Daniela F. Gheorghe | Young Professionals in Local Development
1. You are the founder of ennovent (http://www.ennovent.com/), an innovation accelerator that discovers, finances and scales up the innovations that create a sustainable impact on low-income people across India. What made you turn your efforts towards this field of activity? How was the journey?
I have been studying environmental management in Austria and at the end of my studies, about 15 years ago, I participated in a regional development project for Pakistan over a period of 1.5 years. At that time, I realized that I want to focus my work on sustainability in developing countries.
After my studies, I worked with CARE Austria, an international development organisation for four years. I managed their Environment & Development Program for Africa and Asia, in countries like Tanzania, Kenya, Philippines, Nepal and Vietnam. After my work with CARE, I moved to Nepal and worked as a freelance consultant for WWF, UNDP, CARE and other organisations and as a full-time Program Coordinator for IUCN, an environmental non-profit organization.
In 2008, I decided to move out of the NGO world, as non-profit organisations face several challenges on the ground. First, governments and organizations in developing countries can get dependent on grants, resulting in problems with the financial sustainability of projects or, in some cases, even in corruption. Further, the difference between do
nors and beneficiaries can result in a miss-match between the intended impact of donors and the actual needs of low-income people.
Therefore I decided to start ennovent. I wanted to work in the same field and contribute to the goal of sustainability in developing countries, but with a different financial instrument – investments instead of grants. We started with an impact investment fund to discover and finance the best for-profit solutions with a sustainable impact on low-income people. Early in the process, we realized that in addition to financial resources, investee companies need non-financial resources to scale up and reach more people. We therefore added another vertical, Scale, to the business model. It was a great journey and we learned a lot, but there is still a long way ahead.
2. Is social entrepreneurship the way of doing business of the future? How can we engage the young generations towards creating businesses with sustainable impact?
We do not use the term “social entrepreneurship” as we think this is more a label for marketing.
I have never seen any poor person, in India or anywhere in the world, who cares if he buys a solar lamp from a social entrepreneur. I have also met many entrepreneurs who were doing a great job to impact the lives of low-income people and who never heard about the term. At ennovent we focus not on social entrepreneurs, but on great entrepreneurs who have a sustainable impact on low-income people in developing countries. At the end, it does not matter how an entrepreneur calls her/himself. The most important issue is that they create a product or service that makes a social, economic and environmental impact on the lives of poor people.
Young people are slowly getting attracted to the idea of sustainable impact, as they are not satisfied with only making money. An increasing number of them want to feel that they contributed something meaningful to the society when they come back home from work in the evening. The youth today wants to make a visible difference in the lives of other people. At the time when I was working for CARE, some friends worked for the stock exchange or big consultancies. Despite I earned half or even less of the money, they always stressed that I do something meaningful, especially after I came home from a field visit to Asia or Africa.
3. How does the field of impact investing contribute to a sustainable development, if we consider that investors look for both financial and social returns?
Investors are only supporters of the ecosystem, in the sense that they provide much-needed financial resources. Eventually, the entrepreneurs are the key people creating an impact. I think there is no lack of money at the moment. The challenge is to be able to select the best investee companies. It is difficult for an investor from Silicon Valley or from any other developed country to really understand local ground realities and know what, for example, poor farmers in India really need.
The problem with impact investing is that many investors from the USA or Europe invest in entrepreneurs without a clear knowledge of local realities. They have never worked in a developing country, but have to make decisions whether a potential investee company is offering a product or service valuable to poor farmers living in rural villages. It would be the same if a poor Indian famer travels to Silicon Valley to invest in IT companies, despite he has never been online on the Internet. Therefore we decided that most ennovent team members have to be based in India and to work with local partners and experts.
As impact investing is currently a trend, many investors move into the field. However, there is limited understanding of the required investment timeframes, the risk/return profiles, or even of the before mentioned problem-solution fit. In terms of the return expectations, 15 to 20 or even 25% returns (as often promised to fund investors) is impossible for funds to generate across a portfolio. Additionally, companies will take much longer to scale then often expected. I think the whole ecosystem has to adapt the learning from the mainstream Venture Capital world to this complex space.
4. What drives you to go forward on your professional path for development impact?
It is my desire to make a difference for low-income people in India or anywhere else. Poor people have the right to benefit from high-quality, accessible and affordable products and services like anybody else in the world. My wife is Nepali and we just returned from a short trek in the Himalayans over the weekend, where we stayed with local farmers. What drives me is the desire to see that, maybe in 10 years, these farmers will use improved cook stoves that don’t harm their eyes and health, use solar light instead of kerosene lamps, are able to send their children to school instead of sending them to herd the buffalos and have access to affordable health services. I think this is what keeps me going.
5. Your advice for young professionals working for a better world!!!
My simple advice to young professional would be to follow their heart and not only their rational and logical thoughts. I would recommend them to work on interesting challenges that keep them awake at night, not because there is a huge market, a better salary, or global fame. Believe in yourself and move ahead! YOU CAN DO IT – Even if it takes years!