar: Well, thank you very much for that, Nicola. It makes me think, you know, we heard Professor Yunus talk about one of the key benefits of social business is that instead of a charity approach, you actually can bring the money back, right? I think another key benefit is alluded to in what you described, which is instead of seeing people as the poor. or the needy, or the hungry, or the beneficiary, you see them as customers, right? And so hearing businesses that are more engaged with that customer mentality makes a big difference. You, Minister Parkstow, have been thinking of people as citizens and voters for a long time. You won your first election, I think, at 24 years old. Is that right? No. No, how old were you? 41, as mayor of Johannesburg, 41. Well, but you were elected within the ANC, I think. Within the ANC, yeah. At a much younger age. And you spent, from that moment early in your career, you’ve been working on economic development issues. Now we’re in this new era. We’re in this new moment. And South Africa, as Nicola alluded to, has the presidency of the G20 this year. So I think everyone in this room is looking to you and thinking, how will you use that opportunity to drive the possibilities for social innovation in your country along the lines that Nicola described, using this idea of a public-private collective action? Well, thank you very much. You know, the question itself provoked a few questions in my mind that I needed to process.

Parks Tau: So allow me to be a bit unorthodox and take you through the thought process. South Africa has a well-established and ingrained social and solidarity economy ecosystem. It exists. You have more than 880,000 social and solidarity economy organizations. We call them societies, dogfellows. These are groups of people that come together and collaborate on a whole range of issues, social interests, economic interests. They co-invest and co-benefit in many ways. And this is an established system. It’s part of our DNA as a country. So when the question was asked, how do you talk about social economies and social entrepreneurship in relation to the G20? I ask myself the question, so if this global discourse on social entrepreneurship has evolved and has become mainstream, and you have a culture of social and solidarity economies, how come these have not collided? We’ve developed the policies, we’ve got a social and solidarity economy, policy as a country, we’ve got well-established relationships. I started working with Nicola when I was the mayor of Johannesburg some 10, 12 years ago, talking about relationships between business and government. And the question that I was dealing with in my mind is, so where’s the Holy Grail? How do we find the Holy Grail? And I suspect the problem, or the answer at least, I came up with is that we’re trying to find solutions for people who found the solutions themselves, instead of reinforcing what people do and ensuring that the social entrepreneurship culture is supported based on an existing DNA, as opposed to seeking to develop policies that try and redefine what the people are doing. And that’s where the gap and the disjuncture is. And I’m saying, so government policy and investor appetite and impact investment and social and solidarity economy investments needs to change itself. And maybe G20 is an opportunity for us to lead a process of changing the orientation of investors, the orientation of government policy to respond to what people are doing, as opposed to trying to do it the other way around. It’s almost a change in the way in which we do public policy itself. So I’m saying a bit unorthodox because I didn’t answer your question, but almost went through the thought process that I’ve been going through in trying to answer this question, because if we do have this culture, if we do have it in our DNA, something is just not right that we haven’t gotten it. to that level where it is mainstream. In a country with huge levels of unemployment, yet huge appetite to invest, huge appetite to collaborate. People invest in homes, they invest in investment opportunities. There are different levels at which people look for opportunities, but we simply haven’t gotten that holy grail. And maybe for us, G20 should be, let’s find that holy grail.

Raj Kumar: I think just the fact that a minister of industry and trade and competitiveness is thinking in this way is very important. And thank you for revealing that to this group. South Africa is very well represented on this panel, but we are gonna shift to another region and talk to Schneider Electric. Barbara Frey is with us. You’re an executive vice president there. You’re also the CEO of Industrial Automation. Schneider has been a leader on these issues, right? You’ve got a big focus on just transitions. You’re a signatory to the Schwab Foundation’s Rise Ahead. So you work a lot on these issues. What’s the private company role, the big private company role in this conversation? Yeah, I don’t know if I can dare to talk about big companies because they are a place of slavery, as I just learned from Professor Yunus. But look, for me, big companies, enterprise, play a very important role because they know the ecosystem you operate in.

Barbara Frei: They know how to earn money. They also might understand the challenges that startups might have, be it regulation, go-to-market problems, costs, and so on. So in Schneider Electric, as you might know, we are an energy management company and also doing industrial automation. So energy transition and climate change measures are really at the core of our business. And we are operating in more than 100 countries, have 160,000 people. So that gives us a leverage, a benefit being like this. And we love to work with partners. So in 1998, where we were still a bit smaller. We wanted to give back the money to a certain extent to the society that we are earning and we created the Schneider Electric Foundation. And in line with our core, we were really looking also at projects related to electricity and youth. So we wanted to educate young people and this is something which is ongoing since 25 years with quite a lot of success everywhere in the world. So it’s not just in Europe, whatever, we did this almost everywhere, these programs. Now in 2009, we wanted to do more and we went into impact investing. And again, because we are in energy management and industrial automation, we did this for inclusive energy transition projects. And we started with a foundation called Schneider Electric Access to Energy and it was a starting point in 2009. More foundations came on top of it with different shades and focuses. And today we can proudly say we have invested €90 million. And when you look at the partners, the external financial partners, it’s a sum of €400 million. 66 startups are part of it, 7,300 working places created. And also from an environmental point of view, a lot of CO2 saved. And we always go with the three, we call it the triple bottom line impact. So it has to be social, it has to be environmental friendly, and it needs to be financially sustainable. I think that’s a very important point here to mention. And it’s not an isolated activity within Schneider Electric, it’s really everybody can contribute. So our SE Venture arm is part of the process when we want to evaluate startups. We have then our sales operations which helps to open channels. We have our strategy and marketing department who helps to really shape certain go-to-market strategies.

Raj Kumar: So it’s our pride in that sense, being part of it. Yeah, what you’ve done is you’ve integrated this into your business. Correct. the next horizon, and there are, we could fill the stage with companies, but it’s not that big of a stage. Correct. It’s still fairly rare that companies have truly integrated, but this is maybe the next horizon, right? Nicola, it’s this idea that you don’t just keep your social business through your foundation, you’re not just funding some startups over here, but your procurement, your hiring, the customer markets that you’re chasing after, all of that integrates these ideas, and that you’re collaborating with government, and you’re collaborating with the social sector, with nonprofits and others to get there. We’re gonna continue this discussion, but I wanna get someone in the audience to spark us a little bit further. So we have Chantal Lyon-Carpentier, who’s with us from the UN’s Trade and Development Agency, where you work on these issues on sustainable development and climate and more. So we’d love to hear a little provocation or a question from you. Well, thank you so much, and thank you for the presentation. As you all know, we have now a social solidarity economy resolution within the UN General Assembly. We still get a lot of question,

Audience: because despite the insightfulness of the South African government, not all governments see it that way yet. How do we make them see it, and how can you use the G20 presidency to help us, and how can we help you do that?

Parks Tau: Well, for me, it’s about having practical initiatives on the ground that have an impact. It’s about ensuring that we’re able to invest in the initiatives, as I said, that already exist. It’s about almost holding hands with people that are already there, and ensuring that you’re able to facilitate that these, in certain instances, convert from just a social club that seeks to address the most basic things to ensuring that these common investments that people make produce for them. So it’s not just an investment without the upside, so to say. It’s an investment that’s quantifiable, and I think it’s an opportunity for us.

Raj Kumar: to reinforce existing systems as opposed to trying to design systems for people. Yeah, the G20 is an important platform. And I think part of what we’re doing, part of what Schneider Electric is doing and others is to raise the bar on what is considered standard and normal, what any country should do, what any company should do. And as that bar gets raised, then it becomes normal for boards and executives to talk about what is our engagement. I see you nodding, Nicola, what do you think? No, I think that’s right.

Nicola Galombik: I mean, I have the opportunity to be one of the co-chairs for the employment and education work stream in the B20. And I think that is what we need to do. We need to create a new herd mentality in a way where businesses understand, and I think the point that they are really powerful players in ecosystems because there’s a lot of social solidarity that happens in communities, but the economy relies on people earning and being able to transact in the economy. And they are solving social problems, but there needs to be a flow of economic benefit for that activity. Otherwise, it is unsustainable. And so I think that how larger companies enable that more inclusive economy and create work with government to create enabling environments in communities and in areas that often are excluded. Excluded, too distant from the economy, unable to access economic benefits. So I think the B20 and the G20 is an opportunity for us to identify, but I just wanted to reinforce what our experience has been is people respond to things they can see. It’s quite difficult. for corporate leaders, for example, to sort of imagine a different world. They are very stuck in their incentive schemes, they’re stuck in their incentive models, and their daily challenges. And so we have to create more examples of how this works and when it works. And I think one of the things we’ve done successfully on this youth employment thing in South Africa is actually create one of the organizations. I helped to found and worked with this minister on was the Harambee Youth Employment Accelerator. But what it did is be a social business, a social enterprise, that actually helped coordinate the whole ecosystem. And I think we need more of those. We need more social organizations that help businesses, government, and social sector players to work together and to orchestrate an ecosystem.

Raj Kumar: Yeah, I imagine, and we’re running out of time, so just briefly, Barbara, I imagine that for your business, you don’t wanna be all things to all people. There are certain places where you have real expertise. You talked about the energy sector, climate transit, but you’re gonna need to partner with others. What do you need from government? What do you need from the social sector? I saw you nodding with this idea that you need ecosystem players. What do you need to advance your strategy and agenda on these issues? I think, first of all, you need money.

Barbara Frei: So we are now going for the next fund for just transition in Asia, where we want to have 20 million. The 20 million was the previous one. Now we look for more. You need money to sustain that. And then from a regulation point of view, there needs to be some, let’s say, freedom to act and do business. So you could kill a lot with bureaucracy, what we have seen in certain cases. How good can you really hire people? So there are many aspects which have to flow, but I don’t want to put always the responsibility to the governments. I think a lot of responsibility is also with us. And I think, specifically, big corporates, they have the knowledge. to have the capability to coach people. And then it should really give it to those startups, give it to those social entrepreneurs, because that really gives a sustainable growth overall. It’s an orchestra and there’s a lot of instruments that have to come together, right? And government maybe is the conductor,

Raj Kumar: but it’s not all on your shoulders. But maybe just a final word from you as we close up, Minister. What do you need? We’ve asked what we need from you.

Parks Tau: What do you need from this community to advance this agenda? In fact, one of the things that I’m taking away from this conversation is around procurement, is about entering into a transactional relationship with social enterprises. And I’ll use a very basic example. One of the common areas of cooperation in our communities is around burial schemes. So we cooperate around ensuring that because we live in communities where, when there is a burial, it’s the entire community that comes. You need to have catering and so on and so on. And there’s an established system in a basic community funeral scheme to ensure that there’s food, there’s preparation of food and so on. So they have a system. If we agree with the private sector and the public sector, that actually you don’t need to procure from somebody else when you’ve got an established entity that’s able to provide the service. Let’s enter into a transactional relationship with an existing enterprise that takes them to the next level, that changes the balance of the relationship because suddenly the relationship is not about us donating something to you. It is about changing the relationship that we have with these enterprises. So for me, it’s about shifting the relationship from what it has been, which has been, we will do something for you and be a relationship that says, let’s co-create. And because you’re already creating, we’re just creating the mechanisms for you to access these opportunities.

Raj Kumar: You know, every year I write a predictions article, which is a scary thing to do, is you get to go back and look at the predictions you made in prior years that are wrong. But this year, one of my predictions is that official development assistance has peaked. And so for countries like South Africa, you may see less money coming from the global north in the form of aid projects or charity. And that may be overall bad news. In fact, quite bad for some people and some organizations. But if there’s a thin silver lining, it might be that it pushes all of us to look for new models. And that those new models might be precisely as you described, minister models that look to what you have indigenously in communities that is already working and supporting them with the precious resources that exist in this community. So I think this conversation is so important to that broader context and what we’re reading about and hearing about in the news these days. And I think that the Schwab Foundation and its work and the work of all of you is so key to driving this agenda forward. So I wanna thank all of you for being a part of this. You can share this on social media at WEF25. You should read the report that’s come out and please spread this gospel as you go on to these sessions here at the World Economic Forum in Davos. Thank you so much. Thank you. Thank you. Thank you. Thank you, thank you.

Agreement Points

The growing importance of social innovation and social business

speakers

– Daniel Nowak
– Muhammad Yunus
– Barbara Frei

arguments

Social enterprises are becoming an economic force, generating $2 trillion annually and employing 200 million people

Major companies like Danone and Uniqlo are now engaging in social business

Schneider Electric has invested €90 million in inclusive energy transition projects through impact investing

summary

All speakers acknowledge the increasing significance and economic impact of social enterprises and social business initiatives.

Need for collaboration between different sectors

speakers

– Nicola Galombik
– Parks Tau
– Barbara Frei

arguments

There’s a need for more examples and social organizations that help coordinate the ecosystem of businesses, government, and social sector players

The G20 presidency is an opportunity to lead a process of changing investor and government policy orientation

Large companies can provide knowledge, capability, and coaching to social entrepreneurs and startups

summary

Speakers agree on the importance of collaboration between businesses, government, and social sector players to promote social innovation.

Similar Viewpoints

Both speakers emphasize the need to build upon or create new economic systems that prioritize social value and community well-being.

speakers

– Muhammad Yunus
– Parks Tau

arguments

Current civilization is self-destructive and a new civilization centered on social business is needed

South Africa has an existing culture of social and solidarity economy that needs to be reinforced rather than redefined

Both speakers advocate for a more active and engaged approach to supporting social enterprises and creating economic opportunities, particularly in the South African context.

speakers

– Nicola Galombik
– Parks Tau

arguments

South Africa needs deliberate collective action to create opportunities for young people to participate in the economy

There’s a need to shift from donating to co-creating and entering transactional relationships with existing social enterprises

Unexpected Consensus

Rethinking education and employment

speakers

– Muhammad Yunus
– Nicola Galombik

arguments

Education system needs to change to produce entrepreneurs instead of job seekers

South Africa needs deliberate collective action to create opportunities for young people to participate in the economy

explanation

Despite coming from different backgrounds, both speakers emphasize the need to rethink traditional approaches to education and employment, focusing on entrepreneurship and creating new economic opportunities.

Overall Assessment

Summary

The speakers generally agree on the growing importance of social innovation and social business, the need for collaboration between different sectors, and the importance of creating new economic opportunities, particularly for young people.

Consensus level

There is a high level of consensus among the speakers, which suggests a growing global recognition of the importance of social innovation and the need for systemic changes to support it. This consensus implies that there is potential for significant progress in promoting social innovation and social business, particularly if different sectors can effectively collaborate.

Different Viewpoints

Role of large corporations in social innovation

speakers

– Muhammad Yunus
– Barbara Frei

arguments

Current civilization is self-destructive and a new civilization centered on social business is needed

Large companies can provide knowledge, capability, and coaching to social entrepreneurs and startups

summary

While Yunus argues for a complete overhaul of the current economic system, Frei suggests that large corporations can play a positive role in supporting social innovation within the existing framework.

Unexpected Differences

Approach to existing social and solidarity economy structures

speakers

– Muhammad Yunus
– Parks Tau

arguments

Current civilization is self-destructive and a new civilization centered on social business is needed

South Africa has an existing culture of social and solidarity economy that needs to be reinforced rather than redefined

explanation

While both speakers advocate for social business, Yunus calls for a complete overhaul of the current system, whereas Tau unexpectedly argues for reinforcing existing structures in South Africa. This difference highlights the potential tension between global and local approaches to social innovation.

Overall Assessment

summary

The main areas of disagreement revolve around the extent of change needed in current economic systems, the role of large corporations, and the approach to existing social and solidarity economy structures.

difference_level

The level of disagreement is moderate. While all speakers support social innovation and business, they differ in their approaches and the extent of change they advocate. These differences have implications for policy-making and implementation of social innovation strategies at both global and local levels.

Partial Agreements

Both speakers agree on the need for businesses to engage more actively with social enterprises, but Galombik emphasizes deliberate action within existing corporate structures, while Tau advocates for a more fundamental shift in the relationship between businesses and social enterprises.

speakers

– Nicola Galombik
– Parks Tau

arguments

Businesses need to be deliberate about their social value creation and contribution to creating opportunities

There’s a need to shift from donating to co-creating and entering transactional relationships with existing social enterprises

Similar Viewpoints

Both speakers emphasize the need to build upon or create new economic systems that prioritize social value and community well-being.

speakers

– Muhammad Yunus
– Parks Tau

arguments

Current civilization is self-destructive and a new civilization centered on social business is needed

South Africa has an existing culture of social and solidarity economy that needs to be reinforced rather than redefined

Both speakers advocate for a more active and engaged approach to supporting social enterprises and creating economic opportunities, particularly in the South African context.

speakers

– Nicola Galombik
– Parks Tau

arguments

South Africa needs deliberate collective action to create opportunities for young people to participate in the economy

There’s a need to shift from donating to co-creating and entering transactional relationships with existing social enterprises

Key Takeaways

Social innovation and social business are becoming increasingly important economic forces globally

There is a need for deliberate collective action between businesses, governments, and social enterprises to create inclusive economic opportunities

Existing social and solidarity economies in countries like South Africa need to be reinforced rather than redefined

Large companies can play a crucial role in supporting social entrepreneurs through knowledge sharing, coaching, and procurement

A shift is needed from traditional charity models to sustainable social business models that allow for continuous reinvestment

The concept of a ‘3-0 world’ (zero net carbon emission, zero wealth concentration, zero unemployment) was proposed as a goal for a new civilization

Resolutions and Action Items

Use the G20 presidency to lead a process of changing investor and government policy orientation towards social innovation

Create more examples and social organizations that help coordinate the ecosystem of businesses, government, and social sector players

Shift procurement practices to enter into transactional relationships with existing social enterprises

Integrate social innovation into core business practices beyond just foundation or CSR activities

Unresolved Issues

How to effectively scale successful social innovation models across different countries and contexts

How to measure and standardize the impact of social businesses and enterprises

How to balance the need for financial sustainability with social impact in social businesses

How to reform education systems to produce more entrepreneurs rather than job seekers

Suggested Compromises

Finding a balance between government regulation and freedom for social enterprises to operate and innovate

Combining traditional business models with social impact goals through initiatives like impact investing and social procurement

We have created a wrong civilization. It’s a self-destructive civilization that we are going through. We have no escape route within the framework of this civilization. If you want to survive as human beings, if you want to survive as a global community of all life forms, only way out is to create a new civilization.

speaker

Muhammad Yunus

reason

This comment challenges the fundamental assumptions of our current economic and social systems, suggesting a radical reimagining of civilization is necessary for survival.

impact

It set the tone for the entire discussion, framing social innovation as not just beneficial, but essential for human survival. It led to further exploration of how social business can be a cornerstone of this new civilization.

Making money may be happiness. Making other people happy is super happiness.

speaker

Muhammad Yunus

reason

This insight reframes the traditional notion of success and happiness in business, introducing the concept of ‘super happiness’ derived from social impact.

impact

It shifted the conversation towards the personal and emotional benefits of social business, beyond just financial or societal impacts. This perspective was echoed by other speakers in discussing the motivations for social innovation.

We need to open what we call the pathways of young people into the opportunity in our economy and to do that We’ve had to be very deliberate not as a firm not as a business But as a collective in South Africa

speaker

Nicola Galombik

reason

This comment highlights the need for collective action and systemic change to address social issues, rather than isolated efforts by individual businesses.

impact

It steered the discussion towards the importance of collaboration between businesses, government, and social sectors. It also introduced the concept of ‘deliberate collective action’ which was picked up by other speakers.

So government policy and investor appetite and impact investment and social and solidarity economy investments needs to change itself. And maybe G20 is an opportunity for us to lead a process of changing the orientation of investors, the orientation of government policy to respond to what people are doing, as opposed to trying to do it the other way around.

speaker

Parks Tau

reason

This insight suggests a fundamental shift in approach to social innovation policy, advocating for a bottom-up rather than top-down approach.

impact

It challenged the traditional policy-making process and led to a discussion about how governments and large organizations can better support existing social initiatives rather than imposing new ones.

We need more social organizations that help businesses, government, and social sector players to work together and to orchestrate an ecosystem.

speaker

Nicola Galombik

reason

This comment synthesizes the discussion by proposing a concrete solution to facilitate collaboration between different sectors.

impact

It provided a practical direction for future efforts in social innovation and ecosystem building, tying together many of the themes discussed throughout the panel.

Overall Assessment

These key comments shaped the discussion by progressively building a case for a radical reimagining of our economic and social systems. The conversation moved from Yunus’s broad vision of a new civilization based on social business, through practical challenges of implementation discussed by Galombik and Tau, to concrete proposals for facilitating ecosystem collaboration. Throughout, there was a consistent emphasis on the need for collective action, systemic change, and a bottom-up approach to social innovation. The discussion highlighted the evolving role of businesses, governments, and social organizations in driving this change, ultimately pointing towards a more integrated and collaborative approach to addressing social issues.

How can we find the ‘Holy Grail’ of integrating existing social and solidarity economy practices with global social entrepreneurship discourse?

speaker

Parks Tau

explanation

This is important because it addresses the disconnect between established local practices and global policy discussions, potentially leading to more effective support for social enterprises.

How can government policy and investor appetite change to better respond to and support existing social and solidarity economy initiatives?

speaker

Parks Tau

explanation

This is crucial for aligning policy and investment with grassroots efforts, potentially increasing the impact and sustainability of social enterprises.

How can the G20 presidency be used to help governments recognize and support social and solidarity economies?

speaker

Chantal Lyon-Carpentier

explanation

This is important for leveraging the G20 platform to promote global recognition and support for social enterprises and solidarity economies.

How can we create more examples of successful collaborations between corporations, government, and social sector players?

speaker

Nicola Galombik

explanation

This is vital for demonstrating the feasibility and benefits of cross-sector partnerships in addressing social and economic challenges.

How can procurement practices be adjusted to better support and engage with existing social enterprises and community initiatives?

speaker

Parks Tau

explanation

This is important for creating sustainable economic relationships with social enterprises and community initiatives, moving beyond donation-based models.