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The Business of HELPING

A Capitalist-Socialist Approach in Enterprise Development with Christian Attributesby Alrey Galang, Social Business Consultant

The Business of HELPING in the developmental industry requires social responsibilitywhile ensuring profits are earned as values are added into each ED (EnterpriseDevelopment) intervention. I propose theCapitalist-Socialist Concept.

ECONOMIC SYSTEM. Aneconomic system is the structure of production, allocationof economic inputs, distribution of economic outputs, and consumption of goods andservices in an economy. It is a set of institutions and their social relations. Alternatively, itis the set of principles and techniques by which problems of economics are addressed,such as the economic problem of scarcity through allocation of finite productiveresources.[1]

The economic system is composed of people and institutions, including their

relationships to productive resources, such as through the convention of property.Examples of contemporary economic systems include capitalist systems, socialistsystems, and mixed economies.CAPITALISM. Capitalism is an economic system in which the means of production areprivately owned and operated for a private profit; decisions regarding supply, demand,price, distribution, and investments are made by private actors in the market rather thanby central planning by the government; profit is distributed to owners who invest inbusinesses, and wages are paid to workers employed by businesses and companies. [2]

SOCIALISM. As an economic system,socialism is a system of production based onthe direct production of use-values by allocating economic inputs (the means ofproduction) and investments through planning to directly satisfy economic demand.Economic calculation is based on either calculation-in-kind or a direct measure of labourtime, output for individual consumption is distributed through markets, and distribution ofincome is based on individual merit or individual contribution. [3]

Capitalism and Socialism are inherently not antagonistic. Social capitalism posits that astrong social support network for the poor enhances capital output. By decreasingpoverty, capital market participation is enlarged. Social capitalism also posits thatgovernment regulation, and even sponsorship of markets, can lead to superior economicoutcomes, as evidenced in government sponsorship of the internet or basic securitiesregulation.

THE CONCEPT & PATH OF APPROACH. TheCapitalist-Socialist Conceptpositsthat social groups juridically organized can be identified (and/or gestated and raised) andprofessionally managed to lead and run operational (manufacturing or production)enterprises and mingle with the current capitalist economy and earn profits by it ownmerits and capabilities; and be intervened in intimate consultation (InterventionalConsultancy) by a responsible Christian-oriented Social Business Service Provider (C-

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SBSP) until it matures and released to the economic system and contaminatesneighboring social groups all in the Philippine setting.

This concept is based on the inherent Filipino value system that when one sees theevidence of a successful system, the neighboring social groups will voluntarily comeforward, inquire and purposely adapt the proven system. Filipinos do not simply adapt

something until he can hear, see, touch, and smell (H-S-T-S trait) it. Hearsays are onlyfor chatting and talking about it with neighbors not to act on it.

The Filipino psyche is like a baby organism, immature, prehistoric and ignorant until ithears, sees, touches and smells another full-grown adult organism and becomescontaminated by it; and replicates said organism in its social environment.

I dub this as the Perfect One Community & Contaminate the Next Oneconcept.

The above may be radical to many but yours truly have seen it and have discussed itwith some social science personalities who are in action (not in the academe); andstrongly believe it will work in the Filipino cultural setting. A Filipino would always wantto be like his neighbor in almost every economic improvement of their neighbors sociallife. Its been a long trait of his he wants to be like his progressive neighbor.

Given the above premise-concept, I propose the Capitalist-Social Approach inEnterprise Development with a Christian dimensionwhich will be the binding force inkeeping a capitalist-social organism grow and flourish.

OBJECTIVE OF POVERTY REDUCTION. Based on latest statistics of government,poverty incidence is at 33% or a third of the 95 million Filipinos in our country. Variousgovernment agencies, LGUs and NGOs have long involved heavily in reducing povertythrough every conceivable means based on its traditional and much-talked-aboutconcepts. However, poverty has not been drastically reduced over the last two decades.

Corruption in government, allowing most of the poor to continue to think their poor, the

social self-interest abuse of their number in concentrated communities (specially bypoliticians and syndicated profiteers), adulteration of donor-resources and wrongthinking processes have weakened the intent of reducing poverty.

Hence, a creative and radical approach has to be conceived and put into practicestarting with pre-qualified sectors and high-growth and essential industry segments.

Pre-qualified sectors will come from existing enterprises that support creation of jobs forthe poor and/or livelihood for suppliers or support systems.

High-growth and essential industry segments will come from the food industry (farming,production and processing sectors), retail industry, home construction industry, out-of-school youth supportive sector (e.g., digital animation) and other industries where labor

is of utmost need (instead of intensive computerized systems).

INTERVENTIONAL CONSULTANCY BUSINESS MODEL. Consultancy with objectiveinterventions will be the manner of approach in creating and growing capitalist-socialsystems in target communities/industry segments.

The C-SBSP Provider will take the following 4-prong tactical approaches:

1) CreateStartup Enterprises assist/build-up newly conceived enterprises.

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Example: seaweed farming in Bohol2) Elevate Micro-Enterprises to Small-Scale level strengthen matured Micro-Enterprises.Example: 2-year old branded retail food outlets3) Strengthen SMEs competitiveness, expand market/operations thru working capitalsupport, technical advancement and expand market penetration (special attention on the

Value Chain).Example: raw onion domestic supply4) Develop local industry segments to contaminate industry segment actors anddistrict/provincial level segmentsExample: digital animation and small-scale home construction sectors

Intervention programs will be short & sweet, specific, focused-target categorygroups/areas (industry, geographical, interest groups, etc). Broad approaches will makeit difficult to execute, assign responsibilities to persons, assess its impact and monitor itsperformance.

We cannot wait for reforms in the business environment (local and regional levels) as ittakes too long a time. Direct individual interventions can immediately create short-termoutcomes.

The Enterprise stakeholders and actors do not have to rely strongly from externalsupport systems but blend with these such as local government influences orregulations, financial sector support and the general economic environment. It shouldrely from its own strength as its proponents/actors make things happen for the enterpriseto profit and grow.

THE SEVEN ABIDING CONCEPTUAL FRAMEWORK. All interventions will begoverned by the following frame of active thinking:1) Power of One a strong socio-economic group boxes itself out in a predominanteconomic system.2) No-Free-Lunch Principle everyone who brings in value into the Enterprise shouldbe rewarded.3) Start Small, Think Big an enterprise should start small, make it grow, sustain itselfand plan to be big.4) Customize-Standardize Production Processes all repetitive functionalprocedures should be standardize through a quality management system (e.g., ISO9002)

5) Target Buyers, Negotiate & Create Sales Orders to sustain the enterprise,purposive marketing approach will be adopted focused on generating fast revenuestreams.6) Create the Christian Business Environment cultivate a Christian learning systeminside the Enterprise.7) Practice Social Business Principles all stakeholders and actors in the Enterprisewill prepare to pay-forward to the next community-beneficiary after gaining sustainable

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rewards and profits for the Enterprise.

CAUSAL LINKS = ED/CAPITALIST-SOCIAL INITIATIVE. Below is a simple causal linkframework from Enterprise Development thru the Capitalist-Social System Concept to

improving local socio-economic environment.Small Enterprise Improved ImprovedDevelopment Small Enterprise Socio-economicInitiative Performance Environment> Initiate start-ups, > Increased Profits > Economic growth> Strengthen ME's/SME's > Increase Productivity > Social stability

> Increase Competitiveness > Poverty Reduced> C-SBSP support to > Increases in job creation,Enterprises livelihood/Backyard

Enterprises

Footnotes: [1] to [3] as defined in Wikipedia