The degree of disaster caused by the coronavirus pandemic worldwide is shocking. Despite this, and despite enormous damage, we are facing an unprecedented opportunity.
At this moment the whole world must find an answer to a big question. It is not about how to restart the economy because, fortunately, we already know how to do it. Past experiences have taught us ways to revive the economy. No, the big question we need to answer is another: Do we bring the world back to the situation it was in before the coronavirus or do we redesign it? The decision is up to us alone.
Needless to say, before the coronavirus, the world was not doing well. Until all the headlines were devoted entirely to the coronavirus, everywhere people shouted loudly announcing the terrible calamities that were about to happen. We literally counted the days until the entire planet would become uninhabitable due to the climate catastrophe. We talked about how serious the threat of mass unemployment caused by artificial intelligence was, and how the concentration of wealth in the hands of a few was reaching an explosive level. We constantly reminded each other that this decade might be our last. Ultimately, all our efforts will lead to only partial results, not enough to save our planet.
Should we go back to that world? We have the choice.
Suddenly, the coronavirus radically changed the context of everything. It has opened up endless possibilities that have never been considered before. Suddenly, here we are: with a blank canvas, we can go in any direction we want. What an incredible freedom of choice!
Before we can get it going again, we need to decide what kind of economy we want. First and foremost, economy is a tool that can help us pursue the goals that we set ourselves. It must not make us feel tormented and helpless. It should not act as a lethal trap set by some divine power to inflict a penalty on us. We must never forget, even for a moment, that the economy is an instrument created by us humans. We must therefore continue to design and reconfigure it until it makes everyone happy. It is a tool developed to achieve the greatest possible collective happiness.
If, at some point, we have the feeling that it is not taking us where we want to go, we immediately know that there is something wrong with it. All we have to do is fix it. We cannot exempt ourselves by simply saying “sorry, we cannot achieve our goals because our software and hardware do not allow us”. It would be a pathetic and unacceptable excuse. If we want to create a world of zero carbon dioxide emissions, we will build the right software and hardware to do it. If we want a world in which unemployment does not exist, we will work against that. If we want a world in which there is no concentration of wealth, we will eliminate the differences. It is all about developing the right hardware and software. We have the capabilities. We can do it. When humans decide to do something, they just do it. Nothing is impossible for us.
The post-coronavirus recovery must be driven by social awareness. The most significant decision, taken globally and unanimously, is this: Let us be clear that we absolutely do not want to go back to the world the way it was before. We do not want to jump into the same hot pan as before.
Governments must guarantee citizens that this recovery program will be completely different from those of the past. The next recovery will not be implemented to bring things back to where they were before. This will be the recovery of the people and the planet. Firms capable of making this possible should be created. The crucial point for launching a post-coronavirus recovery program will consist in placing a new kind of social and environmental awareness at the centre of every decision and all political decision-making processes. Governments will have to ensure that not a dollar will end up in someone’s pocket unless there is a guarantee that, compared to any other option, that dollar given to that someone will bring the greatest possible social and environmental benefit to society as a whole. Everything that will be done as part of the recovery must lead to the creation of a conscious economy for the individual country and for the whole world on a social, economic and environmental level.
The time has come.
We will start as recommended in the past with bailouts, or rescue packages in extreme cases, but this time we will use them for projects and interventions stimulated by social awareness. We must develop them now, in full crisis, because, when this is over, there will be a tumult of old ideas and old examples aimed at driving interventions in a given direction. There will be those who will argue eagerly to derail the new initiatives, and will say that these policies have never been tested. (That is what opponents said when we proposed to define the social business Olympics. Now, the Paris Olympic Games of 2024 are understood in this sense, and enthusiasm is growing.) We must prepare before the general run-off begins. The time has come. The moment is now.
Social enterprise
In this article I illustrate a series of policies that are well known to me and in which I trust. This does not mean these are the only creative and effective options. Therefore, I also encourage others to come forward with their recommendations, always keeping in mind that they will have to meet the requirements of a recovery program driven by social and environmental awareness. We can all work together to seize the opportunity presented to us.
In the NRP (New Recovery Program) that I propose, I assign a fundamental role to a new form of enterprise called a social enterprise. It is a company created exclusively to solve people’s problems, a company that does not create a personal profit for investors, except for the recovery of the initial investment. Once they have achieved a return on the original investment, all subsequent profits must be reinvested.
Governments will have many opportunities to encourage, prioritize, and make room for social enterprises to engage in growing and far-reaching responsibilities for recovery. At the same time, governments will have to carry out the programs to which they must commit in any case, for example assistance to the poor and unemployed through traditional welfare programs, restoring health care programs and with them all the necessary services, and supporting all companies in sectors where the options for social business have not yet progressed.
On the social enterprises front, governments can create Social Business Venture Capital Funds, funds at central and local level; they can stimulate the private sector, foundations, financial institutions and investment funds to do the same; they can encourage traditional businesses to turn into social businesses, to establish partnerships encouraging all enterprises to have a social business division, or to create social businesses operating in joint ventures with other companies of this type.
Under the NRP, governments will be able to financially support social enterprises in acquiring other companies and ally themselves with those in need to turn them into social enterprises. The central bank will be able to give priority to the latter in the allocation of loans by financial institutions. Huge opportunities arise everywhere: governments should involve as many players/stakeholders as possible in social enterprises.
Who invests in social enterprises?
Who are the investors in social enterprises? Where can they be found? In my opinion: everywhere. We do not see them because the textbooks of economics in circulation do not recognize their existence. As a result, our eyes are not used to identifying them. Only recently have economics courses started to address some issues in this regard, such as social enterprises, social entrepreneurship, social impact investments, or non-profit organizations as well as some questions inspired by the global popularity of Grameen Bank and microcredit schemes.
As long as the economy remains focused on maximising profits, we will not be able to rely on it to develop a relaunch and recovery program based on social and environmental awareness. Realistically, we will not be able to flip the switch and turn the traditional economy off overnight. As it continues its activities, governments will have to create more and more space for social enterprises to prove their reliability and efficiency. The success of social enterprises will become tangible when we see that those who maximize profits for their own benefit will not only coexist with entrepreneurs interested in having zero personal profits – and friendships and forms of collaboration will be born – but also when more and more entrepreneurs and investors start to create social enterprises on their own or through partnerships with other social services. That will be the beginning of an economy driven by social and environmental awareness.
As soon as government policy begins to recognize entrepreneurs and investors in the social enterprise field, they will come forward with enthusiasm to take on the important social role that will be necessary at that point. Social entrepreneurs do not belong to a small economy of “good people.” Here we talk about a significantly large global ecosystem including multinationals, large social enterprise funds, many talented administrators, as well as institutions, foundations, and trusts with many years of experience in the areas of finance and management of global and local social enterprises.
Finally, when the basic concept and the experience of social enterprises start to receive the attention of governments, many entrepreneurs interested in personal gain will be happy to show off the most unknown part of their talent by becoming social entrepreneurs themselves. Successful social networks will play an important role during socially and economically critical times such as the crises of climate change, unemployment, concentration of wealth and so on.
Human beings are born entrepreneurs, not job seekers.
The NRP must break the traditional division of labour between citizens and the government. It is assumed that citizens are responsible for taking care of their families and paying taxes, and that it is the responsibility of the government (and, to a limited extent, of the non-profit sector) to take care of all community problems such as climate, labour market, health care, education, water and so on. The NRP must drop this dividing wall and encourage all citizens to come forward and demonstrate their problem solving capabilities by creating social enterprises. Their strength lies not in the scope of their initiatives, but in their number. A small initiative multiplied by a large number turns into a significant national action. One of the problems that entrepreneurs in social enterprises will face and be able to solve immediately will be unemployment caused by the collapse of the economy. Those who want to invest in social enterprises will be able to create them to cascade jobs for the unemployed. They may also choose to turn the unemployed into entrepreneurs themselves, and thus demonstrate that human beings are born entrepreneurs, not job seekers. Social enterprises will be able to work together with the government system to create a solid health care system. An investor in a social enterprise does not necessarily have to be an individual. It can be an institution, an investment fund, a foundation, a trust, a management company or the administration of other social enterprises. Many of these institutions know very well how to work amiably with traditional business owners. An initiative launched by the government to address the post-coronavirus situation may set in motion a wave of activities so far unknown. It will be a litmus test for leadership to demonstrate how the world can be brought back to life in unprecedented and entirely new ways, starting with young people, middle-aged people, and the elderly, men and women alike.
There will be no place to hide.
If we fail to engage in a post-coronavirus economic recovery program driven by social and environmental awareness, we will inevitably take a path much worse than the coronavirus catastrophe. To protect ourselves from the coronavirus we can lock ourselves in our homes, but if we fail to react adequately to the constantly worsening global issues, we will have no place to hide from the anger of Mother Nature and the masses of people around the planet.
Originally published in Italian on La Repubblica