By Muhammad Yunus
- A World of Three Zeros; The New Economics of Zero Poverty, Zero Unemployment, and Zero Net Carbon Emissions (2017)
- Building Social Business; The New Kind of Capitalism That Serves Humanity's Most Pressing Needs (2010)
The Nobel Peace Prize winner and bestselling author shows in Building Social Business how entrepreneurial spirit and business smarts can be harnessed to create sustainable businesses that can solve the world’s biggest problems.
Muhammad Yunus, the practical visionary who pioneered microcredit and, with his Grameen Bank, won the 2006 Nobel Peace Prize, has developed a new dimension for capitalism which he calls “social business.” The social business model has been adopted by corporations, entrepreneurs, and social activists across the globe. Its goal is to create self-supporting, viable commercial enterprises that generate economic growth as they produce goods and services to fulfill human needs. In Building Social Business, Yunus shows how social business can be put into practice and explains why it holds the potential to redeem the failed promise of free-market enterprise.
Table of Contents of Building Social Business
- Introduction: Social Business - From Dream to Reality
- Why Social Business?
- Growing Pains
- Launching a Social Business
- To Cure One Child
- Legal and Financial Frameworks for Social Business
- Grameen Veolia Water
- Creating a Global Infrastructure for Social Business
- Glimpses of Tomorrow
- The End of Poverty
Rodney Schwarz on Stanford Social Innovation Review wrote:
"In Building Social Business: The New Kind of Capitalism That Serves Humanity’s Most Pressing Needs he calls for creation of an alternative economy of businesses devoted to helping the underprivileged. The way he envisions it, these companies would be run as efficiently as the for-profit variety. Unlike charities, they would make enough money to be self-sustaining. However, they would invest leftover money in expanding their humanitarian efforts rather than paying dividends to shareholders. People 'will be delighted to create businesses for selfless purposes,' Dr. Yunus predicts. 'The only thing we’ll have to do is to free them from the mind-set that puts profit-making at the heart of every business, an idea that we imposed on them through our flawed economic theory.' [...] In many ways, Building Social Business is best appreciated as a sequel to Dr. Yunus’s 2007 book, Creating a World Without Poverty: Social Business and the Future of Capitalism, in which he first presented his theory of a new economy. The difference is that the author now declares that social business is no longer a dream. Three years later, Grameen has created social business ventures with corporations including Intel, Adidas, BASF and Danone [...] The trouble is that many of Grameen’s partnerships are still in their infancy. And the two more mature projects that he showcases have yet to break even [...] It’s hard to fault Dr. Yunus’ intentions and his optimism. Those things have already taken him awfully far. But it’s a bit premature for him to assert that his social business movement is on the verge of reshaping the world economy. He has a lot more work to do first. Then again, he probably encountered a bit of skepticism when he first floated the idea for microcredit, too."
Paul Kaminsky on Alternatives Journal; Canada's Environmental Voice wrote:
"In his new book, Building Social Business, Yunus devotes many pages to narrowing down the existing definition of a social business—many people precede him in defining it, since the form first cropped up in the Victorian era—but he considers it a new form of economic organization that links a social, ethical, or environmental objective with a commercial or financial one. He also lays out a road map for how these new firms can grow and prosper. Indeed, I found much to admire here and in the man, whose work I have long respected. The book is a refreshingly easy read. Yunus might have started life as a professor, but he certainly doesn’t write like an academic. Instead he fills his book with practical examples, tactics, ideas, and insights [...] All that said, I was troubled by the book. One of Yunus’s core ideas—his definition of a social business—is simply too rigid and dogmatic; it may cause unintended harm to objectives Yunus holds dear. Too many organizations fall outside Yunus’s definition of a social business. [...] Yunus’s definition of social business does not withstand scrutiny, either. He includes large corporate partners who have created social business joint ventures with Grameen merely because they receive no direct financial return (not even 1 percent—a Yunus rule). But to suggest that they get no financial reward is misleading. [...] Huge multinational corporations can also forgo current income on certain investments, but struggling social enterprises may need to raise capital from investors who insist upon a fi nancial return. Why penalize these organizations merely because they lack Yunus’s exceptional access to large corporations? Furthermore, Yunus’s brand of social business allows profits to be earned, but only if totally owned by the poor. But he doesn’t say how poor these 'poor' must be, and isn’t clear about what happens if the social business succeeds and the owners become less poor. [..] My last objection to Yunus’s definition: His limitations will severely constrain activity and discourage innovation. By insisting only on nil-return-seeking capital, he greatly restricts the available capital sources. This handicaps those of us who seek to encourage more capital into the sector."
"The requirement that there be no material benefit to the business owner helps offset some of the added costs associated with ecological soundness and paying better than market wages. Still, one is left wondering how reasonable it is to expect an average person to engage in this sort of business venture, especially when there is a clear injunction on the owner making a profit. When Yunus presents examples of successful businesses, we start to get a more accurate picture of how they can meet these stringent criteria. Almost all of the examples provided in the book are about partnerships with massive multinational corporations, such as Groupe Danone and Veolia Water. [...] I have to ask myself for whom this book is intended. That the captains of industry are re-invigorated by a social business is wonderful, but what practical application does it have for the common person who wants to make a difference? The message seems to be: start a traditional business and build yourself a multinational presence. Then, if you want to do some good, give us a call."
About Muhammad Yunus
Muhammad Yunus established the Grameen Bank in Bangladesh in 1983, fueled by the belief that credit is a fundamental human right. From Dr. Yunus’ personal loan of small amounts of money to destitute basketweavers in Bangladesh in the mid-70s, the Grameen Bank has advanced to the forefront of a burgeoning world movement toward eradicating poverty through microlending. Replicas of the Grameen Bank model operate in more than 100 countries worldwide. Born in 1940 in the seaport city of Chittagong, Professor Yunus studied at Dhaka University in Bangladesh, then received a Fulbright scholarship to study economics at Vanderbilt University. He received his Ph.D. in economics from Vanderbilt in 1969 and the following year became an assistant professor of economics at Middle Tennessee State University. Returning to Bangladesh, Yunus headed the economics department at Chittagong University. From 1993 to 1995, Professor Yunus was a member of the International Advisory Group for the Fourth World Conference on Women, a post to which he was appointed by the UN secretary general. He has served on the Global Commission of Women’s Health, the Advisory Council for Sustainable Economic Development and the UN Expert Group on Women and Finance.