Social Business Forum 2011 with Prof. Muhammad Yunus

On July 23, as the closing of my short trip back to Beppu, I attended this event of Social Business Forum in Fukuoka where Prof. Yunus and other Japanese public figures from different areas gathered to discuss on how this breakthrough concept of Social Business will help to create a sustainable recovery for the recent affected area of Tohoku. The forum was in fact I took it as another eye-opening experience. Prof. Yunus has been working hard in promoting his idea of Social Business in which he believes to become a permanent solution to solve social problems. However, depending on the nations, the reception of this idea itself is quite a challenge. Thus, let me share some of the things I found it interesting to learn.

“Social Business is all about selflessness…”

When it comes into what it known as “Social Business”, not every single person might have a clear idea of what it is. Prof. Yunus as its initator explained in the beginning of his speech. He started by making a statement of “Social business is all about selflessness” thus indeed it has distinct natures with the common concept of profit-making business. The business itself should be created with the aim to solve social problems in the first place. Since it is a business, it must make profits yet the profit should never get out of the business, meaning it will stay in the business for expansion so the poor would be the one who is benefited. In other words, there will be no dividends distributed to the shareholders of a social business company. However, he emphasizes some core values in which a social business should operates at no loss and be sustainable.

Prof. Yunus underlines the importance of having this concept of business for the poor. Operating a business with an intention for self-fulfilling and at the same time aiming to help the poor will never be going along in the same way. He stated that when people start to run business with an orientation of maximizing profit, they will turn into a money making machine. And human being is not a machine to produce money, people do not only live for a money.

“No dividends business is POSSIBLE”

However, this concept of having no dividends for the investors causing some doubts on the possibility in putting it into realization. It was interesting to see the intense debate between Prof. Yunus and representatives from Japanese government, media, NPO and so forth. It was pretty clear that they have doubts that whether Social Business will be well received by Japanese companies or society in general. Most of them stated, “we couldn’t understand how this business without dividends will be attractive. Dividends are essential as a reward to both shareholders and the employees”.  In short, they questioned why should company or a party put their money into something that will not give any returns?

And it was astonishing to have a look on how confidence Prof. Yunus in convincing his panel mates. “Yes, Business without dividends is POSSIBLE”.  He started the explanation by mentioning some real examples of some social business companies that have been created as a join venture between Grameen and private companies. To mention some are the success of Grameen Danone with its yogurt for malnourished children in Bangladesh, Grameen Veolia with its clean drinkable water for the rural people and so forth which he emphasized all are running with the principle “no dividends”. He underlined that it is not the concept that make it impossible but it is the artificial structures or environments that make it so. Common business scheme makes the practice of delivering dividends as an obligatory part of the structure. Thus, it is the challenge of social business, to make it happens we should break the artificial environments that have been around for long.

In addition, he stated that for a company to start social business is actually meaning to have another option other than creating CSR or foundation. In establishing CSR or foundation, company is expected to invest the money with no return, thus there is no difference with starting a social business. Then, why would company should be reluctant in initiating one? Concerning dividends for shareholders, he again underlined that it is the system that creates the image wrong. He stated that when a survey indicating an invitation to the shareholders to invest in this project of social business by Grameen Danone, more than 90% of them gave positive response!

Prof. Yunus messages to young generation…

“Young people should be the one who lead this new era of Social Business”, he stated. It is because young people have this selflessness goal of life. I do agree with what Prof. Yunus mentioned that young people have this goal to not only take care of themselves in the future but also to take care of the planet. And, as it is pretty clear technology, internet in particular is driving the spread of Social Business then it is obvious young generation will pull the lead as they are the one who has this speed in adjusting with the technology development and take the chance to make a change for the betterment of the world.

Fukuoka is the hub of Social Business

Following the forum, a joint declaration between Prof. Yunus and the Mayor of Fukuoka city, Mr. Soichiro Takashima to set Fukuoka as the hub of social business was formed. It is amazing to know also there is this Grameen Creative Lab and Grameen House established in the Kyushu University through which diverse projects and research on social business are currently undertaking. Moreover, it is also great to know that the first Research Center for Social Business is just established here in Japan. Way to go Prof.!!