Latest guest post by Jason Saul
Great NYT article on Vinod Khosla and his plans to start a venture capital fund to invest in companies that solve poverty in India, Africa and elsewhere by providing services like health, energy and education.
Here’s what I like about it: Mr. Khosla is what I call a “social arbitrageur.” He understands that there is tremendous economic potential in solving social problems. Not just in the ethereal, abstract, long-term sense. Like, in the tomorrow sense. Khosla recently earned $117 million – pocket change for a billionaire – on the recent IPO of SKS Microfinance, one of the largest micro-lenders in India. Khosla, who founded Sun Microsystems, also raised a $1.1 billion for a “green” VC fund last year.
According to Khosla: “There needs to be more experiments in building sustainable businesses going after the market for the poor. It has to be done in a sustainable way. There is not enough money to be given away in the world to make the poor well off.” According to the NYT, “Mr. Khosla’s advocacy of the bootstrap powers of capitalism is part of an increasingly popular school of thought: businesses, not governments or nonprofit groups, should lead the effort to eradicate global poverty.”
That is the embodiment of social innovation. It’s also the new development manifesto of the Obama Administration. According to a recent White House statement on global development policy, the U.S. government will “[f]oster the next generation of emerging markets by enhancing our focus on broad-based economic growth and democratic governance. Economic growth is the only sustainable way to accelerate development and eradicate poverty.”
The future of social change depends on how we engage business in becoming part of the solution. Khosla’s efforts are just the beginning – but like most good venture capitalists, Khosla is onto the next big thing…