Why Business Can be Good at Solving Social Problems
by Peter Smith
October 18, 2013
in 501c3, Articles, Finance, Good Business, Mission, nonprofit, Social Enterprise, Social Entrepreneur, social entrepreneurship
Business is a tool, its how you use that tool that matters. Michael Porter, the Harvard Business School Professor in the Ted Talk video below, argues that business can be the tool to solve the world’s greatest problems.
We all know the social problems: childhood obesity, poverty, water scarcity, poor healthcare, climate change. Usually, we look to NGO’s—nonprofit charitable organizations—or government to solve these problems. Often, however, nonprofit work falls disappointingly short, and government . . . . well try calling the IRS (or any other federal government agency) today and see how far you get.
What’s getting in the way of these organizations from solving the big problems? Simple, says Michael Porter in the video below, the problem is an inability to scale. There is not enough tax revenue for government to solve social problems at scale, and there is not enough charitable giving for nonprofits to work at scale. It’s not that NGOs or government can’t or don’t play a role, it’s just that business must be the primary player in scalable solutions.
Here’s Michael Porter:
January 27, 2020