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Could Social Entrepreneurs create new forms of power and influence?

Posted By Administration, Friday, March 29, 2019

Esmee Wilcox writes her third blog post in our Emerging Fellows program. She evaluates social entrepreneurs’ potency in terms of power and influence. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

We’re living in a world where our institutions have been shaped by the power of capital are increasingly less able to meet the changing needs of citizens.  Social entrepreneurs can offer alterative pathways through collaborative and creatively intense enterprises.  If we fast forward to 2050, how might social entrepreneurs create new forms of power and influence? How might they exert this?

 

2050 will see the middle age of the next but one generation.  We’re just switching on now to the influence of Millennials in the working age population. In 2050 Generation Z will be in charge.  They will probably have lived through another global economic crash, after the end of the rapid rise of the next wave of technology.  The seeds of that technology are around us now, responding to climate and population change and attempting to tackle the scarcity of food, energy and water.  The more open socio-economic systems may be more conducive to these new technologies combining, innovating and solving problems at scale.

 

Capitalists and the myriad of related institutions derive power and influence by controlling the development of the infrastructure of our dominant technologies. Capital is allocated on the extent to which it can derive private gains to investors, over the most expedient timeframes.  What would it look like if instead we allocated capital on the basis of social cost and benefit, over time and spatial dimensions that allowed for systems development? How might we develop the infrastructure of the next wave of technology if decisions are based on social metrics? We might see investment programmes that leverage payback from the creation of social capital as an end in itself and not as a proxy for economic growth.  We might see global investment networks that tolerate the risks of start-ups from poor communities with greatest environmental potential.

 

So how might social entrepreneurs seize the opportunities in the next 15 years to shape the infrastructure around the next wave of technology? How might they use their networked influence that taps into the social concerns of Generation Y and Z?

 

We know there will be moments where the economic, political and environmental crises will open up spaces to redefine the legitimacy of existing power.  Think about our current international concern for tax avoiding corporations that dominate particular technologies. Our political institutions, influenced by capitalist models as they are now, have been unable to collaborate to regulate the exchange of benefits for the social and economic system costs.  Corporations play on the different local socio-economic conditions including desires for short-term growth.

 

Where capital starts to be allocated on a social return and system benefit, short-term policies that court tax avoiders start to decline.  Where political institutions have failed to create the pressure for corporations to reform, social entrepreneurs, who derive their political power through networks and the production of known social benefits, may be more able to step in.

 

But crucially, to shape the infrastructure of the next wave of technologies social entrepreneurs need to be connected into the innovation ecosystems where the technologies will combine.  From a number of different reporting metrics, social enterprises are on the rise globally. To capitalise on this growth, they need to be collaborating with enterprises that are seeking to tackle the problems of our environmental limits.  This ecosystem leadership requires a step-change in resources and mindset that allows for adaptive, long-term approaches.

 

2050 could be the place where power and influence are no longer dependent on financial capital but on the systems benefits of sharing new technologies widely. In this future social entrepreneurs could have expanded their political legitimacy and technical credibility to shape the enabling infrastructure.  This is a future where networking of accrued social capital has more influence than closed institutions.  The question still remains, what are the best routes to expand that network?

 

© Esmee Wilcox 2019

Tags:  entrepreneurship  influence  power 

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Could social entrepreneurs do better than capitalists?

Posted By Administration, Sunday, February 24, 2019
Updated: Wednesday, February 27, 2019

Esmee Wilcox has published her second blog post in our Emerging Fellows program. She believes social entrepreneurs are succeeding where they understand how to make use of the creative capital. The views expressed are those of the author and not necessarily those of the APF or its other members. 


It’s easy to think of social entrepreneurs as providing the antidote to modern capitalism. Seen from this perspective, social entrepreneurs are likely to remain at the margins of unreformed capitalism in the latter half of this century. The production of social value out of balance with the primacy of the economy. But hidden within the creative means of producing social goods lie the opportunities to tackle complex global challenges. So where are there hints of these new social norms that could displace how we value economic capital? How might this help us transition towards a world rich in creative capital?

Looking back, there are examples of nineteenth and twentieth-century capitalism that shifted the organising model towards greater social benefits. The Co-operative movement is well known. Public enterprise perhaps less so, but particularly influential in the USA in shifting popular perceptions of what was important for society at large. From the distribution of ice for food safety in rapidly growing municipalities in the early twentieth-century, to the building of ships to keep supply lines open during the second world war. They required a level of social co-operation to displace private gain.

They were distinct from charitable activity that is dependent on philanthropy and separate from the means of economic production. Not only did these co-operative enterprises challenge the imbalance of economic and social value. What they also did through a co-operative model was to demonstrate a more creative means of enterprise.

The social values that were necessary to engage workers in producing social benefits, were what enabled the production of economically valuable goods to be more efficient and innovative. It’s the same empathy, generosity and inclusivity that enables us to work across disciplines and organisational siloes in our modern creative enterprises. We need these organising principles to be widespread to tackle the complex, interconnected issues of our times. We live with hyper-connectivity in our age of the internet. The social, political and environmental challenges we face exist within complex systems.

Co-operative enterprises are more akin to self-organising systems, which we know are capable of co-evolving with changes in the external, operating environment. This self-organising model challenges the existing economic order that links power and status with capital and hierarchies. We no longer need ‘rent-seeking’ managers that disconnect those thinking about the problem from those experiencing the problem. People are able to think and solve problems in dynamic systems themselves. Human capability and ingenuity is released in unexpected places.

Communities that are poor in capital and consumptive power threaten those that steadfastly hold onto it. Government institutions need to stop seeing socially inclusive enterprises as replacements for welfare programmes. Government Innovation Prizes could hint at a shift in practice, making it easier for new social enterprises to find a way in to organising around a myriad of complex societal issues. But it’s Social Innovation Incubators that are countering the institutional bias against people from poor places, who have been held back from accessing their own creative capital. Acknowledging and bridging the gap between those that know the rules of the game and those that want to create new ones.

Vested interests will give up economic power where the alternative is more compelling in the present. However much we may foresee the redundancy of capitalism as it stands, social enterprise will only displace it where it can also be resonant now.

Social entrepreneurs are succeeding where they understand how to make use of the creative capital that is more evenly distributed amongst us. The economic capital we have now won’t be meaningful in the age of scarcity at the end of the twenty-first century. What will matter is how we self-organise around the complex challenges of our times. Empathetic, inclusive, and generous social entrepreneurs can show us how to make this transition.

© Esmee Wilcox 2019

Tags:  capitalism  economics  entrepreneurship 

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Social Entrepreneurs – Fashion or Future?

Posted By Administration, Tuesday, September 25, 2018
Updated: Tuesday, February 26, 2019

Polina Silakova‘s eighth post in our Emerging Fellows program continues to explore social entrepreneurs. The views expressed are those of the author and not necessarily those of the APF or its other members.

Previously we have discussed the potential of social entrepreneurship to make a shift in social values and to address wicked problems through social innovation. What changes in public and private sectors are needed for social entrepreneurship to become future-proof in the capitalistic world?

Government is starting to play an enabling role in the development of the sector. Initiatives like social enterprise strategies, social procurement or social impact investment start to reshape institutional and cultural frameworks of the past. Procuring services from a social enterprise or from a traditional vendor might make no difference in terms of the services received. But it does make a difference for people from disadvantaged groups who get the job or for those from vulnerable groups who benefit from the redistributed profit. Yet, a significant maturity of legislation is still required to better define this sector and to help other players understand what a social enterprise is and what it is not.

Another legislative change needed is about the behaviour that gets incentivised. What if governments would support businesses which are driven not by the desire to maximise profit, but which put community first? This step might seem counterintuitive in the market economy, but it turns out that a government operating based on the principles of commons already exists.

Municipalists, such as Barcelona en Comú – a new movement, independent from political parties – challenge the current understanding of democracy by putting the common goals of city residents in the heart of their policy-making. Despite conservative politicians initially criticising them for being naive, lacking understanding where city money comes from and even tagging them “the democratic mistake”, en Comú proved they were fit to serve the community in just a couple of years.

By focusing on the needs of the most vulnerable population, they:
•do business only with hotels that agree to pay a living wage
•create new affordable housing, many of which were previously vacant bank-owned units
•looking at extending store opening hours to address economy of care – mostly female part of the population whose primary labor is caring for others
•and even launched a publicly held energy company.

According to the Mayor Ada Colau, they are “prioritising people and common objectives above any other vested interest and any other type of power”. This would not turn any enterprise in a social enterprise, but is it a good enough shake-up for businesses to realise that the rules of the game are changing?

And what about businesses? Here as well we see emerging partnerships between corporates and social entrepreneurs. IKEA, for example, employs local artisans in vulnerable communities around the world. Through limited edition collections handcrafted by women from these communities, the company attempts to tackle social challenges: alleviate poverty, empower women and integrate refugees into a new to them society. They call it “business for good, for everyone”. PR or an active social agenda? It does not matter. Remember Erick Jantsch’s theory of social change? Once this initial change in behaviour, introduced by innovators, becomes a norm, a change in social values will follow.

And the process has started already. Australia’s GoodCompany has announced its annual rating of Top 40 Best Workplaces to Give Back. Corporates compete to get on the list by providing pro bono work, sponsorship or volunteering. Is this a natural trajectory of evolution – from maximising shareholders value (and sometimes actively doing harm) to understanding that this approach is not sustainable? Can we reach the other side of the scale, where maximising the value for the community will be essential to remain competitive? While social entrepreneurs are learning from corporations how to do business, can corporations learn from social entrepreneurs how to make business good-for-all?


© Polina Silakova 2018

Tags:  economics  entrepreneurship  society 

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Social entrepreneurs: Heroes on the edge

Posted By Administration, Friday, September 7, 2018
Updated: Tuesday, February 26, 2019

Polina Silakova‘s seventh post in our Emerging Fellows program continues to explore social entrepreneurs. The views expressed are those of the author and not necessarily those of the APF or its other members.

Social entrepreneurship is winning more and more hearts and minds. It is showing a potential to disrupt traditional business models. For now, it is still quite niche and will need to come a long way to be seriously considered as an evolution of capitalism. The time required for the sector to mature and the broader ecosystem to introduce mechanisms for collaboration is one reason. Yet the main cause is probably that it is just bloody hard to be a social entrepreneur.

Not only do you face all the issues that most start-ups are too familiar with – unstable cash flow, scalability, securing high product quality with limited resources – there is also an additional level of complexity: delivering on the promise to give back to the community. To make things harder, it is not enough just to be doing good – you are expected to demonstrate that your approach is working. With social impact in the heart of the business proposition, it is essential to be radically transparent about profit and how it gets distributed. For a social enterprise, earning customers’ trust is more critical than almost for anyone else: no customer wants to find out that the dollars they spent to support a social cause have sponsored someone’s luxurious vacation. And trust takes time.

On top of the challenges of these early days when social entrepreneurship is toddling its way into the big economic system, we would argue that some of the obstacles are created by the entrepreneurs themselves. The very disconformity which drives social entrepreneurs to start their own business in the first place might be doing them a disservice at a later stage. Surveys suggest that after the paramount motivation to make the difference, the key motives driving these startuppers are the need for acknowledgment and heroism. Combined with a strong attachment to a specific social issue, this might make collaboration with other entrepreneurs more difficult. Opportunities to make more impact with joint forces are being missed. This leads to the high fragmentation of the social entrepreneurship ecosystem which slows down the development of the sector.

Previously, we touched on the lessons that business can adopt from nature. Is there a recipe from the wild world which would help social entrepreneurs? Potentially, yes – the phenomenon called the edge effect. In ecology, the edge effect happens at the boundary where two ecosystems, such as forest and savannah, meet. This is the place where the most forms of life are born. By drawing on the distinct features of the two different habitats, edge effect creates the environment for unprecedented biodiversity. A lot has been said about the importance of diversity for innovation, and social innovation is not different.

Stepping out of the zone where you have full control, letting the certainty go and trusting emergence might not be easy. This is the time and space when one might get uncomfortable with the ambiguity of how the future might unfold. This space is called liminal space – the threshold where the solutions from the past are not effective anymore and the new solutions are only shaping. Despite the discomfort, with a little luck and trust this space might uncover completely new answers to an old problem – it can show the way to innovation.

To part with one’s personal ambitions in order to amplify social impact might be hard. But if we truly want to make a sustainable change, we need to move from ego- to eco-system, as Otto Scharmer puts it. We live in the time when we need not heroes but leaders. Leaders, who sense how to jump on an opportunity, able to think in systems, connect the dots and connect with people, drawing on the collective talent.

In the age of connected devices, the ability to collaborate and to come up with creative solutions is one of the key traits differentiating us from machines; it needs to be cherished. We need to shift from problem-solution matching to the recognition that many of today’s issues don’t have a known solution. Trusting a collective co-creation process can get us closer to finding what works. By going beyond the edge for more collaboration, social entrepreneurs could accelerate social innovations. This could help the whole sector more quickly to become a more serious alternative to traditional business.

Finding yourself at the edge might feel uncomfortable, but what if a step forward would give us wings?


© Polina Silakova 2018

Tags:  economics  entrepreneurship  society 

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Social entrepreneurship: Can a storm in a coffee cup change the world?

Posted By Administration, Tuesday, August 7, 2018
Updated: Tuesday, February 26, 2019

Craig Perry has written his eighth installment in our Emerging Fellows program. His entire series explores the potential for another Great-power War. This piece asks whether there would be any profit in a great-power conflagration. The views expressed are those of the author and not necessarily those of the APF or its other members.

In 1999, American journalist Thomas Friedman penned his notorious “Golden Arches Theory of Conflict Prevention,” positing that no countries with McDonald’s restaurants had ever fought a war against each other. Critics quickly noted that the presence of this ubiquitous American fast-food chain hadn’t stopped the U.S. invasion of Panama a decade earlier, nor would it preclude NATO from bombing Serbia (1999), the Kargil War between India and Pakistan (1999), Israel’s second Lebanon war (2006), or Russian incursions into Georgia (2008) and Ukraine (2014-present). But even if Friedman’s pop theory is bunk, it echoes an established maxim of international relations: globalization makes countries so economically interdependent, they can’t afford to wage war very intensely for very long.

English journalist Norman Angell popularized this argument nearly a century earlier, dismissing the supposed economic benefits of war as “the great illusion.” The commercial systems of Europe and America had become so complicated, Angell wrote in 1909, that it is impossible for one nation “to enrich itself by subjugating, or imposing its will by force on another.” The world was then experiencing a remarkable era of globalization, with freely flowing capital and labor producing unprecedented prosperity, and the European powers had few incentives to risk this arrangement through war.

Nevertheless, the continent soon plunged headlong into conflict—followed by an even more cataclysmic sequel a generation later—and it would be several more decades before international trade and finance fully returned to pre-World War I levels. Although Angell went on to win the Nobel Peace Prize for his idealistic views, it wasn’t until 1950 that Robert Schuman, the French foreign minister who championed the European Coal and Steel Community, offered a practical vision to “make war not only unthinkable but materially impossible.” The free movement of goods, services, capital, and people within what is now known as the European Union has indeed facilitated peace among its members ever since.

Of course, neither the EU nor its constituent states are counted among the world’s great powers nowadays, while those that are—the United States, China, and Russia—haven’t achieved anything close to this level of economic interdependence. Although the sheer volume of Chinese wealth invested in the U.S. economy, which is itself highly vulnerable to disruption by Beijing, ought to be sufficient to deter military conflict, there are worrying signs that this mutually profitable arrangement is breaking down. Washington has recently abandoned its longstanding support for globalization in favor of trade wars with its closest allies and fiercest competitors, while the Middle Kingdom’s commitment to build a world-class military by 2050 suggests its foreign policy ambitions will soon catch up with its global economic dominance. Russia, for its part, is far less integrated into the world economy, while its oil and gas customers can’t easily switch to other suppliers in the event of conflict, reducing Moscow’s incentives to curb its aggressive behavior.

As much as it may militate against great-power conflict, globalization can also disrupt the international order in ways that actually increase the odds of war. This paradox played out before WWI, when industrialization created enormous wealth whose uneven distribution simultaneously reordered societies and upset prevailing balances of power. Rising industrial giants like Germany aggressively pursued greater international influence, while rulers in Vienna and Istanbul struggled to keep their polyglot empires intact, and entrenched elites everywhere stoked nationalism to distract an increasingly restive proletariat. By upending traditional social and political arrangements, this previous period of globalization unleashed centrifugal forces that ultimately tore apart the old order.

A century later, globalization has again created winners and losers, both within and between nations. In the United States and Europe, populist politicians increasingly scapegoat immigrants and minorities, bankers and trading partners, and the very institutions that for generations heralded democratic progress and economic prosperity. China, which has profited handsomely within this established world order, now plays the part of spoiler seeking a larger slice of the geopolitical pie, while Russia’s leaders do what they can to exacerbate anti-establishment tendencies for their own short-term benefit.

Globalization has indeed made much of the world so economically interdependent that it renders war objectively unprofitable—yet it has also sown the seeds of potential future conflicts. Whether the great illusion of war will again deceive political leaders in the 21st century depends in large part on how effectively national governments and international institutions resolve the inherent contradictions of modern capitalism, and continue to leverage the more peaceful logic of mutual economic benefit.


© Craig Perry 2018

Tags:  economics  entrepreneurship  politics 

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Virtual Reality Museum Tour in 2030

Posted By Administration, Wednesday, February 28, 2018
Updated: Sunday, February 24, 2019

Below is Adam Cowart’s third Emerging Fellows post. The views expressed are those of the author and not necessarily those of the APF or its other members.

Ah, the entrepreneur. Nothing is more real, more visceral. 100 years ago, the image of the entrepreneur was a man with greased back hair, an impressive handlebar moustache, a three-piece suit, standing solemnly beside some heavy piece of blackened machinery. Fast-forward to the 90’s, and it was young, awkward white boys, doing their best to look cool but not quite pulling it off. And now today, a moderately more diversified group of men and women, usually not quite facing the camera, more turned to the side, as if the camera has just caught them in the act of doing something extraordinarily innovative, something just outside the frame. What’s consistent across all these images is a certain twinkle in the eye, as if communicating to the viewer across time and space, “Hey, I can see the future. Can you?”

The sustainment of a real economy requires not only the ongoing production and consumption of existing products but the creation of new products. These new products are developed and produced by both large and medium-sized companies, along with small and new businesses. Entrepreneurs are considered critical for a healthy and dynamic economy. They provide infusions of new ideas, disrupt old business models, and create new areas of growth and opportunity.

But are entrepreneurs going the way of the Dodo? While much has been written on how entrepreneurs and big business are, and will, use AI to change the world and the economy, less has been written on how AI will disrupt the disruptors. New business and product ideas are, after all, essentially the output of synthesizing insights, developing and testing prototypes, procuring capital for production and expansion, and then running the business. When will we start seeing entrepreneur bots? Autonomous product and service creation programs who generate business ideas and then go out and make the business a reality?

Consider how advanced programs have disrupted market trading, in particular, the well-known story of high-frequency trading. Minute market fluctuations are exploited by advanced algorithms. Take this same rapid response approach to the real economy and AI bots, who could be perpetually scouring global markets for tiny opportunities and move rapidly to capitalize on those blips in the market to make a profit, before the blip disappears and the markets return to “normal”. Along with online sales, the concept of the “pop up shop” could become incredibly ubiquitous. An AI Entrepreneur identifies a local opportunity in, say, Winnipeg Canada. A generic pop up store is procured, a product is developed, rapidly prototyped, market tested in minutes by customer-composite bots, specs sent to other manufacturing bots, the product is created and on the shelf (and available online) within a day. Within a week, the opportunity has been exploited, and the store closes down. Perhaps inventory lingers online for a brief period of time.

In this Blog column, we have been considering whether the real economy will, in fact, be real in the future. A vertically integrated AI product and service creation network could function largely independently of humans. With the capability to generate and produce new products and services far faster than humans can possibly consume them, does this follow the conceptual trend of hypercapitalism? Will the speed and intensity of economic activity continue to accelerate? Forget about getting irritated by a new iPhone every year – with our entrepreneur and product-creation bots, we could have a new iPhone once a week. Perhaps even once a day.

Of course, the next logical step for humans, overwhelmed by choice and upgrades, is for us to outsource our consumer decision making to our own bots. B2B (Business to Business) models will gradually shift towards an AIB2B model, and then eventually to an AIB2AIB model (Artificial Intelligence Business to Artificial Intelligence Business). While most sci-fi movies imagine a dystopian future of nuclear wars caused by a “woke” robot, would the invasion be far less innocuous? Whoever controls the economy controls everything. But is this economy still real?




© Adam Cowart 2018

Tags:  entrepreneurship  technology  virtual reality 

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