No going backOut of the desperation and urgency of the pandemic, governments can affect great change by promoting social entrepreneurship.
The extent of the damage that the novel coronavirus pandemic is causing is mind-boggling. However, the situation also offers us an unparalleled opportunity. We have experience in managing the recovery process fairly well. But the big question now is whether we take the world back to where it was before the pandemic. Or, do we redesign it?
Needless to say, the pre-Covid-19 world was not good to us. Before SARS-CoV-2, the whole world was literally counting the days until the whole planet would be unfit for human existence due to a climate catastrophe. We were under serious threat of massive unemployment created by artificial intelligence. Wealth concentration was reaching a tipping point. We were reminding each other that this is the decade of last chances, after which all our efforts will only bring marginal results, inadequate to save our planet.
The choice is ours
The novel coronavirus suddenly changed the context and calculus of the world. It has opened up audacious possibilities which never existed before. Suddenly, we are at the tabula rasa. We can go in any direction we want—an unbelievable freedom of choice.
Before we restart the global economy, we must agree on what kind of economy we want. First and foremost, we have to agree that the economy is a means. It facilitates us to reach the goals we have set ourselves. It should not behave like a death trap designed by some divine power to punish us. We should not forget that it is a tool made by us. We must keep on redesigning it until we arrive at the highest collective happiness.
If we want to create a world of net-zero carbon emissions, we build the right system for it. If we want a world with no unemployment, we do the same. If we want a world where there will be no concentration of wealth, we do the same. When human beings set their mind to get something done, they just do it.
One simple unanimous global decision will help us tremendously: a clear instruction that we don’t want to go back to where we were before. We don’t want to jump into the same frying pan in the name of recovery. To make our purpose clear, we may call it a reconstruction programme, instead of calling it recovery.
Businesses will have to play the key role to make this happen. The starting point for a post-Covid-19 reconstruction programme must be to put social and environmental consciousness firmly at the centre stage of all decision-making. Governments must ensure that every dollar it spends will bring the maximum social and environmental benefit to society. We must start with ‘reconstruction’ packages for social consciousness-driven plans and actions. We must design our plans right now, in the thick of the crisis. When the crisis is over, there will be a stampede of old ideas and old examples of bailouts that will require rushed decisions. Strong cases will be made to alter new initiatives by saying they are untested policies.
Social business at the centre
In this comprehensive reconstruction plan, social businesses should be placed at the centre. A social business is a business created solely for solving people’s problems, without any personal profit taken by investors except to regain the original investment. After the original investment comes back, all subsequent profits are reinvested back into the business.
Governments will have many opportunities to encourage, prioritise, and open up space for social businesses to undertake major redesigning projects. At the same time, governments should not expect social businesses to show up everywhere they are needed. Where social business options are slow to come forward, governments must first launch traditional welfare programmes to support those who lost their jobs, as well as to revive essential services and support businesses in need.
To speed up the entry of social businesses, governments can create social business venture capital funds, centrally and locally, and encourage the private sector, foundations, financial institutions, and investment funds to fund them. Governments should encourage traditional companies to launch their own social businesses or to create joint ventures with partners.
Under the rebuilding programme, governments can finance social businesses to buy companies and tie-up with needy companies. Central banks can allow social businesses, like other businesses, to receive financing from financial institutions to invest in the stock market.
Social business investors are everywhere. We don’t see them because our existing economic textbooks don’t recognise their existence. Only recently have economics courses started to discuss topics like social businesses, social entrepreneurship, impact investment, and non-profit organisations as side issues inspired by the global admiration for microcredit. As long as economics remains a science for profit maximisation, we cannot rely entirely on it.
As soon as government policy starts recognising social business entrepreneurs and investors, they will come forward enthusiastically to play the important social role demanded by this historic opportunity. The social business ecosystem is already a significant and global one that includes giant multinational companies, big social business funds, talented CEOs, corporate bodies, foundations, and trusts, with many years of experience in financing and running global and local social businesses.
When the concept and the experiences of social businesses start receiving government attention, many profit-makers will be happy to bring out their unexplored talent to play very valuable roles in times of social and economic crises.
We are born entrepreneurs, not job-seekers
It is taken for granted that the citizens’ role is to take care of their families and pay taxes. But it is actually the responsibility of the government—and to a lesser extent, the nonprofit sector—to take care of all collective problems, such as addressing the climate, jobs, healthcare, education, water, and so on. The reconstruction programme should break this wall of separation and encourage all citizens to come forward and show their talent as problem-solvers by creating social businesses. Their strength is not in the size of their initiatives, but in their numbers. Each small initiative multiplied by a big number turns out to be a significant national action.
Social business entrepreneurs can immediately address the unemployment problems created by the collapse of the economy. Social business investors can create jobs for the unemployed. They can also transform the unemployed into entrepreneurs and demonstrate that human beings are born entrepreneurs, not job-seekers. Social businesses can engage in creating a robust health system in collaboration with the government.
If we fail to undertake a social and environmental consciousness-driven post-pandemic programme, we will be heading for a catastrophe that is many times worse than what the novel coronavirus has brought. We can hide in our homes from the virus, but if we fail to address deteriorating global issues, we will not have any place to hide from angry mother nature and the angry masses all around the world.
What do you think?
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