Social Enterprise – Part 9

Presented by: Center for Balanced Development

 

Focus: Commerce, Finance & Admin.

 

Conceptual Framework:

 

History and Background

The history of commerce and trade goes back to some 150,000 years ago when the early civilizations used mostly a barter system for exchange of goods and services. Eventually, with the development of long-distance trade, the use of stone, shells and coins as medium of exchange and value became popular and evolved into the introduction of the paper money by the Song Dynasty in China nearly a thousand years ago. Europeans started using paper money in the middle ages. However, gold and silver emerged as standard for legal tender. By 1900s most industrialized nations were using the gold standard as the while paper notes were used for circulating medium. Today banknotes issued by the central bank is the popular form of currency with the exchange rate among various currencies constantly fluctutuating. The introduction of credit cards and electronic payment systems has added a new dimension to the global finance and there are proposals for the adoption of a global currency system.

The history of administration of human affairs and government can be traced to the early tribes of the pre-historic times. The idea of administering the affairs of a group of people through some method of governance has always been a great challenge and we see the rise and fall of great civilizations as the rulers succeed or fail in their attempts to build empires and control territories and resources.          

 

Present Status & Needs

With the development of technology, today, commerce and finance involves interactions of a complex global network of producers, service providers, consumers and investors. The production of low-cost goods and the global consumption trends are at an all time high while our natural resources are being depleted at a super fast rate and our human resources are experiencing high unemployment rates around the world. Against this backdrop, governments are desperately trying to address these issues in their jurisdiction and try to build their local economy with limited success. We realize that our challenges at the local level is under the direct influence of the global economy. However, there is very little being done by the various nations to find channels of collaborate to address of the challenges of our global economy. The need for solutions with global vision through a local initiative opens the door for the concept of social enterprise. Whether we are making innovations in e-commerce and new creative micro-financing formulas or being supported through government grants and private foundations, social enterprise is emerging as the ideal multi-faceted and flexible approach that brings into the picture the much-needed social, economic and ecological balance while moving the global development forward.

 

Future Outlook

We are starting to see a new wave of social entrepreneurs that are focused on the needs and initiating small programs and projects that is benefiting the grassroots while contributing to the economy and being environmentally safe. Micro-lending at the village and rural areas have been a great success and the their programs keep expanding. New concepts in commerce are emerging as the micro-loans are available. Here, the growth of social enterprise is truly incredible. Grameen Bank www.grameen.com is a great example of a successful micro-lending institution.

Meanwhile, in the high-tech sector and where the access to technology is available, a new model of presenting products and services is emerging where we are realizing the value of information in commerce. We are finding that the more you offer the more you receive. Facebook www.facebook.com and Google www.google.com are the prime examples of highly successful young entrepreneurs who basically started by addressing a social need for meeting people and finding information and therefore setting the stage for a new model of commerce and finance.

As we face challenges in the traditional forms of governance with absolute idealogy and tendencies to fluctuate between the right and left of the political arena, we are seeing the emergence of new moderate forms of governance and administration in various parts of the world, where collective decision-making and managing through consultation and consensus is producing social stability and economic progress while preserving and protecting the environment.

 

Application for Social Enterprise Focused on Commerce, Finance & Admin:

 

Online Retail & Wholesale

The old model of high-cost large retail prime location is proving to be obsolete in comparison to the tremendous growth and sales of online retailers. Online sales, obviously, operates much more efficient in terms of suppliers, resources, inventory, marketing and scope of potential clients. Products can be sold from a closet or a home garage or drop-shipped to the buyers. Here, large online retailers like Amazon www.amazon.com and Shopify www.shopify.com  offer great opportunities to the small and start-up operations. There are also a number of websites that offer wholesale deals for large orders. A social enterprise with its emphasis on the social-economic-ecological criteria can be very effective in selling products online. One example is selling local arts and crafts from around the world that are often made by hand and out of natural resources. www.globalcrafts.org    

 

Manufacturing & Production

From the village craftsman to the most sophisticated computer chip production, manufacturing covers a wide spectrum of possibilities. Since the industrial revolution and the advent of modern technology, the social, economic and ecological landscape has been changing at an incredible pace. Today, the manufacturing and production of products involves complex machinery, sophisticated processes, automation and robotics. In most parts of the world, we heavily rely on certain products such as cars, light bulbs, appliances, entertainment tools and telecom gadgets as necessities of living in the modern communities. In some parts of the world, there is very little access to any kind of technology and or manufacturing technology. The disparity is huge and the need for social enterprise is great. Meanwhile, we are faced with a global crisis in terms of pollution and waste management brought about by the ever-increasing intensity of manufacturing and production. Economic slow-down seem to effect the production process but the race for making products cheaper and more widely available has never slowed down.

 

Trade

The low cost of production in China, India, Mexico and some other developing countries has opened up new markets and created vast pools of consumers around the world. Therefore global trade is thriving and production in high gear. However, as the global consumption keeps rising to new record levels, we are witnessing a chain reaction. The production of low-cost products increases the global demand and cost of raw material and fuels needed for manufacturing which in turn increases the cost of living. Meanwhile, the massive production system creates huge amounts of pollution and waste which is often dumped in rivers, oceans or into the sewage system to keep the cost down. Also in keeping the cost low, the factory workers, staff and management who are trying to improve their living conditions and considering the large pool of available human resources competing for jobs, get low wages and work long hours which leaves very little time for family, friends or social life. Often the parents who are retired must take care of grandchildren or the children attend boarding schools.  This trend has had a huge impact on the social structure. Here social enterprise can play a key role in addressing the social, economic and ecological issues and creation of small home-based independent contractors that could supply the factories and production facilities with portions of the needed products.  

 

Services

The concept of “service” is at the core of the development process. Everyone is somehow providing a service. Whether we are talking about tangible products and goods or intangibles such as consulting and representation, the quality of service determines the success or failure of an enterprise. In a broader sense, service plays a key role in the process of production in terms of the service offered by the workers, staff and management as well as in marketing and sales. In fact, the global economy is increasingly becoming a service-based economy. For a social enterprise that focuses on defining and improving the quality of service in various sectors of the economy, there are infinite possibilities and depending on the approach it can help the social, economic or ecological balance in the process of development.     

 

Food

Food is an essential need for human survival and well-being. However, when we look at the global picture, we see while there is an abundance in some areas, in certain parts of the world there is a great shortage of food resulting in high mortality rates due to malnutrition and disease. According to UN statistics, in 2006 more than 36 million died of hunger or diseases due to deficiencies in micronutrients. Meanwhile, we are faced the issue of obesity and the multiple health issues caused by being over-weight and over-consumption. Here the social enterprise can focus on any of the various needs. It can choose to address the need for proper nutrition, eating habits, access to food, food production or a host of other needs depending on the location of the enterprise and the assessment of the needs at the local level while considering the social, economic and ecological impacts of the enterprise.

 

Travel & Hospitality

The expanding scope of global travel and the growth of the hotel chains and alternative bed and breakfast homes has been phenomenal. It reflects the level of global prosperity and as well as the growth of low-cost travel and tours which has become the source of revenues for certain regions of the world. The internet has also played a key role in opening up the spectrum of option for travel and hospitality. No matter what your budget and how you are willing to travel and where you would like to stay, there are a number of options through various portals and websites dedicated to the task.

Here, a social enterprise can be effective by focusing on low-budget travel and hospitality where the social and ecological impact is considered in the plans. This could entail getting to know a family or culture or learning about the ecological issues that are challenging the place being visited.  

 

Entertainment

As they say; “There no business like show business.”. Whether we are talking about music, dance, plays, pictures, videos, movies, shows, literature, poems and mixed-media and whether it’s on the internet, the big screen, TV, Radio, Print, exhibitions, live performances or whatever format one can imagine, entertainment is a big part of our lives where we get a chance to relax, forget about work, unwind and enjoy being entertained. We spend a lot of time on the internet and checking social networks or watching TV or listening to music or watching sports or reading a novel. Children and youth spend huge amounts on time watching programs, playing games or surfing the internet. In fact, we are much more likely to be influenced and learn much more from the entertainment and media channels than all the other channels of information including the education system. Yet, today’s entertainment is mostly about conflict, controversy, immoral behavior, sex, violence, horror, accidents and everything that we do not want in our lives. So it’s ironic to see the current entertainment trends around the world. Of course, there are lots of positive and good entertainment out there. One good example is Public Broadcasting Service www.pbs.org in the U.S..

However, there is a desperate need for creativity and innovations in the entertainment system to help address the current social- economic and ecological crisis that we are facing worldwide. Here a social enterprise can be very effective in presenting content that is entertaining and at the same time uplifting, enlightening and empowering individuals while uniting and connecting families, neighborhoods and communities around the globe.      

 

Finance

The backbone of commerce is finance and banking. The success and growth of a social enterprise depends on proper financing and planning. In rural areas, micro-lending or small loans has been the source of success for a great number of social enterprises that need very little seed money to get started. The Grameen Bank, which started in Bagladesh has been one of the most successful micro-lending programs and has helped thousands of entrepreneurs. For a social enterprise, once the social need is identified the next step is come up with a projection of how much funding is needed to get the project started and to sustain it for at least one to two years. Finance can also involve a group of investors each with a small sum of money. Kickstarter www.kickstarter.com is a good example of this kind of funding strategy. For certain types of projects, there are also private investors as well as grants available through foundation. To initiate a social enterprise, it is good strategy to identify as many channels of funding. 

Here understanding the financial markets and speculation is really important. Since it is an indicator of the  economy and the flow of investments. However, the speculation, the fluctuations and the risky aspects of the market is something that could be the subject of research for a social enterprise in search of options that would serve the social-economic development of a region in a more systematic way.    

 

Insurance

Whether we are talking about health, business, home, auto or travel insurance, the question of risk management is a great area of focus for social entrepreneur. Although this is normally a high investment type of industry, but there is a need for preventive measures that would lower the risk of mishaps and reduce the high cost of insurance. Here, a social enterprise as a consulting entity focused on educating the public on steps to be better manage one’s health or protect our homes and business can be very valuable and a great service to community. 

 

Co-ops, Barter and Exchange

The growth and development of Co-ops, barter systems in recent years presents an opportunity to social entrepreneurs to start one fairly easy. Co-ops are really ideals for social enterprises that are involved in growing fruits and veggies or household items that are used regularly. Barter and exchange seem to work well in a neighborhood where things are not being used by one family while needed by another. Although barter system presents an issue in some areas where the government collects sales tax, but with some planning and in consultation with the government agencies this could be resolved. Actually, this could be a social enterprise that is set-up by a neighborhood which helps bring the neighbors closer together. 

 

Universal Value System

Here is an idea that could be adopted at some point in the future which requires the establishment of a universal currency. Here, through a system of arbitration, supervised by the regulatory commission, each individual is born with a lifetime debit/credit card which will be used to add or subtract value. The value or the debit/credit system would depend on the impact of the products and services on society, human potential, natural resources and the economy. This approach will effectively reflect the real cost of goods and services, and would foster the growth and development of the global community, optimization of human potential, proper utilization of resources, healthy environments and a balanced economy.

 

Administration & Legislation

The social-economic development of a country or region highly depends on the proper and harmonious functioning of administration and legislation. The concept of democracy and representation of people works when the well-being of people takes precedence over all other concerns and party orientation.

Here, consultation and collective decision-making needs a great deal of maturity and dedication to the spirit of cooperation and support for majority decision.

A social enterprise can play a key role on developing educational programs focused on building capacity practicing proper consultation and group decision-making process. This process is necessary at all levels of administration and legislation. Through mature, selfless and wise consultation followed by whole-hearted support for the majority decisions, the most appropriate policies and programs will become evident. It is also important that the representatives hold local meetings where people can voice their opinion and preferences for the various policies dealing with social issues, economic stability and ecological sustenance. Here, the role of social enterprise in researching the pros and cons of issues and educating the public on successful policies and trends around the world can be extremely valuable.

 

Judicial system & Mediation

Justice is the foundation of civilization, progress and peace. The judicial system plays a key role in promoting social harmony and prosperity. Likewise where there is injustice, we see a great deal of conflicts, stagnation and poverty. Clearly, justice is the cause of enlightenment and unity. Among the various methods of administering justice, mediation and arbitration have emerged as the means for finding the truth, reaching mutual agreement, win-win solutions and establishing unity among people.

Here, initiating a social enterprise focused on mediation and arbitration can be very useful in utilizing mediation as the means to achieve justice.    

 

Implications of a Social Enterprise Focused on Commerce, Finance & Admin:

 

Social

Commerce, finance and administration are the pillars of prosperity and social welfare. Without the proper functioning of these pillars, poverty and chaos can devastate the social order. Throughout history, we see the rise and fall of civilizations and the impact of commerce and administration in that process. Today, we are dealing with a global community of nations and a great deal of interdependence in terms of commerce. However, lack of global administration of human and natural resources, is having deep effect on our ability to advance as a society. Social enterprise can be a great addition to any community in the process of learning about the advantages global administration of resources.    

 

Economic

Commerce and finance offer a wide spectrum of possibilities and economic opportunities for a social enterprise. Here, the focus being the social needs, the economic advantages are in direct proporation to the ability of the social enterprise in meeting the needs. The scope of the project or program can be very small or fairly large considering the nature of the enterprise. Here the benefits go directly to the local community while the nature of the enterprise is based on its considerations of its global impact.  

 

Ecological

The global impact of a local social enterprise based on commerce and administration, is a unique feature of successful social enterprise. The realization that our natural resources and the environmental issues need to be shared and dealt with globally, is becoming a fact of life for this generation and more so for future generations. Therefore the impact of even a small social enterprise in commerce or administration on the global ecological landscape must be at the core of the initiative.     

 

In conclusion, the concept of “think global – act local” is clearly the mode of thinking now. Commerce, finance and administration are ideal industries for a social enterprise where new definitions and great innovations can take shape on the path towards more global concepts, shared resources and deeper understanding.

 

For more information, please contact: info@cbdus.org