I'm at SoCap09. It's an event populated by people who are innovative, intellectual, bonded with other people and society, and -- to some degree -- idealistic. There are a lot of people here that are thought leaders and entrepreneurs.
So I suppose it's only natural to have many different visions being expressed. That's how entrepreneurs, policymakers, public speakers and corporate leaders communicate a cohesive plan, after all.
But there's a hazard that's easy for even The Economist to succumb to, which is talking about the space in "today's" terms: financial markets vs. social good. Either/or. Oil/water. One sector or another.
In the opening plenary, there seemed to be concern by some for-profit entrepreneurs in the audience that they were being overshadowed by non-profit ventures. While there have been many discussions and the closing plenary today based on a lot of deep thinking and objective research on how philanthropy and capitalism merge, I want to push into a level that's deeper, still. The points are straightforward:
(1) Creating something of value is an independent action, and doesn't have anything to do with what you exchange it for, or whether or not it's exhanged at all. In other words, if the tree falls in the forest and no one hears it, yes, there's still a sound.
(2) We need to ask: In our daily activities, what is it that we're creating that has value? Some people call those things "intangible assets," namely knowledge, relationships, processes, mental and physical health, etc. These are the "bricks" which allow us to build.
(3) The only difference between the financial sector and the "social" sector is what the end use those assets is, what we build with the bricks.
If all we measure in the financial sector is financial return, then the financial sector is almost invariably going to be a net brick user, which means the Return On Bricks is negative. (A typical exception to this happens when a lot of learning takes place through R&D, or a company creates a disruptive innovation that is socially beneficial). In contrast, the "social sector" strives to maximize its Return on Bricks, and doesn't spend a lot of time focused on the return on financial capital.
But in either case, everyone needs more bricks! So this dichotomy between the financial and the social sector is a veneer.
The longer we focus the conversation on what is the right mix of financial vs. social effort and try to fine-tune the return and outcomes, the longer we miss the truly gigantic wins that will come when we begin to measure and optimize Return On Bricks, regardless of what we're building. If we are to be a sustainable world -- and we can't exist indefinitely without at least understanding what we are doing "on speculation" -- we must focus our economic work on replenishing our bricks.
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