Authors of 'Capitalismo 2.0'
Patricia Sáez, director of the Social MBA and the Social Entrepreneurs graduate degree at the UOC, and Dr. Lluís Pareras, neurosurgeon and current head of the Project Incubation Department at the Barcelona Medical Association, have just published their book entitled Capitalismo 2.0 (Plataforma Editorial), in which they defend the importance of private initiative in dealing with the social and developmental challenges this world is facing.
Facing government action, which is limited here and elsewhere by a lack of resources and, frequently, corruption and inefficiency, and that of non-profit organizations –NGOs and the like– Patricia Sáez and Lluís Pareras call for social entrepreneurship: the need and opportunity to start up companies that, without eschewing profits, aim to meet the social needs of the most at-risk groups.
Their book criticizes both traditional capitalism and Adam Smith’s liberalism, questioning the fact that the search for individual economic profit benefits the collective wellbeing.
Why do you think social entrepreneurship can provide sustainable solutions to fight problems like poverty, hunger or the lack of basic resources like water?
In fact, our world no longer stands for the simple search for individual economic profit and has committed to social capitalism, a responsible form of capitalism that, moreover, is contagious. Many things in our world need to change. Many of us worry about the challenges of the 21st century. We are facing extraordinary problems: hunger, disease, war, terrorism, climate change, poverty, global pandemics. And we can’t deal with these problems without a profound and radical restructuring of the way we do things. We are worried but we don’t know how to move from concern to action, how to contribute. We feel overwhelmed by the complexity of the task ahead of us.
Social entrepreneurs are a wake-up call from individualismfor the collective human consciousness; they are, as a last resort, people who use their creativity and leadership skills to improve things; they are the superheroes of the 21st century. Faced with misery and suffering, millions of NGOs, social entrepreneurs, philanthropists, activists, solidary investors, etc. show us that it is possible to bring about change and that solidarity among people is stronger that the egotism of nations.
Your book presents social entrepreneurship as a road halfway between the limitations and shortcomings of public social policiesand the activism of NGOs. What do social entrepreneurs contribute compared to the cooperative model used in non-profit organizations?
Compared to the services provided by NGOs and public administrations, social entrepreneurs offer an innovative solution –palliative, preventive ortransformative– to social problems. The best solutions are those that are scalable and can be replicated in other territories (the mission of a social entrepreneur is to apply this solution to as many situations as possible). As well as those that achieve high social and environmental impact with the least resources, a value reflected in the SROI (social return on investment), which indicates the social value (in euros) created for each euro invested in an initiative.
You yourselves categorize social problems as “wicked”, due to their complex and multidimensional character, and the fact that they are the result of multiple causes, which are at times contradictory and can feed off each other. How does social entrepreneurship deal with this complexity?
Social problems are, by nature, badly defined, difficult to understand and difficult or impossible to solve because they are contradictory and ever changing. Social problems can’t be formulated in a specific way; they depend on changing conditions that are inexorably liked to other problems. Solutions to these problems are neither right nor wrong, but better or worse. Moreover, there is no list of possible solutions; each solution is one of many possibilities but not the only one.
Problems that have the aforementioned characteristics are known as wicked problems. These problems, thus, can’t be solved following the laws of logic. There are better or worse options that we must find through heuristic methods: trial and error. Poverty, malnutrition, poor access to healthcare, global warming, these are all wicked problems that can’t be formulated in a structured way because they have many causes.
Social problems, thus, can’t be solved by applying “conventional” strategies. Traditionally, society has tried to solve them by using multiple experts who give propose what they believe to be the best solutions and, together, decide on the best road to take. However, those who try to solve these problems tend to find solutions that are in line with their own interests. There is nothing wrong with that, it’s human nature to seek out individual gain, but this centrifugal tendency (each person looking out for themselves) is very difficult to control.
Understanding the nature of wicked problems can help us find better strategies to solve the social injustices of our era. Solving wicked problems requires a completely different focus, which is what social entrepreneurs bring to the table.
In the book, you present a number of entrepreneurial initiatives focusing on fields as different as finance, healthcare, technology, the environment… Some initiatives are directly linked to the biomedical and biotechnology sector, like the LifeStraw device, which makes contaminated water drinkable using a pocket-sized kit, or kidsfrom Diagnostics for All, which substitutes traditional blood analysis techniques for drops of blood on a piece of paper, making this technology available to millions of people in poor countries and those lacking preventative medical infrastructure and basic treatment. How does a good social entrepreneurship project come about? Is there some way to encourage this process?
We always say that when someone is angry about a problem there’s a good business opportunity underneath. And this is even clearer in a social context where injustices suffered by at-risk groups or our planet motivate people’s anger.
The Healthcare Investment Forum will be held on 10 March, organized by the Medical Association, Barcelona Activa, Biocat and Esade Ban, which has obtained funding valued at 1.5 million euros for five projects over the past three years. Do investors value the social dimension of business projects? How prevalent have social entrepreneurs been at the previous Forums and, in general, how prevalent are they in Catalonia and Spain?
The culture of valuing a business project’s social dimension is growing among investors; they are interested in the social impact a project generates. The problem is that social impact is difficult to measure, making it difficult to compare companies. Economic return is “inside” the company and therefore easy to objectify. Social return is “outside” the company, in society, and its measurements are still little understood, although the first analysis frameworks are appearing. We propose a framework in our book.
The first social projects are starting to go to forums. The progress of this movement in our country is awakening quite a bit of optimism. Of the 300 business plans we analyze each year, 25-30 can be considered social entrepreneurship, and this is growing with time. We believe that social entrepreneurship has a great future in Spain.