Flourishing in a Social Enterprise World

Flourishing in a Social Enterprise WorldTHE YEAR is 2050.

Imagine waking up in a world where you feel positive and motivated about going to work, knowing that your work provides value to customers in a way that is sustainable and responsible. Your employer operates with the express aim of benefiting members of the community and reinvests all profits to further its social aims.

This hypothetical future may seem a distant reality, yet many people today recognise a need for change: executive salaries of large corporations have become excessive, senior managers of listed companies worry about meeting analyst expectations rather than customer expectations, and global finance now focuses largely on speculation and market timing rather than funding productive investment.

Rise of Social Enterprise

Bright Future AheadThe growing trend towards social enterprise could be a game changer. A social enterprise, in essence, is an organisation which is not run primarily for profit and is required to reinvest any profits to further its social aims.

A world based on social enterprise may be closer than you think. Since the late 1990s, the social sector has been on the rise. In Canada, for example, these institutions now contribute 8% of the country’s GDP. And the pioneering work of social enterprises in sectors like construction, manufacturing, banking, hospitality and healthcare suggest that innovative and sustainable businesses are able to thrive without being run primarily for profit.

Social enterprise has the potential to change the status quo in three important ways:

  1. Firstly, social enterprises are allowed to make a profit, which means they have an incentive to innovate and operate efficiently.
  2. Secondly, social enterprises are required to reinvest any profits rather than pay dividends. This enables them to focus on long term sustainability and community benefit, and is an attractive model for charities since funding social projects out of profits makes them less dependent on grants and philanthropy. Take, for example, BRAC, one of the world’s largest social enterprises. Since 1972, BRAC has supported over 100 million people through social development services and almost 80% of its revenue comes from commercial enterprises, including a large-scale dairy and a retail chain of handicraft stores.
  3. Thirdly, social enterprises have the potential to out-compete equivalent ‘for-profit’ businesses in three ways:
    • Social enterprises often qualify for tax concessions and free support available solely these kinds of organisations;
    • Consumer preferences are increasingly supportive of ethical and sustainable business practices; and
    • Management are likely to be under less pressure to shrink a social enterprise during a downturn. This may allow social enterprises to make significant gains in market share during periods when ‘for profit’ organisations are making cut backs.

Who is leading the charge?

Our friends at The Post Growth Institute are currently writing a book called How on Earth?, which will look at how we can flourish in a Social Enterprise World by 2050.

We understand that this will be the world’s first book to explore the prospect of social enterprise becoming the central model of local, national and international business by 2050. It will also outline practical steps that people can take to fast-track an evolution towards a sustainable economy.

If you want an advanced preview of some of the book’s main ideas, please see the talk below by the book’s lead author, Dr Donnie Maclurcan, which was given at the Environmental Professionals Forum in 2012:

Kickstarting the Gift Economy

TODAY is the four year anniversary of the collapse of Lehman Brothers. At the time of its bankruptcy, Lehman Brothers was the fourth largest investment bank in the world. How could it run out of money? And, why did this disrupt the global economy?

Lehman Brothers and other investment banks went down in part due to the huge amounts of money they lost in the sub-prime mortgage crisis. As a result of the crisis, there was less money available for consumption and investment activity, and businesses found it difficult to re-finance existing loans. This led to economic paralysis and stagnation, and the global financial system remains weak to this day.

While earning a certain level of income is necessary for survival, difficulties arise when the drive for constant growth and high incomes becomes the primary objective. The objective of constant growth is incompatible with a world that has limited physical, biological and energy resources. Furthermore, research consistently suggests that, beyond a certain point, having more money does not increase a person’s wellbeing.

Today, September 15th, is Free Money Day! Organised by the Post Growth Institute, Free Money Day is a global event in which people hand out their own money to complete strangers (two coins or notes at a time), and ask recipients to pass half to somebody else. The day aims to spark conversations about the benefits of economies based on sharing. Questions that may come up in your conversations today are ‘how much money is enough?’, ‘do we always need to grow our economies?’, and ‘would sharing make more common sense?’

Happy Free Money Day!

Free Money Day

TOMORROW, SEPTEMBER 15th, at various public locations worldwide, people will hand out their own money to complete strangers, two coins or notes at a time, asking the recipients to pass one of these coins or notes on to someone else.

The aim is to raise awareness and start conversations about the benefits of economies based on sharing, as well as offer a liberating experience that gets us thinking more critically and creatively about our relationship with money and how we could have new types of economic activity. Free Money Day is an initiative of the Post Growth Institute, an international group seeking to inspire and equip people everywhere to explore paths to global prosperity that don’t rely on economic growth.

To learn more, and to participate, click here.

Note: The Post Growth Institute is a catalyst for identifying, inspiring and implementing new approaches to global well-being. Its mission is to build and empower a broad-based global movement dedicated to bringing about futures beyond economic growth.