Enterprise
Innovation in social enterprises and education
Calyn Yap 
AIM is working to transform strategic sectors such as biomass from oil palm and other sources
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Innovation may take a long time to bear fruit, but Agensi Inovasi Malaysia’s (AIM) new CEO Naser Jaafar is up for the task as he steps up efforts taken by his predecessor Datuk Mark Rozario.

Naser, who was appointed on Aug 1, focuses on deliverables and attaining results that would be reported in the form of a 100-day report card.

“I want to focus on what I’ve inherited from Datuk Mark and see it through to achieve the desired outcome. I want to focus on deliverables and results. I don’t want to bite off more than I can chew,” he tells FocusM.

Naser has been spending a lot of time on innovation in education and social enterprises since he took over the helm.

AIM has six approaches – creating a thinking culture, innovation for and by society, facilitating industry-academia collaboration, transforming strategic sectors, innovating organisations and catalysing commercialisation.

Under each category, efforts are underway simultaneously via different initiatives and programmes to push the agenda forward.

There is no intention to create an additional approach in building AIM’s innovation ecosystem, but he will consider opportunities that crop up along the way.

An opportunity that it came across in July was the possible revival of the coconut industry, owing to the creation of hybrid trees that can increase the yield. This is in addition to transforming strategic sectors such as biomass and graphene.

“Through our study, we’ve seen our (the country’s) ranking drop from the number five coconut producer in the world to 12. The question is how we can revive it without sacrificing rubber and oil palm.

“We’ve done a preliminary study, which was presented in July, and we’re now doing an in-depth study on the downstream industries, similar to what we did for the biomass industry,” Naser explains.

Moreover, AIM has also introduced a National Corporate Innovation Index, which is an innovation management and assessment toolkit meant to enhance innovation governance, in order to promote growth and sustainability.

“We created that index for them (companies) to understand what it takes to become an innovative company. There are eight areas we measure and the next project is to measure the return on investment for innovation. We’re working on helping them understand what they should measure and how to measure it,” he says.

Naser wants the return on innovation investment index to be a reality and is looking to create a portal for that purpose.

There are also interesting developments on the social innovation front, he shares.

 

Rising social engagement

No doubt there has been increased adoption of the social business model, but social entrepreneurship is still in its early stages in Malaysia.

That said, Malaysian Global Innovation and Creativity Centre (MaGIC) CEO Ashran Ghazi says it is the perfect opportunity to invest strategically to ensure the development of a sector that will “transform the nation’s economy into one that is more equitable and sustainable”.

With the trend of innovation adoption, it is not only Malaysian start-ups that are stepping up to tackle various issues in different industries by disrupting the traditional way of doing things. Social enterprises are also jumping on the bandwagon and coming up with new inventions to disrupt the economy.

Soara Industries, for one, is a social enterprise that aims to uplift lives through green technology and sustainable community development.

Its founder Ganesh Muren was inspired by the dire need for clean and safe drinking water by rural and marginalised communities to come up with a prototype of a solar-powered water filter, says Ashran.

Social entrepreneurship holds potential with the rise of social impact investment and the introduction of the Social Outcome Fund (SOF), in addition to AIM providing a template for more streamlined reporting on outcome measurements for social purpose organisations (SPOs). SPOs refer to both for-profit and non-profit organisations that address social issues.

Impact investment is quickly gaining traction as social ventures increasingly demonstrate their ability to deliver scalable impact with attractive financial returns.

Ashran says: “This year especially, we are seeing a lot more government involvement in social entrepreneurship. Government bodies are setting up support systems for social enterprises as they recognise that these ventures can help tackle social issues in new and cost-effective ways. We can see more collaboration between social enterprises and the government to solve social issues.”

On MaGIC’s end, its newly launched Impact Driven Enterprise Accreditation (IDEA) programme was introduced to help the country’s impact-driven enterprises (IDEs) gain accreditation and demonstrate credibility, while also offering the public and private sectors the opportunity to integrate social impact into their core business efforts.

What IDEA does is help connect IDEs with the right resources and opportunities by linking them to the public and private sectors, as well as providing access to social procurement and an accreditation programme.

 

Creating a new funding method

There have always been high investments in social services but ineffective delivery, with communities remaining dependent on the government, which is why social financing models such as the SOF and the Social Public-Private Partnership (SPPP) Fund would be more sustainable and effective.

Allocated an initial RM3 mil, AIM via SOF aims to make it easier for high potential SPOs to raise funding from social impact investors, corporations and foundations to deliver social services and preventative interventions to assist marginalised communities.

The SOF was received very positively by the United Nations Economic and Social Commission for Asia and the Pacific as well as the British Council for pioneering an outcome-based social financing model. According to the latter, Malaysia and Scotland are the only two countries that have a method for measuring the effectiveness of social intervention programmes via a structured roadmap.

To enable SPOs to measure social outcomes from their intervention programmes, AIM offers a standard way to report progress in the form of a template to measure social innovation on its website.

The key difference under the SOF is that investors will be refunded if the intervention programmes meet the stated milestones and key performance indices (KPIs), specifically if the result of their investment is at least 1.5 times the value, in terms of cost savings for the government.

This would encourage corporations and foundations to become more invested in ensuring the success of their corporate social responsibility programmes. And in turn, it would ensure a more sustainable method of social financing.

Naser says: “The idea is to encourage SPOs to come to AIM with their ideas to solve social issues, their plans, costs, duration and we’ll find corporate investors to invest in those social intervention programmes. Assuming they meet the milestones and KPIs, they’d get refunded.

“We’re looking to change the mindset (of considering these funds) as donations to investments. It’s a pilot and if it works, we’ll have a new and proven way of financing social causes.”

Following the closing date for such applications on Aug 31, AIM has received 30 preventive intervention proposals.

It is currently evaluating and segmenting the applications into key categories of social issues, which were identified through the Social Progress Assessment (SPA) report released earlier this year. He is hopeful that the process will be completed by the fourth quarter.

The SPA report, which the SOF is based on, narrows down seven overarching categories spanning 40 social issues. It also identifies direct and tangible costs along the value chain, the unit costs of social services that the government incurs to combat the issues as well as a database of cost indicators for social issues.

Naser notes the key is to encourage greater impact with lesser resources and to align expenditure with outcomes.

This is in addition to the SPPP Fund, which has a provision of matching grants on a 50-50 basis between the government and private sector for effective and innovative social interventions delivered by the social sector.

“It’s to get public and private parties to come together to fund social intervention programmes, with the view of normalising it to become the new way of raising funds,” Naser adds.

Going back to education

To meet the needs of tomorrow, it is also necessary to reconsider how education is delivered to inculcate required skillsets in the country’s next generation of leaders.

One of the latest initiatives in furthering that objective is Agensi Inovasi Malaysia’s (AIM) Genosis programme.

Working with the Education Ministry and other local and international partners, Genosis is an initiative under one of AIM’s six approaches – dubbed “cultivating a thinking culture” – to create Malaysia’s innovation ecosystem.

It aims to ensure the next generation of Malaysians will have the skills, qualities and aptitude to thrive in a 21st century workplace, by producing students who are adaptive, self-directed, equally independent and interdependent, as well as creative, collaborative and critical in their thinking.

The programme will be piloted in 10 secondary schools from next year. It will be offered to other secondary schools in 2021 through optional participation if the pilot proves successful. The key difference it will make is in terms of teaching methodology as it seeks to improve the quality of classroom delivery in schools, but the syllabus and examinations remain the same.

“We’ll start from secondary schools and if it works out well, we’ll bring it to primary schools (as well),” says AIM’s CEO Naser Jaafar.

Genosis will be established as an independent accreditation body for government secondary schools with internationally benchmarked quality assurance standards and practices. It will also function as a national reference for the conferral of awards for educational excellence, as well as assure quality standards in government schools.

It is structured on the discipline of design thinking, introduced by AIM via the Genovasi Foundation – one of only four certified design thinking schools in the world – in collaboration with Germany’s Hasso-Platner Institute and US’ Stanford University.

Genovasi Foundation’s role is to create design thinking ambassadors among graduates and young professionals aged 20 to 35.

Currently, this is done through sponsoring government servants, especially administration and diplomatic service cadets, to undergo a programme infused with design thinking. It is sponsoring 500 civil servants for the programme, but Naser says there are plans to raise the figure to 2,500 by 2020.

He adds: “We started with entry-level employees but we need all government agencies and AIM to spread the word to also mid- and top-level management. Something we’re committed to doing is work with various stakeholders and ministries to understand design thinking.”

Other programmes under the approach include i-THINK and International Baccalaureate.



This article first appeared in Focus Malaysia Issue 257.