People Centered Economic Development

People Centered Economic Development Image by Intelligenthq

One of the buzz trends of our contemporary “business” days is the idea that people need to be the new focus, and centre of a business that entitles itself to be social. There is something warming about the idea that people might actually be placed first in the process of economic development. It is important to remember that this idea didn’t just came up recently with the sudden use of social media platforms such as Facebook and Twitter, that triggered an immense revolution on the way business is done.

To put people at the center of economic development is precisely what the concept of  People Centered Economic Development attempted to do, by considering people at the core of progress. The concept of People Centered Economic Development has been in operation for more than 15 years and while it began in the USA in Chapel Hill, North Carolina, the organisation moved to the UK in 2004. Jeff Mowatt is one of the most important advocates of this concept and the director of the organization. P- CED is now a profit for purpose organisation in the UK, which allows it to be able to invest profits for social purpose as well as to conduct small business. Any money that is made is re-invested into purposes that the organisation’s management chooses.

On the core premise of people being central to economic development, the organisation asks a question that seems obvious: “At first glance it might seem redundant to emphasise people as the central focus of economics. After all, isn’t the purpose of economics as well as business, people?” But as the organization sees and we all have experienced, if people are to some degree automatically a core part of business and economic activities in other ways they are not. Clearly, it can be seen that the capitalist model does not lead to benefits for everyone. Definitely some people are rewarded with considerable benefits, however,  according to the “People Centered Economic Development” theory, in fact, the traditional capitalist system doesn’t bring benefits to all. After all, as it points out, more than one billion people are left hungry. This hardly puts people at the core of economic development if a very sizeable proportion of the world’s population does not have sufficient food to eat each day. We don’t even need to go that far: It’s a common discussion nowadays that the current generation is less better off than their parents one. Over the last decade wages stabilized while life costs have skyrocketed, particularly in cities like London or New York.

The premise of People Centered Economic Development,  and they were pioneers in raising these kinds of questions, is that it tries to figure out solutions. Problems like the ones highlighted previously are solvable by taking a slightly different approach and putting people central to the economic development approach.

People Centered Economic Development advocates for businesses to do things differently. It persists with the idea that businesses should operate for profit, but rather than creaming off that profit to make just a few people very rich it is proposed instead that a minimum of 50% of profits should be given to “stimulate a given local economy instead of going to private hands.” Legally there is nothing to stop businesses from doing this if their mandates and relationships with investors are set up accordingly to do so.

People Centered Economic Development argues that profits can and should be utilised more effectively than they are at the current time. Rather than targeting “traditional investment and profit outcomes” it is suggested that by giving half of their profits away to create dozens of new organisations, more jobs would be created. This, it argues would be beneficial for everyone, not just the few lucky individuals at the top of the chain. It is also opined that this would create a more equitable system that could work to reduce human misery and suffering through changing the flow of wealth and working to get rid of issues like poverty and hunger. This is essential, it argues, especially given that there are more than enough resources for everyone, but they are just not shared equitably.

Overall the focus is on long term and permanently sustainable solutions, putting the neediest people first in priority, rather than continuing to overlook or ignore them. The approach is considered to be bottom up. People Centered Economic Development practices what it preaches and does not expect other organisations to take steps that it is not prepared to take itself. With regard to social purposes, the organisation’s largest concern is poverty relief and child care reform in the countries that formerly comprised the USSR. This is achieved through creating ties based on friendship and common ground with countries that were part of the Soviet Union. It is the firm belief of People Centered Economic Development that an approach that it describes as “soft power” for pursuing international relations is the most optimal for building trust, understanding and peace, and the organisation has focused on this strategy right from its outset. As People Centered Economic Development puts it, “Peace is our business.” People Centered Economic Development specifically selected the former Soviet Union region to provide support to.

It seems like a long shot to change a system of profitability that is so embedded in the capitalist principle, but maybe through showing what can be done with sustained efforts People Centered Economic Development can achieve this.