Audrey Tang: Hello, Alex.

Alex Hannant: Hi, Audrey. How are you?

Audrey Tang: Pretty good. Can you hear me?

Alex Hannant: I hear you perfectly.

Audrey Tang: Great. Thank you for making the call.

Alex Hannant: My pleasure. Thanks for finding the time. [laughs] I know how busy you are.

Audrey Tang: How much time do you have?

Alex Hannant: I have no deadline, so let’s maybe work to a bit of an agenda, and see how we go. What about you? Are you constrained?

Audrey Tang: I have another meeting in an hour or so, maybe in an hour of time, give or take. I just received this document which I was just briefly reading, the pre-election briefing of the social enterprise opportunity.

Alex Hannant: When I originally spoke to Corey, he mentioned that it would be useful for you just to get a bit located in terms of what’s happened in New Zealand. I thought one way about that was sending you a document that we’ve just sent to our own MPs and political parties in the run up to the election.

Alex Hannant: The degree that we get through it now or not, we can just have the conversation rather than a presentation, but I thought it might be a useful thing to maybe, if nothing else, read on the plane on the way over to the World Forum.

Audrey Tang: It is very useful, actually. I had just finished reading it, and I do have some questions and some notes. If you’re OK with that, maybe we just use the presentation as the agenda, and I can also introduce briefly where Taiwan is in each of the slides, if that’s OK with you.

Alex Hannant: That sounds great. I’m not sure it’d be interesting to test this in conversation, but one of the things I’ve been thinking on recently is reflecting on how some of the more evolved or mature social enterprise sectors have almost found their way organically.

Alex Hannant: There’s a sense of second wave sector development. You would potentially put New Zealand, and to a certain degree Australia and Taiwan into that, where we’re actually able to see the shape of the infrastructure as a result of others having done it.

Audrey Tang: That’s exactly right.

Alex Hannant: There’s almost a sense of choreography around this work which we are involved in, which was probably far more hit-and-miss and experimental and for the more mature market. Obviously, it’s still assistant staff. It’s interesting to be able to take this intentional approach to architecture.

Audrey Tang: That sounds excellent. Let me try sharing the screen with you and see if you can see the screen. Any moment now. Like this.

Alex Hannant: Yes. Great.

Audrey Tang: OK. It’s working. Awesome. If I put annotations, does it also go through?

Alex Hannant: Yeah, that’s great.

Audrey Tang: OK, great.

Alex Hannant: This is after a bit of trial and error over many years of engaging, I suppose, with government but also other sources of power, be that the corporate sector, the philanthropic sector, local government, to try and find some of the key messages which seemed to resonate with them.

Alex Hannant: Rather than saying social enterprise as a good in itself, really describing it more as a means to an end and how it is complementary to a number of the existing priorities they already have. These six messages are the things that we’ve landed on, after seeing what works and doesn’t work.

Alex Hannant: What comes out there is there is anxiety in government around unequal economic development and how that surfaced itself in a geographical context, but also demographic and cultural. Secondly, this sense of where government wants to go itself around wanting no longer to be their provider of everything.

Alex Hannant: Even if it doesn’t articulate it well itself, an enabler or facilitator of more self-directed development. That’s important in the New Zealand context, especially with Maori development, the tribal economy and self-determination being a very core part of identity and strategy for Maori.

Alex Hannant: Obviously, the piece of round unlocking new pools of capital, so we’re not giving more. The tax take isn’t really increasing. But the social, environmental need is increasing new pools of capital and the argument around impact investment and matching social models to also funding models as a successful strategy.

Alex Hannant: Then this idea of innovation and capability. For me, there’s quite a radical innovation agenda here. A lot of innovation has been linked to pockets and still is. There’s a sense of social enterprise as a channel to broaden access to skills and capabilities around innovation and entrepreneurship.

Alex Hannant: Then this last thing. The SDGs, from my sense, are actually getting traction, perhaps more traction than people ever expected. Social enterprise is being a connection to those global goals and also solidarity of the global movement. Those six things end up being quite holistic systems play. Putting social enterprise in that context is far more powerful than simply saying, "Look, this is social stuff that can pay for itself."

Audrey Tang: Yeah. All right. A few questions on the slide. I noticed that you, if I hear correctly, say that social enterprise somehow is in a sector that overlaps with other sectors. Did I get the terminology right?

Alex Hannant: Yeah. It depends what level you want to interrogate this at. Simplistically, it’s helpful to construct it that way. In reality, we’re talking about socially enterprise as being a space which represents the convergence from different sectors.

Audrey Tang: Right. There are those three sectors. Then we put social enterprise in the middle or something like that.

Alex Hannant: That’s right. Social leaning into commercial. Commercial leaning into social. Also, that space or that market being enabled by the way the government is conducting its business. It’s helpful to try and find an identity and say, "Let’s put edges on it, in order to think about then how we provide the infrastructure to support it." In reality, it’s probably been more nuanced and complicated than that.

Audrey Tang: Right. When I read the definition that you use, which is first that it must trade, that is to say to overlap with the for-profit sector in a certain way, then it must deal not just to further shareholder interests but further the social mission in some way, it really does put the edges, as you said, to form it in a sector.

Audrey Tang: What about the government? Does the social enterprise need to tackle a problem that the government deems as worthy or internationally as DGU-worthy or whatever issue that they find important is good enough, even though it doesn’t overlap with the government identified issues?

Alex Hannant: No. I’ll respond to this in a slightly different way. We very much need government here as a partner and a key stakeholder in it. It is not the owner or the director of. A healthy social enterprise sector will inevitably create innovation and solutions around priorities which are of interest to the government of the day.

Alex Hannant: It will also really be directed by communities or individuals trying to change the problems that are important to them.

Audrey Tang: Right. It’s bi-directional.

Alex Hannant: Yes.

Audrey Tang: It’s has its own agenda setting power. It’s not just the government setting the agenda for the social enterprise development. It’s also surfacing issues that the government did not consider as important, but nevertheless is. Is that the general idea?

Alex Hannant: That’s right. At least in the New Zealand context and I think it is comparable in other countries, it’s interesting if you compare the way that government thinks around social and the way that it thinks about economic are mirror images of them really.

Alex Hannant: Our business strategy is to create the conditions for more businesses to start up and succeed. It may have interests in certain sectors. Generally, it wants to unleash innovation across the board. Whereas, in social, it identifies key priority areas, which it then contracts services to try and make an impact.

Audrey Tang: Exactly, yes.

Alex Hannant: The social thing is very narrowing in, whereas there’s so much open now.

Audrey Tang: That’s what I’m drawing here, is essentially a one-way agenda setting up from the government to the social sector. The social enterprise in your idea does not work like this?

Alex Hannant: No, at its best it will test government to think itself as a facilitator, in terms of supporting the development of enabling infrastructure, but then also as a market participant.

Alex Hannant: Increasingly, it will want to purchase the outcomes of what social enterprise deliver. Whether that is through the direct purchase of goods and services, or funding which relates to specific social outcomes, which is a more difficult and unformed market, nonetheless, that’s where we’re going.

Alex Hannant: I always remember that there was a great slide from one of the guys in the UK government that was talking around the UK government’s role was market builder, regulator, and then participant.

Alex Hannant: It’s there to set the stage. It’s there to make sure that things work as well as they can. That’s, obviously, where government has a monopoly. Then, lastly, its ultimate interest is to actually purchase the outcomes or facilitate the purchase of those outcomes from other parties.

Audrey Tang: I see. Thank you. That’s very clear. The second, and the last question on this slide is that you mentioned SDGs as the connector that connects the local scene to the international. Evidently, it’s getting a lot of support in, especially, the world forum that it’s going to happen and that you are organizing.

Audrey Tang: Are there specific topics outside the SDGs that you also think is important? I understand that Taiwan and New Zealand has an agreement on Aborigines’ development, which is notably not any of the SDG, but nevertheless important.

Audrey Tang: Have you seen anything that are similarly interesting in an international collaboration perspective, but not clearly sorted into one of the SDG slots?

Alex Hannant: That’s a good question. My sense of it, some of it’s around framing. Most things that you would want to see progressed can be allocated under the goals in some shape or form.

Alex Hannant: There is, maybe, a more nuanced point around solidarity movements, which does get picked up, I suppose -- top of my head, democracy and civil rights -- but maybe not as nuanced as it could be.

Alex Hannant: I do think it’s interesting that within the social enterprise agenda, depending where you are, the solidarity and the cooperative movement, or where the social is, i.e., is it external or internal to the organization, have different levels of priority.

Alex Hannant: If you speak about social enterprise in Italy or Spain, the cooperative movement is absolutely thought of at central. In the case of the UK, largely you could say a lot of it has been around the professionalization of the social sector. In the United States, it’s been very much this entrepreneur, solving other people’s problems.

Alex Hannant: It’s interesting that that solidarity element, by its nature, because it is actually more equal, it doesn’t have the same kind of powerful cheerleaders. Sometimes, although it’s huge, it doesn’t necessarily get the same level of profile.

Audrey Tang: Because you mentioned Spain, is there similar cooperatives, or even platform cooperatives, as people are tend to say nowadays, movement locally in New Zealand, as, strictly speaking, starts from the social sector owning their own co-ops, and then evolving to trade with the market?

Alex Hannant: No, not really at the moment. New Zealand’s got quite a deep history in cooperatives, but a lot of them have been really pragmatic structures, which reflects an agricultural economy, and have been less advanced by a solidarity or cooperative agenda. With the exception of things like Loomio, or what have you, we don’t really have momentum in that movement.

Alex Hannant: Again, you mentioned the indigenous. Within Maori development it works differently, but there’s a sense of how community ownership plays out in those contexts, which his analogous, but different.

Alex Hannant: One of the things I’ve been watching from a distance has been the community finance, the community shares, the cooperative movements happening in the UK as there’s been a retreat of a lot of services, basic shops, leisure centers, pubs from remote areas. There’s been a real renaissance in community ownership there.

Alex Hannant: While we have had some of that decline, we haven’t had that same level of response, as yet, at least.

Audrey Tang: That remains one of the areas that could be developed more?

Alex Hannant: I think so.

Audrey Tang: Because just before I entered the cabinet I was visiting New Zealand and living with the Enspiral and Loomio folks. There is a very strong cooperative solidarity theme there.

Audrey Tang: They told be very explicitly that that’s not the norm. They were seen as somewhat idealist and as not the norm in the social enterprise sector. Perhaps that could be developed more.

Audrey Tang: Thank you so much. That’s a very complete picture.

Alex Hannant: There’s even some weird stuff with our legal forms around cooperatives, which actually don’t necessarily lend themselves. The cooperative legislation is quite specific, in terms of you have to have 50 percent of members as active producers or active purchasers.

Alex Hannant: While you can do legal acrobatics to generate governance models, which are analogous, it’s not necessarily straightforward. That’s a detail, but sometimes the details determine why something happens or not.

Audrey Tang: It does matter, because otherwise it’s actually easier to have a closely-held company with its own rules that behaves exactly the same way, but it’s not constrained by law.

Alex Hannant: That’s right.

Audrey Tang: We’re seeing that in Taiwan, here, also. We had a very active co-ops movement about 25 years ago, but there is one entire generation of people simply selecting the company form, but doing more or less the same thing.

Audrey Tang: The term social enterprise is 100 times more visible and recognizable than co-ops, so now everybody is going through the social enterprise umbrella, but this dilutes the conversation around solidarity somewhat. That’s our situation here, too.

Alex Hannant: One of the things I’m absorbed in, which has already happened in more established markets, and I think is always a risk in any developing market, is as you get momentum there’s a risk of fragmentation, as well.

Alex Hannant: There’s almost a tribal sense of within a very broad banner of people using business models to effect social change or community benefits there are a huge diversity of ideologies, values, interests. Trying to hold that space without homogenizing it is a real strategic challenge for sector building.

Alex Hannant: This idea about the politics of the social enterprise movement actually being something, if not managed well, is actually really disabling because human nature likes to...

Audrey Tang: Fragment.

Alex Hannant: ...turn on itself too often.

Audrey Tang: I used to use this slide, personally. Sorry it’s in Chinese, but I hope the emojis go through.

Audrey Tang: This is social and this is enterprise. Then this is about solidarity, governance, and then this is about the environment. I used to, and still do, explain the social enterprise or social innovation sector as the link between the four different concerns, or axis of innovation.

Audrey Tang: They do interact, in a way, in an ecosystem, because the more the social sector involves in the solidarity and participation in enterprise, the more enterprise is environmentally conscious, and improve the social conditions, and so on.

Audrey Tang: I used this to explained that you don’t have to do all four things at once. As long as it’s in the ecosystem, it’s still considered part of the social enterprise sector.

Audrey Tang: You’ve come across a definition here. I don’t see percentages, though, here?

Alex Hannant: No, we’ve deliberately avoided putting figures on those things. I, personally, don’t believe it’s helpful. It’s not even accurate.

Alex Hannant: For example, if you take an organization that’s working in a submarket condition, they might be selling a good or a service at a submarket rate. Therefore, [laughs] they pre-distributed, rather than having to re-distribute. I think those things are unhelpful.

Alex Hannant: I think it’s actually been bound up with the DNA of the Social Enterprise World Forum as its evolved, in terms of being quite definite around the more non-profit, if you like, aspect of the social enterprise models.

Alex Hannant: I can understand that. I understand why they do it, but I don’t think it’s helpful in terms of I think it’s re-litigating politics of the past, rather than trying to redefine the ones of the future.

Alex Hannant: This whole idea that, although it sounds loose, as long as there’s an explicit intent, then an integrity between that intent, the governance, the strategy, and the accountability, then that’s the important thing.

Alex Hannant: Really, different models are fit for different purposes. If you are talking about something which is a social or community enterprise for a specific community to do a specific job in a specific place, then that kind of trust model, there’s no need to distribute, give them profits, because the thing is there to provide the service.

Audrey Tang: Exactly, yes.

Alex Hannant: If you’ve got a cracking product, which you need to get the right type of capital to scale across the world, then that fundamentally means you have to have a business model which facilitates that. It doesn’t necessarily mean the intent is degraded as a result.

Alex Hannant: I think some of these boundaries have been, ultimately, about managing risk, so have become ideological. It’s important to renegotiate some of our thinking around that.

Audrey Tang: In Taiwan, there’s even social enterprises that has founded a charity in a cooperative and is founding a company, so that they can use the correct shell to attract either investment, or donation, or whatever as the organization grows. They use the same name for the three sub-organizations, which is quite creative.

Alex Hannant: This notion of intent, rather than artificial constraints.

Audrey Tang: The majority of their income through trade as part of the definition here, it doesn’t strictly say 50 percent-plus, or it does?

Alex Hannant: One of the problems, this is almost a guideline. This is also recognizing that there is an audience here, which is potentially not aware or informed about this. We’re basically trying to say these things actually do have viable business models. That’s almost the key message.

Alex Hannant: We also recognize that there are some very good social enterprises, which are within a larger charitable or not-for-profit organization, where there is a distinct trade...

Audrey Tang: Yes, a department.

Alex Hannant: That, in itself, is viable, but...

Audrey Tang: But not the larger charitable.

Alex Hannant: ...but we want to say it is, also, there’s a nuance here, in terms of there may be a completely viable business model, which is then best placed to receive grant to do stuff which is sub-market, because it can actually make that money go further because those grants don’t have to fund the whole operation.

Audrey Tang: It’s an amplifier for the grants, basically.

Alex Hannant: Exactly, you can stack these things in different ways. It’s great if you have the opportunity, the time to have the conversations with people, but sometimes you’ve got to try and find shortcuts.

Audrey Tang: The trade may also be grant amplifier, and the majority of their income may also be considered as part of the larger organization, or not. You can slice it any which way.

Audrey Tang: The majority here is mostly to convey that it survives in the market. It’s not saying that next year if it drops to 40 percent, then it’s not social enterprise anymore.

Alex Hannant: Yes. The thing is, the business itself has to be viable, whether that business is nested in a set of other activities, which are funded in different ways. What you don’t want is a business model which requires an ongoing subsidy.

Audrey Tang: It basically says viable business model, but in languages that it’s easier to explain. I see.

Audrey Tang: This flow chart is very useful, essentially because the trade or down trade is the easier to tell one. The next one, which you explain by pre-distribution, already resonates with the various legal structures here, because, as you said, it’s not a hard definition. It’s mostly a guideline. That’s very useful.

Audrey Tang: Here is this huge, SDG-like table...

Alex Hannant: This is plagiarized in many sense, referenced, what I thought what was really good about the Scottish Social Enterprise Strategy they released at the end of last year was they located social enterprise within a number of wider meta-trends.

Alex Hannant: The purpose of putting this in, again, it’s almost going back to the thing I was saying on the front page, was this is not a niche thing. It’s actually a dynamic model, which is being enabled or driven by a number of other, bigger things in the world.

Alex Hannant: Again, hopefully getting people in power to see that there are things here that resonate with them, where they might not have previously connected social enterprise to.

Audrey Tang: In the traditional European context, you do see governance or political social economy and sustainability. That those are very commonplace.

Audrey Tang: I’m interested to see that technology is phrased in a way that says with technology there’s now more connected communities, and therefore more community-oriented social enterprises. This is a very powerful statement.

Audrey Tang: Also, it’s easier to keep everybody accountable, and so on. That applies to the entire social sector, not just social enterprises.

Alex Hannant: That accountability goes in a number of ways. One, it’s that traditional idea of being held to account, so you better make sure you’re doing good.

Alex Hannant: It’s also an enabler, as in we are able to measure things that we previously hadn’t been able to. In that sense it’s a value-driver, as well.

Audrey Tang: As in it’s easier for people to see how much value or impact they are making?

Alex Hannant: Our government, specifically, is making a big play around the use of data in forming how to target the provision of services. That will also play into how those services are then funded.

Alex Hannant: There’s a sense of if you can better appraise where baselines are, and then what the changes are against that baseline, you can actually value the effectiveness of interventions in different ways.

Alex Hannant: The environmental sector’s been doing this. Things like the carbon markets, in that sense. Technology as an enabler to do things which are large-scale and complex. Satellite technology was essential for anything to do with forestry, in terms of the carbon market.

Alex Hannant: Likewise, now, the big data thing. The governments are being able to drill down, literally, to a kid in a school in any given town, and understand how they are interacting with different services over time and therefore given the sense of what is being effective or not.

Alex Hannant: The technology and the data piece are us to enable, to appraise the effectiveness of different interventions in new ways. That will inevitably drive new market models.

Audrey Tang: I completely agree. Why is this specific to trading charities, to social enterprises? Isn’t it true for all the social sector, whether this is charities or people doing volunteering work?

Audrey Tang: They are now all equipped with smartphones and other data-gathering sensors and, in the future, IOT technologies that will inevitably inform policy processes. What part does the viable business model plays interacting with the data-driven trend or it doesn’t really?

Alex Hannant: What I’m saying is that organizations, which previously would never have seen themselves as social enterprises, effectively were grant-funded, because people hoped they would deliver stuff, but didn’t know, will, before they know it, actually be working in environments, where they are being directly financially rewarded for the success of their interventions.

Alex Hannant: Organizations, which didn’t exist in markets, will find themselves in a performance. They’ll be effectively trading. There is a sense of social enterprise is not just the sort of thing of social people wanting to do social enterprise themselves.

Alex Hannant: This is outside of technology, but as soon as government, for example, says, "Rather than us deliver services to people with disabilities, rather than us contracting someone else to deliver those services...", going to the point where we’re actually delegating budgets to service users, who are then choosing who they purchase their own services from, the government situation where once effectively people just saw them as service providers, to actually engage with customers in a competitive environment.

Alex Hannant: Sometimes an enterprise is not an enterprise through an autonomous decision. It’s just the market conditions change around an organization. They find themselves having to trade, whether everybody likes it or not.

Audrey Tang: I see. That line of thinking would eventually leads to universal basic income and so on.

Alex Hannant: Yeah, potentially. Unless there is a radically brave and bold government, there will be an evolution of the way things work, before we get there.

Audrey Tang: Sure, gradually. Not overnight, of course. This is actually very insightful.

Audrey Tang: As you said, the NGOs or NPOs would transition to this kind of social enterprise market business model, not because they think it’s cool or hip. But the market conditions created around them make it easier for them to do the transition.

Alex Hannant: Not just easier. It makes it compulsory potentially. You get to an interesting situation there, in terms of who we want, as citizens, succeeding in those environments. Do we want a large international corporate, in the way that a lot of those corporates are running prisons now, who may want to do a good job to the letter of the contract, but essentially are still driven by a profit motive?

Alex Hannant: Or do we want organizations being able to successfully compete for contracts, but are still driven from a place of care and compassion? There’s suddenly a real keen interest in making sure that mission-led organizations have the capability to succeed, when they’re in direct competition with organizations which are driven by different incentives.

Audrey Tang: Right, but that’s switching from the government doing business with businesses to businesses with a purpose and then eventually social enterprises. But what about the other way? What about subsidies that governments are issuing to local NPOs or regional NPOs? Are there any market forces that make them social enterprises?

Alex Hannant: Well, no. This is why it’s a contested space. Government may actually, depending on who the government is, be less interested in who delivers the contract. They will be going out. It will be like, "OK, we are contracting for door-delivered meals for the elderly."

Alex Hannant: An organization, which was set up as a charitable organization, has been doing this for years on a roll over contract is suddenly going head-to-head with an international corporate, which says, "We’ll install a microwave and deliver you 30 frozen meals a month."

Audrey Tang: That’s right.

Alex Hannant: There will be a challenge of adaptation from traditional service providers. There’s an opportunity for new mission-led organizations to do things in good ways. There is the challenge, from big established commercial outfits, who are just expanding the list of things they do.

Alex Hannant: Whether we run old people’s homes or prisons, maybe we run them in the same kind of way. I don’t know. There’s a key question here as that outsourcing agenda continues. It’s already here. Who do we want to enable to be able to win those contracts? People that are doing it from a position of care or people who are doing it from a position of profit?

Audrey Tang: Right. You can either make it compulsory, as in only those vendors who have a clear social mission enter a bid at all, or you can do it more gradually, saying enterprises with a social mission get this much consideration when we are selecting bids and things like that.

Alex Hannant: Yeah. It needs sophisticated procurement. I don’t think you can discriminate necessarily who goes for contracts sometimes. What would you say? You need a certain legal form.

Audrey Tang: We are actually considering that at this very moment.

Alex Hannant: It’s more the case of, I suppose, make it be more explicit around the type of services that you’re procuring. For example, if you’re procuring doorstep meals to the elderly, maybe you’re not just procuring the food service. You’re also making sure that you’re explicit about procuring the human, face-to-face contact on a regular basis and the supportive care which comes around it.

Alex Hannant: You can’t rely on government to be sophisticated in that way. We’ve seen in other sectors that they end up outsourcing based on price, not necessarily value. I can remember good conversations with colleagues in the UK that spoke around, quite cynically, that social enterprise was used as the acceptable edge of an outsourcing agenda of that conservative government.

Alex Hannant: Whereas, in Scotland, you had a far more intelligent conversation around which organizations are best to deliver what in a social economy. It’s not to say that big corporates don’t have a role. They definitely do. But also recognizing that other organizations may be better placed and also create more value for the community and more value for the taxpayer, if enabled to compete.

Alex Hannant: There are whole heaps of stuff around the way we set up the markets, rather than just build the enterprises. That goes back to this infrastructure building.

Audrey Tang: That’s right. That’s right.

Alex Hannant: It’s not just about supporting entrepreneurs and organizations. It’s about trying to create all the conditions which generate the maximum value for society.

Audrey Tang: Thank you. That’s extremely clear. If it’s transparent and accountable in some way, then there will be less criticisms of people saying it’s just justifying. Also, people will see then those organizations’ mission is actually aligned with the government’s mission when doing this kind of procurement.

Alex Hannant: Yeah. It’s less subjective. More full value accounting will actually differentiate different services.

Audrey Tang: Right. Accountability, in this sense, is more of a publicly auditable value alignment than the traditional way of answering every inquiry from a parliament member and things like that.

Alex Hannant: Yeah. Exactly. That’s what I’m saying. One part of it is about that kind of traditional public accountability. But the other thing is the value driver. If you can demonstrate the value you’re creating, that’s actually a real enabler.

Alex Hannant: Of course, the third part about data measurement is it’s good management information. Every social enterprise should be incredibly keen to actually understand the effect it’s having, so it can improve its work.

Audrey Tang: Right. Again, a data-driven justification, not just to the value, but also to the policies around that value. Thank you. That’s very, very powerful.

Audrey Tang: The other ones are pretty commonplace. The circular economy is getting a lot of attention right now. Is there anything you would like to say?

Alex Hannant: Nothing else in there. They are generic, not least because I took a lot of them directly from the Scottish work.

Audrey Tang: Certainly, they wouldn’t say rangatiratanga.

Alex Hannant: Yeah, rangatiratanga. It’s the principle of self-determination for Maori people.

Audrey Tang: I see in your agenda design and also actually in the events that I attended in New Zealand, there are a lot of dedicated space, dedicated rituals I would say even and dedicated conversations with the subjects of Maori worldview, not just people. How does it tie into social enterprise?

Alex Hannant: That’s a conversation that is being had. We have been doing quite a bit of work recently of social enterprise in the Maori context. What’s been clear is Maori are interested but also want to take it apart and put it back together in their own understanding, values and image.

Alex Hannant: There is a Maori term called kaupapa, which is the way of doing, effectively. Social enterprise with kaupapa Maori is one of the conversations now. It’s like, "We don’t want just another Western idea foisted upon us." A more well-intended colonialism, but it’s still a colonization of ideas.

Alex Hannant: We’ve learned the hard way, in some respects. There is a lot of energy and interest in social enterprise. But it has to be reinterpreted to come from a place which is owned by Maori. That’s going to be a really interesting dynamic to the upcoming world forum.

Audrey Tang: OK. Cool. I will be sure to attend as much as I can. We are just working on the traditional justice with indigenous people here also. They are also voicing that none of the SDGs are indigenous-generated. They really need to be nativized in a way, in their respective cultures. That will be very interesting. This one is just factual.

Alex Hannant: Yeah. The point of this slide is really building confidence in politicians here that this isn’t something which is dreamed up in a backwater in New Zealand. There are probably issues of veracity in any number of these statements. Again, the purpose is really just to give a sense of momentum and scale.

Audrey Tang: Sure.

Alex Hannant: This is probably the stuff which is most specific and of interest in terms of New Zealand in a development context. Like anywhere, there has been social enterprise forever really, or at least 300 years. The Maori would say much, much longer in New Zealand.

Alex Hannant: What we haven’t had has been this more intentional or formalized approach to the support and development of social enterprise. While some organizations have done well, it’s been inefficient. We haven’t been realizing the full potential of our people and the full potential of the sector.

Alex Hannant: What we are basically saying, there are a number of barriers here where we’re not asking government to lead, but government has to be an enabler. There are certain things that only government has the capability and resources to support. It is a traditional role of business to step in in market building in areas of market failure.

Audrey Tang: Right. The "we" here refers to Akina, right?

Alex Hannant: Yes. It does there. Some of this is quite Akina-centric. We didn’t consult on this document. It was our document. We can only really speak from our point of view. It’s also fair to say, in terms of sector development, we probably have a fairly unique insight, in terms of we’ve been doing this for longer than anyone else across the country.

Alex Hannant: We’ve had the scale, I suppose, to at least have any number of learning experiences, which have given us an ability to bring some of these insights together.

Audrey Tang: Right, but this line is basically saying there are more than 700 organizations needing Akina’s services. Right?

Alex Hannant: Yes.

Audrey Tang: It’s more like this is a growing sector and it has grown exceeding Akina’s ability to provide services.

Alex Hannant: That’s right. We know how many we’ve worked with. We know we can’t reach everyone. We know we don’t know everyone as well. There’s who we work with, those that we can’t work with and then those we don’t even know of. It’s that sense of there’s real capacity and underserved demand here to work into.

Audrey Tang: I see. Because you’ve talked about consultation, I understand the statement and, more broadly speaking, this year’s governmental action plan there is a 500 million NZ dollars or something like that input. Is that over a year or over more periods?

Alex Hannant: The government, two months ago, announced an investment into sector development of 5.5 million.

Audrey Tang: That’s right.

Alex Hannant: Which is bigger than anything that’s been on the table before. But it’s still relatively modest. It’s still small. It’s still peanuts really, compared to...That is really over three years, but over four financial years.

Alex Hannant: That investment came as a direct result of us beating a path to the prime minister’s door and pitching him and saying, "Your government departments, across-the-board, are increasingly interested in this area. But you have a coordination and an implementation problem. You cannot lead on this."

Alex Hannant: "You benefit from it. You are fully engaged in it. You do not have the capacity to coordinate and lead this. If you invest into sector development and work with a strategic partner, not only will you build a sector out there. You’ll also enable government to build or determine its own coordinated approach."

Audrey Tang: This is addressing barrier seven, uncoordinated government action.

Alex Hannant: Yeah.

Audrey Tang: And enabling policy. This investment is entirely going to the social enterprise sector, but in the form of various different ministries?

Alex Hannant: No. It’s an external investment. It is there for a strategic partner to be resourced and resource key sector development, key activities related to sector development.

Audrey Tang: It’s an external partner acting to interface with governments.

Alex Hannant: Yeah, to be a primary intermediary effectively. Without doubt, we see ourselves as that organization. There will be a competitive tender process. There might not have been, if we hadn’t been so close to an election. Everything becomes politicized before an election. There will be, very shortly. There will be a competitive process.

Alex Hannant: We were keen to say that that 5.5 is not a finite amount. We believe that 5.5, if government basically, as it has, puts it down, that will facilitate co-investment from the corporate, philanthropic, local government sectors.

Alex Hannant: We said, if we were the steward of that resource, we could multiply that by three or four times, to increase the war chest up to about 15 to 20 million over that time period. It may not be the philanthropic sector, for example, pay it in in one lump sum like government. It will be more about co-investment on different activities, which revert through the interest of those different stakeholders.

Audrey Tang: That’s the amplified impact effect that you were just referring to.

Alex Hannant: Yeah.

Audrey Tang: That’s great. That’s great. I’m glad that it’s a focused external sector. Around three years ago, Taiwan passed a three-year plan on social enterprise development, roughly exactly the same amount of money. It was channeled through various different ministries.

Audrey Tang: There are pretty good effects in each of the ministries. There is very little horizontal coordination after the transition of the ministry with a portfolio from Yin in the previous cabinet. Every year this plan keeps running, but none of the ministries know what the other ministries are doing.

Alex Hannant: Beyond that, I think there’s some really good strategic government...why governments shouldn’t do it. One it misses the opportunity for leverage. Very rarely would philanthropic be willing to give money government to do something.

Audrey Tang: Yes. Exactly.

Alex Hannant: A third independent party kind of leverage. The other thing is around, effectively, credibility, independence, and I think also the convenient power. Government always should be at the table in a capacity, but it cannot necessarily be the convener because it compromises its own position.

Audrey Tang: That’s exactly right.

Alex Hannant: If government turns up everyone will be pointing the finger and wanting something from it. Whereas if an independent party does it, it can reframe those relationships.

Audrey Tang: As an anarchist, I completely agree. Also, I think it makes sense for the government, while it still exists, to endorse this kind of external-sector development. When it owns or as you said, convenes, it does lose credibility without very strong leadership. It’s the national agenda, perhaps, but it’s not the national agenda at that point.

Alex Hannant: This may be different depending on the capability within government, but there’s a sense if government has to lead it almost has to assume it knows what to do.

Alex Hannant: Whereas if it enables another party to lead, it can actually go through its own design process and actually be part of a learning journey to understand its role rather than to be seen to "We’re going to do A, B, and C."

Alex Hannant: I think there’s a sense of there are so many upside for government not being in that position, although it finds it difficult to let go of control sometimes. There’s a much bigger prize if it can.

Audrey Tang: Are you still including career public servants in the dialogues and in the process and in designs?

Alex Hannant: Absolutely. If we won the contract to be the supplier, right from the beginning we’d be wanting to set up an adaptive governance model, which would hopefully -- I’m not saying we’re going to achieve this.

Alex Hannant: But what we will angle for is to say, "Let us set up the governance of this three-year program on a basis where we set out our high-level strategic objectives and then we have a policy of complete transparency, but an ability to change our plans and our approaches based on the reality of what we see."

Alex Hannant: I think that adaptive governance model would actually give rich learning to government and give it a far better input into the policies or levers that it can pull to do more public good.

Audrey Tang: I take it to mean that you will send monthly or quarterly via the feedback cycle and review the goals just like a traditional agile development...?

Alex Hannant: Yeah, I think you’d probably want it monthly. I think you’d want it quite close, and I think what you would want to do, you would actually try and identify senior officials who can effectively be champions within the system.

Alex Hannant: If I had at least off the top of my head a perfect world, I might go for three deputy chief executives. You won’t get a chief executive but you could get three DCEs, maybe one from an environmental, one from a social, and one from a cross-agency, be it a treasury or a minister in cabinet’s office, or we’ve got the Social Investment Agency.

Alex Hannant: If you could convene informed, progressive senior officials to that table who could actually then drive stuff through government in terms of what comes out of that kind of adaptive governance start, I think you’d get a really good result.

Audrey Tang: That sounds great, but why would the ministries devote this much resources if they don’t have control over the process?

Alex Hannant: The advantage here of going all the way up the PM was it was the PM who directed the spend, so it doesn’t belong to any agency. There is a lead commissioning agency, but it is doing it on behalf of whole of government.

Audrey Tang: Ah, OK, so it is a theoretically PM-intervened structure.

Alex Hannant: Yeah. I actually think we kind of got lucky here -- and we may not. Government is very good at snatching defeat out of the jaws of victory. Because we got up to the most powerful level, we got ahead of the bureaucracy.

Alex Hannant: That’s actually framed this in more of a holistic government approach, which stops further down the line one agency saying, "I have to own this completely, and it should be done with our interests in mind," and other agencies going, "Well, this has nothing to do with us, so we won’t buy into it."

Alex Hannant: Because this is such a systems issue, it really has to come from a cross-agency place.

Audrey Tang: I see. This is very clear. There is more transient victory than it being snatched for this plan, not knowing anything about your political situation.

Audrey Tang: This does lower the risk of any individual participation agency over the course of three years. That really helps. This, I’ve got most of the factual information.

Alex Hannant: The point of this slide was just to inform MPs that this, again, hasn’t just happened. There’s been a progressive story. This outlines basically our roadmap. We’re basically saying a three-year program. You would have four work streams. Three of them are the trifecta, thinking around building capability and supporting talent.

Alex Hannant: The second one is enabling finance environment, and the third is this market access, be that around consumers, procurement, or this more nuanced area of payments for results, or impact payments.

Audrey Tang: What kind of IP are you looking at when you were saying transferring IP to proponents?

Alex Hannant: What we mean there is actually developmental IP. For the last five and a half years, Akina has been delivering development programs and services.

Alex Hannant: We’ve got workshops. We’ve got community development models. We’ve got accelerators. We’ve got growth services. We’ve got investment readiness.

Audrey Tang: Wow.

Alex Hannant: In bigger ecosystems, you have more specialized intermediaries. Because we’re quite small and there was nothing here, we have to do everything.

Audrey Tang: Exactly.

Alex Hannant: Because if you wonder, like you were at the edge, or if you do up here, that you don’t get enough deal.

Alex Hannant: Again, we had the advantage of, although it had its challenges, that we created quite an integrated model which made sense. Going forward, if we got this work, it would effectively move away from being a retailer and look to become more of a wholesaler.

Audrey Tang: You are scaling out yourselves, basically?

Alex Hannant: Yeah. What we’d want to see, as there’s momentum, we are seeing local hubs, cultural, thematic support organizations pop up. Our role would, rather than delivering stuff ourself, would be to try and identify those capability-building organizations, and help them develop effective practice and connect them to each other.

Alex Hannant: At the end of three years, a success might be a network of 20 different support organizations across the country, which were embedded in their place, their communities, their thematic areas of specialization, their cultural orientation, and we’re there all the time.

Alex Hannant: Because one of our problems, we do work in the regions, but we’re in that old age problem of development where we fly in and we fly out, or we drive in and drive out. We’ve tried to correct that, but inevitably, if you want to have really successful local ecosystems, the support has to be part of that. It has to be always there.

Audrey Tang: Exactly.

Alex Hannant: We fully recognize strategically that success after three years is this network of support, rather than just a McDonald’s of business development.

Audrey Tang: Personally, I’m traveling with all the different ministries and agency in Taiwan, engaging with social enterprise, which may be seven or eight different ministries, every two weeks to one of the regional social enterprise clusters or centers.

Audrey Tang: There were four or five of them, and every region really grows very differently. The more we delegate the community building into the local ecosystem, the more variety we would get as a result because the social problems and the social issues in every city is really different.

Audrey Tang: We sit here, in the capital city in Taipei, and force, through market and policies, all the social enterprise to look exactly the same as, at some point, South Korea did. Then we will get very good solutions to certain issues or problems. But we’ll never discover any other issues or problems.

Alex Hannant: Yeah. Trying to drive uniformity is an antithesis to enabling innovation. You want diversity. What you don’t want is variability in quality. While you want to celebrate diversity, your counterbalance is actually connectivity between peers.

Alex Hannant: A big part of this is not just enabling individual organizations, but making sure those are healthy and support a peer network between those support organizations. We will smooth out their practice through interaction.

Audrey Tang: Completely agreed. That’s great. That’s great. The quality assurance standards refer not just to the governance or the business model, but the whole thing, right, the services they provide, and so on?

Alex Hannant: Quality should be something across the board. Where you’ve indicated it on there, that’s talking around, as this gets to scale, if you want to get scaled market transactions, how do buyers know that they’re actually dealing with a real...? It could be things like B Corp certification is an assurance.

Alex Hannant: It could be a new legal form, which can act as a shortcut. It could be some kind of national body doing some kind of annual accreditation. It’s really try to make sure how you manage risk, but enable scale.

Audrey Tang: This is more about the form of governance, not the product or services, which is more like the peer network guaranteed way that you just mentioned.

Alex Hannant: Here it’s specifically around transactions. This is less around capability. You’ll get more successful social enterprise activity if you get more trading activity. That trading activity comes from a lot of people, which aren’t actually directly connected to social enterprises and may not know. Things like how do you give confidence to consumers. Things like fair trade.

Alex Hannant: In social procurement, where bigger private and public sector organizations may have preferred supply status or want to procure for social or community benefit within their procurement causes, how can they do that in an efficient way, where they may not have that capability within themselves to raise social impact. Quality assurance there is managing risk and enabling efficient transactions.

Audrey Tang: I see. More like organic farming labels and things like that.

Alex Hannant: Yeah. Exactly. Yeah.

Audrey Tang: Cool. We’re at the last slide.

Alex Hannant: That’s the event coming up. It’s been a huge piece of work for us. We always intended it to be. It was never about an event. It was always a sector building play. The activity that’s going on, up to date, the energy, the alignment, the conversations, the connections, the learning that will happen at the event and then the momentum into legacy afterwards. It’s not an event. It’s a catalyst as far as we see it.

Audrey Tang: That’s great. That’s great. I hope I can help in whichever way. It looks like you’ve got this local network as well as your government networks really connected at this point. I will just see how I can help.

Alex Hannant: Yeah. We are looking forward to meeting you Audrey. Richard Bartlett described you as the smartest person he’s ever met. I look forward to having more conversation.

Audrey Tang: OK. Cool. Thank you for your time.

Alex Hannant: Thank you.

Audrey Tang: It’s more than an hour now. Thank you. I’ll publish the recording, if it’s OK with you, of everything.

Alex Hannant: Yeah, absolutely.

Audrey Tang: OK. Cool.

Alex Hannant: That would be great. Thank you. Bye-bye.

Audrey Tang: Cheers. Bye.