Businesses exist for societies, without a society there will be no business. The society starts before a business, so in other words, business follow societies and not societies following business. Where a society exists, there exists a need for business. Therefore, it is the function of a business to satisfy social needs and at the same time create a business opportunity from the social problem. For purposes of this article, a social problem can be regarded as a dysfunction of a society which represents a challenge to the people and the institutions – but they are also sources of business opportunities.
Social problems should not only be points to complain about, but great sources for business opportunity and profit. Businesses or aspiring entrepreneurs should embrace any social change which result in a problem for the people as an opportunity to convert that change into innovation – thus converting the change into a new business. Innovation is not about technology alone but incorporates ‘doing things different’! Only a poor business manager or leader thinks that innovation refers to technology alone. For years, social innovation or social change has been instrumental in driving business establishments and profits. Several great businesses in the world today are because of converting social problems into business opportunities and business markets.
To name but only a few, the rise of the entertainment industry, the rise of the telecoms business, the rise of the internet and the rise of the football industry are all because of changes in the social environment into business opportunities. Great business opportunities lie in solving problems for the society which directly or indirectly benefits the business or the industry. The strength of a business lies in solving problems for the society and the sustainability of solving such problems. Some problems are very temporal and do not justify heavy investments, therefore understand the depth of the problem first before stepping forward to solve them hoping to make a profit.
Certainly, not every man will see the social problems and be driven to solve them. To some, the problems are something to complain about and excuses why they will not be doing well in life. Yes, the problems do contribute to the well being of many people – but the opportunity will land in the hands of those who will take the initiative to solve the problem. In solving the problem, one may not be driven by the profits or the money at first but driven by the genuine desire to solve the problem. However, solving problems may end up being great business opportunities one never dreamt of. Not many start a business with the hope of making billions, they start a business as a way of helping solve a social problem.
One of the good examples of business opportunities that arose from social problems is the Grameen Bank founded in Bangladesh. Professor Muhammad Yunus got inspiration from the Bangladesh famine of 1974 to loan a small amount of $27 to a group of 42 families as start-up capital. The loan was to support the families so that they can make items for sale without facing the punitive interest rates of the banks. Because Professor Yunus wanted to solve the social problem of poverty, he believed that by making such small loans available to a larger group of the population, business could be stimulated and reduce the widespread rural poverty in Bangladesh.
Long story short, it is recorded that by the beginning of 2005, the bank had loaned over US$4.7 billion and by the end of 2008, US$7.6 billion to the poor. By year 2017, the Bank had about 2,600 branches and nine million borrowers, and a very good repayment rate of 99.6%. 97% of the borrowers were women – what a great way of empowering the women in rural areas? These women have the drive to do better but they lack the much-needed support. It is also recorded that the bank is active in 97% of the villages in Bangladesh. The success of the bank has inspired similar projects in other nations, and the bank is expanding into the wealth nations of the world too. Grameen bank is said to have had 19 branches in 11 US cities in 2017.
What started as a social problem of poverty resulted in an opportunity to start a bank that would later expand into other nations. Every social problem has a business opportunity hidden in it. Those who will search for the opportunities in problems will find them. When you see a problem, you can either make a choice to ignore the problem and hope that someone else will come and solve it or you can be inspired to solve the problem. However, the people who gets inspired to solve the problem are the people who will truly become prosperous. Sadly, instead of solving the problems, some people become the reasons why the problems persist.
The circumstances in the world today are very depressing! Fatigue, high-blood pressure, frustration and ‘burn-out’ is on the rise. However, these serious problems can easily be turned into an opportunity, and one can setup a very big business in the future! After the US great depression people were so insecure in their jobs, they were afraid, and they had lost dignity. IBM did something remarkable to solve this problem, they put people on a salary instead of an hourly wage. The move turned the social problem into a business opportunity, which even created the human potential for the company’s rapid growth.
Solving problems is the responsibility of every citizen of a country rather than to be looking for someone to solve the problems for you. He who solves the problems is the one who makes the money. For good development of business, the managers must be looking for opportunities in the problems emanating in the surroundings. Another example, the advent of the cellphone was to solve the problem of communication, and those who saw the problem saw the opportunity. Strive Masiyiwa is quoted to be saying, “…75% of consumers at the time had never heard a phone ring. Just getting a phone line installed could take more than a decade. So, it was literally impossible for anyone to have a telephone line…” This was a problem that required someone to step-up and solve. Well, Dr Strive did and today he reports that, “…75% of us have a telephone, and sometimes more than one…”
Social problems were plenty, are plenty and will be plenty – and will not all be solved by one man. Also, not only one business will ever be able to solve all the social problems of mankind. Even if the solution looks obvious, do not be intimidated to go ahead and package the solution. Every solution will one day be dismissed as obvious – any right solution will be obvious in retrospect. What matters is for business managers and leaders to identify major social problems and ask how the problem can be solved as a business opportunity.
Not all problems will be easily solved, any business or individual that is serious about solving the problem must organize innovative efforts to convert the social problems into great business opportunities that may result in good performance and contribution. How can a business or an institution grow or become better without the R&D function? The R&D will be responsible for identifying issues, crises and problems in society and work on innovation that will make their solution into a profitable opportunity.
However, of importance to note is that not every social problem will be solved by making it into a business opportunity. Some will be solved for no return, but the return will be a good name – no wonder many businesses engage in what they call ‘corporate social responsibility’. There is nothing for free in economics – someone would have paid for it and will plan to refill the pocket emptied from the benefits of CSR. A healthy business and an ill society are not compatible – therefore, to make your business successful make the society successful. It all starts with the society, when the society is rich so will be businesses in that society. When the society is poor, so will be businesses in that society. Billion-dollar companies are in multi-billion-dollar societies! For businesses to do well, they require a functioning society, and the health of the society is a prerequisite for the success of businesses.
Paul Tudor Jones once said, “You can achieve great economic gains by solving social problems.” Ignoring the social problems is ignoring the potential of the economy and the opportunity for business to flourish. Economies gain from solving their own problems and not only from exports – when problems are solved it is even easier for huge investments to find their way to solving other problems that the society might be facing daily. Also, problems go away because someone chooses to do something about them – and it will be naïve to hope that the problems will disappear by looking the other way and complain. When each man contributes, and every business contributes, then all will benefit from the opportunities in solving social problems.
Batanai Kamunyaru is a business writer, speaker and coach. He can be contacted on firstname.lastname@example.org or +263 718 852 489.