Early Childhood Education refers to educational programs for children from birth to the age of six. A time of remarkable brain growth, these years lay the foundation for subsequent development. These years are considered the most vulnerable and crucial stage of a person's life. Early childhood education, for example, tries to guide children to learn how to think through guided play.
Brain science shows that the neurons in the brain begin to activate and the synapses start to connect on birth until the age of six (see Figure 1). This is why this period is so important and this is why we need to provide early childhood education. The normal process of brain development resides in “pruning” and “neural proliferation”. A kid that did not receive stimulations and education in this critical period will need to make huge efforts to develop brain functions as they grow. Therefore it is very important to shape the brain in early years when it is making millions of new connections or synapses per second.
Figure 1 Synapse pruning and formation (Harvard “Core Concepts in the Science of ECE”, 2012)
The years from 0 to 6 are essential for future learning. During this period (see Figure 2) a child slowly develops sigh, hearing, receptive language and speech. The brain is developing
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cognitive functions like solving puzzles, fine motor skills like picking up objects and writing, and, gross motor skills like walking and running.
A holistic solution must address the needs of kids at different stages:
Figure 2 Child development stages
(Harvard “Core Concepts in the Science of ECE”, 2012)
Giving education earlier in life will provide lifetime positive returns. As seen in Figure 3, the difference as the result of not receiving ECE. Kids are less prepared for primary school, high school and the work life. This is a vicious cycle for the less fortunate living in urban slums.
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Figure 3 Growth Map
(Harvard “Core Concepts in the Science of ECE”, 2012)
1.2. Current Situation
1.2.1. Micro: Early Childhood development
More than a hundred million children aged zero to six living in urban slums (See Figure 4) are not getting the proper quality education to be prepared for primary school and to be competitive in life. In 2014, around 1.3 billion people in third world countries lived with less than US$3 per day. It is obvious that less fortunate kids experience more difficulties compared to privileged higher income families: the level of language skills and even health is significantly different. It is a fact that education can eliminate the poverty cycle and is a factor to improve people’s lives.
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Figure 4 Children under Six living in Slums (in millions) (2015 population reports from the UN)
Unfortunately, according to an IXL Center study in October 2013, most parents and informal care givers do not provide proper ECE. Parents believe that for babies, a home, food and love are enough for child development and education will be provided by other institutions in later years. Limited money and time makes it hard for parents to give their kids ECE even if they would like to. They just have to decide whether to go to work and make some extra money or stay at home and be full time parents.
Government, NGOs and private sector efforts are not enough to solve this problem. For instance governments focus mostly in primary and secondary education. In most developing countries nothing is being done for ECE (IXL study, 2013). Secondly, NGOs offer better alternatives but are simply not scalable ones. Lastly, private sector can provide high-quality ECE alternatives but are way too expensive for these people to afford.
1.2.2. Macro: the missing link
On another note, having so many problems in the world doesn’t mean that there are thousands or millions of people with good intentions wanting to help the less fortunate. Every day people are bombarded with bad news all around the world: wars, natural catastrophes, terrorism, rapes, gangs, global warming and environmental issues. There are currently many
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NGOs working and fighting restlessly to relieve them with the help of social conscious people. An example would be the earthquake in Nepal in 2015 (U.N. report, May 2015): huge tangible losses and more than 8000 deaths. However, the whole world was informed about it and people came to the rescue. International aid agencies like Médecins Sans Frontières (Doctors Without Borders) and the Red Cross were able to start medically evacuating the critically wounded. Volunteers helped plan emergency aid work, UNICEF appealed for donations and NGOs from all over were doing their best to help. These are all examples of people having the good will to help.
So we have on one side the people with money wanting to help and on the other hand people without money in need of opportunities. The problem is that many times people don’t know how to help or, even worse, they don’t know where their money goes. It can even be said that sometimes there’s not even a channel to connect them both. This is where the opportunity relies.
1.3. Business Opportunity
1.3.1. Micro: Social EnterprisesAccording to a study by UNESCO, (EFA Global Monitoring report, 2013) if we could make all kids from third world countries have a decent and basic level of reading, 172 million people could be lifted out of poverty, this represents a 13% cut in worldwide poverty. The same study showed that for every additional year of school, a child can increase his lifetime earnings by 11%. Moreover this can even increase the average annual gross domestic product (GDP) by 0.8%. Every dollar invested in ECE provides an incredible social impact in return on investment of $7 to $13.
Social enterprises may be an effective alternative to address this problem. In fact, a social enterprise delivers both social impact and business profit that assures sustainability and scalability. They provide social impact by significantly improving the education of the less fortunate. Social enterprises can be of two forms: for-profit or not-for-profit. But, their goal is to use a pricing strategy and a one of a kind business that will create a sustainable, consumer-driven or partner-consumer-driven business. This is key to eliminate the problem of depending on
1.3.2. Macro: Impact Investment Platform
In more general terms, to address the problem of the gap between people who want to help and people who need financial opportunities, innovators need to think on how to link them together. A financial intermediary could solve this. By definition, a financial intermediary is an institution, such as a bank, building society, or unit-trust company, that holds funds from lenders in order to make loans to borrowers. The problem is that there is no interest for people to just lend money to these less fortunate people. If there could be something better, something that would provide not only a return on investment but a social return on investment, it would be a more interesting option. This is where the idea of “impact investing”
emerges. Impact investing refers to investments "made into companies, organizations, and funds with the intention to generate a measurable, beneficial social or environmental impact alongside a financial return". Corporate Social Responsibility has been getting popular recently but no one has heard of Personal Social Responsibility. It sounds like these are companies wanting to make these investments but it would be better to create a tool for individuals anywhere in the world to make these kind of impact investments. Impact investors are primarily distinguished by their desire to solve social and environmental challenges through their distribution of capital. The issue is the “how” they will make these investments into people that are excluded from society. This business plan proposes a Social Enterprise named IMPCT with a platform that links conscious investors with capable entrepreneurs in urban slums.
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