They are so damn grateful : A longitudinal study of how postcolonial attitudes influence the innovation process in social ventures

(1)

‘They are so damn grateful’

A longitudinal study of how postcolonial attitudes influence the

innovation process in social ventures

Ruth Brännvall

Department of Industrial Economics and Management (INDEK)

KTH, the Royal Institute of Technology Stockholm

(2)

2

Abstract

Keywords: social innovation, social entrepreneurship, post-colonialism, co-creation, innovation management.

This research is a longitudinal study of three start-ups that are aiming at launching innovative products for underserved markets. Prior research has showed that the ability to design services, which support all parties in the processes of value creation and including the customer into creating the experience, becomes a source of competitive advantage for the firm. Value is determined not only through the products and services themselves, but by the value they co-create with their customers. Within the field of social innovation and social entrepreneurship, there have been few examples in the literature of organisations that have been successful in creating and delivering innovative services at a larger scale. Previous examples include mainly non-profit organisations. Less attention has been given to commercially orientated social entrepreneurs, who wish to deliver economic returns alongside social impact.

Founders, end-users and partners of two start-ups operating in Africa and one start-up in Europe were interviewed over a five year period in order to improve the understanding of the process of end-user inclusion in the innovation process. The results include generalisations and stereotyping by the entrepreneurs of end-users, often limiting and undervaluing their feedback. In two of the cases, this helps explain an important reason for why the ventures did not grow. In the third case, the venture expands to several markets, but is slow to launch new services as users’ requests are not acted upon.

The research problematizes the field of social innovation by applying a critical view on the user and customer engagement in social ventures. It demonstrates a link between the entrepreneur’s view of themself, his or her assumptions and beliefs about others and how the innovation process is managed. By applying a post-colonial perspective to fields of social innovation and innovation management, this thesis contributes to new perspectives on the importance of incorporating users and beneficiaries of social innovation into the innovation process to a greater extent. It also adds a few suggestions on how this can be done in practise.

(3)

3

Svensk sammanfattning

Denna avhandling bygger på en långtidsstudie av tre nystartade företag som vill leverera innovativa produkter eller tjänster till marginaliserade kundgrupper. Tidigare forskning har visat att förmågan att designa tjänster, som tar hänsyn till alla parter som ingår i en process av värdeskapande och som inkluderar kunden, är en källa till konkurrenskraft för ett företag. Inom forskningsområdena social innovation och socialt entreprenörskap finns det relativt få exempel på framgångsrika organisationer som levererar innovativa tjänster och lösningar i någon större omfattning. De som lyfts fram har främst varit icke vinstdrivna organisationer. Sociala företag som strävar efter att leverera ekonomisk avkastning, jämte socialt värdeskapande, har fått mindre uppmärksamhet.

Grundare, slutanvändare och partners till två nystartade företag i Afrika och ett i Europa intervjuades och studerades under fem års tid. Syftet var att förstå vad som präglar relationerna mellan dessa entreprenörer och slutanvändarna i innovationsprocessen. Resultatet av studien visar att entreprenörer ofta gör generaliseringar och har stereotypa uppfattningar om slutanvändare, vilket begränsar och undervärderar slutanvändarnas synpunkter. I två av fallstudierna är detta en viktig förklaring till att företagen inte växer. I den tredje fallstudien expanderar företaget till flera geografiska marknader, men är långsam med att utveckla nya tjänster då slutanvändarnas förslag och önskemål inte får någon större inverkan på företagets aktiviteter.

Avhandlingen problematiserar området social innovation genom att ta ett kritiskt perspektiv på hur sociala företag förhåller sig till kunder och slutanvändare. Den påvisar ett samband mellan entreprenörens syn på sig själv, dennes uppfattningar om målgrupperna och hur innovationsprocessen leds. Genom att applicera postkolonialism till teorier om social innovation och innovationsledning, så bidrar denna avhandling till nya perspektiv på betydelsen av att slutanvändare och kunder blir engagerade i innovationsprocessen i högre utsträckning.

Slutligen ges läsaren några förslag på hur detta kan ske i praktiken med rekommendationer till entreprenörer och finansiärer till sociala företag.

(4)

4

Acknowledgements

There are many people who have provided inspiration, encouragement and support during the nearly six years that have passed from the day that I approached professor Monica Lindgren with an idea about a research topic. I wanted to pursue this research at an internationally well recognised technical university, but was uncertain whether my rather “soft” research topic would resonate here at the Royal Institute of Technology. My first meeting with Monica Lindgren was most encouraging and there was no question that there is certainly room for social innovation at this institution, built upon industrial economics theories. She is therefore the first person I wish to acknowledge here, now at the end of this journey. I also had the privilege to have more senior academics providing supervision and advice; Anna Wahl, Lucia Cervani, Charlotte Holgersson and the people engaged for my “D day”: Malin Tillmar, Fredrik Tell and Tony Huzzard, as well as Calli Nuur who provided the final scrutiny of this manuscript. My opponents at each seminar have each provided most useful comments – and sometimes challenges – that helped me progress and to break up with some intellectual darlings, where my subjective views and interpretations of some issues had to give way for a scientific approach. The diligence and support provided to this end by Malin Lindberg at the final seminar was simply amazing (and I hope you can see what difference it has made, Malin). Laurence Romani and Karin Berglund, your encouragement and feedback in the earlier seminars also displayed you as academic role models for how experienced researchers can share their knowledge and acumen with research students. Mats Alvesson and Hugh Willmott, thank you for producing creative research seminars and pointing out that an important aspect of good research is simply that it should be interesting. Thanks to Jannis Angelis for pointing out when it was not. But still – in your own way – trying to encourage something better. Thank you Erika Lokatt, Matthew Stogsdill, Håkan Nilsson and Britta Nordin Forsberg for making sure the research training has been more than interesting – it has been fun to share (part of) the journey with you.

I also wish to acknowledge the positive influence on this process that some other people had: Cristiana Benedetti Fasil, a researcher and a social entrepreneur whose determination and stamina is second to none. In that “category” of academics who are also professionals in the field of social innovation, whom always provide a good debate and sober look at what is going on within social innovation, I count also Yosra Albakkar, Funda Sezgi, Andreas Vallgren, Rodney Schwartz, Lisa Hehenberger, Anne Holm Rannaleet and Magnus Rehn.

(5)

5 To my supportive, extended family, I want to thank you all for your patience with me for being so very absorbed by reading, writing, studying…

‘Are we there yet, mum?’ Yes, we are at last, Filip! Let’s go play.

Ruth Brännvall

(6)

6

List of Figures

Figure 1 Enablers are required to manage innovation 38

Figure 2 A human-centric design process and cultural competencies applied to key enablers 44

Figure 3 Illustration of engagement levels 45

Figure 4 The ‘SCALERS model’ 59

Figure 5 Choosing a scaling trajectory 61

Figure 6 Hofstede country comparison Ghana, Sweden, Kenya 80

Figure 7 Hofstede country comparison Syria, Sweden, Iran 80

Figure 8 The postcolonial perspectives to innovation enablers 96

Figure 9 Weather forecast using symbols on a mobile phone 130

Figure 10 Weather Corp marketing material 131

Figure 11 The author on field trip 135

Figure 12 Ghanaian man at a demonstration farm 136

Figure 13 The service team of the agro company 137

Figure 14 Participants at the after-school club 156

Figure 15 One of Damu's three product promoters 163

Figure 16 Article in Dagens Nyheter about mobile apps for tracking menstrual periods 173

Figure 17 Screen shot of the ImmoApp home screen 181

Figure 18 The mobile interface of ‘Information om Sverige’service 188

Figure 19 Illustration of engagement levels in each case company 203

(13)

13

Figure 21 The text based user interface of WeatherCorp’s service 222 Figure 22 Two models of hijabis designed for professional wear 232

(14)

14

List of Tables

Table 1 How the CEO of social enterprises rank their organisation’s entrepreneurial orientation 55

Table 2 Different terms in the literature relating to business activities for underserved markets 66

Table 2 Country classifications in selected international organisations 78

Table 3.1 Data collection Case 1 100

Table 4 Comparison of Bruner’s two modes of thought 118

Table 5 Summary of selected user data ImmoApp 183

Table 5 Summary of selected usage statistics ImmoApp 184

Table 7 Innovation results and the influence from end-users and customers per case study 211

Table 8 Gatewood et al (1996) list of “fundamental determinants of entrepreneurial behaviour" 216

(15)

15

‘

Perhaps what we most need here is to combine enthusiasm of the spirit

and scepticism of the intellect.’

Geoff Mulgan, Chief Executive of NESTA

(16)

16

PROLOGUE

The first time I set foot in a so called “developing country” as a 20-year old, I immediately started scanning the surrounding city and judging it in terms of how ‘developed’ it was. Or was not developed, as my conclusion was for the city of Chennai. I came to do a field study during a course in development and international aid at a Swedish university and had just been exposed to theories of social development, provided with heaps of facts about the inequalities between the “first” and “third” world, and the class and gender differences within this great sub-continent of India. I was brought up in a world that was divided into the first, second and third world and how could I not interpret that as the A, B and C-teams of the world? Since then, I have had many opportunities to travel and work in economically deprived countries and regions of South-East Asia and Africa. I have discovered the nuances of the African continent; how business life in Nairobi is very different from that in Accra and how the Nigerian women express themselves very differently from women in Uganda, just to mention some examples. It is still a very superficial understanding, since I do not speak any African language and it is only thanks to using a common language (English mainly) or interpreters that we can communicate with each other, and I have not lived for more than a few weeks at a time in any country outside of Europe. The habit of referring to my own understandings of “development” has not been abandoned though; it is a fairly automatic process, which is set in motion whenever I travel abroad. Lack of infrastructure such as trains or major roads become “evidence”, acceptance or not for paying with credit cards, cities polluted by traffic congestion, the level of cleanliness on the city street – it all adds up to my judgement of a nation. This spills over into to my view of its inhabitants and thus my attitudes and behaviour differs in relation to others. Some less superficial people than myself would perhaps rather point to some more basic needs of society and make this judgement based on access to clean water and sanitation. A ‘developed country’ has all of this – or does it…?

I have myself been brought up in one of the richest and most ‘developed’ countries in the world. Yet, I have spent months every year in a house that had no running water, no toilet, no electric stove or oven, not to mention television or telephone. Access to clean water was not too far away, but required long daily walks to fetch it in a bucket. As a young girl, I could only manage to collect

(17)

17 half a bucket of clean water every time I went, because the bucket was of metal and slammed hard into my legs and was too heavy for me to carry if I filled it up. Was this an “undeveloped” place in my mind? No, it was all about simplicity and the romantic feeling of being close to nature. In the view of my parents, it was a healthy simplicity of life that we needed as a family from time to time. Now, some thirty years later, I have been working within and in relation to the least developed countries for half of my career, as a consultant and trainer to businesses, foundations and international development agencies. I have been driven by curiosity to understand and realize the opportunities of innovation, to see whether business can play a (more) meaningful role in engaging in social and ecological development. I was trained for this in a corporate environment with multi-national Information and Communications Technology (ICT) firms, which all had operations in the South as well as the North. The corporate training including courses in “cultural understanding”. Curiosity – and ignorance – have led me into much trouble, as my traditional business background was dominated by values and views mainly from a Western, and to some extent Far Eastern, perspective. One of my greatest frustrations (and later on learnings) came as I had recruited a project manager for a social enterprise that I had set up on behalf of Virgin Unite, a British foundation set up by Richard Branson. I was to rely on this person bringing a conceptual idea for a rural health care service, that I had formalised with a local NGO, to a larger pilot. Even though the project was to be quite successful (as a project, not as an enterprise necessarily) I encountered numerous problems in understanding and managing the project manager. When I look back, I reflect on the fact that I had spent 95% of the time and energy to get him to understand my and Virgin’s idea about how the enterprise would run and less than 5% on his views and ideas of how it could be realized, although he was, in fact, much more important than myself to that end.

I have been working directly and indirectly with hundreds of start-ups that wish to address market needs that are generally neglected by traditional companies. Most often, an international donor or government institution has been the funder of the services that I have provided to entrepreneurs1_{who want to use entrepreneurship as a means to address a social challenge. These}

entrepreneurs are often referred to as social entrepreneurs or social innovators. The majority of

1_{The empirical research in this thesis has, however, only relied on my own funding, with the exception of some travel}

(18)

18

these start-ups did not originate in the country where they operate, especially the companies operating in Africa. This is different from South-East Asia, where the entrepreneurs that I have supported and met most often operate in the region they come from (and may later have expanded into other markets). I started to observe the challenges that foreign entrepreneurs face as they address users who have a different cultural background also among those entrepreneurs in Europe who address refugees and immigrants. Many seemed to do well when it came to developing a concept, a prototype or an initial cross-sector partnership to deliver a new product or service. After the initial pilot or launch, however, I observed that many struggled to grow their ventures. I have a keen interest in innovation and methods of co-creation, and this raised more and more questions. Why after what seems to be an initial successful pilot do many social ventures struggle to grow? Are the external constraints, such as poor infrastructure and lack of resources, really the main reasons or can there be other, less obvious, factors that affect the chances of growth? Finally, I wondered whether such factors could in that case be observed in social ventures regardless of where the ventures operate geographically?

(19)

19

1 INTRODUCTION AND BACKGROUND TO THE RESEARCH

In this thesis, I study how social innovators and social ventures struggle to become established on a market, with a focus on how postcolonial and cultural structures affect relations and cooperation with end-users.

This introductory chapter outlines the notion of social innovation (1.1) and thereafter situates and further defines this form of innovation in the current political and economic discourses in international organisations such as the United Nations, the OECD and the European Union (1.2 and 1.3). In 1.4, I introduce the reader to the underlying empirical problem of how social innovations can develop and grow their business in relation to their local end-users. Then, in 1.5, the postcolonial theoretical perspective is introduced as a lens through which this problem can be studied in greater depth and handled, which results in the formulation of the research questions and contributions of this thesis in 1.6. The chapter ends with a brief outline of the structure of the thesis.

1.1 The social dimensions of innovation

What is distinctive about the type of innovations and the innovation processes that happen in the start-ups that I described in the prologue is their social dimensions; they require some change in social practices among users or stakeholders (employees, suppliers…), or a change in attitudes or behaviour, and Dawson and Daniel (ibid) therefore suggest that the word ‘social’ describes a collective and highly collaborative type of innovation process. Some practical

examples of social innovations: The Big Issue was the first weekly magazine that was sold on the streets and not in kiosks in Britain. The Big Issue only exists to generate income for and raise awareness of its vendors, homeless people. Solar skylights for the inhabitants of Philippine slums provide a novel light source made simply from plastic drinks bottles filled with water and bleach. These lights are equivalent to a 55 W bulb, reducing electricity bills by around US$10 per month. The development of a new electricity solution that created market demand as a

(20)

20

result of a lower price can also bring an improvement at a social level; enabling individuals to work for longer hours and potentially in better working conditions (Berthon, Pitt, Plangger, & Shapiro, 2012).

These two examples illustrate the core of the purposes of this type of innovation, some form of social change for the better. As such, they are to be considered social innovations (Caijaba, 2013). Social innovation can be broadly described as the development of new concepts, strategies and tools that support groups in achieving the objective of improved well-being (Dawson and Daniel, 201:10). The concept stands for a non-material view of innovation, and scholars point out that social innovation can bring about social change, but it does not necessarily solve a social problem (ibid, Cooperrider and Pasmore, 1991), even if it is sometimes used as a descriptive metaphor when talking about world problems and needs for change (Howaldt and Shwartz, 2010).

What is the difference when scholars say that social innovation should not strive to solve social problems but drive change? A problem can be insoluble, but a social innovator could offer alternatives and improvements (Caijaba, 2013). At a slightly more practical level, social innovation is defined here as a ‘new combination or configuration of practices in areas of social action, prompted by certain actors or constellations of actors with the ultimate goal of coping better with needs and problems than is possible by using existing practices’ (Howaldt and Schwarz, 2010: 54). Social innovation can be viewed along similar dimensions, as classic innovation is sometimes classified, namely according to whether they are institutional, incremental, or radical/disruptive (Nicholls et al., eds, 2015). In other words, there is a natural link between social innovation and innovation theories, as I will discuss further in the second chapter. The other relevant field of research would be social entrepreneurship. Peter Dacin et al., (2010) produced a much-cited overview of the different definitions of this term in comparison with conventional, cultural and institutional entrepreneurship, and they found little difference. They therefore concluded that a focus on social value creation could allow researchers to examine the actions that individuals and organisations take in order to achieve such objectives. Others argue that the challenges of social entrepreneurship are different from traditional forms of entrepreneurship and would, therefore, need theories of their own (Austin et al., 2006; Hockerts, 2006; Murphy & Coombes, 2009; Weerawardena & Mort, 2006 In Dacin, 201).

1.2 Social innovation in international development work

My work with entrepreneurs has most often been financed by a governmental agency or a private foundation. Among international donors (such as Sida, US Aid, UK Aid) there is an increasing

(21)

21 emphasis on collaboration with the private sector and “sustainable economic growth” within the policy field of international development, as 84% of GDP in the low- and middle-income countries is generated by the economic activities of businesses (EC, 2017). International development in the early days after the independence of former colonies meant international funding of infrastructure projects such as dams, roads and power stations (Williams, 2016). In the 1970s and 1980s, it started to include interventions in economic and fiscal policies, mostly notably through the multilateral organisations of the World Bank and the International Monetary Fund, then to include programmes aimed at promoting better democratic practices and ‘good governance’. This has been the same sequence of international development for the vast majority of countries that have been recipients of resources for the purpose of assisting, directing or in other ways helping the process of “development” (ibid). It has also served the purpose of realising the Western countries’ international political objectives since the second world war; for instance, both the UK and the US international development policies have been linked to arguments such as ‘a safer and more prosperous world for us all’ (DFID 2006:13).

Social innovation and the social and environmental aspects in “classic” innovation have become even more important on the global development agenda in the past few years, for example in the UN members’ adoption in September 2015 of “Agenda 2030 for sustainable development” and the 17 sustainable development goals (SDGs) expanded from the previous six goals. The main difference between the previous Millennium Development Goals and the new SDGs was the shift from setting goals that were focused on development for the global South to a development agenda for all countries. Agenda 2030 has a strong focus on the environment, building resilient economies, ‘decent work for all’, and gender equality not only for the women in some regions, but for all women anywhere. The first Global Sustainable Development Report that provided the background to the historic decision stated that “Policies to promote industrial development today will need to be responsive to these two sets of concerns: how to make industrialization more environmentally sustainable? How to make it more socially inclusive?” (UN, 2015) The report stated that it is important to include policies to support social innovation but provided no examples of such policies. Goal No. 9 is ‘Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation’. The word “inclusive” in this context suggests that the expected output would be ‘improvements in the social and economic wellbeing of communities that have structurally been denied access to resources, capabilities and opportunities’ (George et al., 2012, p.661). The term is used in the same way that international development agencies have explained their engagement with the private sector to promote industrialization according to the supply-side economics theory: industrialization and economic growth is a driver of development; as more jobs are created, it provides opportunities for social inclusion and gender equality, then encouraging investments in skills and education. Note that

(22)

22

the UN description of the goal does not say that job creation ‘may or can’ provide, but states this as the given outcome, whereas George’s definition (ibid) of inclusive innovation is the deployment and implementation of new ideas ‘which aspire to create opportunities that enhance social and economic wellbeing for disenfranchised members of society’. Asia is used as the evidence that this logic works (UNIDO, 2015) and, while many researchers have been challenged by the question of why the same logic has not worked in Africa and other places, UNIDOs response (the part of the UN that is responsible for industrial development) is that the key to social inclusion in developing economies is 1) to strengthen agro-industries to become more productive; 2) to attract and support young women and men to become entrepreneurs and develop local business culture; 3) to support SME business clusters and export consortia; and 4) to generate gender and women’s empowerment.

1.3 Social innovation, social ventures and social businesses

As international development is aiming to support the growth of local economies in the global South in a sustainable way, so are there similar agendas in the global North. Since 2015, international development goals for the South and the North have come together in the Sustainable Development Goals (SDGs), adopted by the members of the United Nations in 2015. In Europe and the US, the emphasis on innovation and entrepreneurship to solve domestic societal issues was raised long before the SDGs, and is growing stronger year on year. Previous strategies to address social problems have often turned out to be palliative, mitigating symptoms and effects (Fowler, 2000). Social challenges often have multiple causes, and the public sector is not well set-up to, for example, get people on long-term sick-leave back to work, or alleviate severe poverty in certain boroughs of large cities, such as London’s Tower Hamlets. London hosts the world’s largest financial centre, yet one out of four children grow up in severe poverty in the shadows of its tall, architectural landmarks (Office of National Statistics, 2011; 2014). Entrepreneurial initiatives that address this are often started at grass-root level, by people living in the affected communities who see possibilities of developing missing linkages between different key actors, for example, as they operate outside the formal structures and can in that sense be more creative. They also act on the understanding that the solutions have to be demanded by the beneficiaries, not forced upon them, and have a value proposition that is attractive also to clients and funders, as they often come up with more cost-effective solutions (Gramescu, 2016). Governments are starting to take notice, and the European Commission urged its members in 2013 to promote and fund initiatives that help modernise the welfare states with ‘better performing active inclusion strategies’ (see, for example, the policy document by the EC, 2013). The specific challenges where governments are seeking new routes to solve social problems

(23)

23 are long-term unemployment, long-term sick-leave, poverty in certain demographic groups, unequal education opportunities, the increasing cost of health and elderly care with an ageing population in parts of the world, just to mention a few (EC, 2013 and 2014). Many countries within the European Union have created a specific legal status for social business structures to define how they differ from other forms of legal incorporation (EC, 2014). There are also other variations in the naming of these organisation, which I will return to in the theory chapter.

Another motivator in the public domain is, according to academic scholars, also a belief based on neo-liberal ideology that enterprises can play a role in tackling social and environmental challenges and foster inclusive growth, irrespective of type of country, since innovation is central to economic change (c.f. Bradley et al., 2012; George et al., 2012). “Enterprises” in this context are not necessarily companies in the traditional sense; “enterprise” also refers to organisations embedded in civil society (Borzaga et al., 2016). We have seen the emergence of organisations that use entrepreneurial approaches to offer solutions that benefit society. These are often considered a social enterprise or social business. The literature is using these terms in different senses, and there is no single clear definition of either-or distinction between them. Most often in the literature, the term social enterprise is linked to civil society actors and defined as a non-profit organisation that has income-generating activities (e.g. Leadbeater, 1997; Dees, 1998; Pestoff, 1998; Yunus, 2007; Laville et al., 2015) But, some emphasise the commercial aspects, e.g. ‘A social enterprise seeks to achieve social, cultural, community economic or environmental outcomes while remaining a revenue-generating business.’ (P.O. Andersen et al., 2016, my italics) even though the same authors trace the emergence of this type of organisation to the interactions and new types of collaboration between the welfare states and the third sector (i.e. civil society). As some civil society actors started to deliver welfare services in the 1990s (i.e. long before the above-mentioned EC call to its member states), they have been regarded as capable of delivering bottom-up approaches that include citizens and beneficiaries as they develop, test and deliver new approaches to complex problems (Borzaga et al., 2016). The term social enterprise has since broadened to include organisations that may have some profit-distribution where the emphasis has shifted away from profits as the purpose of the company, if they were organisations with ‘mission-driven business approaches’ (ibid).

The difference though in, for example, creating job opportunities for the population already in a job market and those that are far away from the job market, or creating a new mobile application for the already IT savvy consumer versus creating a service delivered to a low-literate mobile user requires a conscious decision regarding what the organisation should focus on. The social challenges would otherwise have been solved already. Governments, policy makers and funders of social impact recognise this and encourage innovation in this direction. FORA (2009) made a

(24)

24

study with the aim of identifying and describing new ways in which companies work and the need for a transformed business environment. The group concluded, in a report that was the main input to the new OECD innovation strategy presented in 2010, that the emerging innovation differs from the industrial innovation and the key drivers are:

1. Co-creating value with users and tapping knowledge about users 2. Global knowledge sourcing and collaboration networks

3. Global challenges as drivers of innovation 4. Public sector challenges as drivers of innovation

Start-ups, as well as established companies, are responding, and there are more and more incubators and business accelerators in the global North that are working to support the start and growth of start-ups focusing on the third and fourth driver (the drivers of social innovation) judging, for example, by the increasing number of programmes focused on social issues in the UK (Bone et al., 2017) and at Nordic accelerators such as INDEX in Denmark, STING in Stockholm and Vertical in Helsinki. Accelerators are fixed duration programmes that run in cohorts, typically growth-based with a focus on services such as mentorship and entrepreneurial training rather than physical space. By contrast, incubators are typically more open-ended in duration and are generally focused on providing physical space over services. Incubators are more likely to focus on science and research-based companies (Bone et al., 2017). Businesses that have a social mission probably represent still no more than one per cent of all businesses across Europe (EC, 2014). No unified way exists by which to identify and quantify how many companies are engaged in social innovation, even though 20 out of 29 EU countries do have a national definition of a social enterprise. It is not possible to measure how many entrepreneurs in Scandinavia have started and run their businesses with a social mission, since the legal forms of incorporation does not distinguish a social business from a conventional business, with the exception of those registered as cooperatives, and in Sweden as ‘limited companies with limited dividend policy’ (“bolag med särskild vinstbegränsning”) used by very few since no incentive is provided to use this form. From a policy perspective, social enterprises were first recognised as those enterprises that have work integration (of people far from the labour market) as its purpose (“arbetsintegrerande företag”). Today, they include many different types of organisations, and the Swedish government outlines the following characteristics of a social enterprise, in its national strategy for social entrepreneurship and social innovation: a) The business operations are a means to achieve one or more societal objectives, for example reducing social exclusion, improving the climate and the environment, or contributing to safer living conditions; b) the company’s results are measured in relation to the societal objectives that its mission focuses on, c) the profits are mostly re-invested in the operations, alternatively invested into a project for the

(25)

25 public good, instead of primarily distributing profits to the shareholders (Regeringskansliet, 2018). The growth of the sector in Sweden is inhibited by inefficient sharing of knowledge and good practice, and a lack of meeting places where practitioners can learn from each other and from previous initiatives (ibid). In general, social entrepreneurship activities are more common in countries where the welfare system is weaker (Chell, 2010). The growth of the sector in the UK has happened while public welfare is contracting (ibid), which shows that this type of entrepreneurship may grow in importance across Europe.

Entrepreneurs that are driven to create social value are not always interested in labelling themselves as social entrepreneurs, as the term is sometimes perceived as having a negative connotation of being less business-minded and less professionally run. As discussed above, the term social enterprise is usually synonymous with “not-for-profit”, which highlights the social outcomes of an enterprise at the expense of profit generation. In order to survive, many such enterprises therefore requires grant-aid (Chell, 2007). Especially in the community of investors and funders where I work, the term “social” in front of “enterprise” makes them more often mention examples of NGOs and volunteer-based organisations rather than enterprises run based on business principles. That would not be wrong; the positioning of a social enterprise can be along the entire spectrum from philanthropic to commercial (Dees, 1998). Since I am interested studying companies that are run by entrepreneurs that wish to position them as businesses, I will use the terms social ventures and social businesses as terms for the three companies that I have studied and analysed in line with the definition of Dees and Anderson (2003).

Having worked with social ventures in all types of markets, I started to notice that some of the challenges (and opportunities) seemed similar when entrepreneurs rooted in one tradition meet potential customers and end-users with traditions very different from their own, regardless of whether this takes place in Africa or Europe. Could it be that Karnani and Ansari’s critique (2007a and 2012) of the lack of output from innovation aiming at the Base of the Pyramid (BoP)-markets in low- and middle-income countries is also relevant to entrepreneurs targeting marginalised demographic groups in Europe? The journal Technovation published a special issue on innovation and entrepreneurial dynamics in the BoP in 2014, where, in line with Kandachar and Halme (2007), it noted that the research that existed so far had mainly been done on multinational companies and based on exploratory cases. The editors called for more research in the field of the role of the entrepreneur, technology and innovation and balancing economic growth with ecological pressure. More comparisons were needed across countries, age groups, and male versus female.

The geographical scope of my research was, therefore, articulated at the highest level as including innovative start-ups operating in Africa, run by Scandinavian entrepreneurs, where the study

(26)

26

could include the concept of ‘Innovation for the Base of Pyramid’ segments. But, I did not want this to become a study that was only about innovation that happens in “poor” countries. I wanted to see whether what I had started observing would also occur in a social venture operating in Scandinavia, in a situation where entrepreneurs and users come from different contexts. The “context” is defined as elements outside of the entrepreneur’s control that will influence success or failure (Austin et al., 2006). This can include socio-political environment, religion, macroeconomics, culture and technological maturity. A company in Sweden that was developing a new service to help immigrants integrate more quickly was, therefore, included in the study. Doing a cross-comparison of the ventures in Africa with the one in Sweden could also possibly confirm my hypothesis that “BoP innovation” is not necessarily the most helpful area to look for advice when working with innovation in underserved markets in the global South. Better approaches may be found among social innovation research on European organisations. And vice versa.

1.4 My quest to better understand what is going on

I am myself a witness to the challenges that entrepreneurs are facing as they try taking a more inclusive approach in business, with emphasis on serving the poor and the marginalised groups in society and sometimes co-creation. The vision and objective of the entrepreneurs – as well as to public agencies and to funders – is that business can be a way to help decrease inequalities in the world. It is, however, a challenge for several reasons. Start-up activities are always characterised by uncertainty, but, as many of these address target groups that are culturally and socio-economically different from the social groups the entrepreneurs identify themselves with, things get even more complex in managing business and innovation processes that meet the demands of customers and users (Hall and Martin, 2005). Patrick Dawson and Lisa Daniel (2010) linked the study of the failure of the coal mining innovation, which I mentioned earlier, to innovations that aim to improve well-being and quality of life: “there are likely to be technical and commercial dimensions that must also be considered in the achievement of social goals.” (p. 14) and they point to several other studies on the theme of social aspects of technology (e.g. Orlikowski, 1992; Grint and Woolgar, 1997; Wajcman, 1999). One reason that the research in social innovation and social entrepreneurship have not yet answered these critical questions about lack of scaling is that the analysis of case enterprises and entrepreneurs are often based on single case studies and are performed over a short period, which makes them anecdotal (Volkamann et al., 2015, referring to a selection of case studies; Alvord, Brown and Letts (2004); Bhawe, Jain and Gupta (2007); Bornstein (2004); Corner and Ho (2010); Elkington and Hartigan

(27)

27

(2008); Faltin (2009); Mair and Marti (2009); Spear (2006), Thompson, Alvy and Lees (2000); Thompson and Dorothy (2006) as well as Waddock and Post (1991). It would be important also from an economic perspective to better understand this, as several studies identify small firms as the engine of employment, job creation and growth in developing countries (Ayyagari et al., 2014).

In my own experience of starting and many times failing in running a business, I know that getting to the point of a successful pilot or a first product launch is simple in comparison to what comes next – to prove that the business idea is not just a flavour of the day, but is relevant, sustainable and creates value over time.

While the areas are quickly expanding, a contribution to be made in these overlapping fields of social innovation, social entrepreneurship and international development is therefore by studies that include social innovators in different contexts over a longer period. These different research fields are also in need of more geographical diversity. I noticed among the more recently published books and articles, that publications are slowly becoming more geographically diverse year by year with more research about social innovation generated in the poorer countries. Most studies within social innovation are still, however, based on samples of case studies in the US and Europe (see, for example, the extensive literature review made by Sundaramurthy et al., 2013). Universities in Africa do not seem to be producing much research in this field (judging by what is published in international journals), compared to universities in India and other South-Eastern low-income countries (ibid).

Still, from a practitioner perspective, we are not left without advice. There are many articles on “how to” innovate and what to consider, but, as mentioned in the section discussing the business action in international development, when it comes to social businesses, they are most often based on isolated case studies and anecdotal evidence, also by the leading scholars such as Prahalad and including inclusive and bottom-up approaches (e.g. Prahalad and Hammond, 2002; Hart and Christensen, 2002; Prahalad, 2005; Hart, 2005; Ramani, S. and Mukherjee, V 2013; London and Esper, 2014) leading to inconclusive results, according to the editors of the special edition of

Technovation in 2014 on “Innovation and Entrepreneurial Dynamics in the Base of the Pyramid.” It is often the same scholars who research social innovation and social entrepreneurship, but the latter is lagging behind the research in social innovation when it comes to the development of theories (Harding, 2004; Light, 2011; Weerawardena & Mort, 2006 In Ibid). I have, therefore, used social innovation as the “background theory” to my research, and complementary perspectives from social entrepreneurship when studying the actions (as per the suggestion by Dacin et al.,

(28)

28

2010) and innovation management when studying participation and learning in the processes (as per the suggestion by, for example, Dees, 1998; North, 2005).

1.5 Understanding end users: towards a postcolonial perspective

Within the aforementioned theoretical fields, I find little recognition and nearly no debate about the efficiency and problem of low outputs in the least developed countries2_{and the lack of scaling}

of social innovation in more developed economies (Smith et al., 2015). ‘While antecedent research on social innovation has largely concentrated on success stories, few have stopped to consider the profound nature of this shift and the operational obstacles it may pose for small resource constrained organizations.’, wrote Dominic Chalmers (2012:17) and he added that it is questionable that ‘the hype around social innovation’ (p. 22) can be reconciled with the corresponding volume of tangible outputs and that there is very little research undertaken to explore the reasons. Chalmers suggested that low or failed innovations were down to introvert innovation processes, where the social innovators are mostly engaged in talking to each other rather than with users and with other domains.

Nor is there a critical review of how companies engage in their context, with customers and suppliers, or how they balance a mix of expatriate and local resources, although there are plentiful reasons to research this. Many foreign entrepreneurs are establishing their ventures in countries previously unknown to them, from a motivation of solving problems they know about only second-hand (Brännvall, 2012). Cultural understanding is something that advisors in business accelerators rarely bring up, in my own experience, except for sessions where entrepreneurs share experiences with each other. Ethnography and anthropology rarely cross paths with the curriculums of innovation and entrepreneurship.

I realised quite early on in my empirical research that what I observed was not just a matter of (lacking) cultural understanding though. No, there was something else acting as a sort of filter or a priori assumption. I started to see that how entrepreneurs engage with the end-users is critical (and this would be no different from most “traditional” enterprises) and I started to wonder

(29)

29 whether entrepreneurs’ own beliefs and assumptions about their end-users, and the context they address, matter. I found that the literature that describes entrepreneurs with a social mission was often very biased, describing these entrepreneurs in very positive words (e.g. Bornstein, 2004; Martin and Osberg, 2007; Elkington and Hartigan, 2008; Crutchfield and MacLeod Grant, 2008). This is reiterated by people working in the sector of social innovation and by international donors. Based on the results in the cases studies here, I will argue that (overly) positive descriptions of social innovators helps preserve unequal relationships. This empathises again the need to problematize what is happening in these relationships.

The socially motivated entrepreneurs endorse customers and beneficiaries, but how well do they understand them? (Illustration Eva Strindlund. Source: ‘Toolbox for the Social Business. Brännvall, 2015)

When I noticed the prevalence of a priori assumptions, in the phase of analysing the first transcripts from interviews with the entrepreneurs, my background theories fell short of helping me interpret and analyse this. I started to explore postcolonial and power theories, and here things fell into place. In particular the postcolonial theory proved very powerful in developing a deeper understanding of the case studies, which is why the relationships between the entrepreneurs and end-users are unequal. I will describe these theories in Chapter 3.

1.6 Research focus

It would not be possible to address all potential explanations for my original question – Why do many social ventures struggle to grow after what seems to be an initial successful pilot? - within

(30)

30

one research study. Where would I start and how would I define the limitations? This is a dilemma for any PhD candidat, especially when one is reading new articles and new perspectives, new ideas arise. I followed my inclination to go back to the ‘drawing board’ where the product or service is developed, and to try to understand what is really going on in the interactions between these entrepreneurs and their customers and users. This research is, therefore, starting at the time when the three companies have developed a first version of their product or service and are in the phase of a commercial launch. The empirical research ends three years later, which gives a sufficient time span to study how the companies grow and how the innovation process continues. The overall purpose of this study is to find ways to better describe and explain what is going on in the inter-cultural relationships between entrepreneurs in social ventures and the users/customers that they address as they are trying to innovate and scale. Earlier discussions in BoP innovation literature and social innovation have only implicitly concerned inter-cultural relationships and general pointers to the importance of understanding cultural contexts of end-users, customers and beneficiaries. What are the difficulties, challenges – and opportunities – that both parties (entrepreneurs, end-users/customers) face? I want to understand what concrete actions the social ventures take to develop fruitful relationships with end-users and customers that can result in the growth or decline of these ventures and the social impact that they strive for. I am using three case studies, as it allows me to make comparisons of the innovation dynamics and how entrepreneurship unfolds in these ventures.

In particular, the research examines the assumptions, attitudes, beliefs and values that these entrepreneurs express and the observed actions that are performed in the relationship with end-users. What may possibly reproduce these assumptions and what may challenge them? The specific research questions are:

Ø What are the assumptions, values and beliefs that the entrepreneurs express? Particularly in relationship to the customers, end-users as well generalisations about “the Other” Ø Do the end-users and customers have an influence over and take an active part in the

innovation process

Ø How does the connection between user engagement, the management of innovation processes and the growth of the ventures manifest itself?

(31)

31

1.7 Contributions to existing theories

Prior research in this field has mainly focused on large corporates, most often addressing the underserved segment as part of a Corporate Social Responsibility (CSR) agenda. As previously mentioned, the research into socially motivated business ventures in the global South, as well as in the North, is most often done with a focus on a single country and a single case study (Thompson and Doherty, 2006; Littlewood & Holt, 2015). Entrepreneurs and small companies operate under very different conditions as they are resource constrained. They have, for example, few specialists that may understand the specific markets in which they operate. They have smaller business and personal networks and less access to larger, strategic partners and to people within authorities. It is relevant to add more knowledge about entrepreneurship and small businesses in this context if one assumes the belief (as is done for this research) that there is a mutual interest from end-users and enterprises in improving the chances for sustainable, innovative solutions. Very few scholars have paid attention to the importance of the context in which social entrepreneurs operate (Bacq and Janssen, 2011), and this would include postcolonial influences on today’s entrepreneurship and innovation. Drilling down further into what is happening and why socially motivated entrepreneurs are also holding on to stereotypes of the people they want to serve, is ultimately about destabilizing the taken-for-granted. There is a need to start problematizing Western government funding for business initiatives that may support the same old colonial power structures and realities. Research and knowledge can provide a way forward and away from stereotyping (Chen, 2011; Blaine, 2007). As Tsoukas notes: ‘The models through which we view the world are not mere mirrors upon which the world is passively reflected, but our models also help constitute the world we experience.... The knowledge generated within a representational epistemology is not so much a representation of how the world is, but is rather a tool for shaping it.’ (1998:792) There is also a need to suggest new approaches to practitioners (i.e. entrepreneurs) when they face the type of challenges that are described in these case studies. I believe that the results can be generalized to many other small enterprises, as I will show in my analysis, and therefore provide valuable insights into what can be done to make innovation for underserved markets more open and more inclusive of end-users.

Theoretically, the intention of this study is to make the following contributions:

- To advance current social innovation and social entrepreneurship theory by providing richer descriptions and problematizing what is going on in the inter-cultural relationships between entrepreneurs in social ventures;

- To raise awareness in innovation theory of the perspectives of power and post-colonialism that could influence the processes and outcomes of innovation;

(32)

32

- To develop the ‘Base of the Pyramid Innovation literature’ by adding the perspectives of entrepreneurial ventures in a longitudinal study;

- Connecting social innovation and BoP innovation literature by refuting the existing geographical distinction when it comes to the innovation process;

- Adding further variation to the objects of study in postcolonial interpretation by applying the postcolonial perspective to entrepreneurship and small businesses research.

1.8 Outline of thesis

Apart from this introduction, this thesis consists of eight other chapters: Chapter 2: Theory

While I selected the cases and started collecting the empirical material, I researched literature on social innovation and management of user centric innovation, in particular with respect to innovation for the so-called “Base of the Pyramid” market segments in the world. The chapter outlines key elements of classic innovation management and then discusses how these are different, or similar, to the literature about social innovation (with emphasis on its innovation processes) and “BoP Innovation”. These are to be viewed as “background theories” that I had with me at the time when my empirical research started.

§ Chapter 3: Post-colonialism

Here, I explain why I chose post-colonialism as the critical lens for my study. The chapter gives an overview of the main scholars in post-colonialism and show how this is relevant also in countries in Scandinavia that were not colonizers but adopted the colonial worldview that did proclaim one part of the world, and its people, as superior to others. I have also chosen to include a section on how stereotyping functions to aid the cognitive processes in humans in order to point out that racism and stereotypic language is sometimes a product of a sub-conscious process where our brains are trying to be as efficient as possible in understanding people we meet or our surroundings. It was important for me to try to understand this mix of colonial influences and how we function psychologically as humans, to see what behaviour or actions will confirm and preserve our stereotyping of others and what may challenge them.

(33)

33 § Chapter 4 - Method

A description of each method used to collect the empirical material and the analysis is provided. I discuss the limitations of how I have collected the data and how I have been trying to reflect on my own role as a researcher. This role was slightly different from case to case, for two reasons: Firstly, one case company invited me to become more engaged to also provide advice to them. The other case companies held their distance and were less open about giving access to people that I could interview. Secondly, one case study was finished sooner than the other as the company folded its operations in Eastern Africa and I therefore did not have many interviews and interactions, which meant that I did not get to know those entrepreneurs as well as the others. In this section, I also explain that I have chosen to write this thesis in the chronological order that things have happened. In the analysis chapter, some new references are introduced that were not presented in the second chapter. I have understood through the various seminars and feedback I have received that there are different schools on this point. Many scholars prefer that a thesis provide all theories that will be used for the analysis before the analysis is presented. Some (perhaps fewer) agree with my approach in that I have integrated some new theories that I had to search for during the period of the analysis, where some of the “background theories” did not suffice in supporting the analysis. In the past year, the number of publications about social innovations has also increased, with many more researchers now engaging with the problem that I defined. Some of the newer publications therefore also felt as if they belonged naturally to the analysis.

§ Chapter 5 - 7: Case Studies

I have chosen to present my empirical data in three separate chapters for two reasons. Firstly, they are quite large case studies and set in different countries and contexts, which contributes to the difficulty of put them all in the same chapter. Secondly, they can be read and analysed separately, i.e. the reader can read just one of them and still understand the main results of this study should they not have the interest or time to read them all.

These chapters consist of the three cases, starting with a brief background on why and how the companies were started. The empirical findings and company data are presented under the headings of market strategies, challenges, organisational strategies, and the entrepreneurs view of their users and of themselves are described for each case. Each case ends with a brief in-case analysis where I have written a short analysis of things that are specific to the case that is

(34)

34

presented. Comparisons are made in the next chapter.

§ Chapter 8: Analysis

The analysis draws out the major themes that have emerged across case studies and is developed with the help of the theories that I introduced in the second and third chapters, as well as the addition of some complementary references. In the thematic analysis, I compare similarities and differences between the case companies, and my objective is to show how the postcolonial aspects are most relevant to social entrepreneurship and innovation. As the findings contribute to a deeper understanding of what is going on between the companies and their target groups, I propose some other enablers of innovation than what is previously described in the innovation literature.

The findings are not dependent on the geography of where the companies operate; there are internal factors that influence the innovation process and affect the chances of successful scaling. Therefore, my aim in this chapter is also to close the gap between the ‘Base of the Pyramid’ innovation in the global South and social innovation in the global North.

§ Chapter 9: Conclusions & Discussion

I make arguments for how the results contribute to existing theories and what research could continue in this area. Finally, this thesis discusses possible implications for practitioners - entrepreneurs and the supporters of social ventures.

They are so damn grateful : A longitudinal study of how postcolonial attitudes influence the innovation process in social ventures