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Notes on Nortel and One Laptop Per Child

Jeff Trexler | Monday 20th April 2009

Last week brought the news that Nortel is withdrawing its support for One Laptop per Child. Nortel had been one of the program's major sponsors.

While Nortel's bankruptcy is a primary reason for this action, we should not let the fact that the company's precarious financial condition distract us from the broader lessons.

Above all, Nortel's withdrawal is a potent reminded that commercial support for social enterprise is to a significant extent a symptom of a bubble economy. Charity is a luxury good that companies may believe they can no longer afford.

While academics and assorted do-gooders have touted the financial benefits of supporting social benefit, the recession highlights the extent to which such assertions lack concrete evidence. Nortel's sponsorship would no doubt have continued had OLPC been perceived as a profit point. Instead, the charity would seem to have been a drain.

Also worth noting is the dog that hasn't barked--namely, the relative lack of support from companies invested in their own netbooks. As this article notes, netbook makers are focused on profiting from their own ventures rather than supporting a charitable competitor.

This raises an intriguing possibility regarding the longterm impact of successful cause-marketing joint ventures. For much of the past decade we have treated cause marketing as an adjunct of social enterprise. However, we could just as well argue that cause-marketing partnerships are more likely to benefit charitable ventures that have little to no prospect of acquiring significant commercial market share, especially in the sphere occupied by their commercial partners. From a Darwinian perspective, the long-term impact of cause-marketing joint ventures could actually work against social enterprise--in particular, ventures funded primarily through earned income and innovative charities that could potentially undercut commercial products.

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EJ Wensing 20 April 2009

Part 3

You wrote, %u201CFrom a Darwinian perspective, the long-term impact of cause-marketing joint ventures could actually work against social enterprise--in particular, ventures funded primarily through earned income and innovative charities that could potentially undercut commercial products%u201D

Actually, the reconfigured non-charity vision/engagement above will work for everyone because of social enterprise, when it follows along the line of social responsibility.

I assume the %u201CDarwinian Perspective%u201D was a %u201Csurvival of the fittest%u201D reference. The fittest will be the most diversely socially responsible. Expanding that consciousness is part of evolution.

EJ Wensing

US Virgin Islands

EJ Wensing 20 April 2009

Part 2

Instead, social benefit and social responsibility are evolving into the new competitive advantage as companies mainstream these into their corporate identities. Social cause-marketing remains and the philanthropic dimensions are integrated into the overall actions of the SR mainstream.

The vision is marketplace competition based in global CSR along stakeholder and supply chains. One multinational ICT company I am in communication with seems to be interested, so is a key member of their supply chain.

So while the future of cause-marketing joint ventures will mostly move away from charity it will have to continue to engage social enterprise if it is to stay financially competitive/viable. Those that do will indeed acquire significant market share.

See part 3

EJ Wensing 20 April 2009

Hi Jeff,

This part 1 of 2

You wrote,

%u201CWhile academics and assorted do-gooders have touted the financial benefits of supporting social benefit, the recession highlights the extent to which such assertions lack concrete evidence. Nortel's sponsorship would no doubt have continued had OLPC been perceived as a profit point. Instead, the charity would seem to have been a drain.%u201D

Unless I misunderstand you, you seem to conflate %u201Csocial benefit%u201D with %u201Ccharity%u201D.

Supporting social benefit can have tremendous financial benefit. In fact, that appears to be the line along which CSR is evolving, especially in these economic recessionary times. (Concrete references available)

You also wrote, %u201CAlso worth noting is the dog that hasn't barked--namely, the relative lack of support from companies invested in their own netbooks. As this article notes, netbook makers are focused on profiting from their own ventures rather than supporting a charitable competitor. %u201C

Of course, no surprise there, nobody is likely going to support the philanthropic venture of a competitor.

...see part 2