6.1 Lección 1: El papel de las empresas

Companies have long been seen as one of the main economic drivers. Many local governments create initiatives to draw big businesses in the hopes of generating tax revenues, jobs, innovation, worker skill development, and more accessible, reasonably priced goods and services. Regrettably, these businesses typically function according to an extractive paradigm that disregards the welfare of the areas and people in which they are present.

Communities, especially smaller ones, sometimes suffer from a variety of unforeseen negative effects when they draw big box retail businesses, fast-food chains, or high-tech companies. For instance, tiny neighborhood stores gradually close because they are unable to compete with the multinationals. As the town loses its identity and local capital departs, traffic congestion rises. Depending on the type of business, either low-wage employment becomes the norm as labor force skills deteriorate or gentrification leads to the eviction of low-income communities. Also, the practice of remote working has developed over time and has now become indispensable in light of the most recent COVID pandemic. Communities are experiencing a range of repercussions from this. On the one hand, skilled workers are leaving large cities for smaller and rural areas, where a distant workforce is fueling economic minibooms by investing in new homes and patronizing neighborhood businesses. Yet, high-tech businesses that use remote workers grow even more alienated from the urban areas where they operate and do not regard themselves as contributing to the resuscitation of local economies.

While businesses have historically been designed to fulfill the demands of their shareholders, social and sustainable businesses have typically been seen as having the responsibility to provide value and advantages to communities. This is a step in the right direction, but before businesses can play a really regenerative role, two obstacles must be overcome. Earth must be listed as a major shareholder in the beginning. If ecological systems are not considered stakeholders, businesses are given permission to continue damaging and removing resources from the environment without constraints. A local economy is also always part of its environment, or context. The idea of place refers to a neighborhood and the surrounding ecosystem as a unique living system that is unique from other places. Businesses need to learn how to engage with the particularities of place if they want to include both human and natural systems into their strategy and operations.

Second, it’s crucial to define exactly what “delivering value” entails. Delivering value through regenerative development entails fostering ability. In other words, a regenerative investment builds all stakeholders’ capacity and capabilities (including ecosystems) to not only improve their own lives and welfare but also to contribute regeneratively to the wider systems in which they are engaged. A company cannot be analyzed in isolation from the environment in which it operates. The health of a local business community is strongly impacted by the strength of the local economy. Healthy business ecosystems are correlated with healthy stakeholder ecosystems. Local stakeholders directly promote regional economic development when their actions are based on the distinctive character and potential of the local area.