[MUSIC] I want to place this problem or this challenge of meeting public needs, solving public problems, in a broader sectoral context. We typically think of three ways in which public problems get solved. One is the government enters and solves the problem. The second is that the NGO or non-profit sector comes in and solves the problem. And the third is that business may step in and offer its own solution. We often draw a line between these sectoral solutions thinking that government and the NGO sector are focused on mission, public value, creation, social impact. And the business sector is much more focused on the bottom line and on money. But what's really interesting about the field of social entrepreneurship is that it's blowing away that line, the dividing point between sectors. It's saying that problem solving can occur in a lot of different ways across a lot of different approaches. And so what I want to do is, to start the sketch for you, something about why social entrepreneurship has a distinct place in the world of public problem solving. And the way I want to do it is, think about one problem. And then we're going to walk through how each of the sectors might approach it. And then how might social entrepreneurs approach it? Just to get some difference out in the open about what makes this feel so special. So think about the problem of affordable housing. How do we create housing for people who are on very limited means? How do each of the sectors, the public sector, the business sector and the non-profit sector go about providing affordable housing, and then let's step back and say, how might social entrepreneurs do this work? So let's start with the government approach to solving the question of how do we provide affordable housing? From New York to Chicago to Mumbai to Brazil, all around the world, big projects have been built for housing the poor. They share a number of features in common. They are large scale. They focus on equity and evenness of delivery of the service. The apartments are similar. The distribution of these units, it follows strict rules. Government moves typically very slowly and cautiously in providing this help. And because it's accountable to voters, government constantly has to check in and make sure the solution provides is fair, equitable, and open. When the business sector tries to solve the problem of public housing, it goes in a different direction. It says, how can we create housing that everyone could afford. So you have module houses, trailers, small units that are very cheaply priced, that allow people, at a very low entry point, to have housing. Now even in Sweden, IKEA has developed a module house that you can snap together, you assemble yourself. Now, one might think that they provide a huge allen wrench with this, but no, they actually provide a set of instructions and tools and you construct your own house. What do all these approaches share in common? When the business sector tries to solve a problem like affordable housing, profit is a key consideration. How can we construct the business model that will generate product? Businesses are very market sensitive. They want to meet demand, they're quick to respond if they see a need, they will provide a solution. They are very competitive in terms of looking at what are other people providing and making sure that their position is strong. And finally they are responsive to shareholders. Businesses have to produce value for their shareholders. So as a consequence, they tend to produce tangible products quickly in a way that meets market demand. Let's think now about how the nonprofit sector tries to solve the problem of affordable housing. Their approach is very different. They'll say, what does the community need? How can we construct a vision of public and affordable housing that is appropriate to the local needs? They'll take existing housing stock, renovate it. They may build smaller units that are very affordable or mixed units. They might develop housing for truly the most desperate, the poor and the homeless. Whatever the approach is, the non-profit sector is almost always mission driven. It operates under the non-distribution constraint that says money can not be given away to shareholders and owners. It must be retained for mission purposes. It tends to be very creative and locally sensitive to needs, and it's often shaped by deep convictions of value and faith. Non-profit leaders do their work because they care deeply, they want to solve a problem. And they want to be responsive to the vast range of stakeholders that surround non-profits including board members, community members, donors and the general public. [MUSIC]