Social Enterprise in China

Last week’s articles on India have me thinking in a mood of the state of social enterprise programs within the developing superpowers of tomorrow.  So when I ran across an article on Change.org espousing the social enterprise movements within China, my curiosity was roused.  The article points out the As I read up however, it became clear that the situation is much more complicated.  For example, a 2008 study by the British Embassy on the state of social enterprise in China suggests that there are a number of problems that may hold the social enterprise movement back.  Perhaps most importantly, the number of organizations investing specifically in social enterprise is extremely limited.  Furthermore, the Chinese government has policies that are not as conducive to the establishment of explicitly social businesses.  Finally, there is less awareness of the concepts behind social enterprises, both at the level of established businesses and in the general population.

It is, of course, hypocritical to expect a huge cultural shift in Chinese business towards social goals when the dominant mode of business in the developed world is still largely driven solely by profits.  Though I, too, share the hope that the relatively few signs of increased social entrepreneurship awareness in China is but the tip of the iceberg.  However, it is interesting to note that this is but one more difference between the development paths that India and China are taking in their race to the forefront of the global economy.

For Social Enterprise Inspiration, Look to India

A couple weeks back, there was a great deal of skepticism floating around regarding plans within the Indian government to make quantifiable units of corporate good, “CSR credits”, and allow them to be sold in the market.  While most commentators have panned the idea as unrealistic, a few have also remarked that it is startling to hear such a proposal coming from an emerging economic power.  The underlying theme is that the Indian government wishes to institutionalize in their economy some of the core principals of the social enterprise movement, a very progressive and forward-thinking goal for one of the world’s rising economic superpowers.

For those of us left  surprised and perhaps a bit encouraged by the announcement, another piece in the Harvard Business Review today may help to explain the culture in which CSR credits could be imagined.  Peter Cappelli discusses how the focus of successful Indian businesspeople tends to be much more social than in their Western counterparts.  The piece highlights how India is taking the initiative in this area, and reminds us that social enterprise is a growing theme in business worldwide, not merely limited to progressive countries in Europe.

India’s CSR Credits? Can You Sell “Good” as a Commodity?

Last week, India’s government announced that they were considering making Corporate Social Responsibility (CSR) a commodity, to be traded on an open market.  The move has drawn analogies to the cap-and-trade concept of carbon credits, where the amount of greenhouse gas emissions within the country are locked in at a given level, then the rights to “pollute” are traded like any other commodity.  In the case of CSR credits, India appears to be mulling the possibility of requiring companies that are deemed to be particularly socially irresponsible to purchase CSR credits from those companies, charities, or organizations that are more socially conscientious.

The announcement has drawn ample criticism from commentators involved in CSR, and for some good reasons.  Of primary importance, it seems nearly impossible to come up with a specific numerical value for any one socially minded effort, much less to be capable of comparing the value of two different programs in absolute terms (say, shelter for the homeless and increasing accessibility of vaccines to vulnerable populations).  I personally wonder how much value a company would ascribe to a CSR credit, in the cap-and-trade system, companies are purchasing something tangible and there is a limit on the availability of that resource.  With CSR credits, it seems that one might have a nearly endless supply of potential organizations claiming to be generating CSR credit, coupled with an intangible value of owning said credits, except for bragging rights.  Which raises ironic visions in this commentator’s head of “morality” being sold on the open market for fractions of cents per share.

But skepticism aside, the announcement has at least drawn some chatter and does highlight a growing awareness of the need to innovate for new approaches to hold businesses accountable, within India and abroad.  It also highlights what some see as a growing divide between the social awareness of corporate impact in developing countries compared to some western nations.  While I won’t be holding my breath for the success of this particular plan, it does suggest that attitudes about “business as usual” are rapidly changing.