by Lars Josephsen

Some Reflections after a conference with Dr. Muhammad Yunus, founder of the Grameen Bank

A conference on “Social Enterprises and the Future of Capitalism” was held in Copenhagen the 4. December 2008. - The concept of ‘social innovation’ was introduced by professor Lars Hulgård, Roskilde University, CEO Erik Rasmus-sen, the Danish think tank Monday Morning (Mandag Morgen) and director Thomas Bustrup, Confederation of Danish Industries (DI). - The panel addres-sed issues as *Why is social innovation and Muhammad Yunus’ work rele-vant in a Danish context – for Danish enterprises, authorities, and organiza-tions? and *Can social innovation contribute to the creation of tomorrow’s Danish welfare society?

The main speaker at the conference was Dr. Muhammad Yunus, awarded with the Nobel Peace Prize 2006, who gave a presentation on “Social Enterprises and the Future of Capitalism”.

The conference concluded with a panel debate on Social innovation – and global risks & opportunities. Apart from Dr. Yunus, the panel included the Danish minister for development cooperation, Mrs. Ulla Tørnæs, and repre-sentatives from various Danish associations. The panelists reflected on different aspects of the strengths and weaknesses of social enterprises. - The debate focused on questions like *What difference can social enterprises make in the current global crises? *What can traditional companies, government organizations and NGOs learn from the ideas of Dr. Yunus? *Can we create sustainable growth and development through social innovation?

In his presentation Dr. Yunus outlined his personnal path from mainstream economic thinking towards a position with a strong focus on the need for creating accessibility of loans for poor people - often in rural areas - with entrepreneurial skills, without requiring collateral. He further explained social enterprises as private, non-profit organizations, that are providing goods and services with an explicit aim to benefit the community. He characterized social enterprises as a significant supplement to humanitarian aid and common enterprises. - Dr. Yunus stated that social business constitute a new model for power reduction and employment generation, and he underlined the central role social entreprises have to play in the future, to not the least in developing countries.

The account on these themes was attended by illustrative cases from Dr. Yunus’ extensive practical experience. One general and decisive argument behind his alternative economic approach was the surprisingly large creative potential and ingenuity released in those individuals and enterprises, that are aiming at solving social problems in low-income markets (i.e. at the ‘bottom of the pyramid’).

As a result of the conference, many of the participants were left with a strong impression, that social enterprises certainly might play a role, also in relation to the transformation that takes place in these years in many industrialized countries, organized as welfare states, - subject as they are to the challenges of steadily restricted budgets, and simultaneously to a pressure for transference of public services delivery from non-profit public organizations to private for-profit suppliers.

Now, the reader might ask: What has social innovation to do with civil society and new forms of governance, and why might social enterprises be of interest to partners in the CINEFOGO Network?

One part of an answer is that social innovation and social enterprises very often emerge from civil society organizations (CSOs), - using this term in the prevailing interpretation as autonomous organizations, other than the public owned and the for-profit ones (i.e. the ‘third sector’). - Thus the increasing occurrence of social enterprises in many countries in Europe as well as in other parts of the world, is a serious sign of the blurring border line between civil society and market organisations, and that innovative social development and social enterprises therefore deserves a greater attention from researchers in civil society and new forms of governance than hitherto.

Social Enterprises

Social enterprises may be defined as private, autonomous, entrepreneurial organizations, providing goods and services with an explicit aim to benefit the community. They are owned or managed by a group of citizens, and the material interest of capital investors is subject to limits. Social enterprises place a high value on their autonomy and on economic risk-taking related to ongoing socio-economic activity. Social enterprises are either prohibited legally from distributing profits, or are structured in order to exclude profit as the main goal.