I am impatient for change that business is used as an effective tool to create social values as well as economic values. Specifically, I want to help more social enterprise or social venture that brings positive impact to society through business emerge and operate sustainably, thereby enriching impact business.
Then, why is impact business so important?
This is because of the potential of business when it is used to create social impact. For a long time, responsibility of creating and distributing social values has been mainly imposed to government or non-profit organization that pursues public good. Equipped with good-wills, these organizations can focus on creating social impact and on solving problems with less attention on profits. However, there are limits since they are dependent on external supports. For instance, government executes welfare budgets based on tax of citizen, while non-profit organization heavily relies on funds raised by donors. Therefore, it is probable that sustainability of their services is vulnerable to external factors, such as decrease of nation tax and disposable income caused by economic downturn. On contrary, business mechanism is comparatively free from this matter since it has ability of creating values on its own and of increasing its impact through reinvestment. There are three main expected effects to be happened when business is engaged with change makers to create social impacts.
At first, business will enable self-sustaining model that creates social impact by reducing dependence on external supports. External supports caused by good motives of people are the biggest assets for public and social sectors, but also vulnerable points. Robust business model that creates social impact, however, will draw spontaneous engagement of peoples, providing basis of sustainable operation. For example, Goodwill Industries International (GII) for which I am working has been creating social impacts that help people with barrier to get a job, for more than 100 years, because of its ‘Donated Goods Retail’ business model.
Secondly, successful impact business model will help mission expand along with growth of business. In conventional social welfare model, governmental subsidies or public donations are absolutely necessary for the growth. However, impact business models have strength in scalability as they can reinvest their own resources generated through business. Again, GII is a good example of scalability. GII runs more than 3,000 retail stores with presence in 15 countries including United States and Canada.
Last but not at least, growth of impact business may change the perspective of public toward capitalism and market. Many people have criticized that corporates are selfish groups neglecting social values and producing social problems. If business is, however, used for creating social impact and solving problems, such skeptical view on corporates could be relieved.
In overall, impact business will enhance sustainability and scalability of social impacts, compared to the traditional social services performed by public or social sectors. Also, as alternative to capitalism, impact business remains important to heal the society groaning under greed of market. Impact business is not just a way of doing business, but a social agenda which benefits both society and market.