Brainforum

There is no alternative to regulation

The collapse of Lehman Brothers in midst of September 2008 made people become sensitive towards bonus payments in the investment banking sector.We all know that they are different from the ones in middle sized or big companies.
Of course, everyone was aware of the fact that investment bankers receive an especially high remuneration – but until the beginning of the crisis, it did not matter to anyone but a few people outside the sector.
With the collapse of Lehman and the start of the financial and economic crisis, lots of credit institutions had to get back to governmental interventions in order to not break down Lehman style.
It was then that the public realized what the bonus system in the investment sector really was about and how it worked.

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Sustainability sucks!?!

Sustainability sucks? At least that´s the impression we get when thinking about the social, economic and ecologic problems we are facing and the things people do or don´t do to change the way the world moves.

Even single persons struggle with integrating sustainability into their daily life. Public transport to get to the office? Recycling? Car-Sharing?
When it is not even possible for private persons to make the step towards sustainable behaviour, how should this work out for a global company? Even more: Do we then have the right to demand this kind of attitude?

When looking at corporate homepages, the first thing that comes into view most of the times is a big and shiny button screaming “Corporate Social Responsibility”. The flash video next door talks about sustainability. In my opinion, these two terms seem to have evolved to the new and hip gadget in the world of corporate communication. The true motive rarely is an altruistic one, but the fear that some day society will deprive the company from taking action and drift over to competitors.

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“Blindfolded – The future of our children”

“The future of our children” – The title seems to affect all of us, no matter which generation we belong to.
For the old generation, the future is connected with the fear of having depreciated the things they achieved.

Our parents in contrast feel fear and hope at the same time when thinking about their children´s (which means our) future. They guide us hoping that we´ll some day find our own way and they are scared that we won´t be able to cope with all the requirements of today´s society.

Our generation on the other hand is confronted with many feelings and influences at the same time. We are torn between the pursuit of professional success and self-realization.
So is there anyone among us thinking about children? We all know that some day we want to have a family, but this day seems so far on our journey throughout life´s suprises. We conduct this journey blindfolded without knowing whereto and why. And while we are travelling, the pressure to perform and the run of information increase and our future is becoming more uncertain with every second that passes. And that scares us!?

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Can we really price nature: or what is the other version of the crisis we have today?

This article does not want to give the answer to the question, but rather wants to discuss the issue with the World Business Dialogue participants. The right answers are under development and many question raised in this article are the challenge for our generation to find the clue-solutions. At the World Business Dialogue, this challenge can be met by professionals and students.

Who can answer what our Earth is worth in money? What is the value of the air we breathe? It’s the same as to ask how much your life is worth. Seems like a very extreme comparison, but nowadays, when the modern world faces the financial crisis, it is becoming a more and more essential question.

Why? This question refers to sustainability or new fresh trends of economic development. Somebody can say that we already priced water. Yes, we did, but is the price right? Is it fair in every region? Won’t global warming correct these prices?

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The consumer’s power

The concept of a flashmob might be known by lots of people, as there have been many of such gatherings lately.

One great and widely recognized example during election time in Germany was the flashmob called “And everyone goes Yeah” that was organized by the online community during a speech of Angela Merkel, where the people present shouted “Yeah” after every sentence she finished. Merkel was pretty disturbed at the beginning and the initiative even made the evening news.

But while flashmobs are often criticized by certain people and characterized as being senseless, the alternate concept of smartmobs is making positive headlines. One sub-category of the smartmob movement is the one of carrotmobs. The initiative’s name derives from the image of a donkey longing to eat the carrot someone is wagging in front of his nose. In our case, the donkey stands for the business sector and the person holding the carrot is the conglomeration of customers. For organizing a carrotmob, it therefore takes a group of customers that are linked throughout some device (most of the times an online community) and a group of companies competing for the carrot which symbolizes the consumer’s spending power.

How Organized Consumer Purchasing Can Change Business from carrotmob on Vimeo.

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What about this financial and economic crisis?

Right now, in February 2010, hysteria and fuss which were created by the global financial crisis throughout all social ranks and countries worldwide has nearly subsided. You can even hear people asking: Does the crisis continue or have we left turbulent times? Optimism is surfacing again.

But what exactly happened since the downfall of Lehman Brothers? Several meetings of the heads of states, discussions about a global regulation of the financial sector and stimulus packages in all sizes have come over us so far. Time has passed and some concerns have not come true. But huge imbalances in our financial and economic system are still existing. Nevertheless, efforts to commonly and globally fight for a sustainable, stable and equitable economic system after two years of crisis seem to be pretty hushed.

So will we continue as usual, as if the crisis was merely a bad dream? If so, same difference there. Another crisis won´t wait to arise.

We observe an increasing acceleration of global economic processes. This acceleration, if it is not guided – this is our task -, will lead to cause and effect chains that are hardly traceable anymore. If you want to put it that way, it will lead to steadily more complex and chaotic economic processes which will especially provoke short term actions.

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“A little bit of fortune telling (or, the challenges ahead)”

Sure we’ve heard quite a lot about the current crisis and the myriad of effects it had in every corner of the world… you probably noticed some of the consequences in your country, your job or your everyday life.

Since I’m no expert in state regulations or financial instruments, for this post I thought about how the crisis will impact in our role as future leaders once we join the workforce, whether we get into the corporate world, come up with a startup, or join an NGO or government agency.

Of course some of the things you’ll find below won’t be exactly true today or even over the next months, because the priority for a huge number of people is to find new jobs and adjust to new living standards… rather, these are tendencies that started to develop a few years ago, but became more obvious or were accelerated due to the crisis.

Bye bye, consumption boom! The drop of levels of consumption in developed countries is one of the most obvious indicators of the crisis. Ironically, people in emerging markets are improving their living conditions, and being able for the first time ever to have access to products and services that were once impossible to buy.

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How to define Social Entrepreneurship?

The recent article in Beyond Profit magazine caught my attention towards the incessant doubt that I had at the back of my head – “Who exactly is a Social Entrepreneur?”, “What is the thin line of difference between a social entrepreneur and a just another businessman?”.

Probably I have matured a lot since I asked these questions to myself for the first time, as I was able to make a deeper understanding of the questions and my derivations to answer those questions. As a student of engineering background, I am more inclined towards deriving a generalized answer rather than discussing several contingent situations.

Lets just divide the whole business sector in four segments:

• Profits
• Innovation (disruptive innovation) – may or may not be technological
• Poverty alleviation
• Sustainability

The list is mutually exclusive and collectively exhaustive so that we are not missing any single element of the business domain.

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Solve the problems of the villages to help the cities

I remember reading a comprehension passage during my school years titled “A billion strong or weak” which in a Rashomon-esque manner illustrated how we can look at India either as a billion mouths to feed or as 2 billion powerful hands that can be put to work.

Idealistic in many ways, it emphasized on a very important part which I only realized after coming to college.

The economy has to ensure that there’s inclusive growth. This isn’t a rant against capitalism, neither is it a cry for pity. Over the last 2 years I have immersed myself to learn more about the developmental sector and the problems that face our nation. A talk with an eminent social entrepreneur (and one of the first Oxfam GB trustees from a developing nation) made me realize that most models of capitalism don’t benefit the poor because of the way they are structured. The poor end up having no savings because they are caught in a vicious cycle of loans and debt out of which there is no escape. This isn’t to say that capitalism in itself is wrong, in fact I believe that market based approaches to alleviating poverty are in fact very essential for progress. But the form of capitalism that I subscribe to should be inclusive in nature.

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Crisis Demands

This Crisis changed the world. For sure?

The crisis catalysed thinking from years to months – even weeks. In this fast paced environment, drafting possible scenarios and thinking of how to react to them is essential. Disastrous consequences caused by an unstable financial system have been highlighted. Furthermore, the enormous interdependencies of our globally linked world have been shown. The setbacks in growth caused by this crisis had disastrous consequences for corporations and whole states as well as individuals. As response to that, economists, politicians and entrepreneurs try their best in order to revitalize economic growth. Cushioning the crisis’ impacts forced a dramatic increase of national debts. But, what happens with the augment of public debts all over the world? Are we navigating straight into a new heavy crisis, a crisis of states?

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