03 June 2010

When Can and Can't Business Save the World?

I had a beautiful review of Mike Edward's Small Change: Why Business Won't Save the World ready for you and then I accidentally deleted it. Oh well, here is the short version.

As with any Mike Edwards book it is thought provoking and beautifully written. It argues that:

* businesses need to be more like social movements, not the other way around. In other words businesses may be good at delivering technologies, seeds, schools, irrigation, vaccines, but they are not good at being transformational in terms of shifting power relations between various groups. And they have little incentive to change a system that makes them powerful enough to consider being philanthropic.

* there are many types of engagements of business in social change: social entrepreneurs, social enterprises, corporate social responsibility, venture philanthropists, total corporate social responsibility (see Nestle's creating shared value concept from my previous blog)--he does a good job of creating a typology of them all.

* many social movements and community based organisations have more "business DNA" than many businesses--creating change on a shoe string means taking risks, effective communication, establishing a market niche, scanning the external environment very closely, keeping overheads very low, hiring motivated staff and supporting their development and working through networks.

* he suggests a number of ways businesses can improve their social contribution (to all stakeholders, not just shareholders): invest in grassroots organisations with a track record of stimulating positive social change, set up social funds which coalitions of government, business and social movements can work together in using, and apply corporate social responsibility to their lobbying and advertising work.

* despite the title of the book he suggests that there will be some ways in which some types of businesses can contribute more to positive social change and that we should look for them--this is something he and the new DFID team could agree on!

I have a few quibbles.

First, the book focuses mainly on philanthrocapitalists (the new foundations being generated from late 20th century capitalism) not businesses in general.

Second, Edwards seems to deny the transformative potential of the provision of technology, schooling, health, social protection. Yes, these things don't change the rules of the game in terms of who decides who gets what, but they can lead to more empowered individuals who can find their own ways, individually or together, of challenging unjust systems.

Third, the evidence base he cites is thin. I suspect this is not Edwards' fault as he is a careful analyst, but more (again) a dearth of research in this area--see for example the new IDS report (right) by John Humphrey and Lizbeth Navas-Aleman on Value Chains and Poverty Reduction--the vast majority of the 30 donor-led value chain interventions did not conduct a poverty impact.

Nevertheless, this is a thought provoking book, that will stay with you--after all, I have written this review from memory.

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