June 25, 2007   

Waya Quiviger, Director of Special Projects, Social Impact Management

On Friday 8 June, I was invited to speak in the context of the “Fostering Entrepreneurship and Leadership” seminar organized by the Centre for Applied Studies in International Negotiations (CASIN). More specifically, I represented IE Business School in a session chaired by Pamela Hartigan, Managing Director of the Schwab Foundation, on Social Entrepreneurship. The audience was composed of 50 high level leaders from business, government and civil society who had come from all over the world for this 10-day seminar and training in government, governance, entrepreneurship, development and leadership. Other session topics included negotiation, global trade, access to micro-credit (see attached Program and participant profiles).

Pamela set the stage by defining the “social entrepreneur”: a unique, motivated individual who takes direct action to solve a social problem using entrepreneurial skills. She also gave examples of what social entrepreneurs were NOT: lobbyists, activists, socially-responsible-for-profit businesses. Social entrepreneurs’ main goal is transformational change and maximizing lasting social impact. For Pamela the social entrepreneur is a cross between Richard Branson and Mother Teresa.

Continue reading 'Fostering Entrepreneurship and Leadership'

Max Oliva, Associate Director, Social Impact Management

Dear IE Community and Friends!

We are pleased to announce the founding of EcologIE - a platform intended to foster the interaction among IE students, faculty, staff, environmentally responsible corporations, field experts, similarly minded business schools and other academic institutions. The platform seeks to address two major social issues: (i) the increasing need to raise awareness of environmental issues (e.g. climate change, resource scarcity, etc.) and (ii) the merging of business/entrepreneurial initiatives with environmentally friendly/sustainability issues. There are a number of urgent crosscutting problems that need to be addressed, and as a first step we will focus on the following points for this first year of EcologIE:

• Dialogue: Provide a platform for members and guests to present key issues and challenge existing paradigms within both the IE and global business communities.
• Reflection: Seek out innovative ways to incorporate environmentally responsible behaviors into IE protocol and daily operations in accordance with the IE Code of Ethical Conduct.
• Action: Perform an environmental audit IE’s energy use and waste management practices to identify ways in which IE can economize by using alternative/sustainable energy sources and recycling. Concurrently, we aim to further promote waste reduction and expand existing recycling efforts (e.g. plastic, aluminum, etc.) to include paper and extend them to the whole of IE.

We will be having an informational meeting to launch the platform and outline the growth and future activities of EcologIE. The Dean of IE Business School, Santiago Iñiguez, will welcome attendants and speakers to discuss the link between business and environment and ways in which integrating the two can be a corporate asset instead of a liability. The launch is scheduled for Wednesday, June 27th from 18:00-21:00 in the Aula Magna (Maria de Molina 11, 28006, Madrid).

Your EcologIE Team!
For more information contact us at ecologie@ie.edu

   June 22, 2007   

Max Oliva, Associate Director, Social Impact Management

On June 7th, Bill Gates addressed Harvard students with an eloquent and well prepared speech on their graduation ceremony. But it was not just another speech. Referencing Marshall’s speech 60 years ago when talking about the great challenges they faced in implementing the Marshall Plan, this was intended to be a speech with just the same impact.

I truly encourage you to watch the video or read the transcript . It’s not sophisticated but rather simple and down to earth. But it is simple ideas which address complex issues those that work best. From developing a more creative capitalism which helps better address the world's inequities, to committing ourselves and our best minds to dedicating our time and effort to solving our biggest problems, I include some excerpts of the speech, hoping they will motivate you to see/read it all.

“…I had just come from an event where we were introducing version 13 of some piece of software, and we had people jumping and shouting with excitement. I love getting people excited about software—but why can’t we generate even more excitement for saving lives?

You can’t get people excited unless you can help them see and feel the impact.

…To turn caring into action, we need to see a problem, see a solution, and see the impact. But complexity blocks all three steps.

The defining and ongoing innovations of this age—biotechnology, the computer, the Internet—give us a chance we’ve never had before to end extreme poverty and end death from preventable disease.

You know more about the world’s inequities than the classes that came before. In your years here, I hope you’ve had a chance to think about how—in this age of accelerating technology—we can finally take on these inequities, and we can solve them.

We can make market forces work better for the poor if we can develop a more creative capitalism—if we can stretch the reach of market forces so that more people can make a profit, or at least make a living, serving people who are suffering from the worst inequities. We also can press governments around the world to spend taxpayer money in ways that better reflect the values of the people who pay the taxes.

If we can find approaches that meet the needs of the poor in ways that generate profits for business and votes for politicians, we will have found a sustainable way to reduce inequity in the world.

Let me make a request of the deans and the professors—the intellectual leaders here at Harvard: As you hire new faculty, award tenure, review curriculum, and determine degree requirements, please ask yourselves:

Should our best minds be dedicated to solving our biggest problems?

Should Harvard encourage its faculty to take on the world’s worst inequities? Should Harvard students learn about the depth of global poverty… the prevalence of world hunger… the scarcity of clean water …the girls kept out of school… the children who die from diseases we can cure?

Should the world’s most privileged people learn about the lives of the world’s least privileged?"

Waya Quiviger, Director of Special Projects, Social Impact Management

Invited Speakers: Pamela Hartigan, Managing Partner, Schwab Foundation, Switzerland; Mel Young, Founder, Homeless World Cup, Scotland

On Monday 11 June, Dr. Pamela Hartigan, Managing Director of the Schwab Foundation for Social Entrepreneurship and Mel Young, Founder of the Homeless World Cup shared their passion and commitment to social entrepreneurship with the International MBA class.

Pamela began by giving a definition of what a social entrepreneur is. According to her, social entrepreneurs possess the following characteristics: motivation, creativity, the capacity for direct action, courage and fortitude. These unique individuals address social problems with creative, entrepreneurial solutions. Social entrepreneurs are NOT philanthropists, lobbyists, volunteers or charities. They lead productive enterprises whose end goal is lasting social impact. To illustrate her argument, Pamela defined a social entrepreneur as a cross between Richard Branson and Mother Teresa. Social entrepreneurs can run non-profit , for profit or hybrid enterprises.

What Pamela does at the Schwab Foundation is promote social entrepreneurship worldwide and build a global community of entrepreneurs by identifying them and putting them in touch with the World Economic Forum’s vast corporate network, all potential partners and investors.

Mel Young is a social entrepreneur, founder of the Homeless World Cup, a global sports event that targets disenfranchised homeless men and women and gives them a sense of purpose and pride. The statistics are there to prove the success of his endeavour: after the World Cup, 92% have a new motivation for life; 35% have found regular employment; 44% have improved their housing situation; 39% have pursued education; 72 % continue to play football after the HWC.

Students seemed quite impressed with Pamela and Mel’s testimonies. Indeed, Social Entrepreneurship is a rapidly expanding space that is attracting more and more entrepreneurs year after year -- committed individuals who want to make lasting transformational change. Let’s hope this session inspired a few IMBA students to take the leap!

J.Pozuelo-Monfort, MSc candidate in economic development at LSE.

Switzerland has earned a long-standing reputation of neutrality and has stayed away of the main armed conflicts of our time. This neutrality has deserved the respect of the international community and put Switzerland in a situation of remaining away of institutions such as the European Union. But when it comes to money Switzerland is not neutral. When it comes to money Switzerland takes advantage of its neutrality, of its independence, to serve the interest of the powerful, of the wealthy.

A recent article on the French quotidian Le Monde estimates at 4,000 the number of wealthy that have decided to relocate to Switzerland. Switzerland serves as a fiscal destination for individuals seeking to not contribute with taxes to society, whereas Ireland has done so over the past few years vis a vis corporations. The European Union has to lobby Switzerland to stop giving fiscal incentives to European-Union borns. The European Union has to reach consensus regarding corporate tax and wealth tax so that countries do not compete on the basis of taxation.

Switzerland has to stop attracting the wealthy by fiscally lowering their taxation. In a recent trip to Geneva I was not able to see the advantage of the increase in revenue through taxation thanks to the foreigners that get settled in Switzerland. The average Swiss does not for sure benefit from this taxation. Public transportation is not better than in surrounding countries. Public infrastructure is not better than in surrounding countries. Fiscal incentives are only benefiting the better off in Switzerland at the expense of the middle class in Europe.

J.Pozuelo-Monfort, MSc candidate in economic development at LSE.

The Social Enterprise Research Conference is an annual event for practitioner and academic researchers who are actively exploring this new field. Interdisciplinary in approach, the Conference supports the growing number of social enterprise specialist researchers and creates a forum for knowledge to be shared with a large network of stakeholders.

Now in its 4th year, the Social Enterprise Research conference was first launched in July 2002. The themes for each year’s event are determined by the Conference committee, a panel of UK academics active in social enterprise. I will be presenting my piece on Redefining Capitalism, which will be posted on July 4th. We advance the paper’s abstract.

Redefining capitalism to reduce the poverty gap between the first and third world, suggesting mechanisms to redistribute income through regulation in the financial markets in particular, and changing the overall financial system through alternative thinking such as ethical ratings.

   June 18, 2007   

J.Pozuelo-Monfort, MSc candidate in economic development at LSE.

G8 SUMMIT 2007

The summit declaration incorporates 97 bullet points. Some of the more interesting points are quoted next.

* [08] We welcome the Financial Stability Forum's update of its 2000 Report on Highly Leveraged Institutions and support is recommendations.
* [15] We call on the emerging economies to adopt the OECD Declaration on International Investment and Multinational Enterprises.
* [24] We call on private corporations and business organizations to adhere to the principles in the OECD Guidelines for Multinational Entreprises. We encourage the emerging economies as well as developing countries to associate themselves with the values and standards contained in these guidelines.
* [25] We stress in particular the UN Global Compact as an important CSR initiative.
* [29] Social protection systems contain some universal elements and should be based on values such as social equity, fairness, and justice in order to promote equal opportunities and participation.
* [34] We recognize the importance of streamlining and harmonizing the international patent system in order to improve the acquisition and protection of patent rights worldwide.
* [87] We welcome the fact that a number of large banks have already signed the United Nations Environmental Program Finance Initiative and the Equador Principles. We call on further major banks to follow suit to adopt the Equator Principles for project finance.

Based on the above excerpts I suggest the following brainstorming:

1. Highly Leveraged Institutions need to be more regulated. These include private equity shops and hedge funds.

2. Developed countries encourage emerging countries to adopt their standards, but they are unable to fulfill their own rules and eliminate subsidies to agriculture that damage to such a large extent agricultural exports from the developing world into the developed countries.

Continue reading 'Growth and Responsibility in the World Economy'

   June 07, 2007   

J.Pozuelo-Monfort, MSc candidate in economic development at LSE.


The seven most industrialized countries of the world and Russia conform the so-called G8, which until recently excluded Russia and was denominated G7. A group of grand countries that operate as a de facto world government, setting an agenda that impacts the world's population as a whole. This is why G8 meetings are so much followed. This is why G8 meetings are so crucial and deserve so much attention.

The so-called anti-globalists or anti-G8 groups have shown fierce opposition not only to this meeting, but also to prior meetings involving the G8, the IMF, the World Bank or the World Trade Organisation. The last three represent the Institutions that foster the spreading of the Washington Consensus, the neoliberal agenda based on minimisation of fiscal deficits, austere economic policies, privatisation of core industries, elimination of tariffs, promotion of trade, and opening to international financial flows.

The so-called anti-globalists or anti-G8 are really anti-povertists or anti-poverty groups. Nothing else. They represent a growing share of the population unhappy about the direction and the extent of the policies set by the only super power and its main commercial allies. Unhappy because it seems that the international foreign agenda of the only super power and its energy needs set the direction of what is done by the rest of governments. Unhappy because the IMF and the World Bank are pseudo-international institutions that falsely represent the true interests of the world's poorest countries, and being established in Washington, are more concerned with keeping the United States and its policy makers happy.

In his radio address of last weekend President George Walker Bush talked about his trip to Europe to attend the G8 summit. He mentioned, to my own surprise, that he would bring up global warming to address its impact and propose a plan for change. Plain words. No commitment. No engagement. No accountability. Our leaders no longer represent the will of their citizens. Our leaders no longer work to solve the world's real problems. Poverty. Hunger. Global Warming. That is what the anti-poverty movement is all about. Organisations such as Oxfam and Attac only pursue the dream of a better world.

Demand commitment from your political representatives. Demand engagement from your political representatives. Demand accountability from your political representatives. And if they do not deliver, react accordingly. This society of the XXI century has to be sustainable. And the current policies set by the interests of the industrialized nations do not seem to be in line with what a majority of the world's population wishes to see.

   June 06, 2007   

J.Pozuelo-Monfort, MSc candidate in economic development at LSE.

In today's world the individual citizen is demanding. Public and private services are conceived from the point of view of a demanding citizen. Products are manufactured from the point of view of a demanding consumer and must fulfill a minimum standard of quality. In today's world the investor is demanding. The investor demands that the public firm that he or she has invested in be managed appropriately, and fulfill his or her expectations, improving the financial return of prior years.

Think of how a donation is administered. Think that oftentimes the donor does not trust how a donation will be allocated, what impact it will have on the society in the first or third world, and in any way he or she is able to find out whether that donation was invested according to what was promised, and he or she is not able to track down what sort of economic and social return the donation brought about. The problematic of aid has been how to invest the dedicated funds, that oftentimes are scarce. A Ministry, an NGO, any type of organisation that administers third party's funds has the obligation and the responsibility to inform the donor about the final destination of his or her funds, about what type of economic or social return they have generated. The donor, at the same time, if not content with the outcome, should carefully review to whom devote his or her donation as a function of a report of activities of a Ministry, an NGO.

The secret of development aid is to delink it from the purely governmental and institutional allocation that we are used to. An allocation that usually does not know the real problems of a country, a city, the population segment it is meant to, and usually focuses on solving other issues more related to macroeconomic and budget policies of a developing country, and oftentimes focuses on financing projects of doubtful social impact such as the construction of energy plants or the acquisition of weaponry. Development aid should be administered by a universe of organisations which activity is monitored carefully, a set of organisations which activity is audited, so that whenever the slightest indication of funds mismanagement is noticed, the organization involved is penalized and the funds it manages withdrawn and allocated to someone else. Development aid must in principle be devoted to compensate for the lack of basic services to which every human being has the right to access: education, healthcare, water and sanitation.

The mission of the Public Administration is to raise funds and allocate them competitively among organisations established in areas which poverty is to be tackled. Delinking the aid management from the governmental or institutional level is equivalent to making it independent from foreign policy agendas, that are oftentimes unrelated to the poverty scenarios that are meant to be solved.

   June 05, 2007   

Dr. Javier Carrillo Hermosilla, Executive Director of the Centre for Eco-Intelligent Management

Hoy se celebra el Día Mundial del Medio Ambiente, como cada 5 de junio desde 1972, año en que la Asamblea General de la ONU aprobó la creación del Programa de las Naciones Unidas para el Medio Ambiente (PNUMA). En esta ocasión la celebración coincide con algunos movimientos de potencial trascendencia en el debate internacional sobre el principal de los problemas ambientales, el cambio climático global.

Por una parte, el Gobierno de EEUU, primer país emisor de gases de efecto invernadero y contrario a asumir las obligaciones derivadas del Protocolo de Kioto, presentó el pasado jueves su “estrategia de lucha contra el cambio climático”. Si bien el anuncio supone un importante cambio en la actitud en la Administración Bush, el plan ha sido catalogado por los más críticos como una simple “estrategia diplomática” con el fin de eludir una vez más compromisos concretos e imponer una agenda propia al margen de los acuerdos establecidos. En su propuesta, EEUU convoca a una cumbre durante el próximo otoño a los 15 principales países emisores de gases de efecto invernadero, incluyendo a las principales economías emergentes como China e India, de la que con toda seguridad no se derivarán medidas concretas y de obligatorio cumplimiento para los países invitados. La credibilidad del plan estadounidense se resiente al haberse hecho público tan sólo unos días antes de la cumbre del G-8 que comienza mañana, y en la que Merkel pretendía acordar un límite de dos grados en el incremento de la temperatura global y una reducción de las emisiones de gases con efecto invernadero del 50% en el año 2050 frente a los niveles de 1990.

Por otra parte, China, segundo país emisor tras EEUU, aunque exento de obligaciones en el marco de Kioto, también hizo público su propio plan contra el cambio climático en vísperas de la cumbre del G-8, a la que asistirá su presidente Hu Jintao. Tampoco fija compromisos concretos de reducción de sus crecientes emisiones, pero se compromete a controlarlas reduciendo su consumo energético en un 20% en 2010. De nuevo, aunque abre la puerta al optimismo, con este anuncio China refuerza una posición ya conocida, en la que antepone su desarrollo y modernización económica a la asunción de costes ambientales que considera responsabilidad de los países desarrollados.

Parece en definitiva poco probable que la cumbre del G-8 de mañana permita alcanzar, como pretendía Merkel, unos objetivos concretos que pudieran servir de base a las negociaciones que comenzarán a finales de año en el marco de la ONU sobre el llamado período “post-Kioto” (2012 en adelante). Treinta y cinco años después de su creación, el PNUMA no parece pasar por sus mejores momentos.

J.Pozuelo-Monfort, MSc candidate in economic development at LSE.

Vivimos en un capitalismo pseudo democrático. Creemos que el capitalismo es democrático porque vivimos en democracia, porque nuestros representantes públicos se encargan de recordarnos día tras día que todos somos iguales ante la ley, con los mismos derechos, con los mismos deberes.

Vivimos en un capitalismo pseudo democrático. Creemos que el capitalismo es democrático porque vivimos en democracia, porque de vez en cuando y de acuerdo a un documento escrito por nuestros antepasados denominado constitución, tenemos el derecho a elegir a nuestros representantes. El pueblo es soberano. Viva el pueblo.

Pero esas máximas que una vez honraron a la verdad de un sistema realmente democrático en esencia, no rigen el devenir ni de la democracia ni del capitalismo actual. Unas máximas que en su día establecieron unas reglas que hoy en día no pueden regir un juego sustancialmente diferente, un juego con unos actores económicos que dominan el devenir de la sociedad occidental dominadora del mundo actual.

Todos somos iguales ante la ley. Pero no todos somos iguales ante el dinero. El dinero no puede, hoy más que nunca, convertirse en protagonista de injusticias cotidianas que azotan y acechan a los más desfavorecidos de nuestra sociedad global, una sociedad anclada en los mecanismos del pasado sin capacidad para proyectar sus inquietudes en políticas de futuro capaces de cambiar el rumbo de un mundo desigual, de un mundo sin igual. Y un mundo sin igual es un mundo irreemplazable.

Donde quizás otros no vean conexiones, hay conexiones. Donde quizás otros no vean una relación causa efecto, hay una relación causa efecto. El mundo necesita soluciones rápidas, el mundo necesita que de una vez por todas el concepto de redistribución global se lleve a la práctica, y para ello es necesario, y para ello es fundamental que los privilegiados de la sociedad estén dispuestos a ceder una parte de su oficio y de su beneficio para crear las condiciones que permitan que una mayoría de la población mundial acceda a un sistema en el que el esfuerzo se vea realmente compensado.

   June 04, 2007   

Max Oliva, Associate Director, Social Impact Management

It's interesting to see how Nike has radically evolved from being “an unethical company” which was "compliant" with child labour throughout its supply chain, representing a huge reputational crisis, into a company which has fully integrated corporate responsibility throughout their business strategy.

They've just released their 2006 CR Report, which includes a series of ambitious and well aligned business targets for 2011 related to improvements in labour conditions of their contract factories, becoming a climate neutral company, embedding sustainable product design and innovation, and, it couldn't be less, increasing youth's access to the benefits of sport.

"We see corporate responsibility as a catalyst for growth and innovation... ...It is an integral part of how we can use the power of our brand, the energy and passion of our people, and the scale of our business to create meaningful change." Mark Parker, Nike President and CEO

Simon Zadek from AccountAbility, has written an HBR article on Nike’s path to corporate responsibility. He contends that they’ve gone through a five stage process which goes from “defensive ("It's not our fault") to compliant ("We'll do only what we have to") to managerial ("It's the business") to strategic ("It gives us a competitive edge") and, finally, to civil ("We need to make sure everybody does it")”.

Is this a commitment to corporate responsibility or pure PR? To me this is a clear example of a great turnaround, of how a challenge can be turned into an opportunity, and on how being responsible is not only the right thing to do, but how it is core to the long term performance and viability of a company.

Download their entire report and judge for yourselves.

J.Pozuelo-Monfort, MSc candidate in economic development at LSE.

Hoy escribimos la historia del mañana. Hoy sentamos las bases de una nueva concepción del capitalismo. Y si no somos capaces de reaccionar ante los retos que plantea el mundo desigual de principios del siglo XXI, nuestros descendientes miraran hacia atrás con la incredulidad de ver a una sociedad que fue incapaz de reaccionar, que fue incapaz de zanjar de una vez por todas el gran mal de nuestros días, el mal del hambre, el mal de la enfermedad, el mal de saber que se pueden solucionar y de no ver una voluntad explicita por parte de nuestros representantes públicos.

Otras sociedades en otros tiempos reaccionaron ante amenazas que se materializaron. Nuestra sociedad no necesita esperar a que la amenaza se materialice. La amenaza ya se ha materializado repetidamente, y buena muestra son las hambrunas que azotan los países mas pobres y endeudados, y buena muestra son las epidemias de enfermedades erradicadas o controladas en el primer mundo, que asolan y diezman a una población del mundo en vías de desarrollo que se debe preguntar la razón de semejante desdicha.

Abandonemos la visión histórica de que el mundo en vías de desarrollo es incapaz de crecer y salir adelante por meritos propios ganados y demostrados a lo largo de décadas tras la independencia de los otrora imperios coloniales. Cambiemos nuestras reglas antes de querer imponerlas a terceros. Creamos en la sociedad de la redistribución. Creemos la sociedad de la redistribución, de la justicia global, de la equidad. Y para ello, sin duda, es necesario que la sociedad occidental se instale en el convencimiento de que medidas tasadoras alternativas son no solo necesarias, sino factibles.

Es, finalmente, una cuestión de prioridades factibles.

   June 01, 2007   

J.Pozuelo-Monfort, MSc candidate in economic development at LSE.

The value chain of credit

Credit, a method of paying for goods or services at a later time, usually paying interest as well as the original money1. Credit is an abstract concept, as well as practical and necessary. Abstract because it consists of an agreement between two parties whereby the first will lend an amount of money to the second over a time interval in exchange for a compensation usually known as interest. Practical because it allows for the acquisition of goods in exchange for the borrower’s engagement of reimbursing interest and principal payments at a future date. Necessary because without the ability of borrowing money, or similarly of leveraging, the capitalist world of the beginning of the XXI century would not exist as we know it today.

Think of your daily life. Think of the extent to which it is credit-driven and you will realize how difficult it would be to get rid of it. In a basic example the application for a mortgage has become a very common procedure among those who would like to purchase real estate. A mortgage is nothing else than a loan requiring the borrower to make future payments during a predetermined amount of time. Future payments on a mortgage consist of principal and interest. Principal is simply the original price of the purchased good, whether it is real estate or an automobile. Interest incorporates the compensation paid to the lender (individual or entity) for having at one’s own disposal a certain amount of money. Interest rates are a reflection of how money depreciates as time passes by. A dollar today is worth more than the same dollar in a year’s time, because of a phenomenon called inflation, which not surprisingly, inflates prices as time passes by.

As a result the possibility of applying for a loan is important not only to individuals, but also to firms. Corporations often have to borrow to undertake a project requiring financing. A corporate project could involve the opening of a branch abroad, or the construction of a factory. In any case, credit only makes possible today’s life as we know it, both to individuals and corporations.

Continue reading Decem 05

1. According to the definition provided by the Cambridge dictionary.