Economics and business and social enterprise write up
Theme/Interest Group, Saturday morning from Arjuna Krishna-Das
Economics, Business, Social Enterprise - Investment Engagement
The Economics, Business & Social Enterprise workshop on Saturday morning was one of the first workshops of the weekend, and probably one of the most popular. Our facilitators invited ‘burning questions’ from participants, and then invited the questioners to draw people off, Pied-Piper style (but without the magic pipes) to form smaller discussion groups which analysed those questions in detail.
I brought a burning question with me to the Transition Conference, and was delighted for the opportunity to explore it so early on:
How can we engage with large investors/funds to obtain significant investments for large-scale sustainable community enterprises?
Ann Monroe, a financial journalist from Brooklyn and Totnes had brought a similar issue (Sustainable enterprises need to be profitable), and joined with me and around eight other people for a lively and fruitful discussion.
The group broke the question down into numerous sub-discussions/issues, including:
· What makes transition activities appealing to investors? – Clean technology is already seen as a mainstream and green investment opportunity; true green agriculture is perhaps becoming a growth interest area.
If you want to become rich, Jim Rogers, investment whiz, best-selling author and one of Wall Street's towering personalities, has this advice: Become a farmer. Food prices have been high recently. Some have questioned how long that can continue. Not Rogers. He predicts that farming incomes will rise dramatically in the next few decades, faster than those in most other industries — even Wall Street. The essence of his argument is this: We don't need more bankers. What we need are more farmers. The invisible hand will do its magic. "The world has got a serious food problem," says Rogers. "The only real way to solve it is to draw more people back to agriculture."
Read more: http://www.time.com/time/magazine/article/0,9171,2080767,00.html
· Transition projects should be appealing to investors as low-risk investment opportunities, as part of a risk-balanced portfolio, at the other end of the scale from high-risk ventures such as venture capitalism and currency trading. Likewise, large transition ventures may wish to attract a balanced portfolio of investors, from large funds to small-scale investments from participants and community.
· Grants vs. profits: grants may be useful in the short-term, but transition enterprises must generate a surplus in terms of financial profits to continue and prosper in the long-term.
· It’s very important to get an enterprise’s legal and commercial structure right in terms of its status as a co-operative, partnership or limited company, and to define its aims and objectives in a watertight fashion so that majority investors cannot change its ideals, deals and modus operandi.
· Housing associations receive substantial grants to provide housing for disadvantaged people. Housing Co-operatives provide an opportunity for people to share in the ownership of community property. Is some kind of hybrid possible?
· Graham Truscott spoke of his positive experiences presenting ROEI (Return On Energy Invested) to fund managers at an energy seminar, and his involvement with New Economics Foundation and Transition Training Consulting.
· Michael Arblaster from the US spoke about presenting ROI and Resilience to investors, a concept which takes “bifocal” short- and long-term views on natural capital and EROI.
· Graham warned against blind belief in the “growth is bad” mantra. He pointed out that for us to successfully transition, we do need sustainable (and limited) growth of energetically-sustainable enterprises.