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LSE Public Lecture: Professor Alnoor Bhimani in conversation with Nobel Peace Prize winner Muhammad Yunus

21 November 2014

Muhammad Yunus

In a conversation with Professor Mohammed Yunus, Professor Alnoor Bhimani explored the idea of and prospects for businesses which offer a ‘return of investment’ but no ‘return on investment’. Professor Mohammed Yunus is the founder of Grameen Bank and author of Building Social Business. He explained that Grameen bank has established a number of social businesses including joint ventures with commercial firms such as Danone, Intel, Reebok and BASF.  The intent is for these entities to develop business models that benefit the poor while leveraging their core competencies. Unlike traditional business, Professor Yunus noted that a social business operates for the benefit of addressing social needs that enable societies to function more efficiently. Social business provides a framework for tackling social issues by combining business know-how with the desire to improve quality of life. This opens the doorway to a new dimension for capitalism: a business model that does not strive to maximise profits but instead to serve humanity’s most pressing needs. Within our economic system, Professor Yunus stated that there are now two key types of organisations: private sector companies and not-for-profit enterprises. Where both governments and the markets reach their limits, charities may fill the gap. But this system has failed to involve the poor into its economics. A primary feature of a social business is that when the investment is paid back, profits stay with the company for expansion and improvement. No dividend is provided beyond the investment outlay. The argument is that for instance, in relation to technology, those who control it seek to maximise profit generation as a principal objective and use technology as their means to achieve this. But technology can also be used to end poverty or combat disease as primary aims for instance. The problem is that the present theoretical framework under which capitalism operates does not allow this option - however the inclusion of social business creates this choice.  

The video and audio recording is available here.

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