This document discusses social innovation approaches to addressing poverty in Hong Kong. It notes that over 1 million people live below the poverty line in Hong Kong, with unique challenges around housing costs, employment, and an aging population. Traditional approaches like job creation help some but do not address the full problem. New models are needed that decrease costs of living for the poor, such as reducing food costs. The document advocates for launching an accelerator program to source and help scale new models that can meaningfully tackle poverty issues in Hong Kong. It acknowledges building this "missing middle" of the social innovation pipeline will take time but can help create impactful, sustainable solutions to poverty.
2. 2
What does social innovation for poverty actually look like?
Social innovation has
been described as “new
methods to solve social
problems”, but what does
that actually mean in the
context of poverty?
1 in 5 people in Hong Kong or ~1.3
million live below the poverty line
We’re all aware of the poverty situation
in Hong Kong…
1 in 5 youth are in
poverty
1 in 3 elderly are in
poverty
Source: Hong Kong Poverty Situation Report 2013
…and that there are unique complexities
that make addressing poverty really hard…
Welfare spending in a low tax economy?
Rising housing prices and declining space?
Quality employment opportunities for youth?
Rapid ageing population?
3. 3
The first thought that comes to mind is usually job creation
Some local examples… …which target impact through job-creation
1 Identify disadvantaged group
2 Train them in a skill or match them to a job
3 Overcome poverty through increased
income
On average, social enterprises with this type
of model typically create jobs for < 15 people.
This is great, but employment only addresses
a fraction of the problem in a low
unemployment (3.2%) city like Hong Kong
Source: http://www.censtatd.gov.hk/hkstat/sub/so30.jsp
4. 4
We like teaching people to fish, but what happens when the poor
are already fishing and are still unable to escape poverty?
Source: Hong Kong Poverty Situation Report 2013
18,600
211,500
154,700
Poor households in HK fit into 3 categories, and the vast majority are not looking for jobs
In # poor households (post gov. intervention), 2013
Working poor
(40%)
Economically inactive
(55%)
Unemployed
(5%)
“How do we earn/save enough to escape?”
Definition: at least one member is working
Problem: stuck in ‘chronic poverty’ – often earning
minimum wage in retail, restaurants or cleaning services
“Who will support us?”
Definition: all members are economically inactive and
dependent e.g. elderly, disabled, home-makers, children
Problem: unable to earn a wage due to physical or
economic limitation
“How do we find and hold a job?”
Definition: all economically active members are
unemployed
Problem: inability to find or hold a job
100%
384,800
5. 5
We need to do more than just job creation: for example, how can
social innovation decrease the cost of living for the poor?
GOAL: Increase
economic livelihood
Increase incomes
Decrease cost of living
1 Job-creation for disadvantaged
2 Models that remove barriers to
employment e.g. vocational training,
employment matching services or
child-care services (to enable home-
maker employment)
3 Models that reduce cost of
products/services that the poor buy
Let’s look at a case:
reducing the cost of food
Three models where social innovation could be applied to improve livelihood of the poor
Source: SOW Asia analysis
6. 6
How can so much poverty and so much food waste happen
simultaneously in one city?
Focusing on food makes
sense: 40% of the poor’s
expenses are on meals…
…meanwhile, food waste in
Hong Kong is of mind-
boggling proportion
Source: Oxfam "Survey on the impact of soaring food prices on poor families in Hong Kong, August 2011”; Food bank alliance; SOW Asia analysis
39.9%
19.6%
13.9%
8.9%
7.9%
7.8%
2.0%
Meals
Housing
Utilities
Other
Transport
Education
Healthcare
…~50 food banks in Hong Kong
work hard to make meals free,
but they have limited capacity…
Collectively, food
banks collect ~5
tonnes per day,
representing a
serving capacity of
~4-6,000 people
Assumptions:
• Average collection of players is
conservatively 100kg/day (in reality, 2-3
organisations represent 80% of
collections e.g. food angel/food link)
• 0.8kg for every meal
• 1-2 meals per day per person
Food banks have capacity to
satisfy ~0.4-0.7% of the
poor on any given day
This is on the rise:
municipal solid waste
increased 30%
from 2000 to 2010
3,600 tonnes
of surplus food is
discarded in Hong
Kong every day
and to make matters
worse, HK’s landfills
will reach capacity in
only 3-4 years
If 40-45% of surplus food
became meals, no poor person
in HK would go hungry
7. 7
There is obviously a lot of room for new models to address food
poverty/waste: can we learn from community shop in the UK?
• Established over 40 years ago
• Collects and sells surplus food to members working in
food manufacturing and emergency services
• Prevents over 30,000 tonnes of food waste each year
UK’s Social Supermarket Collects surplus
food from industry
Sorts and stocks food
supplies (not meals) at a
members-only discount store
(up to 70% off retail prices)
Recruits 400-500 local
members per store based
on poverty related criteria
Provides training, counselling
and mentoring to help
members achieve their
financial/social goals
Source: companyshop.ltd.uk
An example of social innovation from the UK tackling food poverty/waste:
8. 8
This is not about which model is ‘better’; this is about recognising
that new approaches need to be built, scaled and replicated
Food bank model
Different
model
designs…
• Provides meals for free • Sells groceries at heavy
discount (~up to 70%)
• Indirect distribution
through intermediaries
• Direct to consumer
…to serve
different
purposes,
with their
pros/cons
• Crisis support for the most
needy
• Targets chronic poverty
(includes working poor)
• Low cost but low coverage • High coverage but high set-up
cost – logistics and space
• Emphasis on long term
ownership/dignity
• Emphasis on short-term
efficacy
The market opportunity for new models in food poverty/waste is significant:
only an estimated ~0.1% of food waste is being collected today by food banks
Source: SOW Asia analysis
9. 9
This is why we launched fast forward: to influence and source new
models tackling poverty and help them build toward scale
1 Job-creation for disadvantaged
2 Models that remove barriers to
employment e.g. vocational training,
employment matching services or
child-care services (to free up home-
maker employment)
3 Models to reduce cost of
products/services that the poor buy
Influence and
source models
3 month structured
accelerator
Investment /
matching fund
• Field research
and marketing
• Facilitates model clarity and
an executable growth plan
• Provides access to our
network and mentors, pitch
nights, and workshops
• Access to capital of up
to 1m HKD, with
matching commitment
from SIE fund
OPPORTUNITY AREAS:
• Jobs and training for elderly, disabled and home-
makers
• Child-care to enable home-makers to work
Our initial research suggests opportunities for social innovation in the following areas:
• New business models to reduce cost of food
(poverty/waste); dental; healthcare; child-care;
utilities; education
1st cohort of 5
begins July 2015
Source: SOW Asia analysis
10. 10
Reality check: Given the current state of Hong Kong’s pipeline,
building new models to address poverty will take years
Idea
Proof of
concept
Ready for
early scale
Ready for
breakout scale
End-game
SE pipeline
Socialenterprises
Hong Kong’s social innovation pipeline is filled with mostly idea-stage organisations
?
Milestones
Entrepreneur and/or
team has an idea for
a business model
that addresses a
social issue.
The idea is
iteratively tested
and refined till it is
either dropped or
finds attractive
market demand. A
business model is
created and refined.
The SE has now
succeeded in a few
locations with a
significant number
of users and it is
time to replicate the
model on a small
scale
The SE has proven
its ability to
replicate and is now
ready for mass
scaling up.
The SE has achieved
scale and it now
needs to implement
its end-game
The fundamental problem: the lack of a
strong ecosystem to deliver an effective
pipeline of social enterprises
ILLUSTRATIVE ONLY
Source: SOW Asia analysis
11. 11
The missing middle:
how to help organisations build self-
sustaining, impactful solutions?
Our role in building the ecosystem: the ‘missing middle’ to help
good ideas grow and scale their impact
Idea
Proof of
concept
Ready for
early scale
Ready for
breakout scale
End-game
Investor interest
SE pipeline
Socialenterprises
The ‘missing middle’ in Hong Kong’s ecosystem for social innovation
Many impact investors
looking for deals that
do not exist
Many organisations
promoting the ‘idea’ of
social entrepreneurship
“low-risk” positions in the ecosystem
Source: SOW Asia analysis
12. 12
How we can work together
Entrepreneurs and teams
• Got a prototype and a team
addressing poverty in HK?
• Want to start a social enterprise
but need good ideas?
Non-profit organisations
• Can we learn and work together to explore revenue-
generating models to address poverty in Hong Kong?
Corporations
• Want to launch an
intrapreneurship venture to
utilise your core competencies
toward addressing poverty?
(food manufacturing, logistics,
utilities, healthcare ,education
companies especially)
Sector, function or policy experts
• Got expertise and experience
to share in a specific sector
(food, education, utilities,
healthcare); function
(marketing, design, HR, org
development,
finance/accounting); or
policy?
Investors / Philanthropists
• Want to source investments
and leverage the matching
fund of the SIE Fund for your
impact investment or venture
philanthropic capital?
