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SOCIAL BUSINESS

The Social Business concept

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"By defining entrepreneurship in a broader way we can change the character of capitalism radically" - Prof. Yunus

The Grameen Creative LabWithin our economic system, there are currently two prevailing approaches to organizations. The first is that of the private sector where companies sell products or services to make money. However, there are important issues in our society which are not addressed by the private sector because they do not offer profit-making opportunities. This usually leads to government interventions to create legal and institutional frameworks to advance the common good and to protect the interests of weaker members of society. Where both governments and the markets reach their limits, charities may fill the gap.

The problem is, of course, that the system does not work well enough. We live in a world of terrible injustice and widespread poverty. Governments and charities have the will to improve it, but they lack the efficiency and innovativeness of the private sector. So why not combine the two sides? Let's bring the methods of business to the task of solving social problems such as poverty and create - social businesses!

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Global Social Responsibility

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Global Social ResponsibilityOn 28 October 2010 the Bangladesh German Chamber of Commerce and Industry in cooperation with the German Embassy and the Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ) held a conference on "Global Social Responsibility" in Dhaka.

Over 300 representatives from Bangladesh and German companies as well as prominent participants such as Minister of Commerce Faruk Khan, Nobel Laureate Muhammad Yunus and Dr. Michael Otto discussed strategies and best practices for companies to address social and environmental challenges.

Professor Yunus presented his concept of "Social Business", calling upon the private sector to find solutions for social and environmental problems. Everyone could launch a "Social Business". Professor Yunus illustrated his experiences in establishing "Social Businesses" with international partners (for example BASF) and presented new projects he pursues with the Otto Group, adidas and Solarworld.

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Social Business - a new Business idea from Bangladesh

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Muhammad YunusFollowing the successful concept of collateral-free micro credit a new, innovative and forward-looking business idea with potentially high impact on poverty alleviation is emerging from Bangladesh: "Social Business".

The "Social Business" concept developed by Nobel Peace Price Laureate and Managing Director of Grameen Bank Prof. Muhammad Yunus has the purpose to achieve a maximum of social benefit through the production of affordable but high-quality products and services adapted to the low purchasing power of poor people.

Social Business is a non-loss, non-dividend company with a social objective. All the net profits remain within the company for further expansion and reach. The investor will get the principal amount back, but nothing beyond that.

A company operating as a "Social Business" needs to work profitably in order to cover emerging costs and to invest its earnings in the expansion of the business. In this way, their products become accessible for the poor.

Cooperation of the Grameen Group with international companies such as BASF or Danone show that the model can work and that it also helps international companies to adapt their business strategies to the needs of markets with low purchasing power.

In November 2010 the "Global Social Business Summit" will take place at Wolfsburg, Germany. This Summit will become a regular event and will provide an international forum for information and exchange of ideas on Social Business.

For more information on Social Business, please contact the Yunus Centre:

Yunus Center

GSR conference 2010: program details [pdf, 147.65k]