Why invest in culture is good for the society and the economy?

One of my friends shared on Facebook a video named « La parabole des tuileries », demonstrating the positive impact of culture on economy and society. The video shows a man seating in the Jardin des Tuileries in Paris in a sunny day. The person is thirsty and goes to a pub to drink something. If you order a few glasses, the first glass gives you a deep pleasure, the second one gives you a bit less pleasure than the first one, the third one no pleasure at all as you don’t feel thirsty anymore. This demonstrates a fundamental rule of the economy, named the law of diminishing marginal utility. This law is valid for most of consumption goods. When you buy a new smartphone or a new car, the pleasure is short-lived and the desire to acquire a bigger car, a more sophisticated smartphone is for some of us already in our head. The marketers name also that phenomenon the post-purchase consumer regret.  This phenomenon encourages people to buy always more and to impact positively the economy. But are people happier, and is such way of consumption based on the frustration sustainable? There is an exception to this: the culture. When, for instance, you listen to the music, you want to listen more. When you like books, you want to buy more books. The pleasure remains and is growing too. This is certainly because teachers at schools have taught you the taste for music, for book, for culture. This video demonstrates that when governments spend money in culture, they can expect a return on that investment. Culture is a necessity, an asset for the society and for the economy, for many reasons. Let’s have a look on this.

–          Basic knowledge: Culture, like education, is a fundamental basic that contribute to people development. Reading books for instance, contributes to our literary culture, but more basically to growth our vocabulary. Vocabulary is the basic of communication. Today, some statistics reveal that a range of adults shows lack of vocabulary and don’t understand what they are reading. Such lacks cause problems in the professional life, when some people don’t understand some given instructions and run things on a wrong way.

– Openness: culture is something contributing to openness, to develop our reasoning capacities. We can learn different reasoning and compare them with others. It nurtures our critical mind and judgment capacities. The knowledge of different cultures, from foreign countries is an opportunity to see the wealth of our differences. In the era of internet and social media, openness and language knowledge is clearly an asset to catch opportunities and develop global projects.

– Creativity: Culture is a reference that feed our creativity. The philosophy, for instance, includes concepts about human being principles and things, about their role in the universe. The knowledge of these concepts gives us the possibility to transpose them in another context. Luc De Brabandere, a Belgian consultant in creativity, was a mathematical engineer. His passion for creativity made that he made studies in philosophy in order to understand our environment and to apply philosophical and mathematical concepts in the creativity domain.

– Actor of the society: Culture is something you can acquire but is also something you can create. Culture is a never ending story, and by subscribing to cultural activities, you become the actor of your own life, and enjoying the fact that you can be creative, you can achieve personal goal. To consume is an act, but consumer is not an actor.

– Serenity: Culture, like education is the main thing we need to conquer our freedom. By acquiring our knowledge thru education and culture, we expand our possibilities, but we empower also our self-confidence, and reach serenity. By feeling good with yourself, you are good with other people, and build communities contributing to a better world.

– Economy:  Culture creates local economic activity. As described in the video, when people enjoy the museum, they contribute to create activity and jobs within the museum. The museum contracts goods and services to sustain the cultural activities, but contributes also to develop the tourism activity, what is benefit for hotels and restaurants around, for public transports, etc. Here is what we call the multiplier effect of the investment in culture.

Culture is something immaterial, but is probably the best investment a society can do. Culture is an investment that gains value, for a community as for each member of the community. Culture is the ferment of a sustainable and progressive society, where people can conquer their freedom.

A technological symbol for a better future.

Bertrand Piccard and André Borschberg, the two founders of the Solar Impulse project.

On Friday may 13th 2011, the experimental solar energy airplane, Solar Impulse, was starting his first transnational travel, taking off from Payerne in Switzerland, and landing on the Brussels Airport, 13 hours later. Solar Impulse, is the result of a project initiated by Bertrand Piccard, doctor and aeronaut. “The goal of such experimental project is to encourage political decision makers to adopt more ambitious policies in energy matters.” said Bertrand Picard. He pleaded for a change of mind in order to encourage people to use green and renewable energies, and to stop to waste fossil energies.

This nice technological project is in my mind a symbol for different reasons.

• This solar airplane is an evidence that we can always move the limit forward, and here more specifically the limits of research and development. During this first transnational flight between Switzerland and Belgium, the pilot, André Borschberg, the pilot and CEO of the project, mentioned that the solar cells of the airplane captured more energy than the airplane needed during this travel. This is probably the first time that a transportation mode is acquiring or “producing” more energy than he uses. It is a revolutionary invention, giving opportunities to other project developments.
• This project contributes to build a better world on the ecological level. By using renewable energies, this technology contributes to preserve the natural resources. As we know, natural resources capacities are not unlimited, and we are using more resources than the world is producing. By using renewable or green energies like solar and wind energies, we contribute to preserve our environment, to reduce pollution and preserve ecosystems.
• These renewable energies can have a positive impact on the economy. The usage of fossil energies will become more and more expensive as the costs of extractions are increasing. The cost increase of fossil energies has a negative impact on the margins of the companies. The usage of renewable energies could have a positive impact on the profitability of the companies, and could ensure the sustainability of their activity by decreasing their dependency to the fossil energies.
• The human begin is able to do the best. This solar energy airplane is the result of efforts, of people working together on a project contributing positively to the development of the usage of renewable energies. This project is the result of a wonderful team work, where each people dedicated efforts to contribute to the success of such beautiful project, initiated by Bertrand Picard. I remember when Solar Impulse did his first experimental flight, Bertrand Piccard was crying because he was so happy to see the concretization of his dream, and we could imagine that this day was so rewarding for him but also for all the team working on this project.
• This project is a nice example of entrepreneurship. This project concretization is a wonderful incentive to promote entrepreneurship. It shows that dreams can be transformed into reality, and that by joining competences within a team and with hard work, it is always or very often possible to reach objectives. And if such project does not succeed on the first trial, we can always learn from the different steps we cross over. Each experience provides a useful feedback.

These are a few reasons making me think that Solar Impulse is a symbolic invention, a symbolic project. And if you have a look to the website of the project, you will notice a wonderful Jules Verne’s quote that the Solar Impulse illustrates very well: “All that is impossible remains to be achieved.”

Visit the website of this wonderful project: http://www.solarimpulse.com/

Bootstrapping, a way to make stronger businesses?

 

IT entrepreneur

Some entrepreneurs unfortunately lost their business or project, because they made it with some investors who wanted to have a certain short-term return on investment level. As the expected return on investment was not reached, the founders of the project were sanctioned by the investors and pushed out of the company.

I read in the Belgian economical magazine Trends-Tendance, the story of three partners who had to face such adventure. These three engineers decided to start a new project, but following a totally different business model. They build a new business in the field of digital imaging, a technology having customers in the medical and aerospace sectors. The major concern of this business was to protect the intellectual property of such technology. The patent price for such technology is expensive, and the three partners have to allocate the major part of the profit of the activity to the deposit of such patent. To reach that goal, the challenge was to make the needed profit, and in this case to do business based on a low cost model. They have no offices. Each of the partners is working at home, having only meetings when necessary. They are using free open sources software, communicating thru free voices over IP systems, like Skype. They have no company cars, and are maximizing their travel with public transport, and eventually renting a car when really necessary. One of the partners explain that to work in such a way has of course an impact on their professional and personal life. It implies to have new habits, but the conclusion is that they keep the control on their business and they are very happy.

By thinking about this experience, we note that these entrepreneurs took the option of bootstrapping. Bootstrapping means that you start your activity or business with limited funds and without partnership with investors. It implies that you will have to contract only the necessary costs to develop your business. In each case, you will consider if there is an opportunity to spare money, or to contract a service or a good for a better price. You will also consider if you can do it yourself. The chance to succeed in such process is linked to the competence level of the partners. What you can do yourself is an opportunity for cutting costs. A partnership with members having different and complementary competences will be definitively an asset. In such process, we can maybe see an opportunity to build businesses with much more added value. As your margin are thin, more attention will be paid to the return on investment of the contracted expenses, and maybe the basis of the business could be stronger. You will probably invest money in tools providing more added values to your project and more return on investment after, instead of investing in a luxurious car, which can bring maybe more appearance but which will not contribute to increase the quality level of your product or your services. With the development of technologies, we can more easily see than before, the level of people competences and services performances. This is what the customer is looking for.

But do not forget that such approach is not always a guarantee of success. Each project needs a minimum of capital in order to be implemented. The lack of capital make that some projects are never concretised. Nevertheless, this way to operate will make that people will probably do business on another way, with long term views contributing to develop a sustainable economy where imagination and creativity will be the motivation and the profit the middle to make the dreams work.

The perception of changes, an open window to new opportunities

 

The Center for sustainable energy and technologies in Ningbo - China

Yesterday, I was listening on the radio that the last car was produced in the Opel assembly plant of Antwerpen in Belgium. This is the consequence of the General Motors bankruptcy and the related restructuring process. The Flemish Regional government tried to make lobbying to find another partner to buy the business in order to save a local production, but also to save jobs. On another way, I was reading an article published in the Spanish newspaper El Pais and translated in the Courrier International, that the Silicon Valley, symbol of new technologies and entrepreneurship, was moving his activity in the green technologies. I was wondering why it seems that some countries seem to be always in advance in term of innovation. There are probably many factors to explain such differences.

It is obvious that we are living in a fast moving environment. These fast changes imply to have a long-term view. Changes are sometimes slow but ongoing processes, but we only perceive then at a certain moment. If for instance, you plant a tree in your garden, and you are looking to it everyday, you will not perceive that the tree is growing a bit every day. It is after few weeks or months that you will suddenly notice the tree grew significantly. What is interesting to know is if it is the change which is not always easily perceptible, or is it our mind which don’t want to change of vision easily. Are our mind progressive or conservative? It depends of each of us and we need probably more or less time to integrate new ideas, new paradigms. Does this break of perception, linked to a culture difference, explain that some countries are more innovative than other? This is an interesting question underlining different important aspects, in which governments could have a key role to play.

As said, a sustainable economical development needs a long-term view. Some well performing industries will not be anymore in few years, because the economical environment is changing. It is important to predict what will be the long-term changes, based on what we can observe today, in order to develop appropriate policies to ensure these developments. Let us take the example of Belgium. This country was known during many years as a country where car manufacturers were investing. The car manufacturing industry was bringing a lot of jobs, and these factories were appreciated for the productivity and qualification of people. It was of course a good source of revenues for the State, and as far as everything is fine, we do not look further to what could be happen. But since many years, like in most of western countries, the employment in such factories was decreasing, and companies began to invest in countries where the manpower was cheaper than in western countries. The trend seemed to be obvious. These industries were not expanding their activities in our countries. Our economy is changing and needs transformation. Some elements are necessary to implement such transformation. But are our governments supporting enough the economy renewal implementation? Let us take another example, when by the past, the Belgian Government allowed huge intervention to save the metalwork industry, but like the automotive industry, the size of the production plants and the jobs did not stop to decrease. Was it a good initiative to sustain a declining industry sector in our country? It was probably a good initiative on a short-term basis in order to save jobs, but not on a long-term basis. It would probably be better to allocate budgets to develop new fields of economy and to give incentives for research and development programs.

Since few years now, a lot of local initiatives are taken in order to sustain the development of new economical projects. The question is to know if the efforts and incentive done by the governments to stimulate the innovation and the creation of new economical development fields are sufficient, and if such measures are not coming too late? Is this the result of a too conservative view of our world? Ilya Prigogine, Nobel price in chemical sciences, was used to say that we have to build the present time, based on the experience of the past and by anticipation of the future. If we have a look to the past, we can note that everything has changed, and that there is no reason why this process should stop. This is a reason why we have to be aware about each change, each trend we can see. We have to consider these changes as an open window to new opportunities and challenges. It is a question of mind, of vision about our world, to be able to change of paradigm and to think out of the box. It is obvious that by mentioning this, we underline the importance of education and the qualification level of people. Knowledge and capabilities are the raw material of innovation and development. A strong and sustainable economy can only be build with a performing education system, and by encouraging people to acquire a culture based on adaptability, and considering changes as a opened window to new opportunities and challenges.

 

 

Economical growth or economical development.

Dominique Strauss-Kahn, director of the IMF

At the opening of the International Forum for Human Development in Agadir (Morocco), Dominique Strauss Kahn, the director of the International Monetary Fund, said that the financial and economical crisis destroyed around 30 millions jobs around the world. He said that in a perspective of a new globalization, the first priority should be the employment.

By reading these figures about employment, could we say that the economical and financial crisis is over, beside the fact that the company results are better than in 2009, and that the stock exchange markets recovered more or less their level from before the crisis? It should be premature to take such conclusions.

I was reading an article about the crisis effects in the United States of America, where there are now the mid-term elections, and where the consequences of the crisis on job market are a real issue for Barack Obama re-election. The particularity of the United States, and also of the United Kingdom, is that people are deeply indebted, and the level of unemployment remains high. People are facing real problem to reimburse their loans and credit card invoices. The risk of personal bankruptcy remains high, and as consequences, the financial system remains fragile. Within these two conditions, it is difficult to re-start the sustainable economical growth. And we have not to forget that main countries are facing to a high public debt, after their monetary intervention to save banks from bankruptcy. To try to restart the economical growth on a sustainable way, by allowing people to contract new debts should not be a good idea. Such strategy would be a risk to weaken the financial system, with the risk that the states could not intervene a second time to rescue the banks.

It does not surprise anybody to see that millions of jobs were lost in these particular exceptional economical circumstances. Companies were obliged to take restructuring measures in order to preserve their profitability. We heard at that time, companies which did not want to take the risk and were unable to make some forecasts in such misty circumstances. But since many years, we can see companies cutting jobs in order to maximize their profits and to give more return to the investors. Is it a sustainable logic?

If you want to create economical growth, it implies that people needs to have revenues in order to contract produced goods and services. Main of the people earn revenues from their work. A company hiring people to produce goods or services, is paying a salary to the employees, and so, is creating a wealth re-distribution mechanism. A company can only be profitable, if people can pay the price of the produced goods or services. This equation is easy to understand. These last years, the maximization of short-term financial profits was the main objective of investors and not a sustainable economical development. The financial and economical crisis induced significant value impairments, and in some case, a negative return on investments.

Here, we can see the major difference between economical growth and economical development. It is not forbidden to think that if companies were more focused on human capital and know-how than on financial profits, they would have probably lost a few percent of profit, but they would have contributed to maintain a purchasing power level for the people, and by consequences, ensure future revenues. They could also preserve the know-how of the company. With the development of the new technologies, each people is playing a key role in the companies, and the replacement of such profiles represents a cost for the company. But this logic is not followed by some investors, more focused on personal interests than common interests. And these speculative logical is a break for the business development. Today, companies are facing difficulties to develop their business, because they can not find credits to finance their development.

In a sustainable economical development model, you are not only focused on profitability, but you are focused on a range of key factors: business development, finance management, marketing, human capital management. As in many projects, it is fundamental to determine what is the real goal. In a sustainable economical model, the goal should be the wellness of the people and the business sustainability, which implies a long term view.

Development, a sustainable way of growth.

BP's oil spill, an ecological disaster.

The United States of America are facing the worst ecological disaster since more than a month with the BP’s offshore platform accident. The flow was already categorized as the largest offshore oil spill in the American nation’s history, but the new figures are much higher than the previous estimates. President Barack Obama pronounced a speech, saying it is time to develop the field of new and renewable energies, cleaner for the environment.

But the question is to know if there is really a will to develop such energy field? There is a debate and different mind regarding oil reserves. The extraction of oil becomes more complicated as we have to extract it deeper. The development of more sophisticated extraction techniques shows that we are able to find new oil reserves. But this has a cost, not only on an operational level but also on the ecological level. Money is spend to develop more sophisticated extraction techniques, but have we the full control of the process in case of accident, and are the safety measures always followed? The present situation in the Mexican gulf seems to show it is not the case. As often, companies are focused on short-term profit, forgetting the risk management. Oil generates appreciable profits, but in the Gulf oil spill, the ecological and economical cost is probably much higher for the country, compared to the generated profits on the same period. The balance of such disaster is clearly negative, as the estimated cost amounts to 1 billion usd. This oil spill will have short and long term effects on an economical and ecological point of view.

I would like to make the following comment. Often, ecology and economy are considered as two distinct things, incompatible and with no links between. This is a wrong point of view. Each natural and ecological disaster generates re-construction costs and no added value. In the case of the gulf oil spill, it would have been more interesting to spend the lost money to the development of renewable energy technologies. Research and innovation are an economical motor. The development of sustainable and renewable energies resources provides long terms economical and ecological benefits.

In order to develop a sustainable economy, it is important to analyze the benefits and the risk of each choice, each alternative, but we have also to distinct the difference between growth and development. Let us take an easy example: the growth of the pharmaceutical industry in a country is a good deal for the economical statistics, but it means that the consumption of medicine is increasing, which means that people are not in good health. This is not a really positive situation. On the other side, if the building industry growth is increasing because you build new schools and empowered the education system, this growth contributes to development with future long term economical and social benefits.

Development is the key of sustainable growth. Each crisis we met is destroying values, and the time and energy we spent to recover the lost value, to be again on the start point is a pure waste. A growth based on sustainable value contributes to a long term development, where each step contributes to the next one. It means also that in a development process, each component needs to be taken into account, not only the economical side, but also the social and environmental components, and all these components need to be integrated on a long term view.

Pension and retirement: finally the paradise?

During the month of February, the Belgian government published the “green book”, including conclusions about the payment of retirement pension, the challenge for the coming years. The conclusions were not a surprise, but only what everybody already knew, conclusions already done by economists and demographers. The government and some political people begin to admit that if people want to get a decent pension later, they have to save money. The problem of pension payment is due to the pyramid of ages. Indeed, the percentage of retired people is increasing. It means that the weight of pension costs on shoulders of active people will be more important.

An announced conclusion of the study was that people should work 3 years more than the average. It does not mean that the legal pension age would not be 65 years but 68 years. We have to know that in Belgium, only one person over ten who are between 55 and 60 years old is still working. We are one of the European countries where the activity rate of this generation is the lowest.  How to explain such fact? In Belgium the tax level on work is very high. For somebody who spent few years or his full career in the same company, the lay off indemnities are very high. Of course, each employee agrees to have the maximum of indemnities, but should not be better to have less indemnity but to work for a longer time?

In Belgium as in every country, there were several restructuring processes in large companies, creating social disasters. It is always a painful hardship, where people are wondering how they will pay the bills at the end of the month. Most of them, who were more than fifty five years old, were retired anticipatively. By hearing some politicians, I have the feeling they were considering this as a gift, the fact that people who were wrongfully fired, merit to be retired anticipatively. Does it mean that everybody is necessarily happy to stop working when he is fifty five years old? Does it not mean that you are considered as too old, and then useless? Some studies showed that people who were retired anticipatively, by their own or by force, have a lower quality of live after few years. So to be retired anticipatively is not precisely a gift.

It is of course more difficult for people with lower qualifications to find a job when they have a certain age. But on the other side, with such view I explained before, the qualities and knowledge acquired by experience are not valued at all. In a previous posting, I was talking about the employability, meaning that each worker needs to gain in knowledge and expertise in order to move with the environment changes, to acquire tools and develop capabilities in order to face new challenges. The combination of experience and trainings provides added value and know how for each worker and as consequence for the company too.

It has to be remembered that the education is also important, that everybody needs to have enough chances to start in the active life. There is a lot improvement to be done on that level, when we are noting that in a city like Brussels, capital of Europe, there is around 20 percent of workless people, and for young people who are between 15 and 24 years old count around 35 percent of workless people.

Work is a right, and the government should take initiative in order to give chances to everybody to get dignity to have a job, by empowering the education, by promoting entrepreneurship, by encouraging social and economical initiatives. Work is the way to ensure independence to everybody. It is only on this base that we can maintain a sustainable social system.

Work is a right, and should be more considered as this and not as a constraint. It is a constraint if you do not like what you do, or if you are not considered for what you are doing. Confucius said: “Choose a work you like, and you will never have to work a day in your life.”

Picture source: http://www.summersdale.com/images

Statistics, the best way to lie.

Unemployed people

This week, listening to the news of the French Belgian radio (RTBF), I heard a new about a pessimistic forecast about the unemployment in Belgium for 2010. Following a study led by Philippe Defeyt, economist and member of the board of directors of the IDR – Institut pour un développement durable (Sustainable development institute), the unemployment rate in Belgium should reach a historical level in 2010 compare to 1970, with a rate of 14,6% of the working population, representing a number of 750.000 unemployed people.

The IDR analyzed few macroeconomics variables from 1970 until now. If the number of jobs increased of 17% compared to 1970, the total number of working hours done by this working power is lower compare to the number in 1970 (less 5% in 2010 compare to 1970). During 31 years, the working population increased of 1,3 million of people, but the available jobs increased only of 650.000 units, it means only the mid of what should be necessary to give a job to everybody.

These are few elements included in the study. But what was amazing, is the reaction of the minister of employment, Joëlle Milquet about the figures related to the unemployment forecast. She told that these figures were totally overestimated, giving a worse picture of the situation. Really ?

Here is the question about the definition of an unemployed people. Following the minister of employment, the definition of unemployed people includes the workless people looking for a new job. It means that the unemployed people who are 58 -60 years but not looking for a job because considered as too old, are not taken into account.  Following Philippe Defeyt, the two categories are included in the statistics, as they are facing the same problems when they are looking to their bank account at the end of the month.

It is a bit difficult to understand why a category of unemployed people are not taken into account by the statistics of the government, when such government includes political parties defending social values, and when they are claiming to develop social politics to decrease the poverty. Belgian is one of the countries where the rate of unemployed 50-60 years old people is the lowest. It is totally senseless to ignore such people from official statistics.

By reading this, I remember my studies, where one of my professor of statistics defining statistics as ‘the Best way to lie”.

Institut pour un développement durable – http://www.iddweb.eu

 (Picture source : http://www.onlineforextrading.com/blog/wp-content/uploads/2009/02/html-for-food-292×300.jpg)

Small could still be beautiful

Silicon Valley, land of innovation

In my previous posting, I was talking about the social economy as an alternative. Of course, to face such complex problem, there is not only one solution, but different ways of alternatives. If I am coming back to this subject, it is because when some indicators are showing that the recession seems to be over, other consequences of the economical crisis are still there, to prompt us to stay moderately optimistic ….or pessimistic. That is what we could see in the news these last days.

Few days ago, there were around seven hundred people losing their job in the Brussels region. A major media distributor felt in bankruptcy and around four hundred people will lose their job. Another pharmaceutical group announced a new restructuring process, by cutting one hundred and seventy jobs. A press group, facing to a decrease of advertising revenues announced also a job cutting of seventy six employees. These tree companies were obliged to axe jobs for different reasons. There are circumstances where we have no choice to cut jobs in order to ensure the company continuity.

Regarding this problematic, I would like to talk about the axed jobs as consequences of merging and acquisitions processes. We can hear very often companies explaining that they acquired other companies or merged with other companies because there are synergies and complementarities between activities. In my mind it should mean that the combination of different activities should provide new opportunities and generate more revenues. It makes sense for small companies who have similar or complementary activities but which can not reach a critical size in their market. But for bigger companies, like international groups, it appears that most of the time, the purpose of such operation is often a financial goal. Most of the time, after such operations, it follows a restructuring wave and a lot of jobs are axed. As already mentioned in other postings, how can this economy survive, when the principle seems to be “do more with less people”? If people are losing their purchasing power, how can we sustain a growing economy? Are merges and acquisitions always necessary to ensure a business? Some years ago, a Belgian fashion designer, Olivier Strelli decided to expand his activities in Japan. After some problems of unfair concurrency and piracy, he decided to stop his activities in this country. Finally, such decisions did not have a negative impact on his business.

It is not forbidden to believe that our economy needs to move to a SME economy, where there is more flexibility in terms of organization, in term of creativity and innovation. I was reading recently in a book written by Philippe Buschini (*) about Personal Branding, a sentence of Nathan Rosenberg saying that “The innovation appears often outside of the existing organizations, partly because the winning organizations are staying in the status quo and are resisting to the ideas which could affect then”. A lot of new high valued activities were created by start up companies, with high potential of development. Let us think for example to the IT industry.

But the interesting point is that in the actual environment, where things becomes more and more complex, these small companies needs to get high value advices and services but on a temporary or part time basis. This could be a real opportunity for other companies and people, to create not only commercial and technical relations, but real business partnerships. This kind of services are already existing, with the field of interim management or project consulting, but we could also consider that people could become partners in several companies, and participate of the development processes for each of then. People would work as freelance, which is still seen as more risky than an employee position, but the advantage could be to gain more experiences by working on different projects and in this way, to ensure their employability.

By thinking about this, it seems that the story is a process of constant renewal. Some small companies grew, became giants and then disappeared. It could be that finally, small could be still beautiful.

(*) Philippe Buschini website: http://www.buschini.com/

Picture from http://www.flickr.com/photos/explorer/112761636

Social economy, the sustainable way ?

In Gironde, consumers are financing the installations of a "bio" market gardner for a local direct sale.

Today, the social economy seems to gain interests. The main principle of this concept is to create an economical model showing more solidarity. When I read these words, I am wondering if we are not busy to re-invent what should be the ideal model?

If you think about the economy, it has to be to the service of the people, and not the opposite. By mentionning this, it implies that the economy has a social dimension…or should have it.  But today, the concerns are more to maximize the profit of the companies in order to create value for the shareholders. But for how many time? In these particular difficult times, people lost their jobs. Sometimes, it was the only solution in order to maintain the continuity of economical activity. But we can see also in many countries, increasing difference between higher and lower salaries. When some people could not spend the money they are earning during all their live, other people try to survive.

Do not forget that some people have high responsibilities and need to be paid for. But until which salary level does it still make cense? When I remember by the past, some salaries and bonuses earned by some directors of companies which did not show exceptional performances or falling in bankruptcy, I see that more as an incompetence premium. Everybody would be ready to miss a target of to fail a project and receive a salary or bonus which allows you to have a comfortable live. Where is the risk?

By reducing the lower salaries, how can we ensure an economical growing, if people can not pay for goods or services? By contracting debts? That is what  happened these last years, and created the financial crisis.

We can not create a social environment in an economical desert, but we can not also develop a sustainable economy without a sustainable social model.

Today, it seems we are trying to find new technical solutions in order to re-start the economy, while it is much more a mentality change which needs to happen. Let us take the example of the automotive industry. Today, in order to save this industry and to boost the car sales, many countries are giving allowance to people buying a “green” car. When we know that the automotive industry is in overcapacity since few years and that this industry is producing more with less people than before, this kind of measure will only produce short term effect, but fundamentally will not solve the problem.

In a sustainable economy model, the profit should only ensure the continuity of the company, giving the capability to finance new projects development. The profit is one of the components, the human resource is another. Maintain the number and the quality of the jobs contributes to maintain the know-how of your company. And this know-how is increasing everyday as long as same people are staying in the company. People should not be considered as employee, but as partners of the company. Reduce the people turnover contributes also to reduce recruitment fees and avoid to lose productivity.

To preserve the environment contributes also to a more social environment and develop a sustainable economy. By producing less and recycling more, by developing new activity fields respecting environment, we can develop a social economy giving opportunities to lower qualified people, to contribute to a high valued environmental project. We can already see such programs, gaining successful results.

Personally, I believe that a social economy is possible. It implies innovation and creativity. Creativity does not mean only to invent new things, but also to do things, to think on another way. But such transformation is possible if it is driven by the common good. It is just a question of will and intellectual honesty, to move to a society where people do not exist only by using a credit card.