William Drayton, the man who coined the term ‘social entrepreneur’, tells Sunday Times why the citizen sector is coming into its own globally — and how that will change the world forever

Vikas Singh & Swati Anand | TNN

As a boy, he started a popular newspaper for New York schools, campaigned against racism and read about Mahatma Gandhi with fascination. As a teenager, he trudged through rural India, watching the Bhoodan movement in action and pestering Vinobha Bhava with endless questions.

Back in Harvard, he coined the term ‘social entrepreneur’ to describe individuals who have the energy, determination and innovation of entrepreneurs, but focus on changing the way society works rather than setting up businesses. A stint at consultancy giant McKinsey gave him insight into corporate functioning and public policy-making. As assistant administrator at the US Environment Protection Agency, he created the blueprint which paved the way for emissions trading.

But William ‘Bill’ Drayton, change maestro and eternally-restless ideator, finally found his calling in 1980 with the creation of Ashoka — a venture which provides funding to social entrepreneurs and helps them network to maximise their impact. And yes, in case you’re wondering, Ashoka is named after another of Drayton’s idols, the great Mauryan emperor and humanitarian who was, albeit unwittingly, one of the world’s first social entrepreneurs.

Twenty-five years on, the man named as one of the 25 best leaders in the US retains a slender frame, and remains an ethusiastic evangelist. The two may be linked. As we wait to chat with him, his lunch gently congeals, a casualty of his determination to talk to all colleagues and admirers who surround him. The twinkle in his eye stays in place, as does the ready smile.

Finally, we closet him in a secluded corner, where he immediately takes on the ‘perception gap’ about the citizen sector, which is how he describes NGOs. ‘‘Almost no one knows we’re the world’s fastest-growing sector. The citizen sector now creates three times as many jobs as any other in OECD countries. Students from the best B-schools now seriously think about it as a career option. The biggest organisations in the citizen sector influence national policy. All this would have been unthinkable 25 years ago.’’

What caused this revolution? ‘‘From the Roman empire to 1700 AD, per capita income hardly changed. But then, a new economic model developed, which ignited a virtuous cycle of entrepreneurial innovation leading to productivity gains, leading to more entrepreneurs. The west broke out of 1,200 years of stagnation. Average per capita income rose 20% in the 1700s, 200% in the 1800s and 740% in the last century.

The rise of social entrepreneurs

He pauses for breath, then plunges on. ‘‘The business transformation had bypassed the social half of the world’s operations. By the 19th century, a few social entrepreneurs like Florence Nightingale appeared, but they remained islands. That began to change around 1980. Simultaneously, we had the communication revolution. Politically, the generals retreated in Latin America. Finally, the fall of the Soviet empire in 1989 changed the world forever. This was also a period which saw the coming of age of many generations in post-colonial countries like India. This new generation was better educated than their parents and not demoralised by corruption. They believed that they could do better, and they did. After all, it’s entrepreneurs who fix problems, because bureaucracies don’t make changes. In the last 25 years or so, social entrepreneurship has blossomed. Today, we’re entering an era when every single person can be a change maker.’’

How will this new reality impact individuals? ‘‘There’s a whole new range of career opportunities. Whether you’re 20 or 60, you have a chance to make a positive difference, tell your grandchildren you did something worthwhile. There is no glass ceiling because demand for talent is hugely outstripping supply. And you’re hooked onto a global network. You work together, share the best ideas. You can make something work in India, and then someone can pick it up in Indonesia, or Brazil, or Venezuela. This is a positive side of globalisation, and I think it will balance many of the imbalances. The other actors in globalisation are nation-states, who don’t function too well there, and corporates, who don’t provide adequate social representation. Now, we do. Why is there an international criminal court? Not because nation-states wanted it, but because 2,000 citizen groups got together and lobbied for it. Twenty years ago, there was a certain condescending attitude. People would say, ‘Oh, it’s a nice little bunch of people doing something in a village — a drop in the ocean’. They don’t say that anymore.’’

Talking business

How will businesses be impacted? ‘‘Business strategists who haven’t woken up to the emergence of a world in which everyone is a changemaker could be in for a big surprise, just like western companies were caught off-guard by the rise of Japan. Collaborating with the citizen sector and using its strengths to create hybrid value chains could be a huge source of competitive advantage. Besides, corporates could increasingly look at the citizen sector as a source of recruitment of proven innovators. At a structural level, businesses are increasingly going to have to remake themselves to become organisations of changemakers, because that will be the success factor. Look at companies like Google, which want every single employee to be creative. Companies which embrace this paradigm first, will be the ones that benefit.’’

Traditionally, hasn’t business had an adversarial relationship with the citizen sector? ‘‘There are stereotypes on both sides. But when the best entrepreneurs from both sides sit down together, they find lots in common. We’re now looking at both sides working together for mutual benefit. For example, in Mexico, it can take up to five years for a poor family to add a single room to their dwelling. But one of our associates tied up with cement manufacturer Cemex to give prefabricated units which can be added together to build that room a lot faster, at much lesser cost. Families get an additional room, and Cemex, customers it never did before.’’

Will mainstream financial institutions ever fund the citizen sector with the intention of making a profit? ‘‘I’m talking to a few people about it. Certainly if you look at Grameen Bank and other microfinance ventures, there’s no question there’s good business potential there.’’

What about the criticism that NGOs now routinely attract? For starters, many are accused of just being money-grabbing ventures? The response is straightforward: ‘‘Well, we have pretty professional donors now who tend to build relationships with the NGO and keep a close watch on how their money is being spent. Besides, this is a highly-competitive field where there’s intense rivalry for finance and talent. Organisations that don’t measure up to high standards don’t last too long.’’

There’s also talk of many NGOs being oneman shows which don’t have the managerial talent to scale higher? ‘‘That could be true of any sector. But I think truly great entrepreneurs either find colleagues who make up for their shortcomings, or find a way to improve their own performance so that they can get the job done. Fundamentally, this sector is driven by entrepreneurs. And even in the corporate world, it isn’t always a good idea to replace entrepreneurs with professional managers. Apple tried that and look where it got them. They had to get Steve Jobs back and, no surprises, they’re a force again.’’

Finally, how should governments react to the new superempowered citizen? ‘‘If you’re looking for the best solutions to public policy problems, you need to tap the citizen sector. Let’s say you’re in charge of public education. You really need to pull your socks up. Because across the world, billions of people have given up on public education altogether. If you want to remedy that, you probably need to work with citizens that are making a difference. But I concede that governments don’t always respond speedily to change. So we’ll need to constantly cajole, nudge and push.’’ Chances are, that’s exactly what he’ll keep doing — with not too many breaks for food and sleep, without ever losing that twinkle in the eye.