Wednesday, January 16, 2013

Awakening to a Sustainable World

Today, education is perhaps the most important function of state and local governments. . . . It is required in the performance of our most basic public responsibilities, even service in the armed forces. It is the very foundation of good citizenship. Today [education] is a principal instrument in awakening the child to cultural values, in preparing him [or her] for later professional training, and in helping him [or her] to adjust normally to his environment.[1] 



Al Gore and David Blood in 2011defined sustainable capitalism as “a framework that seeks to maximize long-term economic value by reforming markets to address real needs while integrating environmental, social and governance (ESG) metrics throughout the decision-making process.” Gore and Blood argued that such capitalism should apply to the entire investment market scope, from small entrepreneurial ventures to large public companies, across landscapes to include micro investors and institutional account holders. In fact, they are calling for a broad sweep of involvement from all market participants: “employees to CEOs, activists to policy makers,” sustainable capitalism should transcendent “borders, industries, asset classes and stakeholders.”

I wholeheartedly agree. But I would also add that there is no other stakeholder more vital, more decisive to the success of such a transcendent transformation, than our educational system and the generation that will follow our footsteps in burdening the responsibilities of caring for our planet in the next decades. In today’s society, we face, amongst many other uncertainties, economic[2] and ecological[3] crisis, war and hunger[4], unemployment and increasing costs of our basic necessities. In the United States, however, our education system is failing; cost of secondary education has gone up but its relative value has decreased. Today, you need a Master’s degree to even begin looking for a reasonable white-collar job. All the while, there is a sense of growing divergence between the educational system and the world outside: while employers struggle to better bridge the gap between their operational needs and pedagogical focuses, newly-grads are struggling to find their competitive edge over the more skilled and experienced displaced-workforce. Somewhere in the middle, there is an opportunity—there is synergy to be said for having willing minds and growing businesses; perhaps we’ve just been looking into the wrong places.[5]

What are the right places to look then? This precise question surfaces within the industries with the key question of why sustainability adds value. Gore and Blood suggest that we should be asking "Why does an absence of sustainability not damage companies, investors and society at large?" They go on to argue that industries that would integrate sustainability into their business models are finding their profitability enhanced over the longer term and “embracing sustainable capitalism yields four [specific] kinds of important benefits for companies:

• sustainable products and services increase profits, enhance brand recognition, and improve competitive positioning;

• sustainable capitalism promotes efficiency and reduces waste, and by improving human-capital practices, costs of training new employees decreases;

• sustainable business models give companies a holistic understanding of the material issues affecting their business and their sector economy thus giving them distinct advantages in market downturns; and

• sustainable businesses realize lower cost of debt and lower capital constraints. 

To being our understanding of where to look for these four specific benefits between willing minds and growing businesses, we must first change the way we approach business in our educational and institutional systems. Business is a process. It takes materials and transforms them through production and propels society. This much we already know. What we haven’t caught on, but slowly we are becoming aware of, is the fact that the process is very much a part of the overall ecology that houses the human eco-system. The balance between maintaining a human-ecology with the broader sense planetary ecology is finding a way to overlap the two; the interest of our families, of our communities, and of our businesses, is the interest of this planet as a whole—engaging in this holistic process to improve the way we engage production and society is our duty and responsibility.

But to adapt our existing anthropocentric production process to a more sustainable ecopocentric model, willing minds will have to learn how the existing system works and decide how to best adapt. They will need to engage the business aspect of their learning from an ecological whole. To do this, the student must be mindful of process improvement and engage in civic duties from a business perspective to understand how to best overcome our social, economic, and ecological challenges. Businesses will have to be willing to accept the creativities and innovative energies these willing minds bring forth to the table. Yet, despite the various school programs, civic organizations, and public campaigns, civic engagement overall is on a slow decline alongside of our economies.[6] Traditional internships, community service activities, and advocacy work also fail to inspire change. Without civic engagement, the very core of our republic may be at risk; the very foundation of our society is thus endangered.

Universities and market institutions may have an obligation to address business needs for short term growth—solving the economic and employment issue through their academic curricula; but they must also encourage civic participation mindful of the greater production process and the science[7] of sustainability. But we note in a more and more irrelevant and resource scarce economy, entrepreneurs continue their pursuit of opportunities “exploiting change” “without regard to [scarce] resources currently controlled.”[8] Because of their role as change agents, entrepreneurship is ever more recognized as one of the major players of economic development today.[9] According to economists, entrepreneurial start-ups accounted for most of the positive net job growth in the United States during 1992–2005.[10] In addition to job creation, entrepreneurs and their start-ups also promote market efficiency and serve the economy by “correcting market errors or inefficient uses of market resources.”[11] They also facilitate new knowledge in the market place by commercializing innovations otherwise unnoticed.[12]

Entrepreneurs are thus critical to our transition from a resource scarce economy to a sustainable one by exploiting our current opportunity for change without regards to the methods of our exploitations or our scarcity. They cannot achieve this without civic engagement and empathy for social improvements. Encouraging students to become social entrepreneurs, then, will likely inspire inclusive, diversified, and unique solutions to our most pressing problems.

In a vacuum of civic discontent and economic recession triggered by lack of accountability, social entrepreneurship is becoming more and more popular. Armed with a “heightened sense of accountability to the constituencies served and for the outcomes created,” social entrepreneurs are “change agents in the social sector” and they create and sustain social values, pursuit new opportunities to service social missions, and engage in continuous innovation, adaptation, and learning.[13] Where traditional internships, community service activities, and advocacy works failed to inspire change, business school’s focus on social entrepreneurship may just provide the right amount of empowerment of innovation. With a keen focus on creating viable start-ups, a tailored business incubator for social start-ups can bring new innovations to solve real world problems while creating jobs to benefit the disadvantaged demographics.

Judge McLaughlin of the Second Circuit wrote in 1996 that there is a legitimate state interest in teaching students the values and habits of good citizenship, and introducing them to their social responsibilities as citizens.[14] In the spirit of Brown v. Board of Education[15] and under the current circumstances we face, the legitimate state interest becomes a duty of every corporate and private citizen, of the universities and market institutions, to enhance and empower social entrepreneurial and intrapreneurs, to allow them to lead our transition from an old world capitalism into a new age of sustainable and productive capitalism—one that balances people and their communities with the interest of our planet and the interest of our economic progress.

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[1] Brown v. Board of Education, 347 U.S. 483, 493 (1954).

[2] See generally Yale Global Online, Global Financial Crisis (Last visited Oct 15, 2012) (“The current financial crisis is the worst the world has seen since the Great Depression of the 1930s . . . . “In an Interconnected World, American Homeowner Woes Can Be Felt from Beijing to Rio de Janeiro,” observed the International Herald Tribune at the onset of the crisis. “Chinese Steelmakers Shiver, Indian Miners Catch Flu,” noted the Hindustan Times. “US and China Must Tame Imbalances Together,” suggested YaleGlobal, as the frenzied search for a solution continues around the globe.).

[3] Edmund S. Muskie, The Global Environmental Crisis, 19 B.C. Envtl. Aff. L. Rev. 731 (1992), available at http://lawdigitalcommons.bc.edu/ealr/vol19/iss4/6.

[4] Coleman-Jensen, et al., Household Food Security in the United States in 2010, ERR-125, U.S. Dept. of Agriculture, Econ. Res. Serv. September 2011 (noting that in 2010, approximately one in seven U.S. households were food insecure, the highest number ever recorded in the United States) available at http://www.ers.usda.gov/Publications/err125/.

[5] See Sir Ken Robinson, Do Schools Kill Creativity (TED Video), available at http://www.ted.com/talks/ken_robinson_says_schools_kill_creativity.html (“I believe our only hope for the future is to adopt a new conception of human ecology, one in which we start to reconstitute our conception of the richness of human capacity. Our education system has mined our minds in the way that we strip-mine the earth, for a particular commodity, and for the future, it won’t serve us.”).

[6] See Nathan Conroy, Applying the Entrepreneurial Model of Experiential Learning in Political Science Courses, (2009), available at http://ssrn.com/abstract=2002689.

[7] R.W. Kates (Ed.), Center for International Development, Harvard University, Readings in Sustainability Science and Technology – An Introduction to the Key Literatures of Sustainability Science, CID Working Paper No. 213, 2010, available at: www.hks.harvard.edu/var/ezp_site/storage/fckeditor/.../213.pdf.

[8] Gregory Dees, The Meaning of “Social Entrepreneurship”, (1998) (funding provided by The Kauffman Center for Entrepreneurial Leadership with assistance from the members of the Social Entrepreneurship Funders Working Group). 

[9] Haifeng Qian, Kingsley E. Haynesb, The Small Business Innovation Research Program as Entrepreneurship Policy, (Working Paper) (August 30, 2012) available at: http://ssrn.com/abstract=2140096. 

[10] Haifeng Qian, Zoltan J. Acs, Roger R. Stough, Regional systems of entrepreneurship: the nexus of human capital, knowledge and new firm formation, Journal of Economic Geography 1-29 (2012) (referencing data from Haltiwanger, et al., Who create jobs? Small vs. large vs. young, (NBER Working Paper, w16300.) (2010).). 

[11] Qian & Kingsley, at 2. 

[12] Id. 

[13] Dees, The Meaning of “Social Entrepreneurship”. 

[14] Immediato v. Rye Neck Sch. Dist., 73 F.3d 454, 462 (2d Cir. N.Y. 1996); see also Ambach v. Norwick, 441 U.S. 68, 76-77 (U.S. 1979). 

[15] Supra n.1.

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