Today, I attended a lecture at the Ahmedabad Management Association (AMA) entitled, “Social Entrepreneurship: Challenges and Strategies,” by Lisa Nitze, Vice President of the Global Entrepreneur to Entrepreneur Program at Ashoka. One of the themes that the lecture touched upon was the concept of “self-interest”, and how the effectiveness of social entrepreneurship ventures lies in aligning the interests of public, private, and non-profit parties. As an example, she cited an Ashoka fellow who enabled slum dwellers to organize into collectives, invest in slum property, and negotiate with corporations in need of land for commercial purposes. From this transaction, slum dwellers were then able to purchase another piece of land, construct low-income housing units, and build small stores for the purposes of sustaining income. In this case, a a win-win situation, right? Everybody goes home happy.
So where am I going with this? I don’t disagree with the premise that human beings operate on the basis of self-interest, though the statement does sound like a rather dismal assessment of the human condition to me. Neither do I disagree with the point that there is immense potential in the nexus between self-interest and social good – if I did, it would be impractical, and to a large extent, irrational, because it would be too idealistic to expect both the end and the means to be driven by “unselfish” principles. Clearly, profit and social good are not mutually exclusive, and neither should they be for the purposes of long-term sustainability.
So here’s the question – to what extent is the intersection between self-interest and the social good viable? If a private party is involved in a project intended for the benefit of the underprivileged, to what extent can profit be extracted (to put it crudely) from the community before the partnership becomes exploitative? In a transaction that is not dictated by social / moral values, but rather, profit maximization, how can we account for these types of conflicts of interest? More broadly, with the sudden surge of interest in social entrepreneurship and socially minded business models, where can the line be drawn between mutually beneficial and inherently exploitative ventures?
The question is a difficult one to answer, and one that I grapple with constantly as I meet more and more people getting involved in socially-minded business ventures. I have no answers, unfortunately, but one thing is for certain. Regardless of the venture – PPP, non-profit, private, public, hybrid – the primary stakeholders’ needs must remain at the top of the agenda. This space may very well be shared with the needs and priorities of the other parties involved (and in fact, must be, in order for there to be a mutual exchange), but once the community’s needs become overshadowed, the partnership becomes, in my view, hollow.
So the question I pose to you is this – how can we ensure that this philosophy remains central in a rapidly evolving development arena?