Muhammad Yunus and his Advocay on Social Business: Is Europe Ready?

By Stephany Dano
Last November 17th, for the closure ceremony of the
Global Microcredit Summit in Valladollid, Nobel ri!e
Muhammad "unus advanced his speech to arrive on time
for the ne#t day conference on Social $conomy and
Social Business held by the $uropean %omission&
' had the opportunity to attend different sessions on
Social Businesses (ith rofessor "unus, one of them
bein) more intimate and out of the official pro)ramme,
than*s to M+' %onnect&
,here is usually a hu)e confusion in people-s mind re)ardin) the term .Social Business. used for
describin) a ne( a)e of companies usin) Social Media or Social Net(or*s, or for the so/called
$nterprise 0&1& 2ere (e consider it as another perspective of Doin) Business, also called Social
Business&
3ccordin) to the $uropean %ommission, a Social Business .See*s to serve the community4s interest
5social, societal, environmental ob6ectives7 rather than profit ma#imisation& ,hey often employ
society4s most fra)ile members 5socially e#cluded persons7& ,hey thus contribute to social cohesion,
employment and the reduction of ine8ualities.&
'n "unus (ords, it is a . Business that solves problems rather than ma*e people money., and he
calls it Social, .because the profit/ma*in) business is about me& 't-s me/centered& Social business is
nothin) about me& 't-s all about others.&
,2$ 7 9'N%'L$S :+ S:%'3L B;S'N$SS
3lthou)h a Social Business loo*s li*e (hat the ;nited Nations defines as 'nclusive Business, this
type of enterprise is supposed to run on .No Loss, No Dividend. basis& <hat ma*es it inclusive, is
that it involves local enterprises and the local community&
'n order to )ive a )eneral frame(or* , "unus listed 7 principles to be fulfilled for an enterprise to be
called as Social Business=
17 ,he business ob6ective is to overcome poverty, or one or more problems (hich threaten people
and society> ,he ob6ective is not profit ma#imi!ation
07 +inancial and economic sustainability is necessary
?7 'nvestors )et bac* their investment amount only& No dividend is )iven beyond investment money
@7 <hen investment amount is paid bac*, company profit stays (ith the company for e#pansion and
improvement
A7 't has to be environmentally conscious
B7 <or*force )ets mar*et (a)e (ith better (or*in) conditions
77 &&&Do it (ith 6oy
G93M$$N/D3N:N$ S:%'3L B;S'N$SS 5SB7
"ou may have heard about the Grameen/Danone Coint/Venture, sellin) no( from D to 10 ,a*a
5E1,1D to E1,107 a D1 )rams enriched yo)urt (ith the aim of fi)htin) children-s malnutrition in
Ban)ladesh& 'n that case, it involves the local community, as the mil* comes from local production,
and the distribution in remote areas is made throu)h the so/called .Grameen or Dani/Ladies.&
3lthou)h this pro)ramme faced some difficulties to be (ell implemented in the rural areas, it does
not end here&
M& "unus mentionned a verbal a)reement (ith the recently elected Bra!ilian resident Dilma
9ousseff, to implement this lo(/cost, nutrients/enriched/yo)urt in the lunch pac* of all public
schools around the country, to prevent re)ular children-s bad nutrition& ,he same interest is comin)
from %hina, to use it in some remote areas li*e Sichuan&
:,2$9 3S$%,S :+ SB
3s "unus mentionned durin) the M+'/%onnect conference, a Social Business is .not only poverty
related.& %onsiderin) the societal ob6ective, Muhammad "unus e#plained the case of Capan, ran*ed
as F1 country for suicidesG& +u*uo*a as recently been named .Social %ity., as local sta*eholders
and a university (ill be involved in forsterin) Social Businesses, mainly for the survivors of the
March 0111 earth8ua*e&
3nother aspect of SB (ill be the environment= 'n 2aiti, one of "unus- main idea is to help the
creation of Social Businesses for tac*lin) the country-s deforestation, considered by some e#perts as
one of the (orst e#ample of ecolo)ical disaster (orld(ide&GG
L:NG 3,2 ,:<39DS SB-s D$M:%93,'H3,':N 'N $;9:$
%ulturally, if Social Businesses are mostly held and supported by the private sector in the ;nited
States, in $uropean countries they tend to )et it bac*ed by 'nstitutions&
,he $uropean %omission is strate)ically focusin) on developin) Social Businesses, and seems to
ta*e it into account seriously, as a viable solution for unemployment reduction and economic
)ro(th& +rom 0111, the Social Business 'nitiative belon)s to the 10 priority actions of the Sin)le
Mar*et 9eform, to)ether (ith the $uropean ro)ramme for Social %han)e and 'nnovation 5011@/
01017&
+or 0111, only a le)islative proposal on social investment funds has been made last (ednesday, 7
th

of December, and is pendin) for approval&
2o(ever, the $uropean %ommission, by definition, does not separate "unus- understandin) of
Social Businesses from the )eneral aspect of Social $nterprises= 't is really difficult to clarify and
define the sector& ,herefore, 0110 (ill be the year of SB-s visibility on the a)enda of the $uropean
%ommission, focused on measurin) the number of Social $nterprises, creatin) a platform and,
eventually, labels and certifications&
<e (ill have to (ait at least ? more years 5011@7 to start tal*in) about Social Businesses- financin),
(hich is the first barrier for SB-s development& 3part from developin) a le)al I institutional
environment to foster investment priority for Social $nterprises 5as part of the Structural +unds
re)ulatory pac*a)e 011@/01017, EJ1 million (ill be in6ected for Social Businesses to )et access to
private fundin)& Besides, the $uropean 'nvestment Ban* 5$'B7 has committed to )ive up to
EA1 million for the $uropean Social 'nvestment +acility 5$S'+7, provided at least EA1 million comes
from other private sources&
9'V3,$ 'N','3,'V$S ,: +:S,$9 SB
3lthou)h 3sho*a (as the first association in helpin) Social $ntrepreneurs, fe( initiatives are no(
emer)in)= 3 couple of (ee*s a)o Deloitte launched/ alon) (ith "unus/ the KDeloitte Social
'nnovation ionnersL, in order to boost up to A1 SBs to become investment/ready&
,here are )ro(in) opportunities for increasin) SB and Social 'nnovation-s *no(led)e in
;niversities, li*e the S*oll %entre for Social $ntrepreneurship and the SaMd Business School in the
;N or the "unus Social Business %entre ;niversity of +lorence in 'taly& Some SB-s ,hin* ,an*s
have also appeared, li*e the 2elsin*y Desi)n Lab or the former not/much/successful Social olis
$uropean latform pro6ect& But then still comes the financial issue&
,2$ +;ND'NG
+e( venture and philantropy funds e#ists in $urope, mi#in) )rants and capacity buildin) for Social
Businesses& ,he term KSocial Business 3n)elsL is emer)in), throu)h some initiatives li*e the %o/
+und in the ;N, or throu)h Social Business 3n)els Net(or*s 5SB3N7 li*e %learly So, also in the
;N& But seed fundin)s are still missin)&
Social 'nvestment +unds, or Socially 9esponsible 'nvestin) 5S9'7 funds, are )ro(in) fast= ,here
(ere almost J11 S9' funds in $urope in 0111, (ith a more than 0AO increase a year for the last ?
years& Le)islative initiatives in the ;N and +rance enabled both countries to o(n A1O of the
$uropean S9' mar*et, (hile others li*e Spain and 'taly has decreased their S9' assets& 2o(ever it
is still a niche mar*et, representin) less than 1&AO of the total assets available in the $uropean
mar*ets&
,here are more opportunities for SB-s venture capital= 3part from the S*oll 3(ards on Social
$ntrepreneurship that provides fundin) to very fe( applicants, Social Ban*s are increasin)& Ban*s
li*e ,riodos or %harity Ban* (ith almost e#ponential )ro(th are no( )athered throu)h different
consorsium li*e the +$B$3 5$uropean +ederation of $thical and 3lternative Ban*s7, the G3BV
5Global 3lliance for Ban*in) on Values7 or the 'N3'S$ 5'nternational 3ssociation of 'nvestors in
the Social $conomy7&
$;9:$3N SB-s 'NN:V3,':NS
+e( innovative initiatives spran) up recently, that (ould let thin* there is hope for SB to really
emer)e in $urope=
+rom rof& "unus- side, the city of <iesbaden/ Germany has been declared the first .Social
Business %ity.& 't includes a SB net(or*, the Grameen %reative Lab that promote SB (orld(ide, as
(ell as a Social Business Lab&
,he Social 'nnovation ar* in Spain, created by De*oinn, the Bas8ue %entre for Social and
%orporate 'nnovation, is aimed to become a KSocial Silicon ValleyL& 't (ill )ather more than A1
NG:s, social businesses and cooperatives to tac*le some re)ional social issues& ,he interestin) part
is that it ta*es all SB-s lifecycle into account= Startin) from the Social 'nnovation 3cademy or G/
Lab that search for social emer)in) trends, to the Social $nterprise Generator for SB-s *no(led)e
and to the 'ncubator of Social $nterprises and their KSocial 3n)els %lubL for seeds capital&
3nother (ay of doin) is the Naples 0&1 calls for proposals, (here the $uclid Net(or*, ;nicredit
+oundation and ro6ect 3head identified B issues in the city of Naples, 'taly, and or)ani!ed a Social
'nnovation %ompetition in 0111 for SB entrepreneurs to create solutions, alon) (ith local partners&
Naples is evolvin) into a national hub for social innovation, and the results of this event should be
measured by the end of 0110&
:n a broader picture, apart from the obvious use of SB for 6ob creation, there is a hu)e potential in
$urope for ublic rocurement, (hich represents around 17O of GD of the $uropean ;nion&
Social Demand (hich is not covered by the <elfare system, as (e *no(, is a )ood opportunity for
ne( enterprises, but also (hat already isGGG& ,he civil society is as*in) for more, althou)h there is
still a need for developin) its practitionners- s*ills and capacity& <e need a favorable environment,
and to react 8uic*ly if (e (ant Social 'nnovation in $urope to achieve its full potential&
G :fficially, ?0,111 people per year commit suicide in Capan 5mainly youn) people7, althou)h
unofficial sources says the real data can be ? times more&
GG 'n the mid 01-s, B1O of 2aitian- s landscape (ere held by the forests& No(days, they cover less
than 0O of the country&
GGG Some surveys, li*e the "ouGov poll of 0117 in ;N, found out that B1O of British (ould prefer
local services to be run by social enterprises instead of Government&
The author can be reached at stephany@sdanoor!