Saturday, April 18, 2009

Innovation Through Entrepreneurship in a 21st Century World by Akindele Akinyemi

Urban conservatives must be in the business of eradicating poverty. For those who participated in the tea party protest on April 15, 2009 I hope this experience opened you up to the next level. Now it's time for us to be innovative if we want to help transform and build a network not just in our urban communities but across both the Atlantic and Pacific.

Often times we talk about the free market. As urban conservatives we understand how capitalism has long been a source of prosperity, spurring industrial, technological, and social progress in North America and Western Europe. But even as standards of living rise, large numbers of people are still left behind.

The free markets have ushered in many benefits, however, these gains have bypassed too many of the world's people, especially the poor. And yet, in recent decades, powerful tools have been developed that leverage capitalism's strengths to enrich the lives of those who get left behind.

Urban conservatives have a core responsibility in turning back poverty. Therefore, in poverty stricken areas we need to take a look at social business. A social business is one which aims to be financially self-sufficient, if not profitable, in its pursuit of a social, ethical or environmental goal. THIS IS NOT SOCIALISM where the government controls the goods and services of the people.A key attribute of social businesses is that an increase in revenue corresponds to an incremental social enhancement. A social business is driven to bring about change while pursuing profits.

In the United States, more than 47 million people live below the poverty line; approximately 74 percent of them are located in major metropolitan areas. A wide variety of social, historical, cultural, educational and structural factors contribute to the persistence of poverty in the world’s richest nation.

Despite these obstacles, poor people are embracing microentrepreneurship as a pathway out of poverty. The element in social business is microcredit. This has been a powerful tool in combating poverty, enabling the poorest of the poor to change their lives and provide for their families. Through these small, collateral-free loans with a nearly 100 percent return rate, borrowers – mostly women – have been able to harness entrepreneurial abilities inherent in them.

Microcredit is just one example of how a business approach can help alleviate poverty when we move beyond the idea that business by definition has to mean making financial profit for the owner. Most of these individuals lack collateral, steady employment and a verifiable credit history and therefore cannot meet even the most minimal qualifications to gain access to traditional credit.

Within social business is social entrepreneurship. A social entrepreneur is someone who recognizes a social problem and uses entreprenurial strategies to organize, create, and manage a venture to make social change. Although social entrepreneurs are often non-profits, this need not be incompatible with making a profit. Social enterprises are for ‘more-than-profit,’ using a mixed business models that combine a revenue-generating business with a social-value-generating structure or component. Non-profit and non-governmetal operations, foundations, governments and individuals promote, fund, and advise social entrepreneurs around the planet. A growing number of colleges and universities are establishing programs focused on educating and training social entrepreneurs.

Rather than leaving societal needs to the government or business sectors, social entrepreneurs find what is not working and solve the problem by changing the system, spreading the solution, and persuading entire societies to take new leaps.

A social entrepreneur differs from a traditional entrepreneur in two important ways:

Traditional entrepreneurs frequently act in a socially responsible manner: They donate money to nonprofits; they refuse to engage in certain types of businesses; they use environmentally safe materials and practices; they treat their employees with dignity and respect. All of this is admirable, but their efforts are only indirectly attached to social problems.

Social entrepreneurs are different because their earned income strategies are tied directly to their mission: They either employ people who are developmentally disabled, chronically mentally ill, physically challenged, poverty-stricken or otherwise disadvantaged; or they sell mission-driven products and services that have a direct impact on a specific social problem (e.g., working with potential dropouts to keep them in school, manufacturing assertive devices for people with physical disabilities, providing home care services that help elderly people stay
out of nursing homes, developing and selling curricula).

Traditional entrepreneurs are ultimately measured by financial results. The success or failure of their companies is determined by their ability to generate profits for their owners. On the other hand, social entrepreneurs are driven by a double bottom line, a virtual blend of financial and social returns. Profitability is still a goal, but it is not the only goal, and profits are re-invested in the mission rather than being distributed to shareholders.

Just as entrepreneurs change the face of business, social entrepreneurs act as the change agents for society, seizing opportunities others miss and improving systems, inventing new approaches, and creating solutions to change society for the better. While a business entrepreneur might create entirely new industries, a social entrepreneur comes up with new solutions to social problems and then implements them on a large scale.

Youth social entrepreneurship
is an increasingly common approach to engaging young people in solving social problems.

None of this what I am discussing is new. It has been around forever. But, as urban conservatives, it could be used as a tool to refocus our energy on both improving our community and generating wealth. Social entrepreneurs are not content just to give a fish or teach how to fish. They are in the business of revolutionized the fishing industry. Because urban conservatives are change agents we too should focus on revolutionizing education, banking and other businesses to make our communities come to life in the 21st century.

Speaking of education 70 million children are not in school around the world, and 55% are girls. If we are going to roll back poverty then education must be our top priority.

We are too dependent on government to hold our hands. The other side of this is we have grown to hate government. Neither is good and we need a balance. There should be a balance between government, business and technology when we are transforming our community. Social entrepreneurs understand this focus and are not distracted by politics. They focus more on policy driven issues.

Social entrepreneurs are working in many countries to create avenues for independence and opportunity for those who otherwise would be locked into lives without hope. They range from people who uses technology to address pressing social problems such as the reporting of human rights violations, to those who helps underprivileged children gain control of their lives through literacy.

Traditional philanthropy and nonprofits generate a social gain, but they do not design their programs as self-sustaining business models. A charitable dollar can be used only once. A dollar invested in a self-sustaining social business is recycled endlessly.

A social business is designed to be both self-sustaining and to maximize social returns like patients treated, houses built, or health insurance extended to people who never had this coverage. An investor in a social business retains an ownership interest to hold management accountable and to get the investment back over time, but no dividends are expected, and any profits should be reinvested in the business or used to start new similar businesses.

One example of social business is Grameen Danone Foods (known as Dannon in the US). It was inaugurated in 2006 as a partnership between Grameen Bank and Groupe Danone of France.

Groupe Danone produces and distributes Danone yogurt and Evian bottled water throughout the world. The mission of Grameen Danone Foods is to manufacture nutrient-rich, fortified yogurt in small local plants that minimize the need for expensive refrigeration and to sell it at a low price to improve the diets of rural children in Bangladesh.

By investing in this joint venture with Grameen Group, Groupe Danone can help to eradicate malnutrition in Bangladesh, one of the least developed countries in the world, by doing business, not by simply donating the money.

Some feel that capitalism is too narrowly defined. The concept of the individual as being solely focused on profit maximizing ignores other aspects of life, religious, emotional, and political. Failures of this system to address vital needs, that are commonly regarded as market failures are actually conceptualization failures, i.e. failures to capture the essence of a human being in economic theory.

Perhaps this is one of the reasons why we have issues in urban communities across America. Oftentimes, we teach those who move out of the community not to forget where you come from. Guess what? We forget. While a few make it others are stuck.

When we are pushing for silver rights we are educating and demonstrating a way to show poor people how to be wealthy. Education is the eradication tool to removing poverty from our spirits, minds and physical self. Our third revolution in America will be Silver Rights (the first was the American Revolution of 1776 and the second was the Civil Rights Movement of the 60s).

If we truly want to eradicate poverty, if we truly want to create social change, if we truly want to make a difference in our community, we cannot do it on a partisan political basis. In fact, urban conservatives are going to have to learn to remove themselves from the politics and start dealing with smart polices that will benefit those who are unfortunate. I know we will still have people engaged in the political fighting but if we look at the social movers of our times — Gandhi, King, Cesar Chavez, Mother Teresa — respectfully, none were politicians. They were moral leaders who had the vision and a passion to make a difference.

I am not saying that political leadership is not important. Not JUST political leadership, and surely more than just partisan political leadership, is needed for our true emergence as a people. Having strong spirit-centered leadership throughout the urban community, starting in our homes and in our individual lives, helps and strengthens our political leadership in urban Michigan.

The 21st century is going to be about class and poverty not race. For those who think race is an issue you are still living in the 20th century. According to CNN, 70% of all Americans are living paycheck to paycheck. There are more poor whites in America than poor anybody else. Do not let anybody tell you anything different. We have to focus on spiritual wealth, emotional wealth, economic wealth, and especially educational wealth.

Urban conservatives should strive for an ownership society not just in our immediate community but also globally. Do not let anyone tell you different. Understanding the global connection is paramount to the development of an community. Diversity is a business issue. You do not do business with people you do not reflect, respect, or understand. You do not do business with governments or corporations. You do business with people.

Urban conservatives in areas like Detroit, Flint, Saginaw, Inkster and Benton Harbor must embrace silver rights and use both traditional and social entrepreneurship as a tool of redevelopment.

We must view capitalism differently as we prepare to move into the next decade.

1 comment: said...

Nice work on TV this weekend, boss!