Alternative capitalism: What’s the big idea?
There is plenty of talk about redesigning capitalism to make business sustainable, but nobody’s addressing the problem of scale, says Toby Webb
In preparation for reading Tim Jackson’s book Prosperity Without Growth, I’ve been watching his “economic reality check” Ted talk from a couple of years ago.
What worries me about this talk, especially given the popularity of Ted lectures, is the paucity of practical solutions within it.
Jackson talks of creating “an economics fit for purpose”. This is about “a more meaningful and less materialistic society”. Fine, I get that. On board. No problem.
He also talks of the need to create “community spaces to learn and collaborate”. I definitely agree.
And anyone who has lived though the development of certain parts of London in recent years can see that trend taking hold. It’s great to see and experience it (despite the slightly sterile design of modern community spaces in the city).
But Jackson’s Ted talk, as with so many, seems to present various options without discussing how they might reach scale to the point where they can make a difference. And this goes for many causes championed in the name of sustainability and putative alternatives to conventional capitalism.
Search for “scaling social enterprises” on Google, and the top 15 or so links don’t show many solutions. That’s a worry.
Our best hopes for more sustainable change seem to lie with – according to many who talk about reforming capitalism – governments, community interest companies, “benefit corporations” (or B corporations), social entrepreneurs, NGOs and public institutions. All, of course, with longer-term investment cycles and new technology thrown in.
What no one seems to have addressed so far, leaving aside finance and technology for a moment, is how and whether social entrepreneurs, B corporations (which try to use business to solve social and environmental problems) and community interest companies can reach scale.
Currently, Patagonia, the sustainably minded outdoor clothing firm, is the largest B corporation out there – and it is by no means a giant of the clothing industry.
Does this matter, when so much of GDP and jobs in most countries come from small business?
I think it might, given how powerful large companies are, and given their ability to raise cash and roll out products and services at scale.
The key question to address is whether social entrepreneurs, B corporations and community interest companies can be managed in a way that enables them to reach scale. And how should they do so – is it best for each one to become big, or for small organisations to be replicated by the dozen?
Capitalism’s conventional command-and-control model has certainly proved itself when it comes to scaling up. But if our future does depend on the nascent forms of new companies, is scale a challenge we need to talk about?
Perhaps this question is something we ought to address urgently, alongside our constant conversations about technology, its roll-out and subsidies, and our long overdue hand-wringing over short-term financial markets.
All this is not to say that newer forms of more sustainable capitalist models cannot overcome the challenges. But we need to be talking about scale, both as a challenge and as an opportunity, rather than simply getting excited about new models.
How do we take these organisations from five to 50 to 500 people to 5,000 or 50,000 people? Or should we create 50 companies of 500 people instead, all doing similar work, but in different places?
These are surely questions worth asking that need discussion and research.
Of course, I am now open to the criticism I have levelled at others: more challenges than solutions. So here are a few solutions:
1) Let’s map which academics have tracked business models that have worked, and highlight their work so it is not lost in unread, unreadable papers (any of us could do this).
2) Let’s set smart young researchers the task of breaking down the challenges of scale and working out what the solutions are. These answers can be qualitatively researched and crowdsourced (a job for SRI firms, academics and media outlets, surely?) We need detail.
3) Let’s set some targets and reward alternative models that have demonstrated solutions to scale issues from within. (Create a foundation-funded or corporate-funded prize perhaps?)
4) Let’s start holding public events, to give to business people, entrepreneurs, students, investors, governments and anyone else who will listen, the key messages about beating the challenge of scale.
Toby Webb is founder and chairman of Ethical Corporation, and chief executive of Stakeholder Intelligence, a research and training firm. He blogs here.