Archives for the month of: December, 2010

The events and heated discussions over the past few months over spending and fees, culminating at times in violence, are not isolated events historically or internationally. Many countries are wrestling with the new austerity brought about by the shift in economic power, ageing population, and over use of debt that have characterised our times – often with much accompanying pain and protest. There have been other occasions in the history of these isles when conflict has erupted and threatened to tear apart the fabric of society. Two occasions in particular brought the country to the brink and caused much concern. One was the aftermath of the French revolution in the late 18th and 19th century, with its bloody unrest, and the other was during the late sixties and seventies around the events of the summer of ’68.

There are many similarities with today’s situation and these key periods in our past, as well as some crucial differences. On each occasion an economic, technological, and demographic discontinuity created divides that threatened to erupt into violence, whether between a landed aristocracy and the urban poor in one case, or between a more confident generation seeking a more liberal open mass consuming society versus the bonded and more authoritarian and austere society that emerged after the second world war. Reform in each case proved to be a pressure valve that avoided outright warfare, social reform in the first case, and economic reform in the latter.

But if the potential conflicts of the early Victorian era were mainly about “class” and those of the Sixties and Seventies about authority and values, the conflicts that will characterise this decade are more likely to be about age. Instead of class or culture war, we risk entering an era of age warfare. As David Willetts eloquently outlined in his book, Pinch, as the baby boomers retire, the future for other generations around them risks looking bleak. As the baby boomers stop working and paying taxes, the fuel that helped them (and us) secure free public services, pensions, and property, will start to run out or peak, leading to much harder times potentially for all until and unless the workforce expands again through another baby boom (which is hard to engineer) or more workers are imported (which is hard to justify when unemployment is high). Public consciousness of this demographic driver of present conflict is not particularly high – much of the debate so far around austerity uses the language of class warfare (people versus the rich bankers) or of authority and values (anarchists versus politicians), rather than age. It is the baby boom that produced many of the conditions for globalisation and high finance to grow to the scale it has today, and it is the baby boom that created the conditions for weaker public finances moving forwards.

As with all conflict there are a number of ways to resolve the situation. The first is to protest and take action accordingly and revolt. The key here is to have a plan for what happens if you succeed in overturning the status quo or disrupting business as usual, otherwise the danger is that you make the situation worse and lose influence dramatically yourself as was graphically illustrated by the aftermath of the French Revolution (the rise of Napolean and European wars) and the Winter of Discontent (which prompted a public backlash against the unions). I’m not convinced that those who are choosing the path of conflict today have a coherent plan yet for what may happen later if they succeed. The second approach is to do nothing and turn in on yourself – note the high suicide rate among young people in Japan over the last few decades. The third – and if you read my blogs at all you will know this is my preferred – route is to embark on reform.

We need intergenerational reform. Many in the wealthier baby boomer generation recognise that they have often benefited hugely from the last sixty years. How can they use their considerable wealth (including an estimated £1 trillion tied up in property, and further billions in pensions) to invest in and donate to the rebuilding of the economy, of society, and the prospects and wellbeing of the other generations around them? We need Gen Xers and Millennials to help Silents and Baby Boomers foster a society of mutual understanding, and support, to face the multiple challenges that we all need to address this century: how to use resources more sustainability, how to redesign services to do more for less, how to promote greater resilience and wellbeing. Instead of turning either to violence or fatalism, we need up and coming generations to feel supported to take more control of their lives, and fashion thereby a society which is more balanced, fairer, and less wasteful.

A Big Society should be big enough to also be a free one – and people should have a right to protest. But the right response in my humble opinion is to seek to address the underlying reasons that underpin what you are protesting about: how do we reshape the welfare state to reflect the times and available resources, how we share more across different sectors and not just rely on government and central funding as a panacea, and how do we encourage responsibility among all of us but particularly among baby boomers to trade their resources – time, money, and assets – for the support they will need from everyone else as they enter retirement in their millions.

On Thursday, the Prime Minister gave a significant speech on the role of business in the Big Society. Those who have been following me on this blog will know that I believe that we are in a period of significant transition as economic power shifts from West to East, as technology changes our expectations and opens up new opportunities, as we acknowledge that there are many intractable social problems that state action alone cannot solve, and above all as our population ages, making it harder to maintain the same approach to running our society as before as baby boomers start to retire on masse. This change, combined with the need to reduce our deficit (or at least not to keep increasing our annual spend exponentially), has implications for local authorities and the voluntary and community sector, who will have significant opportunities and freedoms in the medium term, but will face challenges over the coming 12-18 months in terms of transition.

But what about business? Well on Thursday, the Prime Minister set out a vision which gives us some clues. The role of business in this transition, and how it can itself transition, has three elements.

The first is to (continue) to be responsible. In exchange for government seeking to provide an operating environment over the longer term of economic stability, lower taxation, and less red tape, business is offered a deal in which by taking responsibility, demand is reduced for public services from social breakdown and injustice, which provides the means for government in turn to provide the enabling environment that business needs. So business is being invited to continue to treat its employees fairly, pay them well, adhere to the law, treat suppliers fairly and pay them promptly, not exploit workers or customers alike, not abuse market power or position – all the things that all businesses should do. But business is also encouraged to look at how it can at times knowingly or unknowingly harm social as well as environment capital, accelerating social breakdown perhaps through its approach to local planning, supply chains, and hiring, or not being a long-term investor in people and places. On Thursday, business was asked to do more, which is to take part in Every Business Commits, a movement of businesses who take on board voluntarily priorities outlined by government that will enable the building of the Big Society. Every Business Commits has five voluntary pledges that business can sign up for around which government will pledge to work in a coordinated way so the asks of business becomes less confusing:

  • Reduce carbon and protect the environment
  • Improve skills and create jobs
  • Support your community
  • Improve quality of life and well-being
  • Support small and medium sized enterprises

The second way that business can help, particularly in these difficult times, is to support the efforts of local government bodies such as local authorities, and particularly voluntary and community organisations – especially small front-line ones which it is harder for government to support (for example through its Transition Fund) – with the fundraising, marketing, HR/volunteer management, governance, and financial skills support they will need, as well as any other resources such as access to space and funds that they might be able to provide locally harnessing the generosity of customers and employees. As part of this, an initiative has been launched as a collaboration between government and businesses, called the Business Connectors programme. Further details will follow in the coming months, but the programme builds on existing highly successful models in many businesses around the country in which staff locally (such as a store manager) are seconded or freed up to help identify needs in communities that local businesses could help with, and broker in the relevant skills, finances, and other assets that are needed that business could provide, harnessing online and offline tools, and coordinating with local stakeholders such as local government and local representatives of civil society. Where it has been operating it can be a great way to help streamline and make less confusing cooperation between business and communities, avoid duplication, and help businesses and their employees do more and to be more effective in their philanthropy, volunteering, and (social) investment support. An area that will need to be thought through in particular is how to support communities which lack a significant business presence, particularly in deprived areas where a more national/local approach may be needed.

Over the medium term, harnessing the creativity and resources from businesses, together with the public and voluntary sectors, this kind of collaboration could help tackle some of the challenges around unlocking the capacity and hidden wealth of citizens – their time, finances, and leadership – which will be needed to build the Big Society.

The third and final way for many businesses to get involved in building the Big Society, is by empowering citizens through their own business models, supporting them to take more control over their lives. This could be by pursuing opportunities to provide public services in more responsive and effective ways than government alone. Or it could be through the products they make that create genuine social benefit and lower the costs for citizens to access services that improve their lives. Or it could be by harnessing citizens’ own energy to put them more in charge of a customer experience – whether through models such as we find on the internet (we essentially volunteer every day for Spotify or Apple, to create our own experiences of music and share knowledge and entertainment with our friends – also known as collaborative consumption) or for example through the People’s Supermarket, where customers help volunteer to stack shelves and get really affordable organic food as a consequence. Such business hybrids, social businesses, time-credit based businesses and social enterprises, citizen franchises, and freemium models represent in my view the cutting edge of business today, and stand alongside more traditional forms of businesses such as mutuals, cooperatives, and employee-owned trusts and partnerships by blurring the distinction between value created for the business, and value created for individual customers, and value created for communities. In effect they can offer when well-designed a win-win-win for all concerned.

As is often the case with transition, there will be many challenges and barriers to overcome. Business in the Community’s report on 300 businesses’ response to the Big Society highlights a number of areas that will need to be addressed collectively: less red tape around volunteering to enable employees to more quickly get involved in communities whilst still protecting children and health generally; a less onerous approach from the competition authorities when businesses collaborate to improve their communities; and reforming the benefits system to make it more possible for businesses to employ on a casual and part-time basis people who are on job-seekers’ allowance so they can gain experience.

But the good news is that businesses are up for the challenge. 77% of business leaders participating in the report survey say they could do more to scale up strategic support for communities across their business, while 80% feel they could do more to engage other businesses to scale up their support. The benefits businesses most feel they get from being engaged are in terms of employee motivation and the ability to draw in more employees from excluded backgrounds, the ability to build sustainable communities (and in turn sustainable businesses and revenues), and in terms of brand and local relationships.

During this transition we will need as much help as we can get. With the private sector experiencing greater growth now than previously, there is an opportunity for businesses to help all of us transition and get ready to be able to make the most of the new landscape which the Big Society will create.

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