By Muhammad Yunus How do we encourage the creation of SBEs? What are the steps that we need to take to facilitate the SBEs to take up bigger and bigger chunks of market share?
First we must recognize the SBEs in our theory. Students must learn that businesses are of two kinds: a) business to make money, and b) business to do good to others. Young people must learn that they have a choice to make --- which kind of entrepreneur they would like to be? If we broaden the interpretation of capitalism even more, they’ll have a wider choice of mixing these two basic types of proportions just right for their own taste.
Second, we must make the SBEs and social business investors visible in the market place. As long as SBEs operate within the cultural environment of present stock markets they’ll remain restricted by the existing norms and lingo of trading. SBEs must develop their own norms, standards, measurements, evaluation criteria, and terminology. This can be achieved only if we create a separate stock market for social business enterprises and investors. We can call it Social Stock Market. Investors will come here to invest their money for the cause they believe in, and in the company they think is doing the best in achieving a particular mission. There may be some companies listed in this social stock market who are excellent in achieving their mission at the same time making very attractive profit on the side. Obviously these companies will attract both kinds of investors, social-goal oriented as well as personal-gain oriented.
Making profit will not disqualify an enterprise to be a social business enterprise. Basic deciding factor for this will be whether the social goal remains to be an enterprise’s over-arching goal, and it is clearly reflected in its decision-making. There will be a well-defined stringent entry and exit criteria for a company to qualify to be listed in the social stock market and to lose that status.
Soon companies will emerge which will succeed in mixing both social goals and personal goals.
There will be decision-rules to decide up to what point they still qualify to enter the social stock market, and at what point they must leave it. Investors must remain convinced that companies listed in the social stock market are truly social business enterprises.
Along with the creation of the Social Stock Market we’ll need to create rating agencies, appropriate impact assessment tools, indices to undertand which social business enterprise is doing more and/or better than others --- so that social investors are correctly guided. This industry will need its Social Wall Street Journal and Social Financial Times to bring out all the exciting, as well as the terrible, news stories and analyses to keep the social entrepreneurs and investors properly informed and forewarned.
Within business schools we can start producing social MBAs to meet the demand of the SBEs as well as preparing young people to become SBEs themselves. I think young people will respond very enthusiastically to the challenge of making serious contributions to the world by becoming SBEs.
We’ll need to arrange financing for SBEs. New bank branches specializing in financing social business ventures will have to come up. New “angels” will have to show up on the scene.
Social Venture Capitalists will have to join hands with the SBEs.
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