{"id":733,"date":"2025-11-27T03:53:13","date_gmt":"2025-11-27T03:53:13","guid":{"rendered":"https:\/\/blogs.unpad.ac.id\/dzikrayuhasyra\/?p=733"},"modified":"2025-11-28T06:49:43","modified_gmt":"2025-11-28T06:49:43","slug":"building-social-business-the-new-kind-of-capitalism-that-serves-humanitys-most-pressing-needs-audiobook-by-muhammad-yunus-narrated-by-ray-porter-on-audible","status":"publish","type":"post","link":"https:\/\/blogs.unpad.ac.id\/dzikrayuhasyra\/2025\/11\/27\/building-social-business-the-new-kind-of-capitalism-that-serves-humanitys-most-pressing-needs-audiobook-by-muhammad-yunus-narrated-by-ray-porter-on-audible\/","title":{"rendered":"“Building Social Business: The New Kind of Capitalism That Serves Humanity’s Most Pressing Needs” Audiobook by Muhammad Yunus, Narrated by Ray Porter on Audible"},"content":{"rendered":"

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I just finished listening an audiobook entitled “Building Social Business: The New Kind of Capitalism That Serves Humanity’s Most Pressing Needs” by Muhammad Yunus, Narrated by Ray Porter on Audible.\u00a0<\/span>He was awarded the Nobel Peace Prize in 2006, and his concept about “Social Business” has attracted my concern to solve poverty problems and it should be implemented in my beloved country, Indonesia. Here are some insights and keynotes about the book. Enjoy!<\/span><\/p>\n

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Introduction: Social Business\u2014From Dream to Reality<\/span><\/h3>\n

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Origin of a Movement:<\/b> The journey toward social business began during the Bangladesh famine of 1974, which pushed Muhammad Yunus from the university campus into the village of Jobra. Confronted with the emptiness of traditional economic theories in the face of starvation, Yunus sought to be useful to at least one person a day. <\/span>This hands-on experience revealed that poverty was not created by the poor themselves, but by the institutions and systems surrounding them.
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The Spark of Microcredit:<\/b> A pivotal moment occurred when Yunus met a woman crafting bamboo stools who was trapped in poverty due to a loan of just 5 taka (7 cents). This debt forced her to sell her products back to the moneylender at a suppressed price, essentially making her a slave to the debt. Yunus discovered 42 such people in the village with a total debt of only $27. <\/span>He paid this debt from his own pocket to free them, an act that created immense happiness and planted the seed for what would become Grameen Bank<\/span><\/span><\/span><\/p>\n

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Challenging Banking Norms:<\/b> Conventional banks refused to lend to the poor, citing a lack of collateral and creditworthiness. Yunus challenged this by becoming a guarantor for loans himself. By 1976, he was operating an informal banking system that relied on trust rather than collateral. Contrary to banking norms, the poor paid back their loans on time. <\/span>This success led to the official creation of Grameen Bank, which today is owned by its borrowers\u201497% of whom are women\u2014and lends over $100 million a month.<\/span><\/span><\/span><\/p>\n

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Systemic Failure, Not Personal Failure:<\/b> The author posits that poor people are like “bonsai people.” Just as a bonsai tree is genetically identical to a giant tree but remains small due to the size of its pot, poor people possess the same potential as anyone else but are stunted by their social and economic environment. Society has failed to provide the “soil” necessary for their growth. <\/span>Once the poor are given an enabling environment, such as access to financial services, they can unleash their creativity and energy to escape poverty.<\/sup><\/span><\/span><\/span><\/p>\n

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The Flaw in Capitalism:<\/b> The current economic crisis and global poverty persist because of a fundamental flaw in the theoretical construct of capitalism: the misrepresentation of human nature. Economics currently assumes human beings are one-dimensional, driven solely by the maximizing of profit. This ignores the multi-dimensional nature of humans, who are driven by both selfishness and selflessness. <\/span>Real people build charities, schools, and museums without profit motives, yet economic theory has no place for this selflessness in the business world.<\/span><\/span><\/span><\/p>\n

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Defining Social Business:<\/b> To correct the economic framework, Yunus introduces “social business.” This is a business driven by the selfless part of human nature. It operates to solve social problems (like hunger, homelessness, or disease) rather than to maximize personal wealth. In a social business, the investor can recoup their investment over time, but they take no dividend beyond that amount. <\/span>The company is a “non-loss, non-dividend company” dedicated entirely to social goal<\/span><\/span><\/span><\/p>\n

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Funding the Vision:<\/b> Critics often ask where the money for such non-profit-maximizing ventures will come from. Yunus points to the trillions of dollars currently circulating in philanthropy and charity. If donors see that a social business can recycle money indefinitely to solve problems\u2014unlike charity, which spends money once\u2014they will shift funds to this sustainable model. <\/span>Additionally, corporate social responsibility funds and the desire of young people to change the world will fuel these enterprises.<\/span><\/span><\/span><\/p>\n

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Technology as a Vehicle:<\/b> Technology is currently owned and directed by profit-maximizing firms, but it is neutral in nature; it is simply a vehicle that goes where the driver directs it. If the goal changes from profit to ending poverty or disease, technology can be equally effective in achieving those ends. <\/span>Social business creates a framework where the power of technology is unleashed to solve social problems, benefiting all of humanity rather than just those who can pay<\/span><\/span>.<\/span><\/p>\n

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Chapter 1: Why Social Business?<\/span><\/h3>\n

Defining the Concept:<\/b> A social business is distinct from both profit-maximizing companies and non-profits. Unlike a non-profit, it has investors and must be self-sustaining; it cannot rely on donations to survive. Unlike a standard company, its investors do not earn dividends.\u00a0<\/span>It is a business dedicated to solving social problems through the sale of products or services, such as affordable nutritious yogurt (Grameen Danone) or safe drinking water (Grameen Veolia Water).<\/span><\/span><\/span><\/p>\n

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Type I and Type II:<\/b> There are two specific kinds of social businesses. Type I is a non-loss, non-dividend company owned by investors who reinvest all profits into expanding the business. Type II is a profit-making company that is owned by the poor themselves (either directly or through a trust). In Type II, the profits alleviate poverty by flowing directly to the poor owners, as is the case with Grameen Bank. <\/span>Both types serve the ultimate goal of social benefit.<\/span><\/span><\/span><\/p>\n

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The Seven Principles:<\/b> To clarify the concept, Yunus helped formulate the “Seven Principles of Social Business.” <\/span>These include: the objective is to overcome poverty or social problems; financial and economic sustainability; investors get back only their investment amount; profit stays with the company for expansion; the company is environmentally conscious; workers get market wages with good conditions; and finally, “Do it with joy!”<\/span><\/span>.<\/span><\/span><\/p>\n

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Distinction from Social Entrepreneurship:<\/b> While “social entrepreneurship” is a broad term that can encompass personal initiatives, NGOs, and even some for-profit activities with social missions, “social business” is a specific subset with a defined structure. Social business is strictly a non-loss, non-dividend entity. <\/span>While Yunus is often cited as a social entrepreneur, he emphasizes that the unique structure of social business sets it apart from the broader, sometimes vaguer, definition of social entrepreneurship<\/span><\/span>.<\/span><\/span><\/p>\n

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The Problem with Charity:<\/b> Charity is essential for emergencies, but it is not a sustainable solution for poverty. Charity creates dependency and takes away individual initiative. It relies on a constant stream of fresh fundraising. In contrast, social business recycles money endlessly. <\/span>A dollar in charity is gone after one use; a dollar in a social business can be invested, repaid, and reinvested again and again, creating far greater long-term impact while allowing beneficiaries to participate as consumers in the market.<\/span><\/span><\/span><\/p>\n

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Contrast with CSR:<\/b> Corporate Social Responsibility (CSR) is often confused with social business. CSR is typically a charitable activity by a profit-maximizing company, often used for image-building, representing only a tiny fraction of the company\u2019s resources (e.g., 5% for social good, 95% for profit). A social business devotes 100% of its resources to its social mission. <\/span>While CSR is positive, it does not fundamentally alter the business model in the way social business does.<\/span><\/span><\/span><\/p>\n

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The Clarity of Zero Profit:<\/b> Some argue for “doing well by doing good”\u2014mixing profit motives with social goals. Yunus argues that this creates conflicting objectives. In difficult times, the profit motive almost always trumps the social goal. A CEO juggling two bottom lines will inevitably lean toward profit. Social business removes this conflict by mandating zero personal profit, giving management a clear, unambiguous focus on maximizing social impact. <\/span>It acts as a “no-smoking zone,” where even a little profit motive can spoil the concept.<\/span><\/span><\/span><\/p>\n

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Role of Government:<\/b> Social business does not replace government but complements it. It allows citizens to take initiative in solving problems rather than waiting for the state. Governments can encourage this by creating legal frameworks and funds for social business. <\/span>Furthermore, social business enhances competition and efficiency in sectors often dominated by failed government programs or exploitative private monopolies, offering citizens new choices for essential services like water and healthcare.<\/span><\/span><\/span><\/p>\n

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Chapter 2: Growing Pains (Grameen Danone)
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A Joint Venture for Nutrition:<\/b> Grameen Danone was born from a casual conversation between Yunus and Franck Riboud, CEO of Groupe Danone. They agreed to create a social business to combat malnutrition in Bangladesh. The result was a yogurt fortified with essential micronutrients (iron, zinc, iodine, vitamin A) missing from the diet of rural children. <\/span>The project aimed to be a self-sustaining business model that would improve health outcomes.<\/span><\/span><\/span><\/p>\n

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Designing for the Local Context:<\/b> The partners decided to build a small, “cute” factory in Bogra rather than a massive industrial plant. This minimized upfront investment and allowed the factory to integrate into the local community, sourcing milk from local farmers. The factory was designed to be eco-friendly, using solar power and biogas. <\/span>The product, <\/span>Shokti Doi<\/span><\/i> (Energy Yogurt), was priced at just 5 taka (7 cents) to ensure affordability for the poor.<\/span><\/span><\/span><\/p>\n

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Initial Stumbles and Cultural Lessons: <\/b>Sales were initially slow. The company relied on “Grameen ladies” for sales but failed to sell enough yogurt. Investigation revealed a management failure: they hadn’t involved the saleswomen’s husbands. In rural Bangladesh, women often need family support to work outside the home. Once management engaged the families and hired a local managing director, the sales force grew from 29 to 270 ladies, and sales improved significantly.<\/span><\/span><\/span><\/span><\/p>\n

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Impact of Global Crises:<\/b> Just as sales were rising, the global food price crisis of 2008 hit. The price of milk, the primary ingredient, doubled. The company faced a dilemma: raise prices and lose the poor customers, or lose money and become unsustainable. Yunus argued for sustainability, so the price was raised to 8 taka. <\/span>The result was a disaster; rural sales plummeted by 80%, and the sales network collapsed.<\/span><\/span><\/span><\/b><\/p>\n


\nAdaptation and Innovation: <\/b>To survive, the company had to reinvent itself. They discovered they could maintain the nutritional value in a smaller, 60-gram cup sold for 6 taka. This price point brought rural customers back. Simultaneously, they expanded sales in urban areas (Dhaka) at a higher price (12 taka) to cross-subsidize the rural operations. This strategy of market segmentation allowed them to serve the poor while using the urban market to ensure financial stability.<\/span><\/span><\/span><\/span><\/p>\n

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The “No Dividend” Milestone:<\/b> A significant moment in corporate history occurred in December 2009. Danone shareholders voted to remove a clause in the joint venture agreement that allowed for a 1% dividend. The board cheered at the decision to receive no<\/i> dividends, marking a complete commitment to the social business definition. <\/span>It demonstrated that mainstream investors could find joy and satisfaction purely in social impact rather than financial return.<\/span><\/span><\/span><\/p>\n

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Current Status and Future:<\/b> By early 2010, Grameen Danone had reached operational viability, producing over 100 tons of yogurt per month. The company is preparing to open a second plant near Dhaka. The long-term goal is to establish 50 such plants across Bangladesh. <\/span>The journey proved that social business requires flexibility, constant adjustment, and the willingness to challenge assumptions (like the necessity of an 80-gram serving size).<\/span><\/span><\/span><\/p>\n

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Key Lessons:<\/b> The Grameen Danone experience taught valuable lessons: be flexible but keep the social goal central; immerse yourself in the culture of the customers; and utilize partnerships. It also proved the viability of cross-subsidization\u2014using profits from affluent customers to lower prices for the poor. <\/span>The venture highlighted that social businesses must be managed with even greater discipline than traditional businesses because the dual objectives of sustainability and social impact are so demanding.<\/span><\/span><\/span><\/p>\n

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Chapter 3: Launching a Social Business<\/span><\/h3>\n

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The Starting Point:<\/b> Launching a social business begins not with a business case for profit, but with a moment of compassion. An entrepreneur identifies a social problem that disturbs them\u2014poverty, pollution, homelessness\u2014and asks, “Can I design a business to solve this?” The profit motive is replaced by the desire to solve a specific problem. <\/span>The process involves identifying a need, matching it with one’s capabilities, and designing a sustainable business model around it.<\/span><\/span><\/span><\/p>\n

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Start Small and Simple:<\/b> Yunus advises aspiring social entrepreneurs to avoid grand, overly ambitious plans initially. It is better to start with a small, manageable problem and a simple solution. “Do it with joy” is a core principle; a project should not be a burden. Even a small success, like helping five people, is a “seed” that can be replicated and scaled up later. <\/span>The focus should be on learning and refining the model through practice.<\/span><\/span><\/span><\/p>\n

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Empowerment as a Goal:<\/b> A powerful way to design a social business is to focus on empowering a specific group of people. This could involve giving them tools to earn income (like Grameen Phone ladies), providing ownership opportunities, or improving their productivity through health and education. <\/span>The goal is to help customers earn or save more than they spend on the product, turning them from passive beneficiaries into active economic participants<\/span><\/span>.<\/span><\/span><\/p>\n

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Leveraging Personal Talent:<\/b> Anyone can start a social business by applying their specific professional skills to social problems. A banker could create a low-cost remittance service; an engineer could design a waste recycling business; an artist could use culture to educate villagers about health. <\/span>There is no need to be an expert in poverty relief; one only needs to translate their own passion and expertise into a model that addresses a human need<\/span><\/span>.<\/span><\/span><\/b><\/p>\n

Technology for the Poor: <\/b>Existing technology often serves the rich, but it can be adapted for the poor. Infrastructure projects, mobile communications, and renewable energy can all be structured as social businesses. The challenge is to innovate business models that make these technologies affordable, such as shared access or pay-per-use systems, thereby bridging the digital and infrastructure divides that keep people in poverty<\/span><\/span>.<\/span><\/span><\/span><\/p>\n

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Testing and Experimentation:<\/b> A social business model requires rigorous testing. Entrepreneurs should run small pilot projects to validate their assumptions about costs, revenue, and customer behavior. This phase often requires funding from the founder’s pocket or friends and family. Yunus cites the example of Mirakle Couriers, started with just $300, which employs deaf couriers. <\/span>Modern technology allows for low-cost experimentation before scaling up.<\/span><\/span><\/span><\/p>\n

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Replicating Success:<\/b> Innovation doesn’t always mean inventing something new; it can mean replicating a model that works. Entrepreneurs should study existing social businesses and adapt them to new environments. This “social franchising” approach accelerates impact. <\/span>However, entrepreneurs should be prepared for failures\u2014”first trials usually end up in failure”\u2014and view them as necessary steps in the creative process, much like rocket launches in the early space program.
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\nType II Opportunities: <\/b>Existing profit-maximizing companies can be transformed into social businesses (Type II) by transferring ownership to the poor or a trust dedicated to a social cause. Infrastructure projects like bridges or utilities can be owned by such trusts, ensuring that profits are reinvested into the community or used to pay for other social services. This model allows conventional business structures to be utilized for purely social ends.<\/span><\/span><\/span><\/span><\/p>\n

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Chapter 4: To Cure One Child (Healthcare)<\/span><\/h3>\n

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Impatience for Change:<\/b> While large-scale change is the goal, “thinking big” initially can lead to disaster. Yunus advocates for a “constructive impatience” that leads to starting small. Developing a “seed”\u2014a small, working model\u2014is critical. Once a small unit works perfectly to cure or help a few people, it can be replicated exponentially to solve global problems. <\/span>This approach makes social business accessible to everyone, not just large corporations<\/span><\/span>.<\/span><\/span><\/p>\n

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The Challenge of Thalassemia:<\/b> The chapter focuses on a specific health crisis: Thalassemia, a genetic blood disorder prevalent in Bangladesh. Without treatment, children with this condition die young. In wealthy nations, genetic screening has largely eliminated it, but in Bangladesh, lack of awareness and resources leaves 100,000 children suffering. <\/span>A cure exists\u2014bone marrow transplantation\u2014but it is complex and expensive<\/span><\/span>.<\/span><\/span><\/p>\n

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Cure2Children Initiative:<\/b> Dr. Lawrence Faulkner, an Italian specialist, founded Cure2Children to bring cures for rare blood diseases to the developing world. He realized that treating children in their home countries would not only save lives but also generate valuable scientific data on diseases that are now rare in the West. <\/span>He successfully established a transplantation unit in Pakistan with modest startup costs ($35,000), proving high-tech care could be delivered affordably<\/span><\/span>.<\/span><\/span><\/p>\n

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The Joint Venture:<\/b> Inspired by Yunus’s book, Cure2Children approached Grameen to create a social business. They formed a joint venture to bring bone marrow transplants to Bangladesh. Unlike the donor-funded model in Pakistan, this project aims to be self-sustaining. <\/span>The model relies on cross-subsidization: wealthy families paying market rates for transplants will subsidize the costs for poor families who cannot afford the procedure<\/span><\/span>.<\/span><\/span><\/p>\n

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The Business Mechanics:<\/b> The venture plans to charge affluent patients roughly $20,000 for a transplant\u2014one-tenth the cost in the West. This fee is affordable for wealthy Bangladeshis or medical tourists from neighboring regions. The revenue from two paying patients covers the cost of a third, non-paying poor patient. <\/span>This structure ensures financial independence from donors while serving the most vulnerable<\/span><\/span>.<\/span><\/span><\/p>\n

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Technology and Training:<\/b> The project functions as a learning organization. It utilizes an open-source web platform and telemedicine (Skype, Yugma) to connect local Bangladeshi doctors with world-class experts in Italy. <\/span>Instead of foreign doctors “parachuting in,” local staff are trained to perform the procedures, building long-term local capacity and preventing brain drain by offering high-quality, challenging professional environments<\/span><\/span>.<\/span><\/span><\/p>\n

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Prevention as the Ultimate Goal:<\/b> While the social business focuses on curing existing cases, the long-term goal is prevention. The transplant centers will serve as hubs for education and genetic screening. Parents seeking cures for their children will be encouraged to screen their families. <\/span>By raising awareness through these centers and local associations, the project aims to eventually eliminate Thalassemia in Bangladesh, just as it was eliminated in Europe<\/span><\/span>.<\/span><\/span><\/p>\n

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Open Source Medicine:<\/b> Both Yunus and Dr. Faulkner emphasize that social business should operate on an “open source” basis. Knowledge, protocols, and business models should be shared freely to maximize global impact. Unlike commercial businesses that hoard trade secrets, social businesses are driven by selflessness. <\/span>Sharing the “seed” of a successful model allows others to plant it elsewhere, accelerating the solution to human suffering<\/span><\/span>.<\/span><\/span><\/p>\n

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Chapter 5: Legal and Financial Frameworks<\/span><\/h3>\n

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The Importance of Structure:<\/b> Choosing the right legal structure is crucial for funding a social business. Currently, legal systems recognize for-profit companies and non-profit organizations, but “social business” falls into a regulatory gap. This lack of a specific legal definition complicates taxation, regulation, and investment. <\/span>Until specific laws are passed, social entrepreneurs must adapt existing structures to their needs, often requiring creative legal and financial planning<\/span><\/span>.<\/span><\/span><\/p>\n

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Business Plans for Investors:<\/b> To attract funding, a social business needs a rigorous business plan, including a 5-year financial forecast. Entrepreneurs must calculate their “burn rate” (monthly cash spend) to determine how much seed capital is needed before reaching the break-even point. Yunus advises being conservative with revenue estimates\u2014cutting them in half is often safer. <\/span>The plan must tell a compelling story of social impact to attract the right investors<\/span><\/span>.<\/span><\/span><\/p>\n

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Sources of Funding:<\/b> Seed capital usually comes from the founder’s pockets, friends, and family. However, “angel investors” and corporate CSR (Corporate Social Responsibility) funds are growing sources. Yunus advocates for corporations to use CSR funds for social business equity rather than one-off charity, as this recycles the capital. <\/span>Foundations can also invest, though legal restrictions (like “program-related investments” in the US) can be complex<\/span><\/span>.<\/span><\/span><\/p>\n

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For-Profit Structure (Pros\/Cons):<\/b> Most Grameen social businesses use the for-profit legal structure. The advantage is clear ownership, the ability to issue shares, and flexibility in raising capital. The downside is that legally, for-profit directors are often obligated to maximize shareholder value. To mitigate this, shareholders must sign legal documents explicitly renouncing dividends. <\/span>However, there remains a risk that future owners could revert the company to a profit-seeking entity<\/span><\/span>.
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Non-Profit Structure (Pros\/Cons): <\/b>Using a non-profit structure avoids pressure for dividends but lacks the concept of ownership and equity shares. Non-profits are often subject to strict regulatory scrutiny regarding commercial activities, which can hinder business operations. Yunus argues that ownership is vital for social business because it creates personal pride and a legacy that can be passed down\u2014something a non-profit board structure cannot offer<\/span><\/span>.<\/span><\/span><\/span><\/p>\n

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Alternative Structures (L3C, CIC, B-Corp):<\/b> New hybrid structures are emerging. The UK’s “Community Interest Company” (CIC) and the US “L3C” (Low-profit Limited Liability Company) attempt to bridge the gap. However, Yunus critiques these because they often allow for limited<\/i> profit distribution. He argues that “mixed” motives weaken the concept; distinct separation between profit and social goals is essential. <\/span>“B Corporations” are a certification rather than a legal status, offering no real legal protection against shareholder lawsuits<\/span><\/span>.<\/span><\/span><\/p>\n


\nThe Tax Issue:<\/b> Yunus takes a somewhat controversial stance: social businesses should generally be taxable entities. If an investor receives a tax deduction for investing in a social business, they are financially benefiting from the transaction, which reintroduces a selfish motive. To keep the motivation purely selfless, investments should come from post-tax money. <\/span>However, governments can offer targeted, temporary tax breaks to encourage specific sectors if necessary<\/span><\/span>.<\/span><\/span><\/div>\n
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Role of Trusts:<\/b> For Type II social businesses (owned by the poor), trusts can be an effective legal tool. A trust can own a for-profit company and distribute the earnings to a specific group of disadvantaged people. <\/span>This structure requires high-integrity trustees but offers a way to direct the benefits of capitalism to those who are usually excluded from it, effectively bypassing the complexities of direct ownership by thousands of individuals<\/span><\/span>.<\/span><\/span><\/p>\n

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Chapter 6: Grameen Veolia Water<\/span><\/h3>\n

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The Genesis of a Partnership:<\/b> Grameen Veolia Water (GVW) began when Eric Lesueur of Veolia Water (a French multinational) approached Yunus. Yunus challenged him to provide safe drinking water to rural Bangladeshis for 1 taka per 10 liters. Veolia accepted the challenge. <\/span>This partnership highlights how large corporations can use their core competencies\u2014in this case, water treatment technology\u2014for social good rather than just profit<\/span><\/span>.<\/span><\/span><\/p>\n

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The Arsenic Crisis:<\/b> The social problem addressed is the massive arsenic contamination of groundwater in Bangladesh, affecting 35 to 80 million people. Long-term exposure leads to skin lesions, cancer, and death. While safe deep-tube wells exist, they are expensive. Surface water is available but requires treatment. <\/span>GVW aimed to build a treatment plant using river water to serve the village of Goalmari, providing a sustainable alternative to poisoned wells<\/span><\/span>.<\/span><\/span><\/p>\n

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Starting Small (Social R&D):<\/b> Instead of a massive rollout, Veolia and Grameen chose a “learn-by-doing” approach with a single pilot plant. This minimized financial risk and allowed for adaptation. The plant treats surface water and distributes it via a pipeline grid to tap points. <\/span>The project was treated as “Social R&D” by Veolia\u2014an investment in knowledge that could later be applied to other developing markets<\/span><\/span>.<\/span><\/span><\/div>\n
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\nChallenges in the Field:<\/b> Despite technical success, the project faced significant market resistance. Villagers were accustomed to getting water for free and did not fully appreciate the invisible, long-term threat of arsenic. The price (though subsidized) was a barrier for many. Sales were initially only 10-15% of the target. <\/span>This highlighted the difficulty of changing deep-seated habits and the need for extensive social marketing<\/span><\/span>.<\/span><\/span><\/p>\n

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Adapting the Business Model:<\/b> To reach sustainability, GVW had to innovate. They realized they couldn’t rely solely on the poorest villagers to cover costs. They introduced new revenue streams: selling 20-liter jars to institutions and offering direct home connections for affluent villagers at a higher price. <\/span>This cross-subsidization strategy is intended to generate enough revenue to lower the price for the poorest users to the original 1 taka target<\/span><\/span>.<\/span><\/span><\/p>\n

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Corporate Impact:<\/b> The project had a profound effect on Veolia Water’s internal culture. Employees were energized by the opportunity to use their skills for a humanitarian cause. It also allowed Veolia to experiment with business models for the “bottom of the pyramid,” which is strategically important for their future in developing nations. <\/span>The project demonstrated that social business can align with a corporation’s long-term strategic interests without being profit-driven<\/span><\/span>.<\/span><\/span><\/p>\n

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The Importance of Core Competence:<\/b> Yunus advises companies to build social businesses around their core expertise. Because water is Veolia’s main business, the project received high-level attention and resources. If it had been a peripheral project, it might have been abandoned when difficulties arose. <\/span>Connecting the social mission to the company’s primary skill set ensures commitment and quality<\/span><\/span>.<\/span><\/span><\/p>\n

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Future Expansion:<\/b> Despite hurdles, the goal remains to serve 100,000 people with five plants by 2012. The joint venture is collaborating with research institutions (ICDDR,B) to validate health impacts. The ultimate vision is a scalable model for rural water supply that can be replicated globally. <\/span>The Goalmari project serves as a laboratory to solve the complex equation of affordability, social acceptance, and financial sustainability in water delivery<\/span><\/span>.<\/span><\/span><\/p>\n

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Chapter 7: Creating a Global Infrastructure for Social Business<\/span><\/h3>\n

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The Intellectual Infrastructure:<\/b> As the social business movement grows, it requires an ecosystem of support. This includes “social business practitioners” (entrepreneurs) and “social business thinkers” (academics). <\/span>Yunus highlights the rapid adoption of the concept by universities and think tanks, which provide the theoretical depth, research, and legitimacy needed to convince the broader business world to adopt the model<\/span><\/span>.<\/span><\/span><\/p>\n

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The Yunus Centre:<\/b> Located in Dhaka, the Yunus Centre serves as the global hub and one-stop clearinghouse for social business. It monitors progress, facilitates connections between international partners and Grameen companies, and organizes workshops. It is the incubator where almost all current Grameen joint ventures were initially formulated. <\/span>It also serves as a training ground for interns from around the world<\/span><\/span>.<\/span><\/span><\/p>\n

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Grameen Creative Lab (GCL):<\/b> Based in Germany and led by Hans Reitz, GCL acts as an “action tank.” It focuses on three tasks: communicating the concept, incubating new businesses, and consulting with corporations. GCL organizes major events like the Global Social Business Summit to spread the “virus” of social business. <\/span>It has been instrumental in setting up joint ventures with multinational corporations like BASF and Adidas, bridging the gap between Grameen’s vision and corporate reality<\/span><\/span>.<\/span><\/span><\/p>\n

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University Partnerships:<\/b> Academic institutions are playing a vital role. Glasgow Caledonian University established the “Grameen Caledonian College of Nursing” in Bangladesh, a social business training young women for high-paying healthcare jobs. This partnership includes a long-term research study on the health impacts of microcredit. <\/span>Other universities, like HEC Paris and California State University Channel Islands, have established chairs and institutes to teach social business as a core discipline<\/span><\/span>.<\/span><\/span><\/p>\n

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Technology Labs:<\/b> Kyushu University in Japan established the Grameen Technology Lab to develop technologies specifically for the poor. Projects include “E-Passbooks” for microcredit and low-cost agricultural information systems. <\/span>This collaboration ensures that technological innovation is directed toward social problems, creating intellectual property that is jointly owned and licensed for social benefit<\/span><\/span>.<\/span><\/span><\/p>\n

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Social Investment Funds:<\/b> To fuel growth, dedicated investment funds are emerging. The Danone Communities Fund allows employees and shareholders to invest in social businesses. Similar funds are being developed in Monaco and by the Islamic Development Bank. These funds provide professional due diligence and management, allowing investors to diversify their social impact portfolios. <\/span>They charge a small management fee to remain sustainable<\/span><\/span>.<\/span><\/span><\/p>\n

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The Social Stock Market:<\/b> Yunus envisions a future “Social Stock Market” where shares of social businesses are traded. Prices would be determined not by profit potential, but by social impact value. Investors could sell shares to recoup their capital (to reinvest in other social businesses), but without capital gains. <\/span>This market would provide liquidity, transparency, and a valuation mechanism based on social success, creating a parallel financial system driven by selflessness<\/span><\/span>.<\/span><\/span><\/p>\n

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Market Signals:<\/b> In a social stock market, a rising share price would signal that the public appreciates the company’s social effectiveness. This signal helps successful social businesses raise more capital to expand. It transforms investment from a one-time donation into a dynamic, accountable engagement. <\/span>While currently theoretical, Yunus predicts such a market will become an electronic reality, creating a distinct space for “social investors” alongside traditional capitalists<\/span><\/span>.<\/span><\/span><\/p>\n

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Chapter 8: Glimpses of Tomorrow<\/span><\/h3>\n

BASF Grameen (Industry):<\/b> A joint venture with the chemical giant BASF utilizes dormant patents to help the poor. The company is producing chemically treated mosquito nets (to fight malaria) and micronutrient sachets (to fight malnutrition). These products use BASF\u2019s proprietary technology (Fendona insecticide and vitamin encapsulation). <\/span>The venture aims to be self-sustaining by 2011, selling products through local “Grameen ladies,” thereby creating jobs while improving health<\/span><\/span>.<\/span><\/span><\/p>\n

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Grameen Intel (Technology):<\/b> This joint venture focuses on maternal health using IT solutions. Grameen Intel developed software for smart phones that allows village healthcare workers to assess pregnancy risks in rural areas. Data is transmitted to doctors for diagnosis. <\/span>The business model involves training “Grameen\u2019s New Entrepreneurs” (children of borrowers) to operate these IT services, creating a new class of tech-savvy rural entrepreneurs while reducing infant mortality<\/span><\/span>.<\/span><\/span><\/p>\n

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Otto Grameen (Type II):<\/b> A pioneering Type II social business (owned by a trust for the poor) is being established with the German company Otto. They are building a garment factory in Bangladesh. Unlike a standard factory, it is designed to be eco-friendly and provides social benefits to workers (healthcare, childcare, training). Profits will not go to Otto but to the trust, which will use them to improve the lives of the workers and the community. <\/span>It serves as a model for humane industrialization<\/span><\/span>.<\/span><\/span><\/p>\n

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Grameen Adidas (Consumer Goods):<\/b> Adidas CEO Herbert Hainer accepted Yunus\u2019s challenge to produce a shoe for the poor costing under one euro. This project treats shoes as a health necessity (preventing parasitic diseases) rather than a fashion item. However, the goal is to make the shoes aesthetically pleasing (“cool”) to ensure dignity. <\/span>Adidas is applying its top engineering talent to crack the cost barrier, planning to mass-produce an affordable, recyclable shoe for the developing world<\/span><\/span>.<\/span><\/span><\/p>\n

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Grameen Employment Services:<\/b> To combat the exploitation of migrant workers, Grameen is launching an employment agency social business. It will train workers, handle visas, and ensure fair contracts with foreign employers. <\/span>By removing predatory middlemen and ensuring decent wages, this business protects the human rights of migrant laborers while facilitating the remittances that are crucial to the Bangladeshi economy<\/span><\/span>.<\/span><\/span><\/p>\n

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Regional Transformation (Colombia):<\/b> The governor of Caldas, Colombia, approached Yunus to help revitalize his depressed coffee-growing region. They established a $16 million “Social Business Fund” to launch microcredit and social businesses in the province. <\/span>This represents the application of the social business model to regional economic development, moving beyond single companies to a holistic strategy for economic rejuvenation<\/span><\/span>.<\/span><\/span><\/p>\n

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National Initiatives (Albania & Haiti):<\/b> Similar holistic initiatives are planned for Albania and Haiti. In Haiti, following the 2010 earthquake, Yunus proposed a “Social Business Fund for Haiti” to ensure reconstruction funds create sustainable businesses rather than temporary relief. <\/span>These projects test the power of social business to jump-start national economies, suggesting that social business could become a standard tool for government development policy<\/span><\/span>.<\/span><\/span><\/p>\n

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The Diversity of Applications:<\/b> These examples demonstrate the versatility of the social business model. It applies to heavy industry (BASF), high-tech (Intel), consumer goods (Adidas), manufacturing (Otto), services (Employment), and government policy (Colombia\/Haiti). <\/span>Each project started with a specific social problem and used the unique strengths of the partners to design a sustainable business solution, confirming that the model can be adapted to any sector<\/span><\/span>.<\/span><\/span><\/p>\n

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Chapter 9: The End of Poverty<\/span><\/h3>\n

\u00a0<\/span><\/h3>\n

The Convergence of Crises:<\/b> The world is facing a “mega-crisis” combining financial collapse, food shortages, and environmental destruction. This crisis hits the bottom 3 billion people the hardest. The financial crisis revealed the inherent instability of a system driven solely by greed and speculation. <\/span>However, Yunus views this crisis as a unique opportunity to redesign the global economic architecture to include social business, fixing the structural flaws of traditional capitalism<\/span><\/span>.<\/span><\/span><\/p>\n

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Failure of the “Trickle Down”:<\/b> Economic growth alone cannot solve poverty. The “trickle-down” effect is too slow and unreliable. In the current system, the rich accumulate wealth faster than the poor, widening the gap. Social business reverses this by integrating the poor directly into the economy as producers and entrepreneurs. <\/span>It ensures that the poor’s portion of the economic pie grows faster, accelerating the eradication of poverty<\/span><\/span>.<\/span><\/span><\/p>\n

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Globalization Done Right:<\/b> Yunus argues not against globalization, but for a new kind of globalization. Instead of “financial imperialism” where multinationals extract wealth, social business introduces a model where profits stay within developing countries. <\/span>Multinational social businesses can transfer technology and ownership to the poor, making globalization a force for equity rather than exploitation<\/span><\/span>.<\/span><\/span><\/p>\n

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The Resource Fallacy:<\/b> We already possess the resources to solve the world’s problems: technology, healthcare knowledge, agricultural science, and capital. The problem is not a lack of resources, but a lack of access. The profit-maximization rule acts as a barrier, locking these resources away from those who cannot pay high prices. <\/span>Social business removes this barrier, unleashing existing solutions to benefit all of humanity<\/span><\/span>.
\n<\/span><\/span><\/b><\/p>\n

The “Ever-Growing Pie”: <\/b>There is a misconception that for the poor to gain, the rich must lose. Yunus rejects this zero-sum thinking. When the poor exit poverty, they become consumers and savers, expanding the total market size for everyone. A world without poverty creates massive new demand for housing, healthcare, and goods, fueling a robust economy that benefits profit-making companies as well. The economy is an ever-growing pie.\u00a0<\/span><\/span><\/span><\/span><\/p>\n

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Redefining Human Potential:<\/b> Poverty is the waste of human life. A poor person might have carried the gene to cure cancer or solve global warming, but that potential is lost to survival struggles. By ending poverty, we unlock the potential of every human being. <\/span>We must move from a world of “one-dimensional” profit-seekers to a world of “multi-dimensional” people who express their selflessness through economic action<\/span><\/span>.<\/span><\/span><\/p>\n

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A Vision for 2030:<\/b> Yunus urges us to stop trying to predict the future based on the past\u2014a method that failed to predict the Internet or the fall of the Soviet Union. Instead, we should imagine the world we want<\/i> to create. He proposes a wish list for 2030: a world without poverty, without preventable disease, and without pollution. <\/span>By creating social businesses today, we can make these “impossibles” possible<\/span><\/span>.<\/span><\/span><\/p>\n

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The Call to Action:<\/b> The book concludes with an invitation to join the movement. The tools, concepts, and examples are now available. Whether through starting a small business, investing in a fund, or supporting policy changes, everyone can contribute. <\/span>The journey to a world without poverty has begun, and social business provides the vehicle to reach that destination.<\/span><\/span><\/span><\/p>\n

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“We can describe the world of 2030 by preparing a wish list to describe the kind of world we would like to create by 2030. It might include:<\/span><\/p>\n

    \n
  • A world without a single person living in povert<\/span><\/li>\n<\/ul>\n<\/blockquote>\n
    \n
      \n
    • A world whose oceans, lakes, streams, and atmosphere are free\u00a0of pollution<\/span><\/li>\n<\/ul>\n<\/blockquote>\n
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        \n
      • A world where no child goes to sleep hungry<\/span><\/li>\n<\/ul>\n<\/blockquote>\n
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          \n
        • A world where no one dies a premature death from an\u00a0avoidable illness<\/span><\/li>\n<\/ul>\n<\/blockquote>\n
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          • A world where wars are a thing of the past<\/span><\/li>\n<\/ul>\n<\/blockquote>\n
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            • A world where people can travel freely across borders<\/span><\/li>\n<\/ul>\n<\/blockquote>\n
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              • A world where no one is illiterate and everyone has easy access\u00a0to education through the application of new miracle technology<\/span><\/li>\n<\/ul>\n<\/blockquote>\n
                \n
                  \n
                • A world where the riches of global culture are available to all.”<\/span><\/li>\n<\/ul>\n<\/blockquote>\n","protected":false},"excerpt":{"rendered":"

                  \u00a0 I just finished listening an audiobook entitled “Building Social Business: The New Kind of Capitalism That Serves Humanity’s Most Pressing Needs” by Muhammad Yunus, Narrated by Ray Porter on Audible.\u00a0He was awarded the Nobel Peace Prize in 2006, and his concept about “Social Business” has attracted my concern to solve poverty problems and it […]<\/p>\n","protected":false},"author":7014,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-733","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/blogs.unpad.ac.id\/dzikrayuhasyra\/wp-json\/wp\/v2\/posts\/733","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.unpad.ac.id\/dzikrayuhasyra\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.unpad.ac.id\/dzikrayuhasyra\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.unpad.ac.id\/dzikrayuhasyra\/wp-json\/wp\/v2\/users\/7014"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.unpad.ac.id\/dzikrayuhasyra\/wp-json\/wp\/v2\/comments?post=733"}],"version-history":[{"count":5,"href":"https:\/\/blogs.unpad.ac.id\/dzikrayuhasyra\/wp-json\/wp\/v2\/posts\/733\/revisions"}],"predecessor-version":[{"id":743,"href":"https:\/\/blogs.unpad.ac.id\/dzikrayuhasyra\/wp-json\/wp\/v2\/posts\/733\/revisions\/743"}],"wp:attachment":[{"href":"https:\/\/blogs.unpad.ac.id\/dzikrayuhasyra\/wp-json\/wp\/v2\/media?parent=733"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.unpad.ac.id\/dzikrayuhasyra\/wp-json\/wp\/v2\/categories?post=733"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.unpad.ac.id\/dzikrayuhasyra\/wp-json\/wp\/v2\/tags?post=733"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}