This was the question I asked a business network 3 years ago. As I’d observed, the concept of social business advocated by Muhammad Yunus, of business with a primary social goal had been circulating since publication of his book on Creating a World Without Poverty in 2007 and earlier in a presentation paper, which claimed ‘Social Business Entreprenuers are the Solution’
Let me first offer 3 broad definitions: A social entrepreneur is someone who applies business solutions to a social problem and is supported by foundation grants and stipends. Social enterprise is a business which invests the majority of its surplus in a social objective but may also be supported by grants. Social business is a self-sustaining, non dividend distributing business with a primary social purpose.
In 2008, I started the Linkedin group on Social Business and For Benefit Corporations, which was aligned with the Linkedin definition, though many of those self-ascribing this as a skill seemingly had no connection.
Another interpretation was developing however, that of social media business rather than social purpose business and IBM seemed to be in the driving seat.
Our founder who died in 2011 had an anecdote about IBM . Apparently after he’d started to distribute his paper on business for social benefit in 1996, two guys from IBM showed up at the restaurant he frequented. They’d sought him out with the aim of deconstructing his work and discovered he was no pushover. Apparently he’d turned it around on them so severely, that one of them left in tears.
THINK IBM was not only a corporate slogan. It also became an item of desk furniture in the 70s and 80s, in case anyone thought outside their particular box, their mantra that ‘nobody got fired for buying IBM’
In his 1996 paper, Terry Hallman described how the dawning Information Age, presented an opportunity to share information and develop business and economics for the benefit of humanity, concluding:
Just changing the way business is done, if only by a few companies, can change the flow of wealth, ease and eliminate poverty, and leave us all with something better to worry about. Basic human needs such as food and shelter are fundamental human rights; there are more than enough resources available to go around–if we can just figure out how to share. It cannot be “Me first, mine first”; rather, “Me, too” is more the order of the day.
in 2008, asking “what is social enterprise?” he’d said:
“There is so far no commonly agreed definition. Is an enterprise social if it produces some sort of social benefit? If so, in that sense, many or indeed most traditional businesses for profit can be considered social enterprises. Business enterprises typically produce something of value for clients and customers, otherwise they would cease to exist as business enterprises. Earning thousands or millions of customers can by definition be considered social benefit. Social refers to groups of people, as contrasted with one person. If a company produces a product or service, it has to benefit a group of people sufficiently for them to use that product or service. Owners and stockholders benefit from financial profits gained by the enterprise. Stockholders range from individuals owning relatively large percentages of a company to ordinary pensioners relying on income from micro-investments into the company. Profits from almost any large public corporation are shared among wealthy individual stakeholders to humble, modest households who have holdings in the company through an array of mutual funds managed by government-regulated financial managers.”
Today, as if IBM has suddenly come round to realise that it’s not just about social media, an article in Fast Company magazine bears the headline ‘Move over Social Media: Here Comes Social Business.
It’s still about traditional capitalism, however and the maximisation of profit.
Id comment on the Fast Company article but the site tells me that I’m blocked from making a new comment. They’ve already realised that I differ greatly on this issue and the way to force their view is to control rather than share infomation. It takes me back to a paragraph from the 1996 paper:
As Alvin Toffler predicted in Power Shift, where once violence and then wealth were dominant forms of power, information is now becoming the dominant power. Those nations with the greatest freedom of information and means of transmitting it have now become the most powerful and influential, and the strongest economically. Toffler also predicted the collapse of the Soviet Union would come about due primarily to its authoritarian control and limiting of information. Unfortunately for Russian citizens, this old habit has continued for them beyond the collapse of the former Soviet Union and will at the least make an interesting case study on the survivability of a once strong nation which still remains committed to limiting and controlling information.
My concerns 3 years ago, that business with tradirtional profit maximising objectives would undermine the concept of social business are now being echoed within the EU where recently it was observed that:
“They rebranded themselves as social innovators and entrepreneurs because these are the new tags to get the ears and funding of Brussels. The Commission ended up opening the floor to every stakeholder claiming a place at the table.”
This is more than a little ironic since within the EU itself a group of ‘experts’ described as GECES seem to have branded themselves as arbitrators. Their definitions, EU Commissioner Barnier claims, have been made through ‘high level’ consultations None appear to be idenfiable as practitioners of social business however.
In 2011, I included the description and history of our P-CED business model in an application for the EU sponsored social business competition in Naples.
Aside from definitions, there’s also the concept of forward investment in an EU Social Entreprenuership Fund (EUSEF), a concept proposed in our 1996 white paper, our 2004 business plan and more relevantly, the proposal for microeconomic development and social enterprise, I submitted to the EU Citizens Consultation in 2008.
Commissioner Barnier claims, in spite of our own transparency, that he was not aware of our work, that these concept have evolved in the last decade from various sources. He cannot seem to offer any example. A year on from his suggestion of “a fruitful collaboration on these matter in the future” there is no indication that this can ever be expected.