Marjorie Kelly on the Emergent Ownership Revolution

Do you need something more tangible to use when talking about social business?

Is the 'social purpose' argument a bit thin for you?

According to Marjorie Kelly in Towards Mission-Controlled Corporations: Extractive vs Generative Design there are 5 elements of a generative ownership-driven design framework for social businesses:

1. Membership – How can we have the right people forming part of the business? How can they contribute to the running of the business? What roles and authority can they have?
2. Purpose – What purpose can a business have beyond profit-making for shareholders? What problems might it solve? How is 'wealth', and value spread within the local community?
3. Governance – Who is the board? Who does the board answer to? 
4. Finance – Where does the money come from? Where does it go? How does it circulate through the business? How does it generate wealth and value?
5. Networks – How does the business get access to goods, services, information? How might the exchange be carried out? How might it be non-financial? How might it reach beyond typical boundaries e.g. geography?

What types of careers are there in international development?

Skills (What you can do!)

• All skills needed!!

Functions (What role you would play!)

You may have 1 or more of these skills!

• Fundraising - storytelling, strategy, communications, budgeting, networking, relationship building, research, project management
• Policy - research, communications, legal, institutional development, relationship building, politics
• Institutional development - research, governance, relationship building, politics
• Economic development - economic modelling, industrial development, market systems strategy, welfare 
• Social welfare - advocacy, social welfare subsidies, charity work, 
• Private sector development - business innovation, enterprise development, enabling environment, entrepreneurship, taxation and legal
• Marketing and retail - commerce, business management, sociology, psychology, policy and/or network development
• Operations - logistics, network management, project management, finance, and/or results measurement 
• HRM - sociology, psychology, training and development, and/or team building
• Finance - finance, strategy, M&E, project management, and/or legal
• Results measurement - finance, strategy, project management, and/or research

New Trends (Where you might position yourself!)

• Market-based development
• Socialist market systems
• Social welfare
• Ethical business
• Fintech
• Behaviourial sciences
• Systems change
• Resilience
• Conflict 
• Livestock
• Healthcare
• Climate and the natural environment
• Informal sector
• NGO organisational development
• Foundation funding

Things to Remember!

• Be different - If you have good ideas that seem too out-of-the-box for traditional work, this could be the right time to build a skills around it and offer that skill to the development space
• Look deeper than large institutions - If you want to learn on the job, develop tangible skills and be part of an impactful project, start at the field and work upwards
• Competences are important - teamwork, patience, time management, critical thinking, adaptability, focus and determination

New to international development - Where to look for job opportunities?

Books

• Amartya Sen 'Development As Freedom'
• Dambisa Moyo 'Dead Aid'

Research/Think Tanks

• Overseas Development Institute
• International Institute for Environment and Development

Opportunities are for more seasoned development professionals with 5 years or so experience

CSR Networks

• Ethical Trading Initiative
• Ethical Performance
• Triple Pundit

Opportunities are emerging - from communications to technical assistance on projects

Social Business

• Stanford Social Innovation Review
• Business Fights Poverty
• Inclusive Business Practitioner Hub

Opportunities are emerging - technical assistance, field work

Corporate Foundations

• Rockefeller Foundation
• Gates Foundation
• ASPEN Institute

International Charities

• International Red Cross
• World Vision
• Save the Children
• Oxfam

Opportunities are communications, fundraising, project management, team coaching; may provide training to get you field-ready (smaller NGOs might be willing and able to send you directly to the field)

Development Consultancies

• DAI
• Adam Smith International
• Cardno Emerging Markets
• GIZ
• ITAD
• The Springfield Centre

Opportunities are in research, policy, monitoring and evaluation, project management; long term roles will get you field-ready on formal secondments or assignments, however, generally the roles are West-based

Practitioner Networks

• BOND
• Beam Exchange

Opportunities are for seasoned professionals with 5-8 years experience under their belt

Why might some poverty reduction project incorporate behaviour change theories?

Nudges
(behaviour change tactics)

• Commitment device. A commitment device is a choice that an individual makes in the present which restricts his own set of choices in the future, often as a means of controlling future impulsive behavior and limiting choices to those that reflect long-term goals.
• Temptation bundling 
• Loss aversion. More pain with loss than the pleasure for what we gain. The customers that cancel with you are more worried about what they will lose than what they could gain by switching and going elsewhere

System actors
(for market actors integrating nudges)
Market actors who may be interested in behaviour change nudges are diverse. We see commercial enterprises looking to develop a customer base within a low-income population at the bottom-of-the-pyramid; we see Governments wanting to affect the behaviour of citizens such as through giving up smoking, reducing speeds on the roads and paying taxes on time; and we see opinion leaders/institutions/social networks wanting to influence and change socio-cultural dynamics - think of #blacklivesmatter.

System change
(why?)
We think that some behaviour change nudging is needed when the context is new for people, such as a unprecedented growth in the market economy, or recent modernisation, or evolving non-traditional systems, or new sectors and economic activity that require new practice and behaviours.

Facilitation using behaviour change
(for development practitioners)

• Avoid prescribing behaviour. Instead, help system actors find the behaviour they want to adopt; let it be self-deterministic and self-motivated. This makes it easier to find the right nudge - through the process, system actors will indicate the right nudge for them and what it will take to adhere to the effects of the nudge. 
• Be intuitive and look for deeper narratives. System actors will tell you what they want but this will not be overt, out-loud and obvious. This will be through their attitudes, behaviours, mindset, actions, and perceptions. You will need to read all of these cues to understand the full script of what the actor is (not) saying to you.
• Look into the socio-economic benefits for sharing the costs of desgining and implementing nudges and the socio-economic benefits for the value created. This should be the basis for programming the nudge into the market system
• Celebrate the effort not just the intellect. Telling people that they are smart and intelligent can create situations where the individual relies on their intelligence to get them through complex situations. Often what is needed more is a combination of patience, commitment, sacrifice, and possibly super-normal hard work (= effort)

To strengthen an economic system means agents in system must explore, test boundaries. Not the consultants nor the policy makers. The entrepreneurs. - Shawn Cunningham

What does a market system specialist like me do?

Economic Development

• Develop retail networks in developing countries to get products and services in the hands of low-income marginalised consumers
• Help aid programmes do more systemic social welfare through systemic safety net programmes
• Improve the enabling environment for MSMEs and the informal sector  

Social Business and CSR

• Look at supply chain interventions that go beyond the value chain approach and take more of a systemic perspective that actually deliver benefits to poor farmers 
• Identify different areas where CSR can be better programmed by way of a market systems approach
• Integrate the private sector into market systems approaches that have historically focused on socialist mechanisms (large State, community associations, NGOs)
• Work with system actors to identify areas where market systems development will make a difference

Behaviour Change

• Train practitioners on behaviour change and behaviour change methodologies to help projects deliver systemic solutions 
• Design behaviour change tools to improve the adoption and commitment of poor people to long terms savings and investments practices

The systems for welfare and safety net programmes

How are welfare and social safety net systems set up?

Broadly speaking and quite simply, welfare and benefits help people through poverty as well as respond and be resilient to unexpected external shocks, such as macroeconomic downturn and job loss, sickness and injury, and other disabilities. Welfare also helps people grow their financial and asset base and are used to supplement incomes that are considered below living wage. Welfare can also help pay for supplementary services to people overcome poverty, respond to shocks and/or grow their asset base, such as childcare or energy subsidies.

Conversely, tax systems are used to generate income in order to redistribute to welfare recipients. Tax can be applied to incomes (and conversely tax can be reduced on low incomes and personal allowance thresholds). Tax can be applied to goods and services deemed harmful to other people and the environment such as cigarettes. Tax incentives (or tax-free activities) can be applied to goods and services deemed beneficial to other people and the environment such as solar panels for household roofs.

Welfare budget - The welfare budget is formed through amount raised in taxes and more precisely, the proportion of tax income allocated to the welfare system. Who decides this proportion? How does this money get allocated? Does the amount reflect the needs of the benefit claimants within the system? According to Open Democracy: "Benefit levels in Britain reflect political decisions on the amount governments in Britain have been prepared to spend, not the total of claimants’ needs."

Welfare eligibility criteria - There are several different categories of eligibility criteria to be able to clam welfare, such as time in work, dependents, length of residency. There are also different categories of benefit types from job seeker support, to housing to sickness to occupational injury. The specific criteria will differ in different countries. Above all, claiming benefits is not an easy task for local claimants or those from elsewhere classified as migrants or immigrants. And certain welfare opportunities are not included in the benefits system because they are public goods (from clean air to access to a universal healthcare system that treats personal injury and illness especially those that are communicable, contigious and treatable) (BBC News)

Multi-territorial welfare system - Across integrated trade and economic zones (where integration includes policies and regulations as well as social networks, culture and learning), such as the European Union (EU), it was found that migrants from wealthier countries (like the UK) have the power to claim benefits from across the water, in other equally wealthy or even less wealthy countries. At times, the number of Britons claiming welfare in the EU can be larger than 'EU migrants to the UK claiming welfare in the UK' (IB Times and the Guardian)

Changes to the welfare system - Changes to the amount in the welfare system (taxation) and who gets them (welfare recipients) are brought about by those operating within the system itself. The Government may seem to have decision-making power but what analysis do they do to make decisions and who does the research? In some cases, the EU can put pressure on member states to make welfare system changes (Social Europe)

Factors that affect the ability of a welfare system to work

• A restriction in money inflows are more of a burden than the increase in the number of welfare recipients
• 
  

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https://www.opendemocracy.net/can-europe-make-it/charlotte-rachael-proudman/welfare-benefits-are-calculated-by-political-objective
http://www.bbc.co.uk/news/world-europe-25134521
http://www.ibtimes.co.uk/britons-claiming-benefits-across-eu-outnumber-immigrants-getting-welfare-uk-1484091
http://www.socialeurope.eu/2015/02/welfare-union/

What is the TTIP and what effect will it have on developing countries?

The TTIP is the Transatlantic Trade and Investment Partnership between the USA and the EU. The gains for the US and EU businesses, particularly large corporations in the USA and emerging SMEs in central Europe are huge.

"Between the two of them, the United States and the EU stand for 40 percent of global economic production; their bilateral economic links are the most expansive in the world. The liberalization of these ties would boost global competitiveness and market confidence in a time of economic crisis, and according to some predictions, could create more than two million new jobs. This naturally lends it significant support from many Central European governments." (Center for European Policy Analysis)

There may even be benefits for the UK as a member of the EU. An open editorial by UK policy advisors for the Guardian makes the following points:

TTIP is about doing away with those barriers on both sides. We believe that the agreement of a transatlantic trade deal would benefit the European economy in the long run by up to £100bn – £10bn a year to the UK alone – an adrenalin boost for jobs and growth in our countries when we need it the most. Crucially, the businesses that have most to gain are not large corporations but small and middle-sized enterprises. They don’t have the big firms’ economies of scale or the in-house lawyers to overcome trade barriers.

The criticisms of the TTIP focus around the fact that firstly, it will exacerbate trade imbalances by putting in preferential trade mechanisms (going over and above simply alleviating trade barriers) between the USA and the EU and secondly, result in huge social cost at local level as well as for the Global South.

The UK Parliament , a briefing paper describes the TTIP as follows:

Average tariffs on trade between the EU and US are relatively low. Much of the negotiation therefore centres around non-tariff barriers to trade, such as harmonising product regulation and standards and on measures to protect the rights of investors. 

and frames the benefits as follows:

The economic benefits of TTIP are contested. A study for the Department of Business, Innovation and Skills estimated that the gains to the UK would be £4 billion to £10 billion annually (0.14% to 0.35% of GDP) by 2027. Critics of TTIP argue that these estimates overstate the gains, and that alignment of regulatory standards in areas such as consumer safety, environmental protection and public health could have social costs

 and frame the most contested issues as follows:

Probably the most controversial element of TTIP is Investor State Dispute Settlement (ISDS). These provisions allow investors to bring proceedings against foreign governments that are party to the treaty. These cases are heard in tribunals outside the domestic legal system. The concern is that the ISDS provisions might affect governments’ ability to determine public policy if they are concerned they might be sued by corporations.

In the UK, the main area of concern has been the NHS – in particular, whether any future measures to reduce the private sector’s involvement might be challenged under these provisions. The UK Government and the European Commission have sought to allay these concerns but critics remain to be convinced. Besides ISDS, there are a number of other areas of concern with TTIP including food standards, public procurement, intellectual property, transport and financial services.

 Here is what the War on Want, a civil rights and advocacy organisation, thinks about the TTIP (War on Want)

"...the main goal of TTIP is to remove regulatory ‘barriers’ which restrict the potential profits to be made by transnational corporations on both sides of the Atlantic

Here is what the head of  UNISON, one of the UK's largest trade unions, thinks about the TTIP (Bond)

"TTIP may be a US – EU trade deal, but its impact will be felt all over the world. Multinational corporations will profit, but millions will lose out. People in Britain are angry about the impact TTIP will have on their lives. Unless we also get them angry about the impact of TTIP on the Global South, we will have missed an opportunity, and millions will be a great deal poorer as a result."

 On the impact of the TTIP on the 'Global South', here is what policy advisors suggest might be the impact (Green European Journal):

"[the Global South] is not a homogeneous bloc, but consists, rather, of a range of extremely diverse states which will certainly be negatively affected by any potential US-EU trade agreement. Such effects will result primarily from the diversion of trade flows, but also from, for example, the bilateral setting of global standards. Countries for whom, say, the US represents a main trading partner will be forced to enter into competition with the EU when the T-TIP comes into force.

and cites the following possible impacts on specific trade zones:

It is Mexico’s economy that will suffer most from the T-TIP, as it maintains very close trade relations with both the EU and the US. (...) With the T-TIP the Mexican garment industry, for example, could face increased competition from Europe. (...) the garment industries of both the EU and Mexico are already in competition for access to the US market and, if T-TIP favours European products by lowering tariffs, this would negatively affect Mexico’s garment industry. Another example is the trade in citrus fruits. In the EU, they are mainly imported from South Africa, Egypt and Morocco. So far, the US’s biggest export markets are Canada, Japan and the Netherlands. A trade deal could see US citrus fruit exports to the EU rise, forcing South Africa, Egypt and Morocco to look for new markets.

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http://www.cepa.org/content/ttip-setting-global-standards
http://www.theguardian.com/commentisfree/2015/feb/16/ttip-transatlantic-trade-deal-businesses
http://researchbriefings.parliament.uk/ResearchBriefing/Summary/SN06688
http://www.waronwant.org/our-work
http://www.bond.org.uk/blog/119/whos-really-profiting?utm_source=Bond&utm_campaign=995c1d212a-Your_Network_June_2015_W4&utm_medium=email&utm_term=0_9e0673822f-995c1d212a-247690901
http://www.greeneuropeanjournal.eu/the-eu-us-free-trade-agreement-bad-prospects-for-the-global-south/

The dangers of of the 'cash transfer magic bullet'

Cash transfers, conditional or not, are a particularly dangerous movement in development. 

The research from Harvard, MIT, NPR on cash transfers has been often cited in the media. But, it is clear that the the cash transfer mechanism is a very limited and is a short-term stimulus that does not address systemic failures that keep people poor. Could this be another magic bullet that make donors feel good about giving money? Won't money just flood the systems but play no role in building systems? How is this sustainable or scaleable beyond any donor handout?

It is the system that causes poverty, and not, as is assumed under the cash transfer paradigm, people and people's willingness and ability to pay. To take this one step further it is the weak poorly-functioning system for goods, services, information, knowledge that causes poverty. if for example, there are medicines available for poor people to buy, the systemic problem is actually that medicines are not well-distributed and clearly branded with a system for verification so that counterfeits cannot creep in. If there are agents/traders/salespeople/distributors working for the big pharmas, the question is always: what are they incentivised to do? Is it to push products for commission? If so, what will the effect be on the quality of information that goes out to people on what they should buy? Who can poor people go to make sure their ability to spend isn’t subsumed by their inability to get a good quality product?

In weak systems, there are systemic constraints that trap poor people in a cycle of no/bad/sub-optimal investment. They also have no 'voice' to complain, protest, influence, push up quality. Poor people are ‘voiceless’. Cash transfers simple result in money in the pocket but no voice or influence.

Has Africa outgrown aid? #bbcafricadebate

A fascinating debate! I collected many of the comments made on Twitter and reflected on my own experiences and insights. I then looked for any common messages and themes of the debate.

Addressing the dangers of aid

• Aid needs to change; but saying that Africa has outgrown aid suggests that Africa is a child that needs raising
• Aid can be a political tool of foreign donors forcing governments and people into agreements that are 'unfair' and 'unjust'
• Aid needs the support of better systems to monitor how it is being spent BUT aid can be limited in effectiveness when most time is spent time reporting and appeasing donors 
• Aid is lumped in with transparency to appease donors, but not other valuable system actors, such as the citizens
• Aid must be flexible to the changing nature of dynamic systems and economies

Making immediate changes to aid

• Aid must be better communicated to African citizens so that they are not "voiceless citizens"
• Aid must start to recognise the different roles for aid in the different economic and market systems in Africa 
• such as, from Rwanda and Ethiopia, to Kenya and South Africa, to Ghana and Nigeria, to Sierra Leone and Senegal, to Tunisia and Eqypt to Chad and Niger
• Aid must not be delivered at the mercy/desire/will of donors with demanding reporting standards; not every last penny spent can be tracked and it is more important to see broader outputs and outcomes than a tick-box of donor-driven activities

Developing a future role for aid

• Aid must be re-conceptualised towards trade, economic development, market systems and business for poverty reduction and systemic resilience
• in the social sector, this might mean applying systems thinking to public goods for better access by all 
• Aid has a role to play in security and anti-terrorism as well as in institutions building and strengthening
• Aid might eventually play a long term role in the economy as remittances and FDI - aid has been sent by African diaspora for decades and diaspora are looking for new ways to send money home and invest in local businesses
• Aid needs to be re-designed to prevent being a tool for corruption; aid needs better practice-driven local leadership, stewardship and management 

Article - Market-based economic systems - the basics!

Economic systems

Market-based economic systems have many advantages in comparison with command-based ones. These include:

Consumer sovereignty

Resources are allocated towards the satisfaction of the consumer, who is 'king' (sovereign) - firms can only survive if they consistently satisfy consumer demand. The more they satisfy the consumer, the greater their profits.

Choice

Firms may compete with each by offering different products, providing consumers with a wide choice.

Price and non-price competition

Competition keeps prices down and drives up the quality of goods and services.

Automatic adjustment

The price mechanism works automatically, as prices convey information about relative scarcity without the need for a government.

Rationing

Prices fulfill a vital role in terms of rationing scarce resources - the greater the scarcity, the higher the price, and the more it is conserved.

Utility and profit

The price mechanism allocates resources towards products that provide the highest utility and the greatest profit, hence benefiting consumers and producers.

Efficiency

All participants have incentives to be at their most efficient. The production of goods is efficient because firms need to keep costs as low as possible.

There is a considerable incentive for the owners of factors of production to be as efficient as they can be so that they can command the highest incomes.

Innovation

Firms usually need to innovate to retain consumer loyalty and win new customers from rivals.

The disadvantages of market-based systems

However, market systems have disadvantages, including:

Under-valuing non-traded services

Some goods and services cannot easily be traded in markets, such as healthcare, education, and defence. With these goods, the value attached by market forces is unlikely to be the 'real' value of the service.

Missing markets

There is the problem of missing markets, which arises when consumers have a need or a want but where no firms are able to enter the market to supply, and markets do not form, as in the case of public goods.

Incomplete markets

There is also the problem of incomplete markets, which arises when firms only supply a part of the whole market demand, such as the case of merit goods.

Externalities

Some goods and services generate costs and benefits that are not taken account by consumers and producers. These costs and benefits are called externalities.

Lack of purchasing power

Some consumers have no purchasing power, such as the disabled, because they are not able to work in the labour market. Without work, they cannot derive an income, and are unable to purchase goods and services.

The case for mixed economies

Mixed economies combine aspects of market systems and central planning. It is accepted that mixed economies provide a more optimal allocation of scarce resources because:

1. Markets can be used to allocate resources to producing goods and services in which they excel, such as private consumer goods like cars, computers and holidays.
2. Planning can be used to allocate resources to those goods and services that markets fail to produce sufficiently, such as education and policing – and solve the problem of missing and incomplete markets.
3. Governments can regulate markets to ensure that they work effectively in the interests of consumers.
4. Governments can allocate resources towards the unemployed, and provide a basic purchasing power, via a benefits system, to the disabled and others who cannot sell their labour.