Rebuilding the sense of community

Rebuilding the sense of community

Rebuilding the Sense of Community

Tuesday, September 20, 2022, by Matt Cavicchia and Vicki Stylianou

The Institute of Public Accountants (IPA) is one of the three professional accounting associations in Australia, with 75 percent of our members being either advisers to Small to Medium Enterprises (SMEs) or SMEs themselves. The IPA’s reason is to improve small business quality of life, supported by a vision for every small business to have one of our members by their side. 

Following a year memorable for isolation and social distancing, the IPA decided it was appropriate to rejuvenate and restore the sense of community within our membership base for 2021 and beyond. This was signified early in the year when it was decided to redefine one of our strategic themes to reflect this revised direction:  

Build a professional community for the SME and SMP sectors.

The IPA has always been committed to making the small business count. This strategic shift to focus on creating and maintaining a professional community reaffirms the magnitude of the IPA’s passion to enhance the longevity and well-being of MSMEs. In addition, in 2021, the IPA strengthened its strategic focus on the United Nations Sustainable Development Goals (SDGs), selecting the following eight Goals as being the most relevant to our vision, strategy, and stakeholders:

  • SDG 3:   Good Health and Wellbeing
  • SDG 4:   Quality Education
  • SDG 8:   Decent Work and Economic Growth
  • SDG 10: Reduced Inequalities (including a focus on SDG 5 – Gender Equality)
  • SDG 11: Industry, Innovation, and Infrastructure
  • SDG 13: Climate Action
  • SDG 16: Peace, Justice, and Strong Institutions
  • SDG 17: Partnerships for the Goals

This report will look closely at our chosen Goals, highlighting how the IPA has contributed to them in 2021 from the perspective of MSMEs and thereby reinforcing and rebuilding our sense of community.  

SDG 3: Good Health and Wellbeing

Before the pandemic, mental health was already recognized as a significant issue facing small business people, including professionals and many accountants. The IPA has an existing partnership with a clinical health provider to offer initial clinical support to members with mental health concerns. To do more and help more small business people, including the clients of members and members themselves, the IPA partnered with Deakin University (based in Melbourne, Australia) to research the role played by accountants and other professional advisers in improving the mental well-being of small business people. Preliminary research indicated that using a business professional helped to improve the mental well-being of small business owners and operators. It was decided that it was worthwhile to extend the research and develop a training program that could be scaled for use in other jurisdictions and across various economic sectors. 

The program known as Counting On U was born with a host of partners, including other professional associations, mental health groups, and highly regarded medical professionals from Deakin and other universities. It attracted the attention of the Australian Government, which provided grants of over AU$3 million. At this stage, Counting On U offers mental health training for accountants, financial planners, bookkeepers, and other business advisers, providing tools to identify signs and assist their SME clients with accessing professional support. It has also been designed to help the adviser themselves, as they are often vicariously impacted and can develop anxiety and other mental health concerns.   

While the Covid-19 response in Australia focused on protecting physical health and our hospital system, there is widespread acknowledgment of the challenges that ensued for mental health. This, in addition to the IPA’s existing awareness and promotion of mental health, led us to compile numerous additional resources and tools dedicated to mental health and resilience, including access to a range of Corporate Social Responsibility partners, free education and training, and materials from (amongst others) Australia’s RUOK, an organisation dedicated to asking the simple question – “are you okay?”.  

Mental health is not only a medical issue but also an economic one with broad implications for the whole economy. The IPA has been vocal on many fronts, including advocacy, where we have promoted recommendations to enhance the mental well-being of small business people. The effects of mental health can impact a person’s ability to participate and prosper in the community and workplace. For business owners and operators, it can affect their employees and the ongoing viability of their business (business failure/ exit also has a negative health impact). Reforms must extend across workplaces, education institutions, the judicial system, the health system, and the community.

SDG 4: Quality Education

The IPA is undergoing an ‘education transformation’ by designing future education aligned with a sustainable accounting and finance profession. The rate of change occurring within most sectors of the global economy is unprecedented, significantly outpacing the adaptability of units and courses offered by many higher and vocational education institutions. The outcome of the transformation will be a relevant approach to education that supports lifelong learning and focuses on competency. 

Identifying the role of short courses and micro-credentials in the future of education, the IPA released its first digital short course in 2021: Artificial Intelligence (AI) for Accountants. The course introduces the principles and ethical considerations underpinning AI and machine learning, focusing on the challenges and opportunities for small-to-medium practitioners and SMEs. 

The course is delivered online with live workshops, promoting engagement and a sense of community between peers and educators. This is one example of the IPA’s investment in new learning platforms and systems which promote sharing and questioning. This has been enabled by partnering with progressive and experienced educators and encouraging more involvement by members and other professionals in the learning experience.    

SDG 8: Decent Work and Economic Growth

This Goal is directly linked to the IPA’s advocacy, policy, and research work, which is heavily centred on economic policy.  Underpinning this effort is the work of the IPA Deakin SME Research Centre, a joint venture between the IPA and Deakin University. The Centre produces a diverse range of research exploring issues that impact small businesses and SMEs. 

The recent and current work program covering impactful research and academic papers includes: 

  • Productivity: Small Business White Paper 3.0 focuses on innovation policy, including the most effective levers to boost Research & Development (R&D) (see below under SDG 11).
  • Sustainability: Looking at the SDGs with a focus on defining and measuring outputs and capturing intangibles; and how these apply to SMEs. 
  • Innovation: This project focuses on patents filed by SMEs and small businesses as a measure of innovation. The outcomes can be used in several ways to promote small business innovation, including matching the different players in the innovation/ patent ecosystem, such as patent attorneys, investors, government, and others.  
  • Exporting: The Research Centre has explored the linkages between innovation, exports, and productivity, including the role of intangible resources in SME export performance. The research report notes:

“Results suggest SME firms that innovate and have the required technical [or] managerial ability skills have a greater propensity to export. Indeed, technical skills are relatively more important for propensity to export than business skills. Furthermore, when SMEs are incentivized to innovate by using either government support or R&D collaboration, the propensity to export by SMEs increases significantly. Results also show that Australian small business exports and innovation are significantly reliant on five industry sectors. At the same time, SMEs with foreign ownership have a higher propensity to export compared to SMEs with no foreign ownership.”

These five industry sectors are:

  • Mining
  • Manufacturing 
  • Wholesale trade
  • Information media and telecommunications
  • Public administration and safety.

 

  • Funding: Research has been undertaken based on an international comparison of small business agencies, focusing on the Small Business Administration (SBA) in the United States. The objective is to identify and apply the most compelling features and elements worldwide to design an appropriate model for Australia. The centralised capital access assistance programs are of particular interest given the lack of this feature in the Australian landscape. This research has translated into policy recommendations that the office of the Australian Small Business and Family Enterprise Ombudsman (ASBFEO) should evolve into a centralised small business hub comparable to the SBA.   

The ASBFEO is an independent government agency that advocates in the best interests of the small business community. However, limitations of the model have been identified by the Research Centre as follows: 

“Indeed, the Ombudsman is unable to “… duplicate the operations of other agencies … [, and] must transfer a request for assistance to another Commonwealth, State or Territory agency, if that agency could deal with the request” (ASBFEO Act 2015, Division 2, Sections 66-70).  These limitations mean that the Ombudsman’s office can only advocate for the small business sector. Still, it is unable to administer and thereby provide centralised and widespread support to the small business sector in Australia.”

  • Alternative funding: Other avenues for funding, both public and private are being examined, including their efficacy with small business performance. Developing a viable venture capital sector is a particular focus of the research.

SDG 10: Reduced Inequalities

Various research and commentary over many years have focused on the systemic socio-economic challenges and institutional barriers which limit opportunities and pathways for Aboriginal and Torres Strait Islander peoples in Australia to build sustainable businesses or to enter professions. Recognizing the problems that exist, the IPA began its ‘Reconciliation’ journey through the compilation of our first Reconciliation Action Plan (RAP). A RAP is a corporate document that marks a commitment to improving outcomes for Aboriginal and Torres Strait Islander peoples. Within our sphere of influence as a professional accounting body, we have identified the following as the key objectives of our RAP:

  • Conduct cultural awareness training and other education to address unconscious biases within our organisation and membership. 
  • Increase awareness of the inequality faced by Aboriginal and Torres Strait Islander peoples and explore ways to create opportunities to increase equality. 
  • Review perspectives on Australia’s history, including the barriers that prevent Aboriginal and Torres Strait Islander peoples from establishing a sustainable business or pursuing a career in the professions. 

SDG 11: Industry, Innovation, and Infrastructure

This Goal is linked to SDG 8, and the work and outputs which we have noted above are also relevant to the achievement of SDG 11. This is especially concerning industry and innovation, which are critical to achieving decent work and economic growth. 

The year 2021 marked the release of the IPA’s third Small Business White Paper, titled Post COVID Policy Options to Enhance Australia’s Innovation Capabilities. As stated in the executive summary:

“…the White Paper presents a series of recommendations on how some judicious fine-tuning of government policies and regulations aimed at encouraging world-class innovation and R&D – particularly in the lagging small and medium-sized enterprise (SME) sector – could unlock this potentially rich future source of growth and prosperity, and ultimately help to secure the Australian economy against over-reliance on its currently narrow and potentially unstable foundations.” 

The eight recommendations of this flagship thought leadership project informed various policy positions of the IPA in 2021 and leading up to the Federal Election in May 2022. The main focus has been increasing productivity growth through boosting innovation by changing tax levers; promoting more effective collaboration between SMEs and universities, including more significant investment in Co-operative Research Centres; increased data availability, policy experimentation; and regulatory reform. Australia lags comparable OECD economies on private sector innovation and research by most metrics. It is imperative to turn this around if Australia is to build a sustainable and diversified economy and maintain its living standards.  

SDG 13: Climate Action

The urgency around climate action reached an all-time high in 2021, driven by the delayed COP 26 conference and updated science, as released in the Fifth Assessment Report from the International Panel on Climate Change (IPCC). 

The accounting profession has been responding accordingly, and in 2021, the work of various organisations over the past decade culminated into the formation of the International Sustainability Standards Board (ISSB). Housed within the International Financial Reporting Standards (IFRS) Foundation (based in London, UK), the ISSB aims to create a standardised, consistent, and comparable global baseline for sustainability reporting that is held to the same rigour as financial reporting. Given the momentum around climate change, climate risk has been identified as the first topic of focus for the ISSB. The IPA has contributed to the consultations, expressing support for the ISSB, with a specific interest in scaling reporting developments designed for large companies into the MSME context.  

To demonstrate a commitment to action on climate, the IPA has signed as a supporter of the Professional Bodies Climate Action Charter (PBCAC). This Charter acknowledges that no single profession has the resources and expertise to deliver an adequate response to climate change. Therefore, the PBCAC creates a collaborative forum for aspirational professional associations to innovate and support members with Paris-aligned and SDG-focused business models and strategies. 

In addition, the International Federation of Accountants (IFAC) (based in New York, USA), and representing over 3 million accountants worldwide, has anchored its strategy in the SDGs and has encouraged all accounting bodies to contribute to the achievement of the SDGs by 2030. The IPA strongly supports the role of accountants, business advisers and businesses in general in contributing to achieving the SDGs. 

On a more localised level, the IPA has introduced bespoke ESG courses and discussion groups for all business advisers, to raise their own awareness and capability to contribute to the achievement of the SDGs, with a specific focus on small business and SMEs.

SDG 16: Peace, Justice, and Strong Institutions

While creating and delivering value for members is our crucial responsibility and vital for continuity, the IPA’s central reason for being is to improve the life of small business. Accordingly, the IPA’s advocacy and policy platform aim to serve the needs of our members, the profession, and the best interests of the small business community and the public interest. This can only be achieved in the presence of strong institutions. 

The IPA takes a collaborative and consultative approach to its advocacy; however, more recently, the IPA has adopted an approach of ‘net positive advocacy.’ This is described by Polman and Winston (2021) as “a natural step” for a business with a clear understanding of its purpose and how this interlinks with its values. 

“Companies have long viewed ‘government relations’ as a way to resist regulation or fight for tax breaks and other special treatment. We propose, instead, that businesses approach governments openly and transparently, to improve the rules, help policy makers reach their goals, and solve larger problems for the benefit of all. We call this approach net positive advocacy.”

  • Paul Polman & Andrew Winston (2021)

We believe that this concept and approach suits the governance (especially transparency and accountability) aspect of ESG and is, therefore, vital to building strong institutions. The IPA’s work in partnership with other organisations, described below concerning SDG 17, has contributed to building strong institutions in other countries in our region.  

SDG 17: Partnerships for the Goals

The IPA strongly believes that the achievement of the SDGs relies on partnerships, as reflected in our activities and outcomes discussed throughout this report. In addition to our advocacy work, we have also undertaken practical activities to put these policies into practice, both domestically and internationally. One example is our work which contributes to capacity building in the Pacific, including the development and implementation of education programs over the last 12 months in the Solomon Islands and Fiji. The Australian Government is partnering in some of this work. The objective is to make the education programs scalable for implementation in other Pacific nations. 

Specifically, we have entered into a mutual recognition agreement (MRA) between the IPA and the Fiji Institute of Accountants. The main objective is to ensure the transfer of skills and knowledge between the bodies and other support and development opportunities. This reflects that the accounting profession plays a pivotal role in achieving solid institutions such as those governing the financial sector.   

We should also mention the IPA’s partnership with ICSB, which has grown over several years. This includes the establishment of a Knowledge Hub and the exchange of ideas and information, as well as participation in a range of ICSB activities. This recently culminated in co-hosting the virtual thought leadership event entitled, Why do we measure economic success through unicorns? This event brought together global experts to examine: Our social, economic, and natural environments have all changed, but our thinking about measuring success has not kept pace. How will we conduct and measure financial success to ensure our impact on nature and economic development becomes more realistic, responsible, and sustainable? Will it be possible to decouple economic growth from environmental degradation in line with the United Nations’ 10-Year Framework of Programmes on Sustainable Consumption and Production.  

Concluding Remarks

While 2021 introduced the IPA’s strategic intent to foster a professional community for MSMEs, the work is certainly not over. The IPA hopes to enhance member engagement and community spirit by aspiring to increase member value. By leveraging this spirit, we also hope to contribute to achieving the SDGs by 2030. As we continue to learn and celebrate the diversity of our member base, inclusion and well-being initiatives are being prioritised in 2022 and beyond. MSMEs will always remain central to the IPA’s advocacy and activities, supporting our ultimate reason for being – to improve the quality of life of small businesses.

Article by:
Matt Cavicchia and Vicki Stylianou, 
Institute of Public Accountants

Regulations Digitization Networks

Regulations Digitization Networks

Regulations, Digitization, and Networks

Thursday, September 8, 2022, by Dr. Winslow Sargeant, Chair, ICSB

Small businesses in the age of COVID-19 continue to have concerns as many re-open for the first time after many years of disruptions.   The normal business cycle has been far from the norm, and many things remain a concern as business owners seek to operate in this new order.   Three (3) in particular are on the top of mind for many businesses.  These include regulations, digitization, and access to networks.   

 

Regulations are not only a concern for large businesses but equally on the top of mind for small businesses who must keep up with the number of rules and regulations that have been relaxed during COVID-19 or have been strengthened to lessen the effect of the pandemic on society.   With the relaxation of rules, tax benefits, for example, allowed consumers to expense all of their entertainment and dining at restaurants.  This was a tremendous benefit that encouraged more spending in the economy.  Many small businesses saw their revenues increase.  The question, however, going forward is to understand if this tax break will continue to be in effect or if restrictions will be re-imposed.  Small businesses operate best when the rules are clear, transparent, and predictable because a small business owner will not have time to monitor the ever-changing rules that may come from the government. It is therefore recommended that small businesses work with their industry associations to hear what rules and regulations are being considered that could affect the operation of their business. 

 

Digitization and the ubiquitous nature of technology have accelerated since 2020.  The use of touchless payment technologies, cash apps, and many other non-cash transactions continues to increase.  The challenge for merchants is to tap into their digital portals that will allow for safe and secure transactions for their clients and customers and enable the experience to be frustration-free.  Using digital tools requires a “wireless” connection.   In some of our urban and rural areas, access to the internet or wireless access points can be intermittent and occur at the worst time.   Some small business merchants, who are mobile, have decided to set up shop nearby mobile “hot-spots” or similar areas where access to a mobile tower (for wireless access) will give the maximum bandwidth possible.  Small businesses are concerned with this connectivity requirement because of the overall cost borne by the merchant.    It is important that digital access be seen no longer as a nice to have but as a utility like water and electricity.  Governments should make it policy that favors reliable broadband and wireless access to those who are categorized as micro-, small and medium-sized enterprises (MSMEs), in particular, those in the rural areas and are led by women and youth. 

 

Networks are “a group or system of interconnected people or things.”   This definition looks benign but is particularly powerful when you are included with those who are the power brokers and leaders within a particular industry.  One of the most complex challenges for small businesses, especially those led by women and minorities, is the barrier of access to networks.  There is a truth that many of us do business with people we know and like.   The converse is true: we don’t do business with those we don’t know or like.   With networks, it is hard to like someone you don’t know.  In business, structuring partnership agreements, favorable procurement opportunities, or access to bank credit begins (and ends) with a favorable reaction from someone in your network.   This could be your individual connections, those from your advisory boards, and possibly, a customer.   One way to lessen the barrier of access to networks is to have someone in these networks actively invite others to their meetings and other gathering events. Small business owners just want to have a seat at the table rather than just being an “appetizer” on the menu.  Let’s recognize that established networks need to bring in new leaders from underrepresented groups that will keep their events relevant to society at large and make for a fairer playing field for small business merchants.  

Regulations, Digitization, and Networks can become strengths for small businesses and not just impediments.=.  Understanding how rules affect your industry and how to be up to date with newer technologies while expanding one’s network are challenges that small business owners face and are being removed in the push for inclusion and sustainable small business growth.  

Article by:
Winslow Sargeant
Chair, ICSB

Why an Entrepreneurial Revolution?

Why an Entrepreneurial Revolution?

Entrepreneurship is the backbone of society, unifying our global community like a rubber band keeping a stack of cards in order. Yet, like a rubber band, its resilience is equal to its sturdiness and strength, able to adapt to unpredictable changes and stretch to its limits in the name of innovation. Embracing creativity and change, entrepreneurship is ever-evolving, historically providing prosperity and health to humankind at large. So, why are we calling for an entrepreneurial revolution?

If the COVID-19 crisis has revealed anything to us, it’s the inequities our reality is built upon. From gender inequity to racial injustice, it has become clear that we cannot move forward as a global community without taking our neighbors’ hands, ensuring that we all move forward. Only when we stand on equal ground by uplifting marginalized groups can we create a truly humane world. In viewing entrepreneurship and business from this lens, we can establish the “new normal” for society as human-centered, building upward together.

Statistically, according to the World Inequality Report 2022: out of all global labor incomes, women make only 35%, while men make 65%. Perhaps even more disturbing is that this number for women increased by only 5% from 1990–2020. Income inequality is not only apparent in the discussion of gender, but also social classes. As of 2020, the average income of the top 10% of people in the world was 38 times higher than that of the bottom 50%. Similarly to the dismally slow improvement in income-gender disparity, the share of income collected by the poorest half of the world’s people today is around half of what it was in 1820.

Essentially, with the legacy of global economic imbalance in the arrangement of world production between the mid-19th and -20th centuries, wealth is not being distributed fairly, causing marginalized groups to remain in the minority with less opportunity for self-betterment than those in power. Humane entrepreneurship aims to cultivate a world where these numbers even out—where we center economic prosperity to achieve equity for all.

The World Inequality Report 2022 continues by demonstrating how global income inequality is closely tied to climate change impacts. Although humans emit about 6.6 tonnes of carbon dioxide per capita per year, the top 10% of emitters contribute to nearly 50% of all emissions, while the bottom 50% generate only 12%. Therefore, beyond humankind’s livelihood and fair living standards relying on a more equal distribution of wealth, so too is the wellbeing of our planet. As the health of both humans and our planet are innately intertwined, it is obvious that we must rethink and reshape our business practices to promote sustainability and equity; otherwise, there will be no future to plan for.

The world has changed suddenly and irrevocably within the past few years. However, it’s our responsibility as entrepreneurs to use our adaptability and resilience to provide economic prosperity to our global community. With equity between different social groups, and the health of our planet at the forefront of the entrepreneurial revolution, we can sculpt the ultimate humane future.

article by:

Dr. Ayman El Tarabishy

President & CEO, ICSB

Deputy Chair, GWSB, Department of Management

War & Entrepreneurship

War & Entrepreneurship

We are all playing witness to a 21st-century war in Europe—seeing its widespread effects on all aspects of society across the globe.

In his piece paper, “The history of business and war: introduction,” Dr. Erik Lakomma (2017)[1]  describes how there is a significant lack of formal research currently being done on war’s influence and effect on business, specifically entrepreneurship. The following explores war’s relationship to entrepreneurship and proposes a humane approach to both the generation and rehabilitation of the affected economies, focusing on the Russian-Ukrainian conflict.

The people of Ukraine are no strangers to struggle. Since the fall of the Soviet Union, Ukraine has ushered in an era of frugal innovation, as most habitats have endured three, if not four, national crises in their lifetimes. But today—with nearly two million Ukrainians internally displaced and over two million have already fled the country—it’s time to ask, what happens when people are pushed too far into scarcity? When there are not enough resources to survive, let alone continue conducting business?

Both Russian and Ukrainian entrepreneurs and small businesses feel the steep effects of a wartime economy. While the rest of the world sees rocketing natural gas and dwindling supplies of staples like wheat, the Russian and Ukrainian experiences with both are intensified. As a result, the worth of the Russian Ruble has fallen to a record low against the US Dollar, and corporations around the world have worked tirelessly to relocate business operations and withdraw any assets from Russia. In addition, on March 11th, the United States, along with G7 countries and the European Union, announced the implementation of national economic sanctions with an intended goal of “building on the unprecedented package of economic sanctions and export controls already imposed on Russia.”

With such sanctions, what is demanded and what can be supplied shifts during the war in general. Wartime realities require frugal innovation, locally and globally, and the impediments of conflict can spur industry in new ways. Historically, there is a myriad of examples of this. While the War of 1812 is known for having provided “an impetus to American textile production,” World War II is acknowledged for the growth of the electronic and aircraft industries. Around the globe, we are experiencing new grassroots and viral movements of support in support of Ukraine. People worldwide began booking Airbnb stays in Ukraine without traveling there and purchasing digital downloads from Ukrainian vendors on Etsy and eBay, all to push funds into the country. Companies such as BlaBlaCar have even found more tangible ways to support transporting Ukrainians to safety.

Just as war influences business and entrepreneurship, conversely, entrepreneurship influences war. Known as the military-industrial complex, the phenomenon refers to the influence of companies on the government towards “continued or increased military spending.” Demonstrated most frequently by the United States elected officials who remain dependent on military industries and vote for pro-war policies, the military-industrial complex benefits primarily those in weapons supply and military technology advancement. Today, however, we see information and media companies playing much more prominent roles in the complex by disseminating (mis)information and advertising and modern offensive practices, such as cyberattacks.

These powerful companies can influence the votes of Congress. Unfortunately, the micro, small, and medium-sized enterprises (MSMEs) are most likely not being represented or heard. These more singular units of economic power are so interwoven into our societal blanket that we often forget to consider their needs. When aiding them during trying times, they significantly lose between individuals and large companies.

Yet these small units communicate to the world: when it is safe, what to buy, and from where. They are local guardians, and until Ukrainian and Russian small business owners can open their doors once again, the imperative must be to protect their importance. War is another “pre-existing condition” [2] to global disease. If this new normal can not be based on any consistent sense of external stability, let’s decide to center it on an approach that is always within reach. In applying energies toward creating human-centered relationships, policies, and structures, there is a fighting chance to equilibrate the balance so that we can live in a place that upholds equity for all.

ICSB’s goal is to help bring perspective and voice to the MSMEs and entrepreneurs across the globe, and now, especially within both Ukraine and Russia. In 2016 when Dr. Ayman El Tarabishy formulated a proposal for a United Nations Day for MSMEs, he intended to see a day in which all countries, stakeholders, and companies of all sizes might celebrate the importance of MSMEs as the core units of modern society. Furthermore, MSMEs Day would act as a platform from which the global community could build ideas, synergies, and initiatives to help MSMEs prosper and grow while swiveling international attention towards these smaller units.

The day itself, June 27th demonstrates the importance of MSMEs as indicators of a peaceful society. Hence, we picked June 27 as MSMEs Day. A constant reminder of the importance of MSMEs.

Our daily choice is empathy over judgment, equity over greed, enablement over denial, and empowerment over restriction. Created from observing how small businesses operate, Humane Entrepreneurship (HumEnt) seeks to uplift humanity through creativity and innovation to develop solutions that benefit everyone. The approach of HumEnt changes our priorities.

In days of war, the future might not seem as if it is being guided towards Humane Entrepreneurship, but take a moment and look around. The world is standing up and fighting to honor humanity. So when companies pivot their creative solutions to aid those suffering in any war, it is the correct way forward.

Last year, I asked you to envision a world built around the most vulnerable[3]. I requested that we center our energies on those who need them the most and then, from that place, work to create informed policies that generate a resilient entrepreneurial ecosystem. 

Our world has changed again, so I repeat my request. 

[1] Erik Lakomaa (2017) The history of business and war: introduction, Scandinavian Economic History Review, 65:3, 224-230, DOI: 10.1080/03585522.2017.1397314

[2] and [3] https://icsb.org/wp-content/uploads/2020/04/2020ICSBGlobalMSMEsReport.pdf

Article by:

Dr. Ayman El Tarabishy

President & CEO, ICSB

Deputy Chair, GWSB, Department of Management

Future of Automation

Future of Automation

As our society moves through Industry 4.0 and acclimates to manufacturing automation, this 4th Industrial Revolution is throwing our world into uncharted waters where cold, uncompromising technology meets the warmth and unpredictability of the human experience. 

Within the context of humane entrepreneurship, we understand that each entity has its histories, values, and cultures that inform how they do business and interact with their peers. However, any time we approach a different way of operating, there are new questions that arise. Chief among them, we must ask ourselves what the role is of humane entrepreneurship at this unfamiliar intersection of technology vs. the human experience and how we can consider the lessons we have learned from the past to embody the society we want to be in the future.

According to academic and researcher Ivea ZeBryte, we must keep sight of the human element in all that we do. ZeBryte says, “When teaching entrepreneurs, we should be working through a matrix where empathy is understood as the ability to put oneself into the place of another, to identify and be sensitive to others that we recognize as different from us.” Therefore, it is precisely the differences that challenge us to come together for the greater good. To move forward together into the next realm of entrepreneurship, ZeBryte lays out the road map to follow: reevaluate, or delineate what we value as humanity;  reimagine, or work out the plurality of futures ahead of us; and reset, or build a new system of value creation and exchange based on these agreed-upon ideas.

Meanwhile, taking a more micro-level view, we must also consider what influences entrepreneurs and their decision-making processes, both internal and external. Psychological factors include personality, mindset, and level of cognition, while non-psychological elements encompass affiliation to a group, religion, culture, and friends and family. Additionally, one could underscore three main orientations: entrepreneurial, emphasizing innovation; human resource, regarding empowerment; or sustainability, highlighting environment. “When taking all of these factors cumulatively, it creates a multi-dimensional construct that is humane entrepreneurship,” says Indu Khurana, Assistant Professor at Hampden-Sydney College. Without consideration for the individual and the society, including the influences behind our decisions, we lose the value of humane entrepreneurship.

In the meantime, it is essential to reconcile these humane concepts with new technology that is rapidly advancing this current industrial revolution. Take, for example, the travel industry. With tourism contributing USD 8.9 trillion to global GDP, it is closely linked to countries’ social, economic, and environmental well-being. The opportunities to make it even more innovative and efficient through Artificial Intelligence (AI) and automation are endless. Still, it is essential to consider what cost they may come, particularly for these citizens for whom so much is at stake. As Dr. Jugho Suh, Assistant Professor at George Washington University School of Business, warns, “AI-based off of Big Data is not a panacea for all problems…AI can read patterns and behavior, but it cannot read attitude, values, or underlying motives for action.” Therefore, while it is essential to lift the travel industry in this current age of technology, we must not do so at the expense of human lives.

At its core, technological advances have brought us to the current era and given countless opportunities to those living today. However, we are experiencing an important crossroads right now, one with immense ramifications for future generations, and it is up to us the future we choose to orient ourselves toward. Although there will always be significant differences across cultures, we must find common values to move into the future that we desire together.

Watch the session below for more on the impacts of colonialism on Chile, religion in India, and AI technology on the travel industry.

article by:

Dr. Ayman El Tarabishy

President & CEO, ICSB

Deputy Chair, GWSB, Department of Management

Education and Humane Entrepreneurship

Education and Humane Entrepreneurship

Education and Humane Entrepreneurship

Sunday, September 5, 2021, by Dr. Ayman El Tarabishy

Education sits as the cornerstone of creating socially and environmentally conscious entrepreneurs. When we imagine the future of humane entrepreneurship, it includes empowered employees and well-educated entrepreneurs making intelligent decisions to heal the environment and benefit the world. To enable entrepreneurs to make these changes we envision, we must educate them on the issues that truly matter, such as integrating social entrepreneurship with sustainable entrepreneurship and employing business practices that protect our planet, communities, and future generations.

First, we must consider the significance of climate change and the role that government officials and entrepreneurs play in preventing further damage to the planet. Although governments are making changes to reduce negative impacts on the environment, we are still concerned about whether profitability and sustainability can coexist. We must educate all stakeholders about climate risk and their duty to promote sustainability in response to this. As observed by Dr. Mariya Yesseleva-Pionka, Global Certificates Manager for ICSB and adjunct professor at University of Technology Sydney, “With every new business venture comes a great responsibility for making climate-friendly decisions.” Therefore, we need to continue developing and supporting eco-friendly solutions such as green start-ups, fin-techs, and sustainability reporting and educate entrepreneurs on how to implement SDGs and sustainable business practices properly. It is imperative to note that long-term profits will not matter if the planet deteriorates due to climate change.

This sustainability education is inherently tied to education about social entrepreneurship, as both of these entrepreneurial approaches target issues on a human and environmental level. Although there exists an increasing amount of research on social entrepreneurial intention (SEI), or the motivation of entrepreneurs to build new social enterprises, we still lack knowledge about different SEI antecedents, such as personality, cognition, and experience, as well as variables moderating antecedent-SEI relationships, including economic and social influences. According to Dr. Phillipp Kruse, a scientific staff member at the Dresden University of Technology, the solution to these research issues lies in examining SEI in countries with different cultures and economic situations and developing a validated instrument with which to measure SEI. Additionally, social entrepreneurship educators must include more psychological input in university courses to strengthen participants’ motivational ties to social entrepreneurship.

With the amount of power entrepreneurial learners possess to change the future of business and the environment, we owe them the best education, educators, research, and settings. We must listen inclusively to the voices of these learners and new and small businesses alike. As stated by Dr. Norris Krueger, Senior Research Fellow at the College of Doctoral Studies, UOPX & Entrepreneurship Northwest, “Students are our secret weapon. In terms of learning and educating, and especially in terms of the ecosystem.” To provide entrepreneurial learners with the best resources, we must shift from top-down systems to bottom-up, from institutions to people, and from hierarchies to networks. Inclusivity and active listening are the keys to discovering what our entrepreneurial students need to flourish, improve their communities, and shape the future of humane entrepreneurship. In educating entrepreneurs and stakeholders on their sustainable responsibilities, increasing students’ ties to social entrepreneurship at the university level, and providing high quality, comprehensive education, we grant entrepreneurs the tools necessary to implement safer business practices and create long-term, positive change for our environment, communities, and ways of life.

 For more on the importance of entrepreneurial education, watch the session below.