How digital tech can turbo-charge the social economy

Social entrepreneurs matter now more than ever. Purpose-driven social enterprises, which measure success by the good they do rather than the profits they make, have been on the front line in reducing inequality, responding to the COVID-19 pandemic, and in helping mitigate the impact of climate change.

To fully leverage their unique expertise – and mobilize their trusted relationships with disadvantaged communities around the world – we can supercharge their impact through technology.

By equipping them with best digital tools and strategic planning on digital transformation, we have an opportunity to help transform their operations, empower their clients and take the impact of the social economy to new heights.

There has never been a better time to act. One stand-out lesson of the pandemic has been the speed of adoption of digital technologies in all sectors of the economy. Transformations in business practices that were expected to take years have instead occurred in a matter of weeks.

This accelerating pace of change poses both opportunities and challenges for social enterprises. Organizations that went into the pandemic with access to the appropriate technology have thrived – for example, some online education groups – while others reliant on face-to-face interactions scrambled to adapt.

Looking to the future, the direction of travel is clear. Digital ways of working will become ever more important as social innovators harness new ways to deliver their services, from smart healthcare to micro-finance and resources management.

For many social innovators, this is not just about making their businesses more resilient. It is also about preparing the communities they work with for the Fourth Industrial Revolution and the decarbonization of the economy so that at-risk populations are not left behind as traditional industries are transformed.

Two factors have brought the world to an inflection point. The need for digital solutions is urgent and, at the same time, the practical barriers to their deployment are coming down. In particular, the near-universal ownership of mobile phones – the basic tools of digital communication in the 21^st century – means that this is “prime time” for the democratisation of the information technology revolution, extending its reach to billions more people.

But digital technology is not only about reach. It is also a powerful tool for empowerment. Digital tools can provide greater control and access to information for large swathes of humanity – whether they are farmers in remote villages checking on crop prices or young people and their teachers accessing educational materials online across Asia, Africa and Latin America.

Groups like RLabs and Africa Teen Geeks, who are attending the Forum’s Annual Meeting in Davos this year, are putting this potential to work by helping to build technology skills in under-served communities. Both groups are based in South Africa, but parallel approaches are being taken around the world, with RLabs having expanded its model to 23 countries.

Other organizations demonstrate just how potent technology can be as a catalyst for scaling activities. Glocal Healthcare Systems for example, is bringing modern healthcare to rural populations in India through telemedicine and digital dispensing, while AID:Tech is transforming the lives of millions using blockchain. The AID:Tech system gives a digital identity to people with a mobile phone but no other form of proof, allowing them to open bank accounts, get loans and access social services.

Acting now to help other social enterprises forge ahead will help create a stronger overall social enterprise sector at a time of critical need for inclusive models of business as the world emerges from the COVID-19 pandemic.

With many social enterprises at an early or start-up stage of development, this is the perfect time to inject the right digital technology that can help them take quantum steps forward.

For large companies, linking up and helping social enterprises with their needs is not only the right thing to do – it is also the smart thing to do. By supporting social innovators, multinational corporations can learn about new business models, become more purposeful, and start to build bridges to new groups of customers around the world.

Importantly, social enterprises also have a key role to play in meeting the UN’s sustainable development goals (SDGs), so supporting them will help big companies with their ESG (environmental, social and governance) aspirations.

Microsoft is now putting these ideas into practice through a new partnership with the Schwab Foundation for Social Entrepreneurship. The arrangement is powered by Microsoft’s Entrepreneurship for Positive Impact, and will allow it to contribute to the sector’s digital transformation in two important ways:

The partnership between Microsoft and the Schwab Foundation is a powerful demonstration of how large technology companies can partner with social innovators and the ecosystem to scale impact, to the advantage of both.

Social enterprises may have energy and talent in abundance. But solving economic, societal and environmental challenges requires synergy between the right technology, partners and people. Only by empowering them with the right tools and partnerships can they build and develop their operations to deliver social value globally.