Profit & Not for Profit

The idea of shared value blurs the line between for-profit and not for profit organizations. Indeed, we are witnessing the rapid appearance of new kinds of hybrid enterprises. Many businesses are testing this new type of organization, and the result is not only creating Value, but increasing significantly their economic benefits.

A significant example able to show this difference is Fair Trade. Fair Trade activities aim at increasing the proportion of revenue that goes to poor farmers by paying them higher prices for the same crops. Though this may be a noble sentiment, Fair Trade is mostly about redistribution rather than increasing the overall amount of Value creation. Creating Shared Value doesn’t mean redistribution of created Value, but a simultaneous creation of economic and social Value.