[Script Info]
Title: 
[Events]
Format: Layer, Start, End, Style, Name, MarginL, MarginR, MarginV, Effect, Text
Dialogue: 0,0:00:00.37,0:00:02.08,Default,,0000,0000,0000,,I think we're all aware
Dialogue: 0,0:00:02.08,0:00:05.06,Default,,0000,0000,0000,,that the world today is full of problems.
Dialogue: 0,0:00:05.06,0:00:07.15,Default,,0000,0000,0000,,We've been hearing them
Dialogue: 0,0:00:07.15,0:00:11.44,Default,,0000,0000,0000,,today and yesterday and every day for decades.
Dialogue: 0,0:00:11.44,0:00:15.49,Default,,0000,0000,0000,,Serious problems, big problems, pressing problems.
Dialogue: 0,0:00:15.49,0:00:18.84,Default,,0000,0000,0000,,Poor nutrition, access to water,
Dialogue: 0,0:00:18.84,0:00:21.88,Default,,0000,0000,0000,,climate change, deforestation,
Dialogue: 0,0:00:21.88,0:00:25.12,Default,,0000,0000,0000,,lack of skills, insecurity, not enough food,
Dialogue: 0,0:00:25.12,0:00:28.10,Default,,0000,0000,0000,,not enough healthcare, pollution.
Dialogue: 0,0:00:28.10,0:00:29.84,Default,,0000,0000,0000,,There's problem after problem,
Dialogue: 0,0:00:29.84,0:00:32.38,Default,,0000,0000,0000,,and I think what really separates this time
Dialogue: 0,0:00:32.38,0:00:36.50,Default,,0000,0000,0000,,from any time I can remember in my brief time
Dialogue: 0,0:00:36.50,0:00:38.94,Default,,0000,0000,0000,,on Earth is the awareness of these problems.
Dialogue: 0,0:00:38.94,0:00:41.50,Default,,0000,0000,0000,,We're all very aware.
Dialogue: 0,0:00:41.50,0:00:43.53,Default,,0000,0000,0000,,Why are we having so much trouble
Dialogue: 0,0:00:43.53,0:00:45.36,Default,,0000,0000,0000,,dealing with these problems?
Dialogue: 0,0:00:45.36,0:00:48.40,Default,,0000,0000,0000,,That's the question I've been struggling with,
Dialogue: 0,0:00:48.40,0:00:52.57,Default,,0000,0000,0000,,coming from my very different perspective.
Dialogue: 0,0:00:52.57,0:00:55.65,Default,,0000,0000,0000,,I'm not a social problem guy.
Dialogue: 0,0:00:55.65,0:00:58.41,Default,,0000,0000,0000,,I'm a guy that works with business,
Dialogue: 0,0:00:58.41,0:01:01.70,Default,,0000,0000,0000,,helps business make money.
Dialogue: 0,0:01:01.70,0:01:04.94,Default,,0000,0000,0000,,God forbid.
Dialogue: 0,0:01:04.94,0:01:07.99,Default,,0000,0000,0000,,So why are we having so many problems
Dialogue: 0,0:01:07.99,0:01:11.14,Default,,0000,0000,0000,,with these social problems,
Dialogue: 0,0:01:11.14,0:01:13.19,Default,,0000,0000,0000,,and really is there any role for business,
Dialogue: 0,0:01:13.19,0:01:16.72,Default,,0000,0000,0000,,and if so, what is that role?
Dialogue: 0,0:01:16.72,0:01:19.58,Default,,0000,0000,0000,,I think that in order to address that question,
Dialogue: 0,0:01:19.58,0:01:23.45,Default,,0000,0000,0000,,we have to step back and think about
Dialogue: 0,0:01:23.45,0:01:27.10,Default,,0000,0000,0000,,how we've understood and pondered
Dialogue: 0,0:01:27.10,0:01:29.10,Default,,0000,0000,0000,,both the problems and the solutions
Dialogue: 0,0:01:29.10,0:01:33.27,Default,,0000,0000,0000,,to these great social challenges that we face.
Dialogue: 0,0:01:33.27,0:01:36.10,Default,,0000,0000,0000,,Now, I think many have seen business
Dialogue: 0,0:01:36.10,0:01:38.98,Default,,0000,0000,0000,,as the problem, or at least one of the problems,
Dialogue: 0,0:01:38.98,0:01:41.73,Default,,0000,0000,0000,,in many of the social challenges we face.
Dialogue: 0,0:01:41.73,0:01:43.13,Default,,0000,0000,0000,,You know, think of the fast food industry,
Dialogue: 0,0:01:43.13,0:01:45.11,Default,,0000,0000,0000,,the drug industry, the banking industry.
Dialogue: 0,0:01:45.11,0:01:47.29,Default,,0000,0000,0000,,You know, this is a low point
Dialogue: 0,0:01:47.29,0:01:50.28,Default,,0000,0000,0000,,in the respect for business.
Dialogue: 0,0:01:50.28,0:01:51.99,Default,,0000,0000,0000,,Business is not seen as the solution.
Dialogue: 0,0:01:51.99,0:01:55.73,Default,,0000,0000,0000,,It's seen as the problem now, for most people.
Dialogue: 0,0:01:55.73,0:01:57.70,Default,,0000,0000,0000,,And rightly so, in many cases.
Dialogue: 0,0:01:57.70,0:01:59.98,Default,,0000,0000,0000,,There's a lot of bad actors out there
Dialogue: 0,0:01:59.98,0:02:02.16,Default,,0000,0000,0000,,that have done the wrong thing,
Dialogue: 0,0:02:02.16,0:02:03.96,Default,,0000,0000,0000,,that actually have made the problem worse.
Dialogue: 0,0:02:03.96,0:02:07.42,Default,,0000,0000,0000,,So this perspective is perhaps justified.
Dialogue: 0,0:02:07.42,0:02:10.01,Default,,0000,0000,0000,,How have we tended to see the solutions
Dialogue: 0,0:02:10.01,0:02:12.35,Default,,0000,0000,0000,,to these social problems,
Dialogue: 0,0:02:12.35,0:02:15.51,Default,,0000,0000,0000,,these many issues that we face in society?
Dialogue: 0,0:02:15.51,0:02:17.14,Default,,0000,0000,0000,,Well, we've tended to see the solutions
Dialogue: 0,0:02:17.14,0:02:19.30,Default,,0000,0000,0000,,in terms of NGOs,
Dialogue: 0,0:02:19.30,0:02:21.30,Default,,0000,0000,0000,,in terms of government,
Dialogue: 0,0:02:21.30,0:02:23.44,Default,,0000,0000,0000,,in terms of philanthropy.
Dialogue: 0,0:02:23.44,0:02:25.87,Default,,0000,0000,0000,,Indeed, the kind of unique organizational entity
Dialogue: 0,0:02:25.87,0:02:30.63,Default,,0000,0000,0000,,of this age is this tremendous rise of NGOs
Dialogue: 0,0:02:30.63,0:02:33.14,Default,,0000,0000,0000,,and social organizations.
Dialogue: 0,0:02:33.14,0:02:35.96,Default,,0000,0000,0000,,This is a unique, new organizational form
Dialogue: 0,0:02:35.96,0:02:37.15,Default,,0000,0000,0000,,that we've seen grown up.
Dialogue: 0,0:02:37.15,0:02:40.56,Default,,0000,0000,0000,,Enormous innovation, enormous energy,
Dialogue: 0,0:02:40.56,0:02:43.30,Default,,0000,0000,0000,,enormous talent now has been mobilized
Dialogue: 0,0:02:43.30,0:02:45.42,Default,,0000,0000,0000,,through this structure
Dialogue: 0,0:02:45.42,0:02:50.27,Default,,0000,0000,0000,,to try to deal with all of these challenges.
Dialogue: 0,0:02:50.27,0:02:54.52,Default,,0000,0000,0000,,And many of us here are deeply involved in that.
Dialogue: 0,0:02:54.52,0:02:56.03,Default,,0000,0000,0000,,I'm a business school professor,
Dialogue: 0,0:02:56.03,0:03:00.05,Default,,0000,0000,0000,,but I've actually founded, I think, now, four nonprofits.
Dialogue: 0,0:03:00.05,0:03:02.94,Default,,0000,0000,0000,,Whenever I got interested and became aware
Dialogue: 0,0:03:02.94,0:03:05.100,Default,,0000,0000,0000,,of a societal problem, that was what I did,
Dialogue: 0,0:03:05.100,0:03:07.88,Default,,0000,0000,0000,,form a nonprofit.
Dialogue: 0,0:03:07.88,0:03:10.94,Default,,0000,0000,0000,,That was the way we've thought about how to deal
Dialogue: 0,0:03:10.94,0:03:11.95,Default,,0000,0000,0000,,with these issues.
Dialogue: 0,0:03:11.95,0:03:16.40,Default,,0000,0000,0000,,Even a business school professor has thought about it that way.
Dialogue: 0,0:03:16.40,0:03:18.24,Default,,0000,0000,0000,,But I think at this moment,
Dialogue: 0,0:03:18.24,0:03:21.00,Default,,0000,0000,0000,,we've been at this for quite a while.
Dialogue: 0,0:03:21.00,0:03:23.86,Default,,0000,0000,0000,,We've been aware of these problems for decades.
Dialogue: 0,0:03:23.86,0:03:25.77,Default,,0000,0000,0000,,We have decades of experience
Dialogue: 0,0:03:25.77,0:03:30.09,Default,,0000,0000,0000,,with our NGOs and with our government entities,
Dialogue: 0,0:03:30.09,0:03:31.92,Default,,0000,0000,0000,,and there's an awkward reality.
Dialogue: 0,0:03:31.92,0:03:33.86,Default,,0000,0000,0000,,The awkward reality is we're not making
Dialogue: 0,0:03:33.86,0:03:36.45,Default,,0000,0000,0000,,fast enough progress.
Dialogue: 0,0:03:36.45,0:03:39.17,Default,,0000,0000,0000,,We're not winning.
Dialogue: 0,0:03:39.17,0:03:41.25,Default,,0000,0000,0000,,These problems still seem very daunting
Dialogue: 0,0:03:41.25,0:03:42.46,Default,,0000,0000,0000,,and very intractable,
Dialogue: 0,0:03:42.46,0:03:45.16,Default,,0000,0000,0000,,and any solutions we're achieving
Dialogue: 0,0:03:45.16,0:03:47.10,Default,,0000,0000,0000,,are small solutions.
Dialogue: 0,0:03:47.10,0:03:50.98,Default,,0000,0000,0000,,We're making incremental progress.
Dialogue: 0,0:03:50.98,0:03:53.70,Default,,0000,0000,0000,,What's the fundamental problem we have
Dialogue: 0,0:03:53.70,0:03:56.78,Default,,0000,0000,0000,,in dealing with these social problems?
Dialogue: 0,0:03:56.78,0:04:00.81,Default,,0000,0000,0000,,If we cut all the complexity away,
Dialogue: 0,0:04:00.81,0:04:04.19,Default,,0000,0000,0000,,we have the problem of scale.
Dialogue: 0,0:04:04.19,0:04:07.30,Default,,0000,0000,0000,,We can't scale.
Dialogue: 0,0:04:07.30,0:04:10.23,Default,,0000,0000,0000,,We can make progress. We can show benefits.
Dialogue: 0,0:04:10.23,0:04:13.56,Default,,0000,0000,0000,,We can show results. We can make things better.
Dialogue: 0,0:04:13.56,0:04:17.84,Default,,0000,0000,0000,,We're helping. We're doing better. We're doing good.
Dialogue: 0,0:04:17.84,0:04:20.19,Default,,0000,0000,0000,,We can't scale.
Dialogue: 0,0:04:20.19,0:04:25.16,Default,,0000,0000,0000,,We can't make a large-scale impact on these problems.
Dialogue: 0,0:04:25.16,0:04:26.99,Default,,0000,0000,0000,,Why is that?
Dialogue: 0,0:04:26.99,0:04:30.58,Default,,0000,0000,0000,,Because we don't have the resources.
Dialogue: 0,0:04:30.58,0:04:32.29,Default,,0000,0000,0000,,And that's really clear now.
Dialogue: 0,0:04:32.29,0:04:35.17,Default,,0000,0000,0000,,And that's clearer now than it's been for decades.
Dialogue: 0,0:04:35.17,0:04:38.73,Default,,0000,0000,0000,,There's simply not enough money
Dialogue: 0,0:04:38.73,0:04:42.12,Default,,0000,0000,0000,,to deal with any of these problems at scale
Dialogue: 0,0:04:42.12,0:04:44.44,Default,,0000,0000,0000,,using the current model.
Dialogue: 0,0:04:44.44,0:04:47.51,Default,,0000,0000,0000,,There's not enough tax revenue,
Dialogue: 0,0:04:47.51,0:04:51.56,Default,,0000,0000,0000,,there's not enough philanthropic donations,
Dialogue: 0,0:04:51.56,0:04:54.01,Default,,0000,0000,0000,,to deal with these problems the way we're dealing with them now.
Dialogue: 0,0:04:54.01,0:04:59.17,Default,,0000,0000,0000,,We've got to confront that reality.
Dialogue: 0,0:04:59.17,0:05:02.23,Default,,0000,0000,0000,,And the scarcity of resources
Dialogue: 0,0:05:02.23,0:05:06.26,Default,,0000,0000,0000,,for dealing with these problems is only growing,
Dialogue: 0,0:05:06.26,0:05:09.81,Default,,0000,0000,0000,,certainly in the advanced world today,
Dialogue: 0,0:05:09.81,0:05:14.19,Default,,0000,0000,0000,,with all the fiscal problems we face.
Dialogue: 0,0:05:14.19,0:05:18.43,Default,,0000,0000,0000,,So if it's fundamentally a resource problem,
Dialogue: 0,0:05:18.43,0:05:22.48,Default,,0000,0000,0000,,where are the resources in society?
Dialogue: 0,0:05:22.48,0:05:24.86,Default,,0000,0000,0000,,How are those resources really created,
Dialogue: 0,0:05:24.86,0:05:26.57,Default,,0000,0000,0000,,the resources we're going to need to deal
Dialogue: 0,0:05:26.57,0:05:30.21,Default,,0000,0000,0000,,with all these societal challenges?
Dialogue: 0,0:05:30.21,0:05:33.32,Default,,0000,0000,0000,,Well there, I think the answer is very clear:
Dialogue: 0,0:05:33.32,0:05:37.01,Default,,0000,0000,0000,,They're in business.
Dialogue: 0,0:05:37.01,0:05:42.62,Default,,0000,0000,0000,,All wealth is actually created by business.
Dialogue: 0,0:05:42.62,0:05:45.35,Default,,0000,0000,0000,,Business creates wealth
Dialogue: 0,0:05:45.35,0:05:50.39,Default,,0000,0000,0000,,when it meets needs at a profit.
Dialogue: 0,0:05:50.39,0:05:52.86,Default,,0000,0000,0000,,That's how all wealth is created.
Dialogue: 0,0:05:52.86,0:05:55.23,Default,,0000,0000,0000,,It's meeting needs at a profit
Dialogue: 0,0:05:55.23,0:05:57.64,Default,,0000,0000,0000,,that leads to taxes
Dialogue: 0,0:05:57.64,0:05:59.31,Default,,0000,0000,0000,,and that leads to incomes
Dialogue: 0,0:05:59.31,0:06:01.58,Default,,0000,0000,0000,,and that leads to charitable donations.
Dialogue: 0,0:06:01.58,0:06:04.83,Default,,0000,0000,0000,,That's where all the resources come from.
Dialogue: 0,0:06:04.83,0:06:07.29,Default,,0000,0000,0000,,Only business can actually create resources.
Dialogue: 0,0:06:07.29,0:06:09.24,Default,,0000,0000,0000,,Other institutions can utilize them
Dialogue: 0,0:06:09.24,0:06:10.47,Default,,0000,0000,0000,,to do important work,
Dialogue: 0,0:06:10.47,0:06:13.65,Default,,0000,0000,0000,,but only business can create them.
Dialogue: 0,0:06:13.65,0:06:15.17,Default,,0000,0000,0000,,And business creates them
Dialogue: 0,0:06:15.17,0:06:23.05,Default,,0000,0000,0000,,when it's able to meet a need at a profit.
Dialogue: 0,0:06:23.05,0:06:26.43,Default,,0000,0000,0000,,The resources are overwhelmingly
Dialogue: 0,0:06:26.43,0:06:28.32,Default,,0000,0000,0000,,generated by business.
Dialogue: 0,0:06:28.32,0:06:33.62,Default,,0000,0000,0000,,The question then is, how do we tap into this?
Dialogue: 0,0:06:33.62,0:06:36.00,Default,,0000,0000,0000,,How do we tap into this?
Dialogue: 0,0:06:36.00,0:06:38.95,Default,,0000,0000,0000,,Business generates those resources
Dialogue: 0,0:06:38.95,0:06:43.62,Default,,0000,0000,0000,,when it makes a profit.
Dialogue: 0,0:06:43.62,0:06:46.99,Default,,0000,0000,0000,,That profit is that small difference
Dialogue: 0,0:06:46.99,0:06:51.84,Default,,0000,0000,0000,,between the price and the cost it takes to produce
Dialogue: 0,0:06:51.84,0:06:54.15,Default,,0000,0000,0000,,whatever solution business has created
Dialogue: 0,0:06:54.15,0:06:57.38,Default,,0000,0000,0000,,to whatever problem they're trying to solve.
Dialogue: 0,0:06:57.38,0:07:04.14,Default,,0000,0000,0000,,But that profit is the magic.
Dialogue: 0,0:07:04.14,0:07:08.89,Default,,0000,0000,0000,,Why? Because that profit allows whatever solution
Dialogue: 0,0:07:08.89,0:07:11.11,Default,,0000,0000,0000,,we've created
Dialogue: 0,0:07:11.11,0:07:15.30,Default,,0000,0000,0000,,to be infinitely scalable.
Dialogue: 0,0:07:15.30,0:07:17.90,Default,,0000,0000,0000,,Because if we can make a profit,
Dialogue: 0,0:07:17.90,0:07:21.42,Default,,0000,0000,0000,,we can do it for 10, 100, a million,
Dialogue: 0,0:07:21.42,0:07:24.72,Default,,0000,0000,0000,,100 million, a billion.
Dialogue: 0,0:07:24.72,0:07:29.44,Default,,0000,0000,0000,,The solution becomes self-sustaining.
Dialogue: 0,0:07:29.44,0:07:32.04,Default,,0000,0000,0000,,That's what business does
Dialogue: 0,0:07:32.04,0:07:35.64,Default,,0000,0000,0000,,when it makes a profit.
Dialogue: 0,0:07:35.64,0:07:38.03,Default,,0000,0000,0000,,Now what does this all have to do
Dialogue: 0,0:07:38.03,0:07:41.10,Default,,0000,0000,0000,,with social problems?
Dialogue: 0,0:07:41.10,0:07:44.38,Default,,0000,0000,0000,,Well, one line of thinking is, let's take this profit
Dialogue: 0,0:07:44.38,0:07:49.93,Default,,0000,0000,0000,,and redeploy it into social problems.
Dialogue: 0,0:07:49.93,0:07:51.19,Default,,0000,0000,0000,,Business should give more.
Dialogue: 0,0:07:51.19,0:07:52.62,Default,,0000,0000,0000,,Business should be more responsible.
Dialogue: 0,0:07:52.62,0:07:55.07,Default,,0000,0000,0000,,And that's been the path that we've been on
Dialogue: 0,0:07:55.07,0:07:57.75,Default,,0000,0000,0000,,in business.
Dialogue: 0,0:07:57.75,0:07:59.62,Default,,0000,0000,0000,,But again, this path that we've been on
Dialogue: 0,0:07:59.62,0:08:03.96,Default,,0000,0000,0000,,is not getting us where we need to go.
Dialogue: 0,0:08:03.96,0:08:07.11,Default,,0000,0000,0000,,Now, I started out as a strategy professor,
Dialogue: 0,0:08:07.11,0:08:08.61,Default,,0000,0000,0000,,and I'm still a strategy professor.
Dialogue: 0,0:08:08.61,0:08:09.97,Default,,0000,0000,0000,,I'm proud of that.
Dialogue: 0,0:08:09.97,0:08:11.50,Default,,0000,0000,0000,,But I've also, over the years,
Dialogue: 0,0:08:11.50,0:08:14.15,Default,,0000,0000,0000,,worked more and more on social issues.
Dialogue: 0,0:08:14.15,0:08:17.42,Default,,0000,0000,0000,,I've worked on healthcare, the environment,
Dialogue: 0,0:08:17.42,0:08:20.99,Default,,0000,0000,0000,,economic development, reducing poverty,
Dialogue: 0,0:08:20.99,0:08:25.34,Default,,0000,0000,0000,,and as I worked more and more in the social field,
Dialogue: 0,0:08:25.34,0:08:26.90,Default,,0000,0000,0000,,I started seeing something
Dialogue: 0,0:08:26.90,0:08:30.17,Default,,0000,0000,0000,,that had a profound impact on me
Dialogue: 0,0:08:30.17,0:08:33.76,Default,,0000,0000,0000,,and my whole life, in a way.
Dialogue: 0,0:08:33.76,0:08:37.54,Default,,0000,0000,0000,,The conventional wisdom in economics
Dialogue: 0,0:08:37.54,0:08:41.41,Default,,0000,0000,0000,,and the view in business has historically been
Dialogue: 0,0:08:41.41,0:08:45.37,Default,,0000,0000,0000,,that actually, there's a tradeoff
Dialogue: 0,0:08:45.37,0:08:50.38,Default,,0000,0000,0000,,between social performance and economic performance.
Dialogue: 0,0:08:50.38,0:08:51.86,Default,,0000,0000,0000,,The conventional wisdom has been
Dialogue: 0,0:08:51.86,0:08:54.93,Default,,0000,0000,0000,,that business actually makes a profit
Dialogue: 0,0:08:54.93,0:08:56.72,Default,,0000,0000,0000,,by causing a social problem.
Dialogue: 0,0:08:56.72,0:08:58.91,Default,,0000,0000,0000,,The classic example is pollution.
Dialogue: 0,0:08:58.91,0:09:01.68,Default,,0000,0000,0000,,If business pollutes, it makes more money
Dialogue: 0,0:09:01.68,0:09:06.32,Default,,0000,0000,0000,,than if it tried to reduce that pollution.
Dialogue: 0,0:09:06.32,0:09:08.21,Default,,0000,0000,0000,,Reducing pollution is expensive,
Dialogue: 0,0:09:08.21,0:09:13.70,Default,,0000,0000,0000,,therefore businesses don't want to do it.
Dialogue: 0,0:09:13.70,0:09:16.64,Default,,0000,0000,0000,,It's profitable to have an unsafe working environment.
Dialogue: 0,0:09:16.64,0:09:19.38,Default,,0000,0000,0000,,It's too expensive to have a safe working environment,
Dialogue: 0,0:09:19.38,0:09:20.69,Default,,0000,0000,0000,,therefore business makes more money
Dialogue: 0,0:09:20.69,0:09:22.53,Default,,0000,0000,0000,,if they don't have a safe working environment.
Dialogue: 0,0:09:22.53,0:09:26.02,Default,,0000,0000,0000,,That's been the conventional wisdom.
Dialogue: 0,0:09:26.02,0:09:28.84,Default,,0000,0000,0000,,A lot of companies have fallen into that conventional wisdom.
Dialogue: 0,0:09:28.84,0:09:31.38,Default,,0000,0000,0000,,They resisted environmental improvement.
Dialogue: 0,0:09:31.38,0:09:36.81,Default,,0000,0000,0000,,They resisted workplace improvement.
Dialogue: 0,0:09:36.81,0:09:40.36,Default,,0000,0000,0000,,That thinking has led to, I think,
Dialogue: 0,0:09:40.36,0:09:41.88,Default,,0000,0000,0000,,much of the behavior
Dialogue: 0,0:09:41.88,0:09:43.82,Default,,0000,0000,0000,,that we have come to criticize in business,
Dialogue: 0,0:09:43.82,0:09:46.34,Default,,0000,0000,0000,,that I come to criticize in business.
Dialogue: 0,0:09:46.34,0:09:49.87,Default,,0000,0000,0000,,But the more deeply I got into all these social issues,
Dialogue: 0,0:09:49.87,0:09:52.88,Default,,0000,0000,0000,,one after another,
Dialogue: 0,0:09:52.88,0:09:55.33,Default,,0000,0000,0000,,and actually, the more I tried to address them
Dialogue: 0,0:09:55.33,0:09:57.44,Default,,0000,0000,0000,,myself, personally, in a few cases,
Dialogue: 0,0:09:57.44,0:10:00.17,Default,,0000,0000,0000,,through nonprofits that I was involved with,
Dialogue: 0,0:10:00.17,0:10:03.11,Default,,0000,0000,0000,,the more I found actually that the reality
Dialogue: 0,0:10:03.11,0:10:05.64,Default,,0000,0000,0000,,is the opposite.
Dialogue: 0,0:10:05.64,0:10:06.89,Default,,0000,0000,0000,,Business does not profit
Dialogue: 0,0:10:06.89,0:10:08.59,Default,,0000,0000,0000,,from causing social problems,
Dialogue: 0,0:10:08.59,0:10:12.96,Default,,0000,0000,0000,,actually not in any fundamental sense.
Dialogue: 0,0:10:12.96,0:10:15.16,Default,,0000,0000,0000,,That's a very simplistic view.
Dialogue: 0,0:10:15.16,0:10:17.87,Default,,0000,0000,0000,,The deeper we get into these issues,
Dialogue: 0,0:10:17.87,0:10:19.71,Default,,0000,0000,0000,,the more we start to understand
Dialogue: 0,0:10:19.71,0:10:21.61,Default,,0000,0000,0000,,that actually business profits
Dialogue: 0,0:10:21.61,0:10:23.61,Default,,0000,0000,0000,,from solving from social problems.
Dialogue: 0,0:10:23.61,0:10:26.15,Default,,0000,0000,0000,,That's where the real profit comes.
Dialogue: 0,0:10:26.15,0:10:28.99,Default,,0000,0000,0000,,Let's take pollution.
Dialogue: 0,0:10:28.99,0:10:31.21,Default,,0000,0000,0000,,We've learned today that actually
Dialogue: 0,0:10:31.21,0:10:33.62,Default,,0000,0000,0000,,reducing pollution and emissions
Dialogue: 0,0:10:33.62,0:10:37.12,Default,,0000,0000,0000,,is generating profit.
Dialogue: 0,0:10:37.12,0:10:39.19,Default,,0000,0000,0000,,It saves money.
Dialogue: 0,0:10:39.19,0:10:40.89,Default,,0000,0000,0000,,It makes the business more productive and efficient.
Dialogue: 0,0:10:40.89,0:10:42.28,Default,,0000,0000,0000,,It doesn't waste resources.
Dialogue: 0,0:10:42.28,0:10:44.93,Default,,0000,0000,0000,,Having a safer working environment actually,
Dialogue: 0,0:10:44.93,0:10:46.42,Default,,0000,0000,0000,,and avoiding accidents,
Dialogue: 0,0:10:46.42,0:10:47.79,Default,,0000,0000,0000,,it makes the business more profitable,
Dialogue: 0,0:10:47.79,0:10:50.100,Default,,0000,0000,0000,,because it's a sign of good processes.
Dialogue: 0,0:10:50.100,0:10:55.03,Default,,0000,0000,0000,,Accidents are expensive and costly.
Dialogue: 0,0:10:55.03,0:10:57.63,Default,,0000,0000,0000,,Issue by issue by issue, we start to learn
Dialogue: 0,0:10:57.63,0:11:00.60,Default,,0000,0000,0000,,that actually there's no trade-off
Dialogue: 0,0:11:00.60,0:11:04.19,Default,,0000,0000,0000,,between social progress
Dialogue: 0,0:11:04.19,0:11:07.19,Default,,0000,0000,0000,,and economic efficiency
Dialogue: 0,0:11:07.19,0:11:09.29,Default,,0000,0000,0000,,in any fundamental sense.
Dialogue: 0,0:11:09.29,0:11:10.65,Default,,0000,0000,0000,,Another issue is health.
Dialogue: 0,0:11:10.65,0:11:13.22,Default,,0000,0000,0000,,I mean, what we've found is actually
Dialogue: 0,0:11:13.22,0:11:15.10,Default,,0000,0000,0000,,health of employees is something
Dialogue: 0,0:11:15.10,0:11:16.49,Default,,0000,0000,0000,,that business should treasure,
Dialogue: 0,0:11:16.49,0:11:18.82,Default,,0000,0000,0000,,because that health allows those employees
Dialogue: 0,0:11:18.82,0:11:20.23,Default,,0000,0000,0000,,to be more productive and come to work
Dialogue: 0,0:11:20.23,0:11:22.54,Default,,0000,0000,0000,,and not be absent.
Dialogue: 0,0:11:22.54,0:11:25.97,Default,,0000,0000,0000,,The deeper work, the new work, the new thinking
Dialogue: 0,0:11:25.97,0:11:30.15,Default,,0000,0000,0000,,on the interface between business and social problems
Dialogue: 0,0:11:30.15,0:11:33.07,Default,,0000,0000,0000,,is actually showing that there's a fundamental,
Dialogue: 0,0:11:33.07,0:11:34.99,Default,,0000,0000,0000,,deep synergy,
Dialogue: 0,0:11:34.99,0:11:38.92,Default,,0000,0000,0000,,particularly if you're not thinking in the very short run.
Dialogue: 0,0:11:38.92,0:11:40.75,Default,,0000,0000,0000,,In the very short run, you can sometimes
Dialogue: 0,0:11:40.75,0:11:42.86,Default,,0000,0000,0000,,fool yourself into thinking
Dialogue: 0,0:11:42.86,0:11:45.15,Default,,0000,0000,0000,,that there's fundamentally opposing goals,
Dialogue: 0,0:11:45.15,0:11:47.96,Default,,0000,0000,0000,,but in the long run, ultimately, we're learning
Dialogue: 0,0:11:47.96,0:11:52.16,Default,,0000,0000,0000,,in field after field that this is simply not true.
Dialogue: 0,0:11:52.16,0:11:55.45,Default,,0000,0000,0000,,So how could we tap into
Dialogue: 0,0:11:55.45,0:11:58.17,Default,,0000,0000,0000,,the power of business
Dialogue: 0,0:11:58.17,0:12:00.37,Default,,0000,0000,0000,,to address the fundamental problems
Dialogue: 0,0:12:00.37,0:12:02.81,Default,,0000,0000,0000,,that we face?
Dialogue: 0,0:12:02.81,0:12:05.41,Default,,0000,0000,0000,,Imagine if we could do that, because if we could do it,
Dialogue: 0,0:12:05.41,0:12:07.45,Default,,0000,0000,0000,,we could scale.
Dialogue: 0,0:12:07.45,0:12:09.86,Default,,0000,0000,0000,,We could tap into this enormous resource pool
Dialogue: 0,0:12:09.86,0:12:12.75,Default,,0000,0000,0000,,and this organizational capacity.
Dialogue: 0,0:12:12.75,0:12:18.24,Default,,0000,0000,0000,,And guess what? That's happening now, finally,
Dialogue: 0,0:12:18.24,0:12:22.26,Default,,0000,0000,0000,,partly because of people like you
Dialogue: 0,0:12:22.26,0:12:24.20,Default,,0000,0000,0000,,who have raised these issues now
Dialogue: 0,0:12:24.20,0:12:27.32,Default,,0000,0000,0000,,for year after year and decade after decade.
Dialogue: 0,0:12:27.32,0:12:29.73,Default,,0000,0000,0000,,We see organizations like Dow Chemical
Dialogue: 0,0:12:29.73,0:12:31.65,Default,,0000,0000,0000,,leading the revolution away from trans fat
Dialogue: 0,0:12:31.65,0:12:34.78,Default,,0000,0000,0000,,and saturated fat with innovative new products.
Dialogue: 0,0:12:34.78,0:12:36.73,Default,,0000,0000,0000,,This is an example of Jain Irrigation.
Dialogue: 0,0:12:36.73,0:12:39.28,Default,,0000,0000,0000,,This is a company that's brought drip irrigation technology
Dialogue: 0,0:12:39.28,0:12:41.95,Default,,0000,0000,0000,,to thousands and millions of farmers,
Dialogue: 0,0:12:41.95,0:12:45.00,Default,,0000,0000,0000,,reducing substantially the use of water.
Dialogue: 0,0:12:45.00,0:12:48.32,Default,,0000,0000,0000,,We see companies like the Brazilian forestry company Fibria
Dialogue: 0,0:12:48.32,0:12:49.81,Default,,0000,0000,0000,,that's figured out how to avoid
Dialogue: 0,0:12:49.81,0:12:51.68,Default,,0000,0000,0000,,tearing down old growth forest
Dialogue: 0,0:12:51.68,0:12:54.46,Default,,0000,0000,0000,,and using eucalyptus and getting much more yield
Dialogue: 0,0:12:54.46,0:12:56.45,Default,,0000,0000,0000,,per hectare of pulp
Dialogue: 0,0:12:56.45,0:12:58.42,Default,,0000,0000,0000,,and making much more paper than you could make
Dialogue: 0,0:12:58.42,0:13:00.53,Default,,0000,0000,0000,,by cutting down those old trees.
Dialogue: 0,0:13:00.53,0:13:03.41,Default,,0000,0000,0000,,You see companies like Cisco that are training
Dialogue: 0,0:13:03.41,0:13:07.56,Default,,0000,0000,0000,,so far four million people in I.T. skills
Dialogue: 0,0:13:07.56,0:13:09.51,Default,,0000,0000,0000,,to actually, yes, be responsible,
Dialogue: 0,0:13:09.51,0:13:11.94,Default,,0000,0000,0000,,but help expand the opportunity
Dialogue: 0,0:13:11.94,0:13:14.21,Default,,0000,0000,0000,,to disseminate I.T. technology
Dialogue: 0,0:13:14.21,0:13:15.51,Default,,0000,0000,0000,,and grow the whole business.
Dialogue: 0,0:13:15.51,0:13:20.13,Default,,0000,0000,0000,,There's a fundamental opportunity for business today
Dialogue: 0,0:13:20.13,0:13:24.19,Default,,0000,0000,0000,,to impact and address these social problems,
Dialogue: 0,0:13:24.19,0:13:25.51,Default,,0000,0000,0000,,and this opportunity
Dialogue: 0,0:13:25.51,0:13:28.78,Default,,0000,0000,0000,,is the largest business opportunity
Dialogue: 0,0:13:28.78,0:13:32.45,Default,,0000,0000,0000,,we see in business.
Dialogue: 0,0:13:32.45,0:13:34.65,Default,,0000,0000,0000,,And the question is, how can we get business
Dialogue: 0,0:13:34.65,0:13:38.08,Default,,0000,0000,0000,,thinking to adapt this issue of shared value?
Dialogue: 0,0:13:38.08,0:13:39.89,Default,,0000,0000,0000,,This is what I call shared value:
Dialogue: 0,0:13:39.89,0:13:43.65,Default,,0000,0000,0000,,addressing a social issue with a business model.
Dialogue: 0,0:13:43.65,0:13:45.57,Default,,0000,0000,0000,,That's shared value.
Dialogue: 0,0:13:45.57,0:13:47.40,Default,,0000,0000,0000,,Shared value is capitalism,
Dialogue: 0,0:13:47.40,0:13:49.96,Default,,0000,0000,0000,,but it's a higher kind of capitalism.
Dialogue: 0,0:13:49.96,0:13:53.32,Default,,0000,0000,0000,,It's capitalism as it was ultimately meant to be,
Dialogue: 0,0:13:53.32,0:13:56.73,Default,,0000,0000,0000,,meeting important needs,
Dialogue: 0,0:13:56.73,0:13:59.56,Default,,0000,0000,0000,,not incrementally competing for
Dialogue: 0,0:13:59.56,0:14:02.82,Default,,0000,0000,0000,,trivial differences in product attributes
Dialogue: 0,0:14:02.82,0:14:04.55,Default,,0000,0000,0000,,and market share.
Dialogue: 0,0:14:04.55,0:14:06.77,Default,,0000,0000,0000,,Shared value is when we can create social value
Dialogue: 0,0:14:06.77,0:14:09.38,Default,,0000,0000,0000,,and economic value simultaneously.
Dialogue: 0,0:14:09.38,0:14:11.88,Default,,0000,0000,0000,,It's finding those opportunities
Dialogue: 0,0:14:11.88,0:14:14.95,Default,,0000,0000,0000,,that will unleash the greatest possibility we have
Dialogue: 0,0:14:14.95,0:14:16.94,Default,,0000,0000,0000,,to actually address these social problems
Dialogue: 0,0:14:16.94,0:14:18.97,Default,,0000,0000,0000,,because we can scale.
Dialogue: 0,0:14:18.97,0:14:22.53,Default,,0000,0000,0000,,We can address shared value at multiple levels.
Dialogue: 0,0:14:22.53,0:14:25.70,Default,,0000,0000,0000,,It's real. It's happening.
Dialogue: 0,0:14:25.70,0:14:28.59,Default,,0000,0000,0000,,But in order to get this solution working,
Dialogue: 0,0:14:28.59,0:14:32.72,Default,,0000,0000,0000,,we have to now change how business sees itself,
Dialogue: 0,0:14:32.72,0:14:35.23,Default,,0000,0000,0000,,and this is thankfully underway.
Dialogue: 0,0:14:35.23,0:14:38.71,Default,,0000,0000,0000,,Businesses got trapped into the conventional wisdom
Dialogue: 0,0:14:38.71,0:14:40.55,Default,,0000,0000,0000,,that they shouldn't worry about social problems,
Dialogue: 0,0:14:40.55,0:14:42.60,Default,,0000,0000,0000,,that this was sort of something on the side,
Dialogue: 0,0:14:42.60,0:14:45.18,Default,,0000,0000,0000,,that somebody else was doing it.
Dialogue: 0,0:14:45.18,0:14:46.75,Default,,0000,0000,0000,,We're now seeing companies
Dialogue: 0,0:14:46.75,0:14:49.23,Default,,0000,0000,0000,,embrace this idea.
Dialogue: 0,0:14:49.23,0:14:51.42,Default,,0000,0000,0000,,But we also have to recognize business
Dialogue: 0,0:14:51.42,0:14:54.16,Default,,0000,0000,0000,,is not going to do this as effectively
Dialogue: 0,0:14:54.16,0:14:56.02,Default,,0000,0000,0000,,as if we have NGOs and government
Dialogue: 0,0:14:56.02,0:14:59.05,Default,,0000,0000,0000,,working in partnership with business.
Dialogue: 0,0:14:59.05,0:15:02.06,Default,,0000,0000,0000,,The new NGOs that are really moving the needle
Dialogue: 0,0:15:02.06,0:15:04.24,Default,,0000,0000,0000,,are the ones that have found these partnerships,
Dialogue: 0,0:15:04.24,0:15:06.06,Default,,0000,0000,0000,,that have found these ways to collaborate.
Dialogue: 0,0:15:06.06,0:15:08.53,Default,,0000,0000,0000,,The governments that are making the most progress
Dialogue: 0,0:15:08.53,0:15:10.15,Default,,0000,0000,0000,,are the governments that have found ways
Dialogue: 0,0:15:10.15,0:15:13.80,Default,,0000,0000,0000,,to enable shared value in business
Dialogue: 0,0:15:13.80,0:15:16.92,Default,,0000,0000,0000,,rather than see government as the only player
Dialogue: 0,0:15:16.92,0:15:19.93,Default,,0000,0000,0000,,that has to call the shots.
Dialogue: 0,0:15:19.93,0:15:22.41,Default,,0000,0000,0000,,And government has many ways in which it could impact
Dialogue: 0,0:15:22.41,0:15:24.72,Default,,0000,0000,0000,,the willingness and the ability of companies
Dialogue: 0,0:15:24.72,0:15:26.71,Default,,0000,0000,0000,,to compete in this way.
Dialogue: 0,0:15:26.71,0:15:29.66,Default,,0000,0000,0000,,I think if we can get business seeing itself differently,
Dialogue: 0,0:15:29.66,0:15:32.21,Default,,0000,0000,0000,,and if we can get others seeing business differently,
Dialogue: 0,0:15:32.21,0:15:35.01,Default,,0000,0000,0000,,we can change the world.
Dialogue: 0,0:15:35.01,0:15:38.22,Default,,0000,0000,0000,,I know it. I'm seeing it.
Dialogue: 0,0:15:38.22,0:15:40.17,Default,,0000,0000,0000,,I'm feeling it.
Dialogue: 0,0:15:40.17,0:15:41.86,Default,,0000,0000,0000,,Young people, I think,
Dialogue: 0,0:15:41.86,0:15:45.04,Default,,0000,0000,0000,,my Harvard Business School students, are getting it.
Dialogue: 0,0:15:45.04,0:15:49.36,Default,,0000,0000,0000,,If we can break down this sort of divide,
Dialogue: 0,0:15:49.36,0:15:52.37,Default,,0000,0000,0000,,this unease, this tension,
Dialogue: 0,0:15:52.37,0:15:54.30,Default,,0000,0000,0000,,this sense that we're not
Dialogue: 0,0:15:54.30,0:15:56.54,Default,,0000,0000,0000,,fundamentally collaborating here
Dialogue: 0,0:15:56.54,0:15:58.89,Default,,0000,0000,0000,,in driving these social problems,
Dialogue: 0,0:15:58.89,0:16:00.100,Default,,0000,0000,0000,,we can break this down,
Dialogue: 0,0:16:00.100,0:16:02.100,Default,,0000,0000,0000,,and we finally, I think,
Dialogue: 0,0:16:02.100,0:16:05.63,Default,,0000,0000,0000,,can have solutions.
Dialogue: 0,0:16:05.63,0:16:08.43,Default,,0000,0000,0000,,Thank you.
Dialogue: 0,0:16:08.43,0:16:11.15,Default,,0000,0000,0000,,(Applause)