TOURISM MATTERS: Corporate venturing: An economic solution?
Frankly, the phrase “corporate venturing” was not one I was even vaguely familiar with, but an article written by Paul Ellingstad and Charmian Love and carried in the Stanford Social Innovation Review grabbed my attention.
It concluded that if you asked the average person what comes to mind when they think of Jamaica, the answer would most likely revolve around sun, rum and music.
But at the recently concluded Foromic conference hosted in Montego Bay, it highlighted the business side of Jamaica and the wider Caribbean, including how business leaders are beginning to recognise the region’s enormous potential for blending business and social impact using strategies like corporate venturing.
The article concluded that “going beyond more traditional philanthropy and corporate social responsibility, corporate venturing is a strategic approach linked to a company’s core business that offers opportunities for generating both social and financial returns”.
Founder of Global Corporate Venturing, James Mawson, who’s website describes the organisation as the media publication and data provider for the corporate venture industry, said: “Corporations and others are funding start-ups with an expectation of both financial return and making a positive difference to an area of social and/or environmental change. The approach is using the tools of venture capital developed over the past 75 years and, effectively say [that] fast-growing businesses can and should recognise what effects they bring into the world by how they are making their money”.
The article said that while corporate venturing in the Caribbean is still relatively young, it is growing in size and scale.
Added to that, many private and civil sector leaders have expressed enthusiasm about its prospects. With progressive leaders actively testing related approaches to see how they can create better financial returns, while simultaneously exploring ways to also deliver social outcomes in the region.
They name one Caribbean example, Eppley Limited, an investment company and an affiliate of the global conglomerate Musson Group.
Eppley has initiated a pilot programme that enables micro, small and medium size enterprises, including artisan craft makers and food producers to leverage their commercial relationships with larger companies, such as hotels, so they can access capital efficiently, bypassing the customary impediments imposed by banks and other traditional providers.
Another regional example, perhaps better known to readers is the Branson Centre of Entrepreneurship Caribbean. Launched in 2011 with the heady but admirable mission statement “to operate in a sustainable and socially responsible way to improve livelihoods and transform the world”. Its stated objective is “to generate jobs and growth for both Virgin Group companies and the overall economy by supporting entrepreneurs during business model developments”.
Its efforts also benefit its business partner Virgin Holidays; contributing to the development of a vibrant community strengthens the community’s position as an attractive tourist destination. What makes the Caribbean so special when it comes to corporate venturing?
Again, according to the article, nearly 70 per cent of the region’s population is self-employed, which gives relatively greater autonomy to make decisions quickly, as well as more flexibility to experiment and change. So can we use adapted versions of these paradigms to help our economic recovery?