How Much Can We Give for All We Get? – Ecosocial Entrepreneurship For a Regenerative Economy by William McDonough & Michael Braungart




“How much can I get for how little I give?” vs. “How Much Can We Give for All We Get?”

When the legacy of an enterprise – its long-term value to the world – drives the business agenda, it unleashes the power of commerce to create a wide spectrum of positive effects. This is perhaps best understood by the new social entrepreneurs, whose value proposition is not “How much can I get for how little I give?” – the mantra of the old capitalism – but instead, “How much can we give for all we get?” Rather than focusing on the quarterly bottom line, this new question suggests a rich, inspiring pursuit of life-affirming wealth and productivity.

“How much can we give for all we get?” is fundamentally a design question. Asked throughout the design process it guides entrepreneurs toward products, facilities and business models that grow ecological and social revenue while generating economic health. The goal is good growth for all.

The practitioners of these new business models are transforming conventional notions of profit, value and wealth. Instead of old-school capitalism’s narrow focus on the bottom line, which typically shrinks business activity into short-term profit making, social entrepreneurs are cost-effectively creating ecological, social and economic revenue, both in the short-term and for future generations.

Ecosocial Entrepreneurs – Pioneers For a Regenerative Economy

In India there are 20 million people without sight, most of whom suffer from cataracts. To serve them, Dr. V opened Aravind Eye Hospital, a twelve-bed clinic in his brother’s home in Madurai, India, and offered cataract surgery for free. Today, Dr. V runs 5 hospitals that perform more than 200,000 operations each year. Since opening his first hospital in 1976, the Aravind clinics have given sight to more than 1 million people.

If you think free surgery sounds like a bad business proposition, well think again. At Aravind, a cataract operation costs about $10; the same operation in the United States costs nearly $1700. Aravind keeps costs low, writes Rubin, with specially designed equipment that allows surgeons “to perform one 10- to 20-minute operation, then swivel around to work on the next patient-who is already in the room, prepped, ready, and waiting.”

Using this effective system, Dr V’s hospitals give sight to more than 500 people each day. Roughly one third of the patients pay nothing; one third pay 65 percent of cost; and about 30 percent seek out Dr. V and pay market rate for his services “because the quality of his work is world class.” After nearly 30 years of operation, Aravind has a gross margin of 40 percent and has never depended on donations. It has done so, writes Rubin, by inventing “a service so perfect that it created its own market . . . without any significant resources, and with a paying clientele that represented far less than half of its customer base.”

“We were not thinking of amassing money as our goal,” says Dr. V. Instead he asks, “How can my work make me a better human being and make a better world?”

David Green’s strategy is to manufacture high quality, programmable digital hearing aids for $40 and sell them with a multi-tiered pricing model similar to Aravind’s for up to $200, about $1300 less than the current market rate. He is putting this strategy to work by:

  • Hiring the former head of R&D at the largest hearing aid company-getting the instant benefit of long-term experience
  • Finding high quality generic hearing aid chips on the market and adapting them for particular hearing aid designs
  • Manufacturing at Aurolab in India, where overhead and labor costs are low
  • Negotiating discounts with component manufacturers equivalent to those normally offered on purchases of 500,000 units or more

In effect, Green is developing a business model for ethical globalization. It offers affordable pricing, local ownership of distribution and sales, and the training required to establish a multi-tiered pricing scheme, test patients for hearing loss, and provide treatment, fitting, installation, and maintenance of hearing aids. It is a model that not only offers hearing to the world but also builds the capacity of many locales for developing sustaining enterprises. There is, after all, no end to what the world needs.

Chitrakar’s approach [on meeting Nepal's energy needs] was built on three basic principles:

Invest in local capacity. Hiring western firms to build a huge dam would take the place of smaller hydroelectric projects that Nepalese firms could build, bypassing and ultimately destroying Nepal’s existing industrial capacity.

Maximize linkages to the local economy. Making borrowed funds work both backward and forward, the influx of capital builds existing local capacity to generate power and creates new capacity for economic growth. Small local firms build capacity as they grow.

Use natural resources wisely. In a mountainous country with yearlong runoff, energy needs can be effectively met with smaller, less invasive hydroelectric systems.

Following these principles, local and government-owned firms, along with international companies, have built small and medium sized projects throughout the country, which created twice the energy output of the originally planned dam for half the cost in half the time. The re-directed loan was also used to establish a power development fund for local companies. As Chitrakar has said, the world needs a bank, but we must be able to direct the bank’s capital to projects that truly meet a nation’s needs.

What Nobody But Me Can Do, What We All Can Do

“You don’t have to be the best of the best. Just do what only you can do.”

What do you do? There are literally millions of answers to that question. No single vision or leader can possibly build a truly sustaining world. It is going to take all of us.

It will take thousands of affordable hospitals, an idea taken up by Lions Aravind Institute of Community Ophthalmology, which is offering the Aravind model to other eyecare organizations throughout the world.

It will take institutions like the Grameen Bank, which extends loans to entrepreneurs too poor to qualify for traditional credit-$1 billion lent to 2.4 million borrowers, 95 percent of whom are women-and thereby offers an empowering catalyst for community economic development.

It will take technological ventures like the Benetech Initiative, which uses entrepreneurship to harness the power of technology to meet social needs, from removing land mines to safely storing human rights data to providing an Internet library for the blind.

It will take groups like Associacion ANAI, an NGO helping Costa Ricans integrate people-centered conservation and development initiatives that strengthen local communities capacity to be economically self-reliant while preserving the biological wealth of their remarkable rain forests.

Ultimately, that is what we are all working for: commercial activity that is economically profitable, ecologically regenerative and socially empowering – a regenerative economy whose benefits are shared by all. And when we ask . . .

“What do I do?”

“How can my work make a better world?”

“How much can I give for all I get?”

. . . we can begin to become powerful catalysts for change and take the first small steps toward creating a world of fairness, hope and sustaining abundance.

~ This article is an abbreviated, rearranged and summarized form of “How Much Can We Give for All We Get?” by William McDonough & Michael Braungart

Keywords : ecosocial crisis, ecosocial entrepreneurship, work, capitalism, socialism, regenerative economy, design, profit, business model, commerce, trade
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Published::
5.3.07 / 11am
Category:
Appropriate Science and Technology, Change in Change, Ecosocionomics, Global Governance, Means, Paths, Ends, Spirituality
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