Creative Capitalism

In my last blog, I mentioned a Times article by Bill Gates discussing creative capitalism ( http://www.time.com/time/business/article/0,8599,1828069-1,00.html ). But what is creative capitalism? The aforementioned (RED) campaign is an example, as is the Pound for Pound Challenge, but what does creative capitalism do? And for whom?
Creative capitalism, as I understand it, is a synthesis between philanthropy and business interests. It’s a way for companies to make a difference where it’s needed most and still turn a profit.
The idea of pure philanthropy- giving without expectation of return- is a beautiful thing. But it’s a bit idealistic and not necessarily well-suited to a capitalistic society. Even some of the most well-meaning philanthropists do receive returns on their charity - they’re called tax breaks. Don’t get me wrong, I’m not against the idea of charity at all. I encourage it, in fact.
But the reality is that businesses need to make money in order to survive. If they don’t succeed, they’ll have nothing to give back. It’s akin to the ‘place the oxygen mask on yourself before assisting your child’ rule on airlines. If you’re passed out, you’re no good to anyone else.
So this idea of creative capitalism has my vote. In the cases of Pound for Pound and (RED), marketing and promotion are synthesized with donations to charities (Feeding America and The Global Fund, respectively). Another variation of creative capitalism has companies selling their products in new ways, catering to the populace of the third world in purpose and price.
In order to make their goods affordable for this emerging market, companies may lower the cost of their products or change the way in which they charge for their services. For example, some cell phone carriers are charging by the second rather than by the minute (Gates, 07/2008). There are benefits to both the companies (a new source of revenue) and the market (access to products and services not previously available).
The challenge of how to newly promote a product that was designed to be used in a specific market for a specified purpose is born. This is where the creative comes in. Interested companies have started putting together committees and work groups to find answers to this question. Their charge is to find new uses, in accordance with third-world needs, for their existing products.
But why leave it up to the brain trust? If you have an idea to sell your company’s products or services in an underserved market, in a way those products or services will benefit the third world, take the idea up the chain. We’re all a part of a capitalistic society, and we can all participate in making capitalism more creative.