Michael Porter: Why business can be good at solving social problems | Summary and Q&A

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Michael Porter: Why business can be good at solving social problems

TL;DR

The content explores the idea of tapping into the power of business to address social problems by embracing the concept of shared value.

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Questions & Answers

Q: Why are we having so much trouble dealing with social problems?

One of the reasons why we are having trouble dealing with social problems is the lack of scale. While there have been incremental improvements and small solutions to these problems, we are unable to make a large-scale impact. The scarcity of resources, particularly money, is a major obstacle in addressing these challenges.

Q: Where do the resources for solving social problems come from?

The majority of resources required to address social problems come from business. Business creates wealth by meeting needs at a profit, which in turn leads to tax revenue, incomes, and charitable donations. While other institutions can utilize these resources to tackle social issues, only business has the ability to generate them.

Q: How can business contribute to solving social problems?

Business can contribute to solving social problems by embracing a concept called shared value. This is achieved by addressing a social issue through a business model, creating both social and economic value simultaneously. By finding opportunities for shared value, businesses can have a significant impact on society and help scale the solutions to these problems.

Q: What has been the traditional view of business's role in social problems?

Historically, business has often been seen as part of the problem in social challenges. Many industries, such as fast food, drugs, and banking, have contributed to these negative perceptions. This view has led to a lack of respect for business and a belief that it is not the solution. However, this perspective is justified due to the actions of certain bad actors within the business world.

Q: How does the conventional wisdom regarding business and social problems differ from the reality?

The conventional wisdom suggests that there is a trade-off between social performance and economic performance for businesses. However, a deeper understanding of social issues reveals that business does not profit from causing these problems. In fact, business can benefit economically by solving these problems, such as reducing pollution, creating safer working environments, and prioritizing employee health. There is a fundamental synergy between social progress and economic efficiency.

Summary & Key Takeaways

  • The world is facing numerous pressing social problems such as poor nutrition, climate change, lack of healthcare, and pollution.

  • Previous approaches to solving these problems, such as NGOs and government efforts, have not been able to scale up and make a large-scale impact.

  • Business has the potential to address these social problems through the concept of shared value, where social and economic value are created simultaneously by meeting important needs. This approach requires collaboration between business, NGOs, and government.

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