First published in AMS business magazine. Author: Catalina Iorga
Amsterdam: facilitating social-entrepreneurship tech and developments
When it comes to the latest developments in sustainable business, adopting universally accepted definitions is no easy feat. That is one thing that came out of a recent debate, hosted by Amsterdam urban innovation platform Pakhuis De Zwijger, on what makes a ‘circular economy’, well, circular. But social enterprises – and the organisations that help them grow – stand in agreement: positive societal impact comes first, ahead of owner or shareholder profits.
As the city with the most social enterprises in the Netherlands, Amsterdam has a rich history of businesses focused on a more inclusive labour market and on solving other societal challenges. In 2015, research revealed that 62 local social enterprises were employing 2,800 people with occupational disabilities. One of the ways Amsterdam’s local government is showing strong support for this movement is by ensuring that social businesses get shelf space and higher sales to increase their impact. This is one of 17 concrete measures on the agenda of the Amsterdam Economic Affairs’ Social Entrepreneurship Plan 2015-2018, through which strives to turn the city into the place to be for impact-driven entrepreneurs.
What’s more, Social Enterprise NL, the Dutch national platform for social entrepreneurs, boasts nearly 300 member companies operating both locally and inter-nationally in 16 sectors and impact areas, such as inclusive employment, social cohesion, poverty reduction and environmental sustainability. The Amsterdam Impact Hub was the first of its kind in the Netherlands, and subsequently the co-creator of a growing global community of over 12,500 social entrepreneurs in 82 – and counting – cities worldwide.
Why now, why Amsterdam
‘What is most valuable about social enterprises is that they dynamically blend social responsibility with business opportunities. Any enterprise should be creating value for society,’ believes Tatiana Glad, Co-founder and Director of Impact Hub Amsterdam. Since the first such Hub, of which Glad was a member, launched in London in 2005, the global Impact Hub network has grown into a mature entrepreneurial ecosystem that acts as an incubator and accelerator for innovative start-ups keen on tackling economic, environmental and societal challenges.
Dutch-Croatian Glad was brought up in Canada, where her family immigrated to when she was seven years old and started a small sustainable bakery. ‘Looking back, my drive for co-creating the kind of society I want to live in came from seeing my parents contribute to our local community,’ she adds. With a background that spans the financial, non-profit and government sectors – she worked as the Global Quality Manager of Citigroup; co-founded Waterlution, a Canadian NGO advocating sustainable water management and collaborated with the European Commission – Glad came to Amsterdam in 2006 to explore her Dutch heritage.
‘Before coming here, I saw the Dutch as progressive and well-versed in environmental, social and governmental change. I expected to find a place where you can have an intellectual conversation rooted in decades of experimentation, but also pragmatism. And that’s exactly what I did find,’ Glad explains. ‘In fact, the Impact Hub in Amsterdam started as an 18-month conversation between volunteers who cared about the city’s problems, be they related to water or integration. We wanted to shape a cross-disciplinary, physical space for experimentation where unlikely allies, such as corporates and activists, can meet,’ she adds. In 2013, this desire reached its peak, resulting in the Impact Hub’s second multifunctional co-working, event and networking space in the Westergasfabriek area, home to many of Amsterdam’s innovative entrepreneurs. Designed specifically for interaction, collaboration and learning by one of its members, AKKA Architects, Impact Hub Amsterdam is located in the Westerpark district’s former municipal office.
‘We legitimised and professionalised idealism through entrepreneurship,’ Glad says proudly. Her words are echoed by achievements such as the €3 million invested in several of the 10 social enterprises that took part in the 2014 edition of the Impact Hub’s Investment Ready programme. This annual four-month peer-learning programme sees carefully selected participants engage in a systematic review of their business model before crafting a growth and investment plan that they pitch to the growing number of impact investors in Amsterdam. Among the programme’s successful alumni is the Edie Award for Sustainable Business Models-winning MUD Jeans, a social enterprise that makes denim from mostly recycled or organic cotton and uses at least 75% less water per pair than the industry average.
In less than eight years, Impact Hub Amsterdam has thus grown from a value-driven group of volunteers to a professional team that is running a social enterprise. The Impact Hub puts its money where its mouth is and practices sustainable procurement that generates roughly €300,000 worth of yearly business for several Dutch socially responsible firms, including Tony’s Chocolonely, a confectioner that strives to abolish slavery in the chocolate industry.
‘The local community really embraced us,’ concludes Glad. ‘Doing good business and improving society is in Amsterdam’s DNA. And in times when cities are being pushed to close off their walls, Amsterdam is not afraid of celebrating a fringe perspective.’
A national platform for global impact
Serving as another testament to the Dutch spirit of innovation, the Higher Education Act of 1876 laid the foundations of the modern research university. 1876 also happens to be the year when a building was erected on the city’s Keizersgracht canal that would go on to host the former groundbreaking Netherlands Media Art Institute and, since 2012, the Dutch national platform for supporting social entrepreneurs, Social Enterprise NL. Social Enterprise NL seeks to build a national ecosystem in which entrepreneurs can thrive through business-support programmes focused on areas such as market positioning, regulatory frameworks and financing. ‘We don’t decide what our network does; we facilitate collaboration and learning exchanges between like-minded entrepreneurs instead,’ says Willemijn Verloop who, together with Mark Hillen, is Co-founder and Director of Social Enterprise NL.
‘My personal mission is bettering the world. I was very proud of the achievements of War Child, the organisation I founded when I was 24, but had become increasingly frustrated with the pace of societal change,’ she explains. ‘Although NGOs do great work, they often depend on unstable philanthropic financial streams.’ Verloop felt that most problems in the non-profit realm stemmed from the absence of structured financing, and set out to implement a new model for effecting societal change. ‘I decided to build something rooted in the same idealism, but using a different tool: the business sense of the gutsy entrepreneur who is capable of scaling innovative solutions to take on society’s biggest challenges,’ adds Verloop.
Once again, she found in Amsterdam – just as she had when she started War Child in 1994 – a perfect breeding ground for ideas that aren’t yet mainstream. ‘This city has a liberal, creative spirit that gives social entrepreneurs much needed community support and space for experimentation.’
It didn’t take Verloop and Hillen, a former Managing Partner of Accenture and an expert in crowdfunding, long to build a base for Social Enterprise NL, thanks to a large number of socially minded businesses already operating in the city. ‘I discovered that Amsterdam has a history of entrepreneurship and private initiative focused on people’s talents instead of their perceived disabilities,’ Verloop explains.
Among Social Enterprise NL’s members are many early examples of enterprises that operate as inclusive employers. Ctaste, a ‘dine in the dark’ restaurant founded in 2007, prides itself on hiring blind or partially sighted waiters, who are able to guide guests through meals in a pitch-black room. And Swink, a web-services company created in 2008, offers people with conditions such as Asperger’s the chance to use their unique analytical skills to help clients improve their website’s SEO or social-media presence.
Verloop also found in Amsterdam an existing fertile network of organisations, ranging from the aforementioned Impact Hub Amsterdam and Pakhuis de Zwijger to traditionally commercial accelerators such as Startupbootcamp and Rockstart, which are becoming more active in the social space. ‘When impact is your drive and you have to swim upstream, it helps to have stubborn, like-minded people around. In our building alone, you can find shareNL, a knowledge and networking platform for the collaborative economy, and THNK, an academy for creative leadership with a strong social-innovation focus,’ she adds.
Connecting the dots with social innovation
Hajo van Beijma, Co-founder and Director of TTC Mobile, is no stranger to the collaborative power of Amsterdam’s many co-working spaces, which he believes play a huge role in scaling up existing enterprises. ‘When TTC Mobile started out in 2007 as a non-profit called Text to Change, we decided to share an office with two like-minded organisations,’ says van Beijma, referring to the 1% Club, a crowdfunding platform that connects people in developing countries with smart ideas to those who can help them effect change, and Akvo, which builds open-source software used to make cooperation in international development more effective and transparent. ‘At that time, we didn’t call ourselves “social enterprises” yet, but we were among the first organisations in the city working on using technology in emerging markets to do good.’
A pur sang entrepreneur who’s never worked for someone else, Van Beijma was running his own ICT company when he met his future business partner and close friend Bas Hoefman, who came from a background of corporate marketing for financial institutions such as ING. Together they developed the idea of using SMS communication for health-awareness purposes after watching a BBC documentary on the explosive growth of mobile phones in Africa.
‘TTC Mobile’s mission is to reach as many people as possible in developing countries with the right information that enables behavioural change in areas of their lives such as health, finance, agriculture and education,’ van Beijma explains. ‘But we don’t like to invent new software or hardware. Our strength lies in harvesting already existing knowledge.’ And nowhere is this ethos better exemplified than in the Healthy Pregnancy, Healthy Baby SMS Service of the mHealth Tanzania Partnership, in which TTC Mobile is the key technical associate. This service, which was nominated for the Best Mobile Innovation for Emerging Markets at the 2016 Global Mobile Awards, was set up in 2012 to help reduce child mortality by sending free text messages with tailor-made healthcare info to a wide audience that includes pregnant women, mothers with newborns and male supporters.
‘We are good at connecting the dots. To create the Healthy Pregnancy, Healthy Baby SMS Service, we linked basic SMS technology with the end user’s needs and the extensive content on maternal health in areas such as nutrition according to pregnancy stage provided by the Tanzanian Ministry of Health could provide,’ van Beijma says. The service was a hit: by February 2016, it had amassed 1.2 million registered users, who had received 74 million free text messages, while 3,330 healthcare professionals had been trained to use the tool. To keep spearheading impactful projects, TTC Mobile needs to examine its work’s outcomes, which is why the company collaborates with prestigious higher education institutions such as the city’s Vrije Universiteit (‘Free University’). ‘Scientific research helps us to truly understand what value TTC Mobile adds to the world,’ Van Beijma points out.
With universities also starting to include social-innovation modules in their curricula, and Amsterdam attracting more investors that see capital as a tool for change – Verloop herself co-founded Social Impact Ventures NL, a hands-on social-enterprise growth fund whose portfolio includes Taxi Electric, the city’s first taxi service with a fully electric fleet, which also trains unemployed locals to become drivers – the future of social enterprises in Amsterdam is looking very bright indeed.
The future of social enterprises in Amsterdam is looking very bright indeed. Read more here.