I always wondered whether a “business” (corporation) can be created that is driven not only to make profit but also driven to ease the world’s inequalities. “Business of business is business” but can a business’ business be to ease the world’s problems and still sustain itself as a profitable business? I recently came across this speech by Bill Gates on World Economic Forum in Davos last January. In his speech, Gates said that many of the world’s biggest problems cannot be fixed by philanthropy, but instead require free-market capitalism—”creative capitalism”—to solve. According to Gates, creative capitalism is “an approach where governments, businesses, and nonprofits work together to stretch the reach of market forces so that more people can make a profit, or gain recognition, doing work that eases the world’s inequities.”
Overall what I gather from his speech is that : You cannot create a profit driven corporation that is in the business of just easing the world’s inequalities. But a profit driven corporation can become a socially responsible corporation by generating ideas and processes within their realm of expertise to solve world’s problems. For example:
- A drug company can become creative to provide affordable medicine for most common ailments like malaria, cholera etc. in poorest nations like Sudan, Somalia etc.
- A software/hardware company generate ideas to provide affordable laptops to kids in poor nation ($100 laptop)
- Soft-drink company generate ideas to provide technology to supply drinkable water to remote areas.
- A bank generate ideas to provide loans to people who can’t provide collateral (poorest of the poor) and give them an opportunity to succeed.
A perfect example of a business where the line between the purpose of the business (to make profit) and social responsibility of the business is very narrow, is: Grameen Bank. Muhammad Yunus – a Bangladeshi banker, economist and founder of Grameen Bank, jointly won (with Grameen Bank) the Nobel Peace Prize, “for their efforts to create economic and social development from below. Lasting peace can not be achieved unless large population groups find ways in which to break out of poverty. “[Ref. 1] Now thats some serious “creative capitalism”!!