明治経営2015 II

Social Business Entrepreneurs Are the Solution

Many of the problems in the world remain unresolved because we continue to interpret capitalism too narrowly. In this narrow interpretation, we create a one- dimensional human being to play the role of entrepreneur. We insulate him from other dimensions of life, such as, religious, emotional, political dimensions. He is dedicated to one mission in his business life ― to maximize profit. Economic theory suggests that you are contributing to the society and the world in the best possible manner if you just concentrate [     ] squeezing out the maximum profit for yourself.

As we devotedly follow this policy sometimes doubts appear in our mind whether we are doing the right thing. Things don't look too good around us. We quickly brush off our doubts by saying all these bad things happen because of "market failures"; a well-functioning market cannot produce unpleasant results.

I think things are going wrong not because of "market failure". It is much deeper than that. Let us be brave and admit that it is because of "conceptualisation failure". More specifically, it is [      ] our theory. Everyday human beings are not one-dimensional entities, they are excitingly multi-dimensional and have emotions, beliefs, and priorities.

Suppose we consider a world with two kinds of people, both one-dimensional, but having different objectives. One type is the existing type, i.e. profit maximizing type. The second type is a new type, who are not interested in profit-maximization. They are totally committed to make a difference to the world. They are social-objective driven. They want to give a better chance in life to other people. They want to achieve their objective through creating/supporting sustainable business enterprises. Their businesses may or may not earn profit, but like any other businesses they must not incur losses. They create a new class of business which we may describe as a "non-loss" business. Can we find the second type of people in the real world? Yes, we can. Aren't we familiar with "do-gooders" (people who want to do good) ? Do-gooders are the same people who are referred to as "social entrepreneurs" in formal language.

Some social entrepreneurs (SEs) use money to achieve their objectives, some just give away their time, labour, talent, skill or such other contributions which are useful to others. Those who use money may or may not try to recover part or all of the money they put into their work by charging a fee or price. We may classify the SEs, who use money, into four types :

i) No cost recovery

ii) Some cost recovery

iii) Full cost recovery

iv) More than full cost-recovery

Once an SE operates at 100% or beyond the cost recovery point he has entered the business world with limitless possibilities. This is a moment worth [     ] . He has overcome financial dependence and now is ready for independence! This is the key moment of significant institutional transformation. He has moved from the world of philanthropy to the world of business. To distinguish him from the first two types of SEs listed above, we'll call him "social business entrepreneur" (SBE). [       ] the introduction of SBEs, the market place becomes more interesting and competitive. Interesting because two different kinds of objectives are now at play creating two different sets of frameworks for price determination. Competitive because there are more players now than before. These new players can be equally aggressive and enterprising in achieving their goals as the other entrepreneurs.

One good way to get started with creating social business enterprises would be to launch a design competition for social business enterprises. There can be local competition, regional competition and global competition. Prizes for the successful designs will be funding for financing for the enterprises. All submitted social business proposals can be published so that these can become the starting points for the designers in the next cycle, or ideas for someone who wants to start a social business enterprise. A Social Stock Market can be started by an SBE as a social business enterprise. One business school, or several business schools can join hands to launch this as a project and start serious business transactions. If we create the right environment, SBEs can take up a significant market share and make the market an exciting place for fighting social battles in ever more innovative and effective ways. So, let's get serious about social business entrepreneurs. They can brighten up this gloomy world.