The Millennial Digital Gig Economy
The shift in consumer behavior from ownership to sharing has produced a similar effect for corporations who are increasingly engaging “consultants”, “contractual”, “seasonal” and “freelance” workers on a temporary basis rather than hiring employees with a long-term connection to a particular business.
Although interim and temp hiring has been a staple of blue-collar and service industries for years, the growth of this phenomenon in white collar fields such as law, engineering and accounting is rising and notable. Research by Intuit predicts that by 2020, 43% of all workers in the U.S. will be contingent, or part of the “gig” economy – in large part due to digitization. As workforces become increasingly mobile and work can be completed from anywhere, the decoupling of job and location has meant that gig workers and employers can select amongst a vast pool to find the perfect fit in the nick of time.
The gig economy is defined as an environment in which temporary positions are common and organizations contract with independent workers for short-term engagements. The Intuit study estimates that these jobs will grow from 3.2 million in 2016, to more than 7 million by 2020. Contract workers contribute more than $700 billion to the U.S. economy and 10 out of the 50 startups on Forbes’ Hottest Startups of 2015 list are part of the gig economy, with a collective valuation of $78 billion. The gig economy already is, and promises to be, the employer of the future.
Not surprisingly, the majority of individuals involved in the gig economy are Millennials (39%) – who typically like to control decisions about where, when and how they work. In fact, one of the biggest advantages of the gig economy is that it can improve work-life balance over traditional jobs, since workers can pursue more meaningful and independent lives and businesses can access the exact right skills and people they need just-in-time. These on-demand jobs are creating a nimbler economy that is potentially more innovative, more competitive, and better able to deal with the fluctuations of global markets.
The gig economy however, does present some challenges. Freedom and flexibility don’t come with the traditional full-time perks such as healthcare and retirement savings. Critics of the gig economy cite the “disposable” and “replaceable” nature of workers who are far cheaper for employers since they do not qualify for benefits and are technically not their responsibility.
But socially-minded Millennials – the creators and workers of the gig economy, are working to change those conditions. The Good Work movement is a gathering of companies pledging to deliver the protections and benefits that gig companies typically do not offer. As governments struggle to re-classify workers and create policies that will provide gig workers with paid vacation and career development, The Good Work movement aspires to lead the changes in the field by inviting companies to create scalable solutions which address the gig economy’s current challenges.
At DU, we have the pulse of the drivers of the gig economy – millennials and digitization and look forward to working with you on creating gig economy 2.0!
Maggie & Hector
The Millennial Link Between Digital Marketing and Social Impact
Digital marketing and social impact are both transformative ideas in their respective fields. We’ve written about the continued evolution of strategic vs. responsive impact, and how social impact is creating new ecosystems as it disrupts industries, re-engages new ideas and revolutionizes businesses. Digital marketing, with its viral content and measurable ROI, is creating similar ripples in the field of marketing.
Traditionally, a company’s marketing mix is defined by 4 “P’s”: Product, Price, Place and Promotion. Digital marketing, adds a fifth and powerful P: People. In a digitally connected world, the internet allows people to become channels via peer-to-peer sharing. For example, Adage publishes Viral Video Charts, ranking the most-viewed brand videos per month. In May of 2016, Knorr’s #LoveAtFirstTaste video received over 31 million views, making it the # 1 viral video that month. Even more interesting is the fact that there were four new entries by well-known brands on the top 10 list, indicating that competition is fierce and that the incumbents have recognized the need to embrace digital.
Just as social impact is changing the finance and healthcare fields (amongst others), digital marketing is disrupting the advertising world. Today, companies are switching ad spend from traditional marketing campaigns to digital. The tipping point might have been the Oreo “dunk in the dark” tweet. In 2013 during the Super Bowl XLVII power outage, the sandwich cookie’s social media team jumped on the cultural moment and tweeted an ad that read “Power Out? No problem” with a starkly-lit image of a solitary Oreo and the caption: “You can still dunk in the dark.” The message caught on almost immediately, getting nearly 15,000 retweets and more than 20,000 likes on Facebook. The ad was also posted on Tumblr with the note “Oreo won the Super Bowl blackout.” Where companies paid upwards of $4 million for ad spots during the game, Oreo’s digital success was free.
Where social impact is typically difficult to measure, digital marketing allows for concrete ROI calculations. On the consumer front, marketers have access to specific data on individuals, allowing them to serve up advertising and content targeted with mathematical accuracy. And because every click on the internet is measurable, digital marketing agencies such as digitalmarketingroi.com can create dashboards with numbers of Instagram clicks segmented by age group, or quantify Facebook sentiment by gender. This precise ROI drives the new business currencies of awareness by conscious consumers with unprecedented voice.
The common link between the digital media and social impact are of course, the Millennials. Not only are they demanding more social impact and change, they are the creators and consumers of digital media. That may help explain why some of the top digital marketing content today encapsulates both worlds. The #icebucketchallenge was the biggest hashtag campaign of 2014, created to raise money and awareness for the disease amyotrophic lateral sclerosis (ALS) by pouring a bucket of freezing water over one’s head. With over 2.4 million videos shared on Facebook and 2.2 million mentions on Twitter, the online support translated into more than $100 million in donations. Similarly, Virgin Mobile captured the hearts of Millennials everywhere with their #mealforameal campaign. Recognizing that pictures of food are the second-most posted content on social media (after selfies), the company donated a meal every time the hashtag was used. Through the life of the campaign, Virgin Mobile donated 400,000 meals in exchange for the attention of Millennials.
Digital marketing holds promise to transform the marketing world and reposition cause marketing as a social marketing tool. At DU, we are working with our clients to consider the intersection between social and digital: come and see how we can work together!
Maggie & Hector
Impact Investing Creating Social Impact
A global survey by Toniic shows that 79% of Millennials describe themselves as impact investors. In fact, a 2014 U.S. Trust survey indicates that it is Millennials more than any other generation who believe investment decisions are a way to express social, political and environmental values. Given the power and reach of Millennials, it is hardly surprising that the annual survey of impact investing estimates over $60 billion of capital being allocated to impact investing in 2015, with investors indicating an additional 16% increase in commitments for 2016.
The Global Impact Investing Network defines impact investing as investments made into companies, organizations, and funds with the intention to generate social and environmental impact alongside a financial return. Impact investments provide capital to address some of the world’s most pressing challenges in sectors such as sustainable agriculture, clean technology, microfinance, and affordable and accessible basic services including housing, healthcare, and education. As such, impact investing is the engine fueling the incubation, infrastructure and growth of social impact enterprises in developing and developed countries.
By creating mechanisms through which investors can both make money and address social and/or environmental challenges, impact investment offers the potential to expand the pool of capital available to fund innovative solutions across a range of asset classes and geography. Aavishkaar is a venture capital firm which recently provided two rounds of $25,000 in funding and bridge loans to a company called Servals Automation which sells kerosene saving stove burners targeting the rural poor in India. The social and financial impact of the funding and loan were manifold – products sold by Servals have impacted 450,000 low-income households with annual fuel savings of more than 72 liters of kerosene, resulting in financial savings of $70 per household. Another example, Lyme Timber, a forestry fund based in New Hampshire, has been able to utilize conservation contracts and industry experience to invest in sustainable forestry projects throughout the US. These projects help conserve local forests while delivering market to above-market returns to their investors.
An interesting characteristic of impact investing is the wide range of return expectations. Impact investments target financial returns that range from below market to risk-adjusted market rate. The New York City Acquisition Fund is an example where investors earned sub-market financial returns but has spurred the creation of similar funds in Los Angeles, Atlanta and Louisiana. City of New York and the Rockefeller Foundation invested $40mm in the affordable housing project and provided guarantees in the form of low-interest subordinated loans. The fund’s structure enables it to develop 30,000 units of affordable housing in a 10-year time span in New York City. By allowing for submarket returns on certain projects and focusing on the social impact, impact investing allows investors to be the agents of social change.
As impact investing grows globally, the ecosystem around it has grown to support it. ImpactBase for example, is an online search tool where investors can search for funds that fit with their investment interests and objectives. Enable Impact is an Austin-based platform where social entrepreneurs get introduced to and funded by impact investors. There are even specialized impact investing communities such as Toniic, which is committed to creating an environmental impact and Ford Foundation, committed to reducing poverty and injustice.
At Digital Union, we have a broad definition of impact investing – from investing in employees, in stakeholders and building businesses that invest in the communities around them. Come and see impact investing in action!
Maggie & Hector
The Evolution of Measuring Social Impact
Measuring social impact is a vital component of the growing social impact ecosystem. As a social impact entity, measured results are critical to demonstrate success, attract investors and receive funding. Impact investors today range from those who want to see measurable social returns, those who want their portfolios to align with certain principles, and those who simply want to limit their exposure to systemic problems such as carbon regulations and water scarcity. Just as each of these investors can be placed on a continuum of commitment to impact-based investing, there is a parallel continuum of evaluating tools that measure social impact to help these investors in their decision-making.
In fact, tools and frameworks to capture social impact’s value are growing almost as fast as social impact businesses themselves—and each of them targets a specific segment of investor. The Foundation Center website features over 100+ resources, with frameworks ranging from those designed for niche segments such as Planet Rating’s GIRAFE tool which evaluates the performance and institutional risk of microfinance organizations, to good housekeeping seals such as Better Business Bureau’s B Wise Giving Alliance seal for organizations that meet BBB’s code of best business practices.
The most widely accepted heavyweights in the alphabet soup of impact measurement are the GRI, CDP, and the DJSI. Each of these tools relies on self-reporting survey data and covers an extensive breadth of information. It is also the most frequently used set of measurements – the Global Reporting Initiative (GRI) for instance, is used by over 22,431 organizations worldwide in conjunction with company-generated sustainability reports.
For investors and organizations looking for a more simplified and familiar approach to measurement, there’s the Global Impact Investing Ratings System powered by B Impact which translates the social and environmental impact of companies into ratings similar to Morningstar or S&P Credit. Or the International Finance Corporation’s Development Outcome Tracking System which identifies standard performance goals indicators and measures the rate of achievement in assigned categories against certain benchmarks and timelines.
Consumers today are more environmentally and socially conscious than ever before. On the retail side, there’s the consumer focused The Good Guide, which helps buyers choose individual products by rating their environmental impact, health and social responsibility on a scale of 1 to 10. The site has over 120,000 products listed and has a mobile app so you can make decisions in-store, as well as a toolbar to help you navigate as you shop on the web. For a side by side comparison, you can use JustMeans Insights to measure a company’s social impact against its competitors.
Impact that cannot be translated into numbers can often be relayed into a case study. Outcome Mapping by the International Development Research Centre offers a methodology that combines qualitative and quantitative approaches. HCT Group for example, is a social enterprise providing public transportation in the UK. On their website, they indicate “you can find out more about our social impact through the stories of those who use our services” with links to Robert’s Story or Susie’s story. With quotes, pictures and anecdotes from those who have benefited from the work of the organization, these case studies are a potent, creative way to demonstrate success.
In fact, at Digital Union, we find this win-win approach to be the great way of exhibiting our leadership while also providing additional brand value to our clients. Come and see how we can help you fuse profit with purpose and measurement with marketing!
Maggie & Hector
A World of Women Driving Social Impact
Women control upwards of $20 trillion, or 27% of the world’s total wealth; in a global study by the Center for Talent Innovation, 90% of women indicated that making a positive impact on society was important to them. Today we celebrate some of the countless incredible women leaders who are forging paths through the creation of their profit + purpose impact businesses. These women are championing social impact businesses by creating, building, and financing them.
Jane Chen and her work with Embrace is a stellar example of a woman who is creating a company around a social mission – saving newborn babies’ lives. In 2008, while pursuing an MBA at Stanford, she teamed up with graduate students in computer science, electrical engineering and material science to develop a device that keeps low-birth-weight babies warm even when the electricity in hospitals and clinics fails. The “Thermopod” looks like a miniature sleeping bag and provides lifesaving four to six hours of heat on a single 30-minute charge. After raising funds and after a successful pilot program in India, Embrace has struck a global distribution deal with GE Healthcare. The invention has landed her among Forbes’ Impact 30 list, and established her social impact business as a respected leader in the space. Yet her mission continues – Next up for Embrace? A hot-water-powered product that doesn’t require electricity to warm newborns.
Women are creating markets and moving economies forward via social impact businesses. Eleni Gabre-Madhin has created Ethiopia’s first commodities exchange to better connect buyers and sellers in the hopes of solving the nation’s constant food crisis. While studying at Cornell in the 1980’s, Eleni watched helplessly as famine killed millions in her homeland, even as parts of Ethiopia boasted a food surplus. Within three years, the exchange has gone from a startup to trading an average of $20 million a day. Women like Eleni are transforming a nation’s and economy with businesses rooted in social impact.
Women with successful social impact businesses are also investing in other women entrepreneurs with the same mission. Genevieve Thiers, creator of SitterCity has launched an investment fund called High Note Enterprises – specialized funding for women-led social impact businesses. With a dual goal of making money and boosting women entrepreneurs, High Note will invest in companies run by women who are solving problems for women. Although it is too early to look at the fund’s returns, Thiers is confident that the fund will grow since she feels there are other successful women who are looking to invest in this space.
In the same vein, but with a nonprofit lens, Maz Kessler started Catapult.org, a crowdfunding site for projects related to empowerment of women worldwide. Began in 2012, Catapult has changed the lives of over a million girls who are receiving an education, are free from violence, have access to family planning and are taking part in economic empowerment programs. Both of these women have created platforms that fund social impact work being done by women, for women. The idea of successful women supporting other women who are working to solve social issues has the potential to create a powerful virtuous cycle.
As the momentum builds, women-owned businesses are also using their philanthropic dollars and resources to create impact. Spanx Founder Sara Blakely was the first female billionaire to sign the Giving Pledge, a commitment by the world’s wealthiest individuals and families to dedicate the majority of their wealth to philanthropic causes. Spanx’s Leg Up initiative recognizes that “Everybody needs a leg up in the beginning of starting a business.” and uses Spanx’s distribution channels to support female entrepreneurs and their businesses/products.
Profit + Purpose businesses have the potential to catalyze women’s economic independence and equality, advance economies, become sound business investments and generate profitable returns in addition to changing the world we live in. Keep in touch with us for more!
Maggie & Hector
Demystifying Thought Leadership
Thought leadership is key to innovation and a foundational aspect of social impact businesses. There are several ways to engage in thought leadership, from new ideas that bring disruption and change, to marketing-related programs focused on driving sales. Thought leadership can transform an industry, increase brand value and create powerful social impact.
Netflix is an example of transformative thought leadership. Co-founders Marc Randolph and Reed Hastings are examples of leaders that changed the DVD rental services industry. In 1997, the idea of an internet-based mail service for DVDs without late fees was so transformative that it IPO’d for $50 million just three years after its creation. Netflix even patented their “dynamic queue” of DVDs available for each customer and their communication and delivery methods. The ripple effect of this innovation was felt not only by its immediate competitor, Blockbuster, who ultimately filed for bankruptcy, but it also affected the way audiences watch televised content (binge watching House of Cards anyone?). These thought leaders revolutionized the industry they entered, successfully launched a new service model, and changed consumer behaviors.
Khan Academy is an example of a nonprofit venture exhibiting thought leadership by solving the issue of access by providing “free education to anyone, anywhere.” Khan Academy has forced traditional brick and mortar universities to reexamine their business models and offer online education to the larger public. In turn, this free and accessible education has sparked a debate about the current model of higher education, with its high cost of entry and liberal arts mandate. Khan academy’s thought leadership model solves a social issue with a new service and transforms the education system, provoking a sea change in their industry and beyond.
Thought leadership can increase brand value. Whole Foods’ thought leadership was in its sourcing of organic food long before it was fashionable or well understood (i.e. 1980!) The company has built its brand with this commitment to healthy, organic food at its center, and Whole Foods now calls itself “America’s healthiest grocery store.” Their stores offer eco-friendly and sustainable products and their website has information on healthy eating and what organic really means. Whole Foods has built their brand and entire marketing platform around their pioneering idea of organic produce.
Kiva’s thought leadership has been transformative in the field of microfinance. KIVA is a strong brand-builder and is flawlessly aligned to their social mission of connecting people through lending to alleviate poverty. Kiva allows people to lend money via the Internet to low-income entrepreneurs and students in eighty-two countries. At the time, the concept of using the Internet to mobilize capital for low-income entrepreneurs was revolutionary. Furthermore, Kiva allowed its lenders to select their borrower(s) – humanizing the process and providing the lenders with tangible beneficiaries they could empower. In fact, Kiva’s marketing strategy was powered by this same idea. In 2012, when LinkedIn Co-Founder Reid Hoffman lent Kiva $1 million, Kiva allowed 40,000 people to lend for “free.” The microloan beneficiaries were expected to pay back the loan to the original lender, but Kiva was betting that the new 40,000 lenders would also return to the site and lend more to projects, increasing their overall user base. Kiva’s thought leadership has powered its business model, its marketing strategy and its social mission.
At Digital Union, we take thought leadership seriously and seek to help businesses become true thought leaders by fusing purpose and profit. We help companies to navigate social impact and become real game changers in their field – come and see what we can accomplish together.
Maggie & Hector
Impact & Supply Chain Social Sustainability
In an ever globalizing world in which products are sourced from numerous tiers of suppliers from across the world, it is a very important consideration for a company to synergize and stregthen their impact within their supply chain.
In fact, local and national governments are becoming more active in demanding social responsibility in supply chains a requirement, such as California’s Transparency in Supply Chains Act, which requires retailers and manufacturers doing business in the state to report publicly on efforts to ensure their supply chains are free of forced labor. High profile tragedies in countries like Bangladesh are bringing more media scrutiny to supply chain issues. Investors are recognizing that weak social and environmental standards in supply chains can lead to financial and liability risks for the companies where they invest. Beyond this, a rising class of engaged, socially conscious aspirational customers are forcing companies to expand their sourcing paradigm.
There’s a strong business case for investing in sustainable supply chain programs. According to Ceres’ 2014 study, 58% of publicly traded U.S. companies set clear social and environmental standards for suppliers, up from 43% in 2012. Moreover, 34% now monitor supplier performance, up from 25% in 2012. Successful firms work collaboratively with vendors. Rather than simply auditing them, they build long term relationships and business contracts which make suppliers less likely to be tempted by short-cuts.
The first most high profile example of “relational sourcing” came in the 1970s, when Toyota started outperforming American automobile companies by producing cars with far fewer defects than in that decade’s dominant models. A major cause for this increase in standard of quality was the long-term, open-ended contracts that Toyota had entered into with its designated suppliers. These contracts incentivized suppliers to ensure quality. Because of their success, relational sourcing became an established best practice in a wide variety of sectors, from food to furniture.
In addition to established corporations like Apple, Philips, H&M, and IKEA using relational sourcing in their value chains, a number of innovative start-ups like Everlane, Honest By and Zady Fashions are taking this approach further by marketing socially responsible sourcing as their competitive advantage.
While third party international organizations are still in the process of developing sustainability and social metrics that can be applied broadly, businesses must prioritize which metrics are right for their purposes. These impacts may be determined by proximity to supply chain, geographic proximity or financial factors. In addition, the United Nations and International Labor Organization (ILO) have developed documents that outline basic expectations for how workers will be treated; ILO’s eight core conventions address forced labor, child labor, discrimination, freedom of association and collective bargaining.
The Institute for Supply Chain Management offers the following 10 criteria to look at when trying to improve a supply chain’s social performance:
- Diversity and Inclusiveness — Workforce and Supply Base
- Ethics and Business Conduct
- Financial Integrity and Transparency
- Global Citizenship
- Health and Safety
- Human Rights
- Labor Rights
A move to supply chain social sustainability is an important consideration in an ever more complex business world. To learn more about implementing successful social strategies for your business, please contact Digital Union.
Maggie & Hector