NUEVAS EMPRESAS-NUEVAS ECONOMÍAS-PÁGINAS 5 -8-RESUMEN EJECUTIVO Y HALLAZGOS-TRAD

8/9/2019 NUEVAS EMPRESAS-NUEVAS ECONOMÍAS-PÁGINAS 5 -8-RESUMEN EJECUTIVO Y HALLAZGOS-TRAD

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educational levels, and seeking to spread their business philosophy among all their stakeholders,

including promoting changes in public policy to build new markets and expand their impact.

They are much more than organizers of productive processes and they are instrumental in

persuading others and altering the very balance of power within markets.

There is no specific ecosystem to develop B companies as they are still an emerging

phenomenon; the first B companies in the region were certified only in 2012. Business firms withpotential to become B Companies have emerged as isolated individual efforts, resulting from

conviction by entrepreneurs who wish to operate differently, and they are inserted into

traditional business environments, sometimes supported by product certifications (organic, fair

trade) or management certifications (FSC of sustainable forest management). Some are

embedded within entrepreneurial ecosystems and considered "special" business firms with

social or environmental attributes. Building a community of certified companies offers the

emerging impact investing industry a new area of investment.

B Companies are mostly small, newly‐created business firms with less than 10 employees and

less than five years of operation. Over half of them are in the service sector and their sales are

below the two million dollar figure. They face the same obstacles to development as all small

business firms in the region, but in addition they face a significant cultural barrier to credibilityas they are actors seeking public interest purposes and operating in the for‐profit market. They

require better tools to measure the achievement of social and environmental impact, as well as

financial capital and management tools sharing their philosophy.

B Companies propose transforming models that point to a paradigm shift. The existence of a

significant number of companies thriving under this model will demonstrate in practice that the

private sector can play a constructive role in solving social and environmental problems.

The biggest challenge to realize their promise, however, is to mainstream the scope of these early

pioneers. The way to scale up these initiatives is through an effort seeking to break the almost

exotic current nature of these promising forms of innovation.

This requires not only increasing the number of B Companies and supporting their individual

scaling, but also linking B Companies to solving major social and environmental problems in the

countries where they operate. Topical, localized demonstrations are not enough to drive the

paradigm shift, especially in societies where opportunities for corporate profits related to

predatory activities are so great. This model must be attractive to all kinds of companies and

organizations. It would be a great risk for the model proposed by B Companies to be seen as a

niche phenomenon, embedded within a special, reduced ecosystem.

To advance this process, the theory of change proposed in this paper seeks to turn the emerging

scenario of pioneer companies and their business ecosystems into an institutionalized scenario

with new values and rules. As a transformation mechanism we suggest communities of practice,

understood as diverse groups seeking to create new knowledge and share it widely to establish

it as recognized general standards.

In this case, communities of practice are developed from three strategic groups: (1) pioneering

B Companies; (2) traditional companies intending to change; and (3), "beacon" B Companies, i.e.,

those with a high profile in the national economy and serving as benchmarks to other firms. In

addition, critical connections are required between strategic groups and the other actors in the

traditional business environment: universities in order to introduce the new paradigm in the



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training of entrepreneurs and the development of business models; public policies to establish

new formal rules facilitating the operation of B Companies and allowing to scale up their impact;

impact investors who provide industry knowledge and market contacts together with capital,

and promotion organizations as accelerators to complement the growth of B Companies with

tools and strategies allowing them to grow while remaining true to their mission.

The goal of these communities of practice is to address the problems relevant to the constructionof the new economies, rather than just trying to generate a critical mass of B Companies. For

South America these important problems include, among others, the regeneration of ecosystems,

conservation of biodiversity, the use of alternative energy, conscious consumption and waste

reduction, low‐carbon economies, improved social protection, meaningful employment,

impartiality and access to quality public services both in cities and in rural areas.

Implementing communities of practice as the central mechanism of the theory of change

involves identifying critical actors in each country, spreading new knowledge among these

actors, improving access to markets and impact investment, and managing communities.

Connecting the B Companies model with sectors of emerging economies allows the private

sector to play its role in building business firms that allow South America to overcome growth

models linked to re‐primarization, low innovation, and inequality.

FINDINGS

B Companies are an emerging phenomenon with potential to support changes towards

sustainability in South America. Their potential lies in the voluntary yet binding

extension of company purpose allowing them to go beyond the goal of maximizing

financial returns as the central focus of management. This facilitates developing long‐

term business strategies that make the size of the economy compatible with ecosystem

boundaries and social needs.

B Companies are an emerging phenomenon with potential to support changes towards

sustainability in South America. Their potential lies in the voluntary but binding

extension of company purpose, which overcomes the commitment to maximize

financial returns as the central focus of management. This facilitates the development

of long‐term business strategies that make the size of the economy compatible with

ecosystem boundaries and social needs.

B Companies can operate in any sector of the economy. They propose solutions to social

or environmental problems such as the ecosystem regeneration, conservation of

biodiversity, use of alternative energy, conscious consumption and waste reduction,

low‐carbon economies, improved social protection, meaningful employment, equity

and access to quality public services both in cities and in rural areas.

B Companies are an emerging phenomenon resulting from the decision of entrepreneurs

under an intrinsic logic of achieving social, environmental, and financial results. At

present, most B Companies are predominantly small; 90 per cent of them have less than

10 employees and sales under two million dollars. Over half of them are in the service

sector.

B Companies result from (1) business firms started to solve social and environmental



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problems, (2) traditional companies that switch to this model, and (3) foundations that

decide to adopt this corporate form.

The biggest challenge to implement the B Companies model is to mainstream the scope of

the early pioneers. This requires not only increasing the number of B Companies and

supporting their individual scaling but also linking B Companies to solving major social

and environmental problems in the countries where they operate. Connecting the BCompanies model with sectors of emerging economies allows the private sector to play

its role in building business firms that allow South America to overcome growth models

linked to re‐primarization, low innovation and inequality.

The theory of change proposed in this paper seeks to turn the emerging scenario of

pioneer companies and their business ecosystems into an institutionalized scenario with

new values and rules. As a transformation mechanism we suggest communities of

practice, which involves identifying critical actors in each country, spreading new

knowledge among these actors, improving access to markets and impact investment, and

managing communities of practice.

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NUEVAS EMPRESAS-NUEVAS ECONOMÍAS-PÁGINAS 5 -8-RESUMEN EJECUTIVO Y HALLAZGOS-TRAD