Creating a World without Poverty. FACT that YOU Should know:. 94% of the world income goes to 40% of the population 60% of peoples live on only 6% of the world income. Poverty - Makes people live of difficulty and unhappiness - Leads hopeless
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FACT that YOU Should know: 94% of the world income goes to 40% of the population 60% of peoples live on only 6% of the world income • Poverty • - Makes people live of difficulty • and unhappiness • - Leads hopeless • - Creates economic refugees • - Leads to conflicts between peoples over scarce resources
Capitalism is a half-developed structure “Pro-poor growth” VS. “anti-poor growth” objective Generate spin in economy Poor people drawn into spin Poor people (actors) Generate economy *The poor can be self-employed and create job for others *Growth is extremely important in bringing down poverty • Mainstream free-market theory: One dimensional concerned only maximum profit • Free-market competition, victory is measured purely by profit. • Failure to capture the essence of what it is to be human
Who’s responsible for this social problem? Could CSR be the tool to solve the problem? The answer is NO CONFLICT OF INTEREST: “Triple bottom line” Financial : Social : Environmental benefits Company should be measured only bottom line calls “Financial Profit” The problem lies with very NATURE OF BUSINESS, It is CENTER OF CAPITALISM
Who’s responsible for this social problem? Poverty is a cause lead to other social problems. Government, NGO, alone doesn’t provide the answer Impossible to solve a problems So we should consider changing from Corporate Social Responsibility (Weak CSR) Do no harm to people or the planet Activity creating good for people and the planet
Book Review: The proper combination of Non-profit organization and profit-maximizing business(PMBs) • New idea of business solve the world’s social ills • The company itself earn a profit: Sustainable business
What is Social Business?? Social business and the future of capitalism What is It?? The company is providing a product or services that generates revenue even as it benefits the poor or society at large: SOCIAL-BENEFIT PRICIPLE • An Alternative Social business structure • owed by poor people ex. Grameen Bank also paid dividends • to the poor
Why would investors put their money into social business?? • Self-sustaining : No need to pump in money every year, • it continues to grow on its own. • You get more Social benefits for your money • Invertors get their money back and can also reinvest • Exciting opportunity to leverage your own business skill and creativity to solve social problems.
Who will invest in social business?? • Foundation can be a great source of funds for social business • Commercial lending institutions will be sources of funds for social businesses • New kinds of financial institutions can be created as required to cater to the financing needs of social businesses
Example of successful social business • Grameen ex. Bank, Telecom, Cyber net, Health care, Energy, Grameen Danone • Whole foods Market “The World Bank” VS. “Grameen Bank” • Give them money and also ideas, expertise, plans, principles • Borrowers seems to bear the suffer alone if it doesn’t work out as planned • Evaluate employees by amount of loans he has successfully negotiated • Encourage people to make their own decisions • Want our borrowers to feel important • Evaluate employees by the impact of his work has made
Suggestions from Yunus to The World Bank • Evaluation of staff should be related to quality of work ex. Help borrowers move out of poverty instead of amount of loans • Should grade all projects each year on the basis of poverty reduction, same basis for every countries • Should open to both govern and private investors, which following social business model • Should work through govern, NGOs, and social business • Should open social business window besides existing International Finance Corp. • The president of the World Bank should have candidates from over the world, selected by search committee
Example of successful social business • GRAMEEN DANONE - A Social Business • Initial fund = 75 million taka ($1.1 million) • Equally investment by DANONE and group of 4 Grameen companies • Objective : To reach malnourished children with fortified yogurt • Mission : Reduce poverty by • - a unique proximity business model which brings daily healthy nutrition to the poor • -design a manufacturing and distribution model that • involves local communities
Example of successful social business • GRAMEEN DANONE - A Social Business • Reduce poverty : improve the economic conditions of the local bottom class population by
GRAMEEN DANONE - A Social Business Enterprise • The joint venture will aim at sharing the benefits with its community of stakeholders • Profits from sales could help subsidize expansion of the business • to benefit the poor • To increase production and sell the yogurt to everybody. sell a higher-priced yogurt to more affluent consumers. • The joint venture would pay the investors a 1% annual dividend on their original investment
The power of IT IT Can help the poor by : • Expanding their markets through e-commerce • and cutting middleman • Promoting self-employment among the poor such as a cell phone and an internet connection. • Bringing education, knowledge, and skill training to the poor. • Social Business and the IT Revolution • Create “the Center for International Initiatives for IT Solutions to End Poverty”(ISEP) • The IT Revolution and Democracy
Hazards of Prosperity EconomicInequality and the struggle over Global Resources “the Growth Dilemma” • Economy growth has improved the standard of living of people. But Growth also creates problems. • Makinga space for a new set of voices. • Findinga way to solve the Growth Dilemma.
Putting poverty in museums • A better world starts with Imagination • creating a wish list of your dream world • The ultimate goal is “To relegate poverty to poverty museums”