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Social Entrepreneurism

June 27th, 2009 No comments

One of the topics that came up in this week’s Thursday Morning Coffee Meetup was the extent to which companies should be following social rather than financial objectives. Most people want to do their bit for society and it seems that possibly the majority of people in the startup community are wanting to adopt a primarily social or charitable focus to their activities. I can’t help worrying that this is not a realistic path for most of the people following it. If one is generating cash then diverting a potentially significant proportion to charity definitely helps us all but trying to factor in social objectives to every business decision leads to some very difficult decision making.

One can barely travel to a client or deliver a product and present it as ecologically sustainable. Even the much heralded virtues of the ingredients of some chunky ice creams are really greening of a product which clogs arteries and even kills off customers. Trying to be truly consistent could lead to some very long office meetings. The effect would tend to be a weight on the ecologically and socially conscious businesses. The more equitable way forward, I would argue, is for people to be better informed to be able to make the decisions they need to make and to be less shy about regulation so that businesses are on a level playing field that takes account of wider social impact. For each company to try to decide this for itself is a less practical solution than the regulation adopted in Europe, Japan and increasingly in China.

The prevailing wish in the discussion this week to have corporations manage the decision is probably in large part an effect of being in US culture where there is minimal regulation, little supervision and a lack of any notion that government should have a more active social role. Or even be effective in general. Corporations seem to be looked to to solve all problems. Our national government spends less than 0.5% of spending on education, less than 1.5% on social programs and a total of 48% of non overhead spending on the military. So the idea that the national government should be taking care of social expenditure, taxing carbon emissions and other destruction often seems foreign. It does seem though that at least the need is being identified, which is a cultural change for the US, if the solution being discussed is still a very different one.