Tim Jackson – University of Surrey

Thanks to the enthusiasm of THOMAS VERDIER-FUENTES, of the Belgian Positive Entrepreneurs,  two entrepreneurs BERNARD FORNOVILLE (Trividend cvba) & FRANKY DE COOMAN (Art Decoo bvba), had the opportunity to interview TIM JACKSON,  writer of Prosperity without Growth.  Economics for a finite planet

Professor Jackson was at the “Université Catholique de Louvain” where he received a Doctor Honoris Causa degree on February 2, 2011.  We met him in Louvain-la-Neuve, the preceding afternoon.


Feb 1 2011

To do justice to the informal spontaneity of our conversation, we chose to keep the interview format.

Format, Titles and layout are entirely ours.

PART 1:        The role of Entrepreneurs in the Cinderella Economy,  The role of Government in Socially Responsible Investment

Professor Jackson, your latest book obviously takes a macro-economic point of view,  as it emphasises the role of government and consumers for instance.  To what extent do you also see (societal) entrepreneurs as actors in your philosophy ?

I have indeed sometimes even been accused of not taking sufficiently a micro-economic point of view.

Yes I do view entrepreneurs as actors, and it would not be true to say that they are absent from my book.  They emerge through my concept of the Cinderella Economy, which hints to an economy of smaller scale: locally embedded, community-based organizations and sector activities which share socio-ecological goals.

This Cinderella Economy is a place where some hit an embryonic form, a foundation for a new economy.  What your network is doing is exactly at the heart of where I would see entrepreneurs in this vision of economy.

In my book, there is also a discussion on how entrepreneurs in the Cinderella economy sit in the broader term of traditional market sectors, with debates on resource productivity, transformation in terms of resourceful activities, carbon intensity and the transformation in terms of organizational structure and legal form.  I discuss how ownership is constituted, how ownership might be shared, and how the returns from activities might be locked more firmly into community interests.

Since the book has been published, I have an informal gathering together of largely anecdotal material which is all about this particular model.  That is why I’m very pleased to meet you, the Positive Entrepreneurs, where I now have yet again an example on this matter: companies that are organised around a cooperative model, but there are different legal forms as well.  I’m taken by the idea that there are enterprises with clear social goals, as this is a distinct emerging feature in the new economic landscape.

Do you think that this kind of economy can be developed bottom-up?

Yes, but I think that it does need government assistance.  One of the interesting questions for me (from all my anecdotic material) is to see how much is genuine bottom-up and how much is still dependant of governmental influence.

Government can seed such kind of enterprises, it can create critical mass and can provide the legal basis for such organizational forms, new company legislation for e.g. community interest companies.  Legislation for the seed funding of such companies should also be foreseen, just like the institutional framework which makes it easier to set up a company within this model.

Indeed, to some extent, protecting such companies from capital flight towards mainstream or institutional investors should be looked at.  There are apparently short-sharp attractive sexy returns with such companies which will hold away longer sustainable investment money with slow credit and longer payback period.  Nurturing of capacity is a key government role.

It is quite important to give real positive examples of companies which are not simply seed-funded and last only as long as the seed-funding lasts.  We need companies that are able to show longevity, show sustainability in their own right.

There are good examples, e.g. Triodos Bank you referred to, which is a clear success story of a company providing an ethical product with a new organizational goal and a new sense of what financing should be doing.

We have also SRI (Sustainable or Socially Responsible Investment) Funds within the institutional investors, which show to people how it is possible to create an emerging, a new mainstream investment fund, coming right out of the existing paradigm, financially sustainable in its own rights.

I do believe it is possible to have grassroots initiatives, and I do think there is a role for the government to facilitate that, still.

PART 2:        SHARED VALUES ?  Protecting social risk and Capacity building

Might it be that Michael Porter with his views on “Creating Shared Value” read your book?

It is possible that he has read my book, but what is interesting is the emergence of this nature of ideas, perhaps not pulled together in the way that I did.

We do see however that in different places, this idea of a different way of doing business, a different way of creating value, a different way of thinking about returns on capital, a different way of structuring ownership is emerging, like the beginnings of legislation to support such initiatives.

What types of accompaniment do these (maybe naive) grassroots initiatives require?  How do they  -for their part-  avoid being based on a consuming model, just as well?

We should encourage diversity and experimentation.  One should create a protection around those innovative features that treat the return to capital differently.

We should do something at the other end of the market, where those social entrepreneurs are competing against.  They are competing on an uneven playing field.  What they are doing is rather altruistic, those companies should have the ability to survive entirely, to have financial sustainability.

The likelihood of survival of those entrepreneurs taking the social risk should be substantial.  Because thinking in terms of social risk is an interesting thing to do.

This issue of social risk is also a huge issue at the other end of the market.  It is exactly what happened at the high end of the financial market: the risk-return balance has been completely skewed.  What we have created is a financial sector in which the private returns are being taken by the private sector. And the huge risks are being taken by the public sector.

The way in which the government has preferentially treated social risk in relation to the financial sector really requires some rebalancing.  It is deeply inequitable: privileging huge financial interest and disadvantaging the public sector and big parts of the working population for decades to come.

It is good to take some position in relation to social risk towards these new enterprises.  Essentially, what these new enterprises are doing is adopting social risk, internalizing social risk, in order to create social and ecological goals, in order to create a new form of enterprise.  This looks after long term prosperity and greater security, which is more integrated in community and grows in slow and more sustainable ways.  When you justify the trillions that were spent to save the banking sector, there is a huge case for supporting this new sector of the economy.

There is also some capacity building to be done.

It is quite difficult to discover and know the legal forms which offer the best benefit for this new kind of economy.  There are very few places where you can go to for advice.  In the UK, there are only one or two organizations dedicated to supporting social enterprises and seed-funding such enterprises, yet this is nothing compared to the support which exists for mainstream companies.  Here is a role for the governments:  intervention and capacity-building, training, help on skills and advice to support.

PART 3:        Private returns and public costs revisited:  GDP and well-being

Is it possible  a) to put larger companies before their responsibility to internalize the risks ? and  b) to give credit for the creation of (societal) value by companies ?

In the social economy sector, what is happening is the protection of social and ecological value, as these companies are set up with that explicit aim.  In a sense, this goes down to my point on altruism.  In the long run, if we expect that to occur for purely altruistic reasons, we have to reward that particular value, and measure returns:  how we can evolve towards the protection of those values.

We should be able to measure returns, social and ecological, on a footing that at least bares some influence on strict financial return.  We should be able to create an environment where you do not disadvantage yourself by creating social and ecological returns.  In doing so, the question of Social Return on Investment is absolutely key.

What one should do is regulate this end of the market where there is no sense of social and ecological return on investment, which is purely based on financial return on investment, where there is no internalization of cost.

You want to be able to expand and give space to those funds which are attempting to measure social and ecological return (like SRI: social return on investment).  You need to expand the space for these funds, by elaborating incentive structures for clear targets around investments that explicitly nominate social and ecological return.

One should facilitate companies that are doing it or beginning to do it in a certain way.  It should be a variety of mechanisms, some around incentives, some around regulations, some around facilitation, some around reporting frameworks and requirements of reporting frameworks,  all of which can begin to equalize the value that society places on different kinds of returns, so not only retrench in terms of financial returns.

Are we going to make any progress on this, before we redefine GDP?

They are related, but not completely exclusive or mutually inclusive.  It is not so that one should have the one before the other.

But shouldn’t Governments show more clearly where their own interest lies ?

That’s true, I think.  Government now is looking at GDP, which has no sense of social and ecological return.   The two things do reinforce one another.

What is interesting about the GDP conversations is that they have been slower than the conversations on the bottom-up attempts to create social and ecological value.  These GDP discussions are slower than the rise of the SRI funds.

It took us four decades to see that GDP is not a good indicator of national wellbeing, there is very little progress in adjusting it in that way.  GDP is not progressing in internalizing costs with real rigor or intensity.

These two agendas certainly do reinforce one another.  It is also interesting to see that we have some micro-examples of internalization of social/ecological value, even before we have this in a national governmental framework.

Who is the key actor in economic change and in economic innovation?

(…)  I do not have a clear answer to that question.  If you take the case of traditional, conventional economy, you would assume that it are the entrepreneurs, that it is their job to innovate, and that then demand follows that innovation.  They construct their role to be a demand-led role, as a creeping evolution of social norms.

We did some work in the electronics industry.  These have a very particular strategy for creating demand, but they don’t see it themselves as creating or constructing demand, they see it as understanding demand and being led by consumer demands.

This is clearly not entirely true:  there is a process of co-construction of demand, which is around a certain link between a social logic, a progression of social norms and an economic logic.  The logic that you have to innovate in order to survive, the idea of Schumpeter around progress of capitalism through innovation.

So I think it is difficult to see the driving factor, even in the conventional economy.  It is going to be similarly difficult to define it in the new economy.  But a lot of what we actually see and practice is a kind of real social innovation by social entrepreneurs.

They are the key actors at this point, I think, rather than a huge demand-led economy.

PART 4:        Future Pathways: conscious consumers, innovating entrepreneurs, networking & sharing,  and slow credit investment funds

Are these entrepreneurs key actors, more so than some privileged consumer groups, who are able to formulate their needs?

These consumers are capacitating, that is for sure, as they are providing niche-markets, in which it is possible to establish some sort of enterprises and sustainability for the enterprise.  It is very difficult to see however that the consumers are being the driving force behind the huge expansion.

That is partly because they are niche markets, and almost marginal, even with respect to that demographic: they are not the main expenditure category, they are marginal, almost luxury expenses …

We did some work, years ago (we called it the Sustainable Consumption Roundtable) and looked at a variety of different changes in consumption patterns and indeed in production and production models.  What was very clear is that very few of those changes were strictly demand-led.

There was clearly an element that was about consumer demand, but it was not the main driver in innovation in many of those examples.  There are various good reasons for that: the consumer power is a useful thing to mobilize, but it is not a trivial thing to mobilize.  And it is certainly not something you can sit and wait for, if you are trying to change consumption patterns and innovate in social ways.

In all modesty, is there anything that you expect from us, the Positive Entrepreneurs?

To me, the social economy is a very fertile area and I’m incredibly pleased that an organization and a network is established with this specific aim.

I have been in contact with some organizations like yours in the U.K., something like Unlimited which is a lobby and support organization for social enterprises.  I’m involved in one of their projects, unlimited futures, which is very much around social and ecological enterprises.

What is still missing there, is the financing model for this sector, that could provide long term sustainability, that could provide slow credit and achieve social and ethical returns and measure them appropriately and protect them in a rather competitive complex capital market.  This is the challenge I think:  creating something more than anecdotal interest in the social enterprise sector.  Of course, it does not all rest on your shoulders.  There is also a lot to do by reforming the capital markets, about creating those vehicles.

But I’m really encouraged when I see people gathering, creating these kind of initiatives in the UK, the United States, in France, in the Netherlands, …  It is quite challenging !

So you indeed perceive quite some movement in that direction?

I see a lot of very interesting conversations that are going in a similar direction.  It is too early to say whether this is a real ground swell, in a way it is all down to a political will.  The strength of the sector itself being able to establish the right conditions, to flourish and support, from both consumers and the government.

This is the kind of economy we have to be able to develop, because there doesn’t seem to exist another option on the table to deliver sustainability, …

… in order to “fix” capitalism … ?

It is the most promising reinvention of capitalism, even some of it is not quite capitalism in the way that we know it, and it is a meaningful way of thinking about enterprises.

Who are the bystanders, the fore-frontrunners, the people we should listen to?

Difficult to say, it’s one of those ear-to-the-ground things, you are listening to things that barely exist.  There are a lot of interesting conversations around finance, around slow financing, around social credit, community finance mechanisms, long term saving vehicles.

It does seem to me that this has to be at the heart for making the stuff work, because companies are continuously led by the conditions of finance, by the way in which shareholding is structured, the way in which returns are or are not regulated, the way in which capital is either free to move and impose its own conditions, or is able to move at the speed at which social enterprise needs it to move in order to be productive.  I’m fascinated by those initiatives.

We have a product in the UK called the Finance Lab, something similar to the Capital Institute in the USA (in which I’m involved).  The New Economics Foundation has done quite a lot of work in social credit.  Unlimited is not actually providing finance, but is overseeing seed funding.

The one thing that I’m really trying to encourage them to do, is to move that idea of seed funding into a more mature finance-based model …

… and which can be mutualistic ?

Absolutely.  It is quite clear that we need changes in legal form and in ownership structure, if we want to make this vehicle work properly.  At this moment the constraints of the main stream markets exert this huge almost gravitational pull on capital into the sharp-end, high return, high risk which is underwritten by the public sector, but offers private returns to people in really inequitable, unfavorable conditions in terms of social and ecological reality.

So the importance of pulling back, of getting that balance shifted much more into a kind of grounded finance mechanism, with appropriate ownership structures, appropriate controls over the returns of capital is a part of the key.

Is there any way we can meet again?

Sure, I’d like to be involved in what you are doing.  One thing I’m trying to do is crowd-source anecdotal examples of this kind of enterprises.  It seems that what you are doing in the network is pulling that together, pulling resources.

I’d like to feature you, the network and possibly some of the examples, on my facebook account where I pull examples and point people into the direction of things.  If you have got some links that you can send, I would be really happy to publicize them.

I also want to create a real, proper crowd-sourcing project, using electronic media to identify examples of the new economy and to create a sense of momentum across different countries.  We are in early stages of the setup, but later on, we hope it will be a resource for people who are interested in this new kind of modern economy.  So I’d be very happy to feature you, to draw in your examples.

I’d be happy to discuss further and put you in touch with people in the UK.

One particular person who I am in relation to is Alex Grayson, he is putting together something called Empower Community which is a way of financing community built projects, mainly in the energy sector, but I think they also have got projects which are ecological, social projects.  The model of financing he is building is very much along the lines of things that you are doing here, they offer that kind of protection for slow financing under realistic conditions for social enterprises.

It might be nice to organize some sort of seminar or meeting, where we can pull experiences around this.  This is one thing I wanted to do in the Sustainable Development Commission for which I made the report.  It won’t be possible anymore to do it under those auspices.

But there are other forums where we can do that.

PART 5:        References and Links

A. on Tim JACKSON and the context in which we met

Tim Jackson (University of Surrey)                               http://www.ces-surrey.org.uk/people/staff/tjackson.shtml

Tim Jackson (UCL Université Catholique de Louvain)                            http://www.uclouvain.be/351968.html

Tim Jackson on Facebook                 http://www.facebook.com/pages/Tim-Jackson/136886903010533?sk=wall

Tim Jackson on TED                                    http://www.ted.com/talks/tim_jackson_s_economic_reality_check.html

Prosperity without Growth. Economics for a finite planet

Book review by Jeremy Leggett – www.guardian.co.uk/books/2010/jan/23/properity-without-growth-tim-jackson

The Guardian, Saturday 23 January 2010

Welvaart zonder groei.  Economie voor een eindige planeet”  Jan van Arkel, Utrecht, uitg ism OIKOS 258p

OIKOS : denktank voor sociaal-ecologische verandering                                                     http://www.oikos.be

Prospérité sans croissance” (Etopia – De Boeck)                           http://www.etopia.be/spip.php?article1533

Text of Tim Jacksons’ lecture  UCL, Feb 2, 2011                                       http://www.uclouvain.be/352059.html

Video of the Doctor honoris causa ceremony  UCL, Feb 2, 2011      http://www.uclouvain.be/310439.html

B. on some authors, terms and initiatives  (in order of appearance in the interview)

Cinderella Economy (by G. Rundgren)      http://gardenearth.blogspot.com/2011/03/jacksons-cinderella-economy.html

seed money                                                                                          http://en.wikipedia.org/wiki/Seed_money

Triodos Bank  (the Dutch article is more up to date)                         http://en.wikipedia.org/wiki/Triodos_Bank

SRI (Sustainable/socially Responsible Investment) funds

sustainable investment                                                                      http://www.sustainable-investment.org/

Michael PORTER                                                                             http://en.wikipedia.org/wiki/Michael_Porter

capacity building                                                                        http://en.wikipedia.org/wiki/Capacity_building

SROI (social return on investment)          http://en.wikipedia.org/wiki/Social_Return_on_Investment

GDP (gross domestic product)                              http://en.wikipedia.org/wiki/Gross_domestic_product

Joseph SCHUMPETER                                                         http://en.wikipedia.org/wiki/Joseph_Schumpeter

Sustainable Consumption Roundtable                                                                         http://www.food-scp.eu/

Unlimited                                                                                                                                http://www.unltd.org.uk/

Finance Lab (UK)                                                                                                                   http://thefinancelab.org/

Capital Institute (USA)                                                                                          http://www.capitalinstitute.org/

NEF  or New Economics Foundation (UK)                                                     http://www.neweconomics.org/

(crowd sourcing)                                                                             http://en.wikipedia.org/wiki/Crowdsourcing

Alex GRAYSON  (& Richard KNOWLES) Empower Community Fund                                     http://www.omniworldview.com/

Sustainable Development Commission


C.  on ourselves and on the positive entrepreneurs in Belgium

Positive Entrepreneurs in Belgium                                                                 http://www.positive-entrepreneurs.be/

Bernard FORNOVILLE,  general manager of TRIVIDEND cvba                                     http://www.trividend.be/

Franky DE COOMAN,  manager and owner of ART DECOO        http://www.artdecoo.be/   artdecoo.wordpress.com

D.  Some references we exchanged with Tim Jackson:

Jan JONKER (prof CSR at Radboud Univ)         http://www.ru.nl/businessadministration/koppeling/jonker_j_j/

Our Common Future 2.0” (in Dutch)                                          http://www.ourcommonfuture.nl/nl/welkom/

Josephine GREEN (Senior Director of Trends and Strategy,  at Philips Design)

a.          “Democratizing the future.  Towards a new era of creativity and growth”  67p


b.         “Change the Rule of Profit”  March 11th, 2009  1’23”        http://www.youtube.com/watch?v=wAIY3eLiZhA

SIX  (Social Innovation eXchange),                                                        http://www.socialinnovationexchange.org/

SIX,  “A study on Social Innovation;  Paper for the Bureau of European Policy Advisors

© European Union / The Young Foundation 2010,  127p

http://www.socialinnovationexchange.org/files/images/ocial_Innovation_for_the_European_Commission_0.pdf (sic!)

The YOUNG FOUNDATION  (social impact investment …)                          http://www.youngfoundation.org/

LIEBMAN, Jeffrey B.

Malcolm Wiener Professor of Public Policy at Harvard University’s John F. Kennedy School of Government

Social Impact bonds. A promising new financing model to accelerate social innovation and improve government performance”, feb 2011,  36p


(and also:)

Michael SHUMAN “going local”

“The Small-Mart Revolution” (Carnegie-Mellon Univ)       http://www.youtube.com/watch?v=b9YUxYXG678

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