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amounting to $ 100 trillion equals 65 times of the total wealth of the bottom half of the world’s population. Further, it reveals that 85 richest people in the world own wealth equalling to the bottom half of the world’s population.
In the last few months I have advocated through a series of articles in the Daily FT the need to create a greater inclusive society with the accountability and responsibility of all the stakeholders of the country. Alarming revelations of the Oxfam paper argues well for what I have contended through my thoughts on creating an inclusive society in Sri Lanka.
There is now a greater awareness created of the social inequalities prevailing and the need to work on a sustainable social inclusion. As I have said in my previous writings to the FT, there are more discussions at the global forums and written reports but less engagement in find more pragmatic solutions to dispel the inequalities.
Accountability of commercial entrepreneurs and responsibility of social entrepreneurs
There is now a greater social consciousness among the political and business leaders than ever before and the emergence of social entrepreneurs and initiatives like corporate social responsibility which has add to the momentum that drives greater social inclusion.
The evolution of social entrepreneurship which is a relatively new development traces back to the 1960s and 1970s and became a widely advocated concept in the 1980s and 1990s. It is now is a driving force to create economic equality. On the other hand, commercial entrepreneurship is an age-old concept that drives economic value addition and wealth creation, targeting greater benefits that are shared by smaller stakeholder groups.
Whether it is social entrepreneurs or commercial entrepreneurs, it is the entrepreneurs that are the driving force in the world who stimulate economic growth and wealth creation. It is the multiple innovative efforts and value additions of the entrepreneurs that bring progress and prosperity to the world at large.
While all entrepreneurs are engaged in driving economic growth and wealth creation, the difference between social entrepreneurs and commercial entrepreneurs is the application of distribution of wealth created by their economic enterprises. Commercial entrepreneurs whilst working on maximising revenue for the distribution to a limited stakeholder group, the social entrepreneurs too engage in innovative economic engagement that benefits the society and environment and the wealth created by their economic engagement is for the only purpose of distribution among society.
World needs thousands of socially-conscious entrepreneurs like Warren Buffett and Bill Gates
With the advocation of the triple bottom line performance among the public and private sector corporates globally, there is now a paradigm shift that will blur the boundaries between social entrepreneurs and commercial entrepreneurs . Some of the successful commercial entrepreneurs globally renowned like Warren Buffett and Bill Gates have now created much wider reasons for their entrepreneurship in channelling most of the revenue earned from their conglomerates towards global social empowerment.
"Whether there is the need to work towards food security or protection of the planet , to look after over seven billion people who live in the world we need responsible entrepreneurs for not only the creation of wealth but also entrepreneurs with a great accountability to distribution of the wealth to dispel economic inequalities"
There are many North American and Western European entrepreneurs and business conglomerates which have now created greater reason for their existence and thriving in the market place to channel majority of the revenue earned to projects and programs that will create social upliftment and poverty alleviation across the world. The conglomerates that are spearheaded by entrepreneurs like Warren Buffett and Bill Gates have remained most successful and innovative while making good revenue but have tilted more now towards the objective of social empowerment and engagement.
Even Bill and Melinda Gates have completely moved away from their most-loved involvement in their conglomerate Microsoft and are full-time driving the Gates Foundation which they have created for global social upliftment. Warren Buffet equally engaged with them has now written most of his wealth i.e. 85% to the Gates foundation for the enormous social upliftment, healthcare and poverty alleviation across the world to benefit particularly billions of people who are at the bottom of the pyramid.
Social impact of the corporate commercial responsibility
Some of the triple bottom line corporate conglomerates in USA and Europe now have created foundations with a greater mandate for social engagements at all possible levels for creating economic equality and economic inclusion and are transferring most of the revenue earned by the corporate entities to the foundations to carry out multiple projects and programs that bring economic equality and empowerment across the world.
What we see is that some of the world’s great entrepreneurs who have been commercially successful in creating unprecedented wealth have now are mastered the art of wealth distribution to more people in more places across the globe for sustainable economic enrichment. Some of the triple bottom line conscious global business conglomerates are adopting highly stringent sustainability practices such as environment protection, ethical trade, fair trade purchasing, fair labour practices as cardinal components of doing business.
Dispensing corporate commercial responsibility effectively can transform society to experience greater economic enrichment. For example multinational corporates like Nestle apply sustainability practices in fair trade milk purchasing from the small holder dairy farmers in creating value that triggers livelihood development and economic enrichment to small holder dairy farmer communities as a corporate commercial responsibility done well.
Wealth creation is a science, wealth distribution is an art, wealth accumulation is not sustainable
Today Corporate Social Responsibility (CSR) or sustainability is a buzz word among public and private sector corporate entities across the world. The emergence of social entrepreneurs and corporate entities allocating a certain portion of their profits to a particular project or programs that will benefit the society is a reflection that some stakeholders in global society take accountability for sharing the economic benefits to enrich the societies in which they live.
Whilst we see a greater maturity of the commercial and social entrepreneurs and the corporate entities in the Western world in the way many initiatives are made to transfer economic benefits to transform societies across the world, we are yet to see that maturity in Asia. Most of the Asian and Sri Lankan entrepreneurs and corporate entities are relentlessly pursuing wealth creation but have not mastered the art of wealth distribution. We are yet to see in Asia and in Sri Lanka the kind of greatly successful entrepreneurs like Warren Buffett and Bill Gates who understand the science of creating wealth and now mastering the art of wealth distribution.
One thing they have very clearly understood is that wealth accumulation for a single individual or entity is not sustainable. We have seen from the past history that most great empires that have accumulated great wealth have eventually disintegrated to non-entities. Leave alone disappearances of great empires, like Babylonian and Persian empires, we have seen Grecian and Roman empires that have accumulated a great amount of wealth become bankrupt nations in the very recent past.
Globally there is an unwritten truth that wealth does not pass beyond the third generation most often, though many try to accumulate wealth for 10 generations. Today many of the great and successful businesses and conglomerates founded earlier by renowned entrepreneurs are in the hands of total strangers who have no connection to its founders.
Need entrepreneurs who make social accountability part of their DNA not just a feather in their cap
In the light of the findings of the paper presented by Oxfam at the recently-concluded World Economic Forum, the extreme economic inequality in the world and the wealth of the world is divided in two, half the wealth going to the richest 1% and the other half divided among 99%. The World Economic Forum has identified this imbalance as the major risk to human progress.
By taking note of this, looking at Sri Lankan society, we are seeing signs of a rapidly-increasing economic inequality. Unless Sri Lanka produces commercial entrepreneurs and corporate entities who have not only understood the science of creating wealth successfully but equally mastering the art of wealth distribution, the current form of Corporate Social Responsibility (CSR) and sustainability initiatives are meant just to create a feather in their caps, not to make it a part of their DNA.
Many innovations, concepts and ideas that were discussed at the recently-concluded World Economic Forum show that the boundaries between social entrepreneurs and commercial entrepreneurs is getting blurred and almost now becoming two sides of the same coin , so it is too with corporate commercial responsibility and corporate social responsibility, which is so intertwined now.
Whether there is the need to work towards food security or protection of the planet , to look after over seven billion people who live in the world we need responsible entrepreneurs for not only the creation of wealth but also entrepreneurs with a great accountability to distribution of the wealth to dispel economic inequalities.
[The writer is the Chairman of Asia’s largest micro finance network BWTP. He is also the Chairman of Lanka Financial Services for Underserved Settlement (LFSUS) and recently incorporated CSR Sri Lanka the national network for corporate social responsibility , serves on the boards of number of national and international financial institutions that advocate and practice financial inclusion. The thoughts and comments expressed here are of his own and in no way connected to the organisations he represent. He can be contacted at [email protected] or [email protected].]
