Big Think Interview With Saras Sarasvathy | Big Think

Summary

This video script explores the gap between entrepreneurial thinking in the for-profit sector and the funding mechanisms available in the social sector. The speaker argues that while social entrepreneurs share the same innovative mindset as their for-profit counterparts, the lack of scalable financial structures makes it difficult for social ventures to thrive. The speaker advocates for applying innovative funding models and market mechanisms from the for-profit world to the social sector, proposing solutions like venture capital for education in Latin America and fixed-income instruments for education in Pakistan, aiming to create a more sustainable and scalable social impact.

Takeaways

• 😀 Entrepreneurs in the social sector often think like those in the for-profit sector, but the funding models differ significantly, creating challenges.
• 💡 The speaker questions how funding in the social sector can be transformed to support entrepreneurial thinking and development like in the for-profit sector.
• 🚀 The speaker emphasizes the importance of creating equivalent credit markets and innovative financial instruments in the social sector to boost social entrepreneurship.
• 📊 The timing for discussing innovative financial instruments is uncertain, but the speaker sees it as an opportunity to apply new thinking to social sector funding.
• 🌍 The speaker highlights ventures like Lumy and fixed income instruments for funding education as examples of innovative funding in the social sector.
• 📈 Social sector funding lacks the kind of market efficiency seen in the for-profit sector, where resources are easily matched with companies.
• 💬 The speaker notes that there are no accessible channels for global investors to easily discover and support impactful social ventures, such as addressing illiteracy in the Congo.
• 🛠️ Market mechanisms, such as competition and scaling, exist in the for-profit sector but are underdeveloped in the social sector.
• 💰 The funding side of the social sector lacks the entrepreneurial thinking that drives venture building, making it harder to scale impactful solutions.
• 🌱 The speaker proposes 'Markets in Human Hope' as an initiative to bring entrepreneurial thinking to the social sector funding landscape, aiming for innovative solutions and scaling opportunities.

Q & A

What is the main challenge faced by social sector entrepreneurs, as described in the script?

The main challenge is the difference in funding models between the social sector and the for-profit sector. While entrepreneurial thinking exists in the social sector, the lack of innovative funding mechanisms makes it difficult for social ventures to scale effectively.

What does the speaker suggest is missing in the funding of the social sector?

The speaker suggests that there is a lack of innovative financial instruments and credit markets in the social sector, which hinders the scaling and sustainability of social ventures.

How does the speaker compare the funding options available for for-profit and social sector ventures?

In the for-profit sector, entrepreneurs can easily access a variety of financial instruments, like venture capital and public markets, to scale their ventures. In contrast, there is no similar infrastructure for social sector entrepreneurs, making it harder for them to grow and sustain their ventures.

What is the 'Markets in Human Hope' initiative mentioned by the speaker?

The 'Markets in Human Hope' initiative is an effort by the speaker and their colleagues to develop innovative funding models for the social sector. It aims to bring the same entrepreneurial thinking and market-driven mechanisms seen in the for-profit sector to the social sector.

What example does the speaker give to illustrate the lack of funding infrastructure in the social sector?

The speaker uses the example of entrepreneurs in the Congo attempting to solve illiteracy, emphasizing that there is no easy way for people to evaluate such ventures and invest in them, unlike how people can evaluate and invest in for-profit ventures such as cars.

What does the speaker believe needs to change in the social sector to improve funding?

The speaker believes that funding systems in the social sector need to be reimagined to match the sophistication and efficiency of the for-profit sector, creating better channels for investors to evaluate and support social ventures.

What are some of the examples of innovative funding models in the social sector mentioned by the speaker?

The speaker mentions a venture capital model for funding education in Latin America and a fixed-income instrument for funding education in Pakistan as examples of innovative funding approaches in the social sector.

Why does the speaker refer to the current time as a 'great time' for innovative financial instruments?

Despite the financial challenges, the speaker believes this is a great time for innovation because the same innovative mindset that exists in the financial sector could be applied to the social sector, potentially leading to breakthrough solutions.

What does the speaker mean by 'entrepreneurial thinking' in the social sector?

Entrepreneurial thinking in the social sector refers to the mindset of innovation, problem-solving, and the pursuit of scalable solutions that drive social change, similar to how businesses in the for-profit sector approach problems.

How does the speaker envision the role of entrepreneurs in improving funding for the social sector?

The speaker envisions entrepreneurs playing a key role in transforming the funding landscape for the social sector by developing new financial models and infrastructure that can effectively support the growth of social ventures.