Earlier this summer, Bill Gates wrote a Time magazine piece about creative capitalism. Nowadays that seem like ages ago. These days we seem to be patching up our version of the free market. According to Bill creative capitalism may be the answer to the question: How can we most effectively spread the benefits of capitalism and the huge improvements in quality of life and provide for people who have been left out?
While idea remains debatable, I’d leave that discussion for some other time. For now I would assume that it works. Also the efficiency of his prime example, the RED campaign have been question a few times, however for the purpose of this entry, I will also assume that this is a managerial challenge and not a structural problem.
On Wall Street
Politicians ripping into Wall Street, is common these days. Yes, financial service firms got drunk off fancy models for a while, but the real problem here is that wall street is cold. Stone cold, money grabbing, never caring, bottom-line driven crowd at least that is the image projected by the media. While the Street and financial services firms in general may be broke, this is also the time to retool the model. It is time the street became a bit more creative about profit making. The state of events also present a unique opportunity for Wall Street to set a new agenda where firms can display a more human side, rather than their walled persona of the recent past.
On Broad Street
None of my blog entries will feel complete without a discussion on Africa and my second favorite African country, Nigeria. What would be the fate of financial service firms in Nigeria if they ever needed a bail out. Imnakoya while holidaying in Nigeria observed that the gains from the financial sector in Nigeria did not seem to have trickled down to the man on the street. Isn’t it time that those at the helms of financial institutions in Nigeria start paying closer attention to civic responsibility. I am not talking about the hype, holding giveaways once in a while, but activities that genuinely seek to elevate the indigent in the communities in which they operate. Word on the street is that the stocks of financial institutions may be over priced by as much as 52%. Isn’t it time for this institution to play nice because they may need a shoulder to cry on when the moment comes. .
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What is cretive capitalism?
Here is Babara Kiviat of the Time Magazines pessimistic summary of creative capitalism: “his phrase for applying market forces and business know-how to solve the world’s problems, like mass poverty. It’s one part corporate social responsibility (caring about “stakeholders,” not just shareholders), one part Fortune at the Bottom of the Pyramid (poor people become profitable if you sell to enough of them), one part cause-related marketing (buy my company’s stuff and I’ll give money to people you want to help), and one part goodwill (praise from government, NGOs and the press for do-goodery that ostensibly pays off in increased brand equity).”
Here is creative capitalism in Bill’s own words:“an attempt to stretch the reach of market forces so that more companies can benefit from doing work that makes more people better off. We need new ways to bring far more people into the system — capitalism — that has done so much good in the world. Naturally, if companies are going to get more involved, they need to earn some kind of return. This is the heart of creative capitalism. It’s not just about doing more corporate philanthropy or asking companies to be more virtuous. It’s about giving them a real incentive to apply their expertise in new ways, making it possible to earn a return while serving the people who have been left out. This can happen in two ways: companies can find these opportunities on their own, or governments and nonprofits can help create such opportunities where they presently don’t exist.”
In my own words, helping the less fortunate amongst us using the same agents of capitalism. Mostly for our own sake.
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Tags: Bill Gates, Economy, Wall Street
