Climate change is no longer an issue that can be denied or swept under the proverbial rug. It is here and evident every day in the news. We see weather patterns that are disrupted and natural disasters that get increasingly more volatile each year. The evidence is in live footage each morning and evening. It can sometimes be hard to believe this all started with the beginning of manufacturing in the world, but it’s true.
There has been a market failure ongoing for decades, back as early as the 1950s when the first signs of global warming began emerging. Climate change was happening but was being ignored. This ignorance is bliss mentality didn’t span just five years or so. No, it went on for almost 30 years before any attention was given to this monumental problem that has the capacity and scale to disrupt the global economy, environment, and our life on this planet as we know it. Whether the industries involved would like to acknowledge it or not, the inefficient use of production factors and the misallocation of our natural resources have polluted our environment in irreversible ways.
Fortunately, as we saw in how nature and the animal kingdom rebounded during COVID as we all faced several lockdowns, some solutions can help us repair the pieces of our world that are salvageable. Social entrepreneurship is one of those solutions.
How did we get here?
To understand how we systematically depleted our natural resources and polluted our planet, causing global warming, you have to understand a few essential terms fully. They are the terms that combined to help the world build business industries and economies.
These are factors of production, land, labor, capital, and enterprises. Let’s break them down a bit more below before talking about how they all combined to bring us to the state we are in today.
Factors of production
These are the resources required for a company to create goods for our economy.
This is the physical location in which economic activity takes place. It is also where our natural resources are extracted from.
In short, this is us. Human resources have both the physical and intellectual capacity to invent, create, and sell all goods and services.
Any manufactured material such as a machine that supports the production of goods or services falls under this category.
These are the big guns, the companies. They manage all the other above factors of production to fulfill all the needs and wants consumers may have. So now that you have all these terms down, you probably think this doesn’t sound so bad. We need products and services. Right? The truth is that the process itself shouldn’t have to be broken and shouldn’t have to cause so much damage. The problem is how it was practiced for decades in a linear economy.
A linear economy, which our world runs on today, produces its goods by something called value-adding. The most popular way to add value to a production process is through natural resources, which you guessed are low-cost to extract due to them being inherent to the earth itself. Easy to obtain and easy to exploit. This ease of access meant economies could scale to astronomical sizes. That is where world powers and powerhouse economies were born.
Globalization and the ability to travel, ship, export, and import more accessibly every decade added to this formula. Labor and capital moving easier did have positive effects. Poverty in many developing countries was alleviated, and as the living standards and wages increased, so did access and quality of healthcare and education. People were living longer. These were all positives. What could go so wrong?
As people lived longer and continued to have children, the population grew at a rate that had never been possible before. Rising consumption and the desire for more meant that industries were depleting our natural resources at alarming rates, all at the same time increasing our waste output and greenhouse gas emissions. It was a recipe for environmental disaster. What
we are faced with now is a monumental burden that has been placed on future generations with long-term social costs that no one could have forecasted a mere century ago.
What can we do to change?
There is hope to reverse some but not all of the damage that was created. It lives in the space of solving resource scarcity and in preventing environmental degradation. The thoughts behind this are simple and are something we have been taught since our elementary school days-reduce, reuse, and recycle. The technical name for this is a circular economy. The goal of a circular economy is not to stop development and growth but to shift it to being accomplished by using sustainable resources. Unfortunately, up until this point, the result of a circular economy has been slow, but there is a light in the distance. It is called the 4th Industrial Revolution, and it could change everything.
What is the 4th Industrial Revolution (4iR) & its impact?
The hope is that new technologies will be discovered and developed during this time that will be able to end our global climate crisis. This will be enabled profoundly by the “internet of all things” that will allow the discovery of new materials, digital platforms in research and sales, marketing, and distribution. The improved functionality and quality products and services that will be produced as a result at a low cost will create a “platform effect.” These platforms will be of the most importance in this movement.
The platforms of the 4iR will be able to match buyers and sellers with products and services, creating the foundation of the sharing or on-demand economy. As it grows, so will the creationbof all new models of business and organizations. These platforms will reshape how our world’s companies look and operate. It will have positive and negative effects, just as the first Industrialn
Revolution did long ago.
It is possible that the new technologies developed will increase the abilities of intelligent machines. This will be a boon for those with creative or technology-focused careers and degrees, but not so much for those working the jobs that these machines may replace. Education will have to shift to supply workers for these jobs and keep up with the pace that the 4iR will create for these specific kinds of talent. Societies, cultures, and countries without the ability to engage in the sharing or on-demand economy may also suffer, feeling fragmented, isolated, and excluded. The on-demand economy will also see an ever-increasing need for independent workers, with an improvement in wages, integration, and work-life balance but at a loss of the job security so many were accustomed to over the last several decades.
The solution many see on this horizon is social entrepreneurship, a term you may or may not be familiar with. Let’s dive into it a bit.
Why social entrepreneurship as the solution?
If you ask what it is about social entrepreneurship that can solve both our future economy and climate change, it is a good question. There are six ways in which social entrepreneurship can help change our world. They are through blended values, sustainability, adaptivity, innovating, collaborating, and inclusivity. By bringing each into the fold of this solution, we can create an economy focused on people and not on power, and in turn on the environment and the planet’s well-being, not on just what we can take from it.
This all can happen with each core component of social entrepreneurship below.
The goal of blended values is to bring together economic, social, and environmental values to focus on both community and social development. It is about both social and sustaining entrepreneurship sharing common goals and complementing one another.
When there is a more accurate projection of demand and supply, it is possible to reduce waste and promote efficient resource use. The sharing of resources in the 4iR will help overcome the capitalization challenge by providing a lower operational cost.
Social entrepreneurship is adaptive by nature and can be structured within existing entities regardless of if they are for-profits or nonprofits. This means it is possible to grow social development activities in different organizational settings, no matter the size.
One of the main focuses of social entrepreneurship is the generation of solutions and ideas to create social values. Organizations aim to work in an open, agile, and collaborative nature while still conforming to commercial and ethical standards that are acceptable.
Transparent, sustainable models of user-generated content shared among peers will allow for the development of sustainable solutions through innovative collaboration. Many social problems will be able to be tackled with this approach.
The sharing economy of social entrepreneurship and the 4iR will break down entry barriers, and networks will help stakeholders and beneficiaries connect with real-time feedback to improve response to social situations. Participation in the economy will increase dramatically.
The damage that has been done to our planet and the economy of those living on it cannot be undone or rectified overnight. It is a process that can be adopted and see a significant change. Will this overhaul happen in our lifetimes? It may not be complete, but we can see it set into motion and make a substantial impact on it.
We have to break the linear economy cycle and adopt a circular economy. This will take transformation on a large scale and take those across industries and platforms to put their differences aside and embrace the change that the 4iR and social entrepreneurship can bring. It is a human-centric solution to our economy and climate change. One we need desperately with no time to waste. To learn more check out www.thebrilliantculture.com.