The Converging Worlds: Social and Business

The business (corporate sector) and the social worlds are converging. We could call this a megatrend and it continues to gain momentum. One has seen this through microfinance where an effective development tool initially created in the social/NGO/NPO world have given birth to numerous microfinance institutions that have become sustainable and profitable. Microfinance now attracts funding/investment from both capital markets (commercial banks, asset managers, private investors) and foundations. Social entrepreneurs are also another major force behind this and no doubt that Microfranchising also links these two worlds.
One can also see it through the new partnerships between players of these two worlds especially as the multinational corporations and their executives team up with social activists and NGOs to market products to the 4 billion people at the base of the pyramid (BOP). C.K. Prahald, one of the leading advocates of BOP opportunities, has recently co-authored with Jeb Brugmann, a very interesting article in the February Harvard Business Review titled Cocreating Business’s New Social Compact. It is an excellent read (even if you have to pay for the copy to download) for those who are interested in these new partnerships. Many examples are cited including British Petroleum, Healthstore Foundation, and ICICI.

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