This past June, I attended the Social Business Day conference in Bangalore, India through the encouragement of Nobel Peace Prize laureate, Dr. Muhammad Yunus. This conference gathered social entrepreneurs from all around the world to discuss how social business could solve world problems.
I have long been interested in social business as an alternative model to traditional profit-driven business. After hearing Dr. Yunus’ speech at the award ceremony for the Ford Family Notre Dame Award for International Development and Solidarity, I began to see this model as an ideal one that combined the efficiency of business and the humanitarian pursuit of philanthropy. As I was hoping to delve more into startups in the fashion industry, I intended to 1) understand how social business works and if it really is a good model of business to adopt, 2) explore how social business could help solve world problems, and 3) make meaningful connections with social entrepreneurs in different industries and sectors.
I was able to find some initial answers from this conference. First, social business as defined by Dr. Muhammad Yunus is “a non-dividend company that is created to address and solve a social problem. In a social business, the investors/owners can gradually recoup the money invested, but cannot take any dividend beyond that point.” While I appreciated the generosity and idealism of entrepreneurs who adopted this kind of social business model, I also saw limitations to it. For one thing, having a cap on dividends potentially deter the growth of the ventures because businessmen might end up ignoring the profit side or losing the momentum to maintain and grow the business. This model could thus make ventures less sustainable and self-sufficient. One of the young entrepreneurs shared with me that he wished he had been more profit-focused -- even though his venture addressed the needs of teenagers who hoped to find a non-traditional career path and was able to grow over the past years, he himself had experienced financial difficulties.
Through conversations like this, I realized that social business didn’t have to go as far as defined by Dr. Muhammad Yunus. Business with social consciousness could still address social problems while making sure the business itself is well-functioned and at least self-sufficient.
Second, social business has the potential to and could really solve world problems. Over the two days’ conference, I heard people from all different industries sharing how their business contributed to social good. These stories really inspired me and convinced me that business and social good are not contradictory, and that most businesses could find ways to address and solve social problems. I have heard about how a specialty coffee company dedicated itself to biodiversity conservation and higher financial returns to farmers through innovating the farming practices and controlling the market chain; how a technology company designed and sold bangles that detect the concentration of carbon dioxide in the air for pregnant women; how some local organizations provided microloans to support small-businesses and help alleviate unemployment. Even though the size of these businesses’ impacts differ, they are all solving world problems in their own ways.
And of course -- I was able to get to know some inspiring social entrepreneurs and learn about their insights into the development and status-quo of social business in their respective countries. Among numerous people I met, the president of Grameen China shared with me how Chinese governmental policies to alleviate poverty had provided booming opportunities for microfinance and social business within mainland China.
This conference was definitely a highly educational experience that allowed me to learn and redefine social business in a way that I found is both sustainable and capable of solving social problems. The stories I heard and the people I met will for sure continue to inspire me to remain social-minded and promote the various forms of social business.