Since starting my master’s at Aalto I have had so many lectures about the problems our planet is facing – whether social, environmental or economic – and the suggested solution offered is often blurry: make a business case out of the problem and create an enterprise around it. The challenge is then only to innovate such a business model, test it, develop it and start marketing it. Piece of cake, right?
If it would be easy to create business models which are at the same time generating profit but also socially and economically responsible the world would be full of those social enterprises. Unfortunately there are many barriers in the society that make it difficult to start such a company but also the many general risks involved with being an entrepreneur are a constraint.
Still, I believe that starting a social enterprise or another type of company with a sustainable business model is relatively realistic. For instance, acting in the Base of the Pyramid market requires new ways of thinking about the business model. I would call any company operating in those environments – whether it has the label of being a social enterprise or not – a sustainable company because of the social norm to reduce poverty, in environmental terms it has to use resources efficiently and from the economic point of view it still has to remain existing in order to help the local people also in the longer term. The difference with traditional companies is mainly in its processes, and thus the way in which the concept of a business model is applied. They have to be different than the traditional ones in order to deliver relevant and affordable products to a large customer base with low incomes – and through that change the world.