Blended Value: a new outlook on business

The growing number of social enterprises indicates a change in public perception of the value created by businesses. The focus has traditionally been on the provision of products and services for certain target groups, generally those who from the middle and upper income brackets, in order to make a profit. Unfortunately, traditionally this goal has been pursued without much thought for other impacts, particularly those that constitute negative social and environmental externalities. The concept of “blended value” has emerged, where the success of an organisation (civil or private) is measured through the added social and environmental value as well financial gains.

This simple idea has huge implications for billions of people, particularly those the bottom of the pyramid (BoP) who have been marginalised from traditional business models because of their lack of financial capacity to participate in the market. If we broaden our definition of value to include social and environmental factors as well, products and services for the 4 billion people at the BoP become a potential source for a wide variety of commercial activities.

In Spain, cooperatives have been leading the way on this front, combining profit with the pursuit of social good through a fresh outlook on societal problems, and possible market-based solutions. Cooperatives like Mondragón, Grupo Asces and Eroski have demonstrated the profitability of these kinds of organisations, and today socially oriented cooperatives have managed prove that you can make profit while striving to rectify social ills (Rebel, 2013).

In times of crisis, any success is miraculous, and if cooperatives and social ventures have been able to prove their financial viability, reason dictates we stick to what works. And if you can kill two birds with one stone, even better.

Sources:

Emerson, Jed. (2003) Blended Value Executive Summary. BlendedValue.org retrieved 28 March 2014, from:

http://www.blendedvalue.org/bv-map-papers/

EuropaPress (2013) Grupo mondragón, Eroski y Consum en el ranking de las 300 empresas cooperatives mas importantes del mundo. Retrieved 28 March 2014 from:

http://noticias.lainformacion.com/economia-negocios-y-finanzas/alimentos/grupo-mondragon-eroski-y-consum-en-el-ranking-de-las-300-empresas-cooperativas-mas-importantes-del-mundo_9yhsMPMyB9mpsFHzDKUdx4/

Rebel, Christina (2013) Spain’s entrepreneurs carving path amidst economic crisis. The Guardian Online. Retrieved 28 March 2014 from:

http://www.theguardian.com/social-enterprise-network/2013/jan/02/spain-enterpreneurs-economic-enterprise-cooperative

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