Arthur Lok Jack GSB

Sir Ronald Co­hen has asked the British gov­ern­ment to con­tribute 300 mil­lion pounds from un­claimed bank as­sets to an or­gan­i­sa­tion fo­cused on so­cial fi­nance. This or­gan­i­sa­tion will act as a whole­saler of cap­i­tal to the so­cial sec­tor. For these sorts of in­sti­tu­tions to suc­ceed, tal­ent needs to be at­tract­ed in­to the so­cial en­tre­pre­neur­ship are­na. So­cial in­vest­ment is the way for peo­ple with busi­ness back­grounds to show that busi­ness prin­ci­ples can serve as a mul­ti­pli­er for phil­an­thropy. Ap­ply­ing the an­a­lyt­i­cal skills and meth­ods taught at Har­vard Busi­ness School to the so­lu­tion of so­cial en­ter­prise is ab­solute­ly fun­da­men­tal to this ef­fort. "Thir­ty years ago, if you'd talked about the po­ten­tial im­pact of en­tre­pre­neur­ship, (in Eu­rope) peo­ple would say you're crazy. To­day, the same is true of so­cial en­tre­pre­neur­ship." Sir Ronald M Co­hen

In ad­di­tion to so­cial en­tre­pre­neur­ship, broad-reach­ing pub­lic poli­cies are need­ed. While so­cial en­tre­pre­neur­ship is im­por­tant, in Pro­fes­sor Sum­mers's view, the small-scale suc­cess­es of so­cial en­tre­pre­neur­ship will not on their own have a large enough im­pact on so­ci­ety. In ad­di­tion to the ef­forts of so­cial en­tre­pre­neur­ship, broad-reach­ing pub­lic pol­i­cy is need­ed to make so­ci­ety's fun­da­men­tal sys­tems, like ed­u­ca­tion and health care, work more ef­fec­tive­ly. (When peo­ple dis­cuss poli­cies and re­forms, they of­ten fo­cus on the poor. Pro­fes­sor Sum­mers en­cour­aged fo­cus­ing on the mid­dle class.

This group doesn't want hand­outs; it sim­ply wants the op­por­tu­ni­ty to com­pete.) How­ev­er, one of the bar­ri­ers to the im­ple­men­ta­tion of pub­lic poli­cies to ad­dress the neg­a­tive con­se­quences of mar­ket cap­i­tal­ism is that such poli­cies are of­ten not wide­ly sup­port­ed by the busi­ness com­mu­ni­ty. Too of­ten, mem­bers of the busi­ness com­mu­ni­ty are nar­row­ly fo­cused on ad­vanc­ing the spe­cif­ic is­sues rel­e­vant to their own short-term in­ter­ests. They push to low­er tax­es, pur­sue spe­cif­ic tax breaks, or lob­by for a par­tic­u­lar is­sue. In these ways, busi­ness ac­tu­al­ly makes it more dif­fi­cult to ad­dress so­ci­ety's larg­er, long-term in­ter­ests. The busi­ness com­mu­ni­ty and usi­ness lead­ers must ac­knowl­edge the need for pub­lic pol­i­cy to ad­dress the is­sues that threat­en the fu­ture of cap­i­tal­ism. Busi­ness­es must look be­yond their nar­row, short-term in­ter­ests to­ward what is good for so­ci­ety and for their busi­ness­es in the longer term.

"We need pub­lic pol­i­cy that makes sure that every kid has a chance to have an ed­u­ca­tion, that does some­thing about big ur­ban school dis­tricts, and that makes a health­care sys­tem that gen­er­al­ly works."

Lawrence H Sum­mers

There are many ways busi­ness­es can ad­dress so­cial prob­lems, while still sat­is­fy­ing their own self-in­ter­est. Busi­ness­es should seek prof­it op­por­tu­ni­ties in places that al­so make a broad so­ci­etal con­tri­bu­tion. By em­ploy­ing a lens that fo­cus­es on do­ing well (fi­nan­cial­ly) by do­ing good(for so­ci­ety), many at­trac­tive op­por­tu­ni­ties are like­ly to be dis­cov­ered. Spe­cif­ic ex­am­ples in­clude

Em­ploy­ing the dis­ad­van­taged. Busi­ness­es are unique­ly po­si­tioned to cre­ate in­de­pen­dence for peo­ple through jobs. When the gov­ern­ment pro­vides un­em­ploy­ment ben­e­fits, it cre­ates de­pen­den­cy in­stead of giv­ing peo­ple a chance. Some com­pa­nies have elect­ed to lo­cate in eco­nom­i­cal­ly trou­bled ar­eas. In many cas­es, they find work­ers who are bet­ter and low­er-cost than if the busi­ness were lo­cat­ed in a "fash­ion­able" place to live.

"Peo­ple don't want char­i­ty; they want a chance."

Sir Ronald M Co­hen

En­vi­ron­men­tal ini­tia­tives. Some of Har­vard's high­est re­turn in­vest­ments have been stim­u­lat­ed by look­ing at en­vi­ron­men­tal is­sues like bet­ter in­su­lat­ing a build­ing. These types of projects had a three-year pay­back pe­ri­od, while al­so ben­e­fit­ing the en­vi­ron­ment.

"Make sure that no stone goes un­turned in terms of seek­ing prof­it op­por­tu­ni­ties in the places that are al­so mak­ing a broad so­ci­etal con­tri­bu­tion."

Lawrence H Sum­mers

Pro­fes­sor Michael Porter will be vis­it­ing Trinidad for a one-day con­fer­ence on March 25, 2011, en­ti­tled: Com­pet­i­tive­ness and De­vel­op­ment for Growth. The con­fer­ence will take place at the Hy­att Re­gency Ho­tel, Port-of-Spain and is host­ed by the Arthur Lok Jack Grad­u­ate School of Busi­ness.

www.dlictt.com or call us at 868-645-6700 ext 316 or email us at con­fer­enc­ing@gsb.tt for more in­for­ma­tion.