Author: Lay Hing de Kort-Yee, Chief Purpose Officer Cornerstone Economics
We understand, talking about the social role of business is not common for traditional businesses. Very easily confusion can arise between the concept of capitalism and socialism, giving rise to prejudice.
However, the social role of business does not relate to the concept of socialism. Social impact relates to the sustainability for a business, which in turn refers to the achieving of profit while looking after people and the planet.
The World Council of Sustainable Development has a saying: “business can’t succeed in societies that fail”. It is in the best interest of companies for its community to thrive, because it directly benefits their own bottom-line.
How does a business benefit from a thriving community?
For example, if a business contributes to student and youth programs, in the long run the youth will become their employees of the future. Having healthy families, contribute to engaged employees, and higher productivity. Imagine a world, where we deplete our natural resources, how will we continue to live our daily lives? Sustainability is a word that has gained more and more popularity, but in order to achieve sustainability the needs of the current generation should be considered without reducing the options for future generations.
Are businesses in Aruba ready?
New concepts such as social economy, circular economy, shared economy got their entrance in Aruba, connecting us to global developing trends and keeping us as a country sharp! Certainly, some businesses in Aruba are investing in their Corporate Social Responsibility Programs, and with the recent pandemic, businesses have become more aware of their vulnerability for external shocks coming from their own community. However, we are still far from seeing structural changes. For structural changes to take place, businesses need to adopt these concepts in their Key Performance Indicators and planning. While the public sector should consider incentives to reward businesses that contribute structurally to their community.
Why it matters for Aruba and businesses?
Aruba performs comparatively well on several important indicators in the region. Overall, Aruba’s health sector knows a Universal Health Insurance that even some of the wealthiest country don’t have. The literacy rate in Aruba is relatively high and highest in the Caribbean, report at 97.81% in 2018 (World Bank), with one of the highest levels of education in the Caribbean. In addition, we have a strong and resilient tourism sector.
However, social progress in Aruba over the past years has shown its challenges. Therefore, the Social Crisis Plan has been enacted by the government of Aruba even before the pandemic of covid-19. Even before, when there was relative economic prosperity in Aruba, there continued to be challenges and dysfunctions in the social outcomes of the nation. There are many reasons for businesses to consider tackling these social dysfunctions as well from an entrepreneurial perspective. Preventing poor social outcomes have many economic benefits, including reduction of crime, maintaining skilled workers and a prosperous community.
Often, we look at these dilemmas as something that the public sector and NGOs should solve, and indeed, we agree that they have that as their first mandate. However, businesses can also be part of the answer, businesses can lead!
As a matter of fact, businesses and entrepreneurs have the perfect profile to do this, considering their flexibility, stamina, market adaptability, creativity, and innovation. Businesses have particular resources in the form of people, skills, and capabilities that can contribute to building social capital.
The question is then, what society’s problem are you solving with your business? A question that makes little traditional sense. However, we do have hope to see more and more local businesses understanding their influence and impact. Understanding their strengths and superpower and use this particular for their own prosperity as well as the well-being of their community and the world.
Cornerstone Economics was created to support impactful and sustainable business models, NGOs, and programs through economic, finance, and strategic consultancy and training. We support organizational and systematic change by helping our clients formulate a strategic vision that considers the impact on its community while taking into account its financial sustainability. We focus on a customized approach with practical solutions to our clients to achieve their sustainable goals. We integrate sustainability into everything we do. Visit www.c-economics.com for more information.