Bristol Social Enterprise Conference

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Social enterprise may seem like a contradiction in terms for some, but is fast emerging as a growing way to go about effecting social change. The “Occupy movement” is fed up with a society based on self-interest and have made demands on governments and corporations to put the interests of society first. This question of who’s interests are preferred lie at the heart of social enterprise and are useful in defining what is meant by social enterprise.

Nowadays, every company is familiar with the rhetoric of “Corporate Social Responsibility” (CSR), an obligation that corporations have to feed something good back into society. The 1990’s saw the rise of CSR in almost all companies’ agendas and saw the creation of new departments within large corporations. Predicated on Adam Smith’s infamous invisible hand, these companies were and are still obliged by law to pursue the highest returns possible to maximise shareholder value. Social enterprise on the other-hand is focused on “others-interest” whereby social entrepreneurs benefit financially from improving the welfare of other members society. They share this priority with charities and philanthropy but differ in their approach as Michael Porter from Harvard Business School puts it “Businesses acting as businesses, not as charitable donors, are the most powerful force for addressing the pressing issues we face.” Social entrepreneurship seeks to innovate and create new models that are financially sound to effect lasting social change.

“Fightback Britain” a recent publication by Social Enterprise UK showed that this social change is all pervasive in all economic sectors and regions of the country, particularly focusing on deprived communities; 38% of social enterprises working in the 20% of most deprived communities in the UK compared to 13% of standard businesses. It also showed social enterprise is successfully tackling social issues from within, with almost nine out ten having at least one female director and almost one in ten having a director under the age of 24. It is estimated that 14% of social enterprises are start-ups bringing greater dynamism and innovation to the economy. In comparison to the public or private sector, social enterprises are better able to balance commercial and social outcomes; work with excluded groups and reach out to local communities.

The Bristol Social Enterprise Conference last weekend focused on how students can make the transition from social consciousness into finding entrepreneurial solutions to social problems. The event brought together students with budding social entrepreneurs to discuss and debate issues and opportunities; debates explored the role of social enterprise in higher education, new inventions tackling climate change and new systems of money. As support and financial backing for young people’s ideas in social enterprise continues to grow, young people have a new and valued stake in shaping the world we live in. 

Why Nations Fail

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Thursday lunchtime at the Watershed is what you would expect, full of local Bristolians grabbing a quick pint of fine ale and a pie before seeing the matinee. However an imposing Harvard professor sat in the corner, wearing a crisp suit, talking between mouthfuls about the worlds’ most pressing issues from climate change to sovereign debt crisis and from diamonds to road-building.

The book we were discussing deals with formation and remedy of these contemporary problems starting at the beginning of the British colonial period. James Robinson, a political scientist and his co-author Daron Acemoglu have published many academic papers, but have for the first time turned to a hardcover book. It weighs heavy in your hand but as James Robinson describes it in his robust English accent “fifty scientific papers lie behind this, some more technical, some historical but the main argument is summarised in a page and we have the rest of the book to give historical examples.”

The thrust of the book shows that what matters in the path of development of a nation is the political and social institutions. They differentiate between “inclusive” and “extractive” regimes, which can manifest themselves in the political or economic spheres. Some regimes do not give the population a voice in society and are considered politically “extractive”. Economic institutions that spread the benefits of prosperity across society instead of just enriching a narrow elite are considered “inclusive”. It is the combination of political and economic institutions that determine a nation’s success.

His mushroom risotto arrives in a tall bowl providing some hearty sustenance on what seems a busy book tour. Chapter two in the book is an onslaught on the “cultural hypothesis”, the “geography hypothesis” and the “ignorance hypothesis”. Defending this chapter, he begins humbly that he wishes that he were capable of writing as well as his friend Jarred Diamond but disagrees about the facts and the evidence. Robinson tactfully argues that the theory in Guns, Germs and Steel is of continental inequality. Why was Eurasia so far ahead of the Americas at the start of the modern age? Why nations fail tackles within continental inequality, which is as great as across the whole world, can be viewed as complementary approach. It seemed that years of teaching around the world has still not eroded his polite English manner of speech. He debunks Jeffrey Sachs’ (running for head of the World Bank) argument about climate (latitude) determining development. As in an Econ101 class, he does away with Sachs, “Correlation does not imply causality”. Seizing upon the opportunity, he emphasizes his approach is to understand the historical development of institutions. Climate changed the way that colonialisation unfolded. In tropical areas, the indigenous population received “extractive economic institutions”, as exploitation was possible in these areas. These institutions persisted over time, where political power in the states in Latin America is still concentrated in narrow elites who still extract prosperity from their societies. However, the people that Robinson really seeks to convince are the swathes of “Development economists” who adhere to an ignorance hypothesis – we simply do not know what to do about the developing world.

Having devoured the Fairtrade, Columbian roast coffee, he was primed to address the elephant in the room, what next for growth? Expecting another diplomatic answer, I was not surprised to find that he would not share strong views on the prospects of growth, but would rather suggest that the type of countries with inclusive political institutions would be best placed to make the best decisions. “If power is equally distributed within society, then it is more likely that the people who care about different things will have an influence on public policy.” In Columbia, the small number of people who run the country can avoid all the disastrous effects that constrain everyone else’s lives. They go to Miami, hire bodyguards, and build walls around their houses. Leaders that can avoid the consequences of their decisions do not make for a good society. His answer was somewhat underwhelming at the time but demonstrates the simple underlying principles of political and economic institutions that should be at the heart of our thinking for what next? Robinson says that the nuance is in the academic papers but this book seeks to engage people in the discourse of development. The tyrants in the world that stand in the way of a “good society” should tremble if this is on their summer reading lists, as it should be on ours.