Thus far in the 21st century, companies’ concern for social issues and the social dimension of business have been growing steadily. At the same time, our society has become increasingly sensitive to issues such as equality, the fight against poverty, education, climate change, economic development, and overpopulation, to mention but a few.
The scope and complexity of each of these problems which affect humanity as a whole mean that they require the dedication and effort of as many players as possible. Citizens have upped their level of mobilization; the number of NGOs has increased significantly in recent decades, and they also have more resources to meet their targets. There is no doubt that the work they have been doing and continue to do is very important. Thanks to the so-called “third sector,” significant social, economic and environmental progress has been attained, with the leadership of associations, foundations and charity organizations.
However, these actions are still too few to tackle the root problem of all the challenges of the present and of our jeopardized future. The search for solutions that will fully transform the world for the better requires innovative and scalable answers that create a positive, widespread, and long-lasting social impact. This impact is difficult to measure, but nonetheless necessary for societies to improve and develop on a longer-lasting planet that will provide better living conditions for more people. In short, we need proposals to contribute to the sustainability of our world.
Companies have adapted their role to this new framework where everyone is committed to making their contribution. Thanks to the impact of companies’ decisions, their efforts are the focus of analysts and researchers, as well as the media and all citizens who demand corporate transparency in order to have the information they need to make informed decisions.
Aside from constant scrutiny (which is intensified on social networks and because of the accessibility provided by the Internet) companies’ capacity to create projects and business models which add value greatly exceeds the potential of the Third Sector. Therefore, they are jointly responsible for our current situation. If they have the capacity to revert or mitigate it, it is their responsibility to exercise this power for their own personal benefit — which, as companies, is legitimate — and that of others. Thus, we see more and more responsible companies who know how to generate a shared value for all those involved.
By focusing a business’ mission on generating value for all stakeholders, we are seeing the emergence of a business paradigm that is completely different from what we were used to in a purely capitalist system. Without forsaking an economic model geared towards maximizing profit, strategies, policies, and procedures are being developed that consider everyone affected by the decisions companies make, taking into consideration their interests and wellbeing.
Simultaneously, a movement is becoming consolidated, propelled by young people’s interest. This is the creation of socially-geared businesses, which are aimed at resolving some of the social problems that affect us and placing this at the center of their business strategy. The main motivation behind these initiatives is to address a large-scale social problem. These so-called “social enterprises” are organizations somewhere between NGOs and companies, as they are managed in such a way that they must focus on optimizing economic resources to guarantee the durability of the project. They pursue a balance between economic viability, social purpose and/or caring for the environment.
There are countless examples of these organizations: companies created to provide work to groups who have difficulties entering the job market; financial institutions whose main objective is to provide sources of financing for projects unable to obtain funds through traditional mechanisms, but which promote culture, environmental protection, or social development. Additionally, there are companies aimed at reducing the environmental damage caused by consumption to a minimum by producing more ecological goods.
These are only some examples of successful initiatives, but the truth is that these new organizations are gaining ground. They are led by social entrepreneurs — change-makers — who dream of changing the world. With their aspirations applied to realistic, attainable and viable projects, they obtain funding from social investors, small contributions from large numbers of people through crowdfunding, or income by selling market-attractive products that are manufactured by incorporating this social commitment throughout the value chain.
Not all input is financial. Providing these courageous entrepreneurs with training, knowledge, and non-financial but equally important resources such as contacts or platforms to disseminate their work is a way to equip them with a means of launching or consolidating their initiative. The Young Social Entrepreneurs Awards is one such initiative which Universidad Europea promotes every year.
The socio-economic scene has, in essence, become more diverse. We continue to have traditional companies geared towards economic profit as their sole decision-making factor, as well as non-governmental organizations whose focus is on meeting social needs. Halfway between the two, other organizations are gaining ground. These are companies with a social purpose, who are either established with a social vocation or who are redirecting their strategy towards the value contribution and commitment that are increasingly being demanded by society.
The pairing of social interest and economic profit comes in different shapes and sizes, which will vary depending on our support as consumers, employees, suppliers, investors, and citizens. Challenge and responsibility are shared.