Category Archives: Local Economics

Little Fish Big Pond

Evan Williams                                                                                                                     Week 3:  Localism Example

Little Fish; Big Pond

Community based enterprises encounter an interesting dynamic when addressing the expansion of their organization.  The Agua Dulce example typifies this point, and it can be observed in other organizations as well.  Their unique structure and culture, which makes these CBE’s successful upon startup, proves to be a major setback for them in expansion.  This unique situation is one of the most challenging dilemmas that the organization must overcome to successfully grow.

Agua Dulce’s community emphasized an accountability that was established within the social structure of the developing community.  This created a notably unique organizational structure that was highly dependent upon community participation.  Due to the community’s vested interest in the project, and majority participation in the organization, a highly effective system of checks and balances was established at Agua Dulce.  This inter-organizational system of self regulation proved to be an essential key to the CBE’s success.

Ingvar Kamprad, founder of IKEA, experienced considerable difficulty in expanding his culturally unique company internationally ‘Rapid growth would make it difficult to retain the company’s cultural values.” (Bartlett, 1990)  It is clear to see that unique organizations have difficulties in transferring their specialized cultures in their expansion endeavors.  When the culture is a key element in the company’s success, this turns into a serious problem.  Agua Dulce, as well as other CBE’s, has the same problem in their expansion efforts.

In an interview with Mikel Lezamiz, Mondragon’s director of cooperative dissemination, Lezamiz provided interesting insights into the organization’s most pressing challenges.  He said: “How can we maintain the cooperative values and principles when we expand to other countries.  Mondragon is based on a commitment through solidarity.” (Hollender, 2011)  Lezamiz had further explained that in the countries where Mondragon has looked to expand into, they were having difficulty in turning employees to cooperative members.  Mondragon, much like Agua Dulce, hinges upon not only workers, but workers who are vested in the organization through membership.  Without membership, they run into financial setbacks, but worst of all the social structure and accountability suffers considerably as well.

Therefore, to succeed locally the CBE institutes an organizational structure which will paradoxically inhibit its ability to grow beyond the local level.  One could presume that this is simply an inherent limitation of most CBE’s.  Assuming this infers that these types of enterprises can only expand beyond the local realm by reorganizing their overall structure.  This thought process could be challenged, however, by delving deeper into the IKEA case.  Ultimately, IKEA was successful in its global expansion.  It had effectively opened international stores without compromising their original unique culture.

It should be feasible to replicate and expand the distinctive organizational structure of the CBE.  Execution and planning of this growth, however, would need to be conducted as an exploratory endeavor.  As was the expansion planning at IKEA, expansion planning would need to be thoroughly strategized.  An exceptionally keen attention to demographics must be utilized in order to determine the availability of the most invaluable resource for the CBE, its employees and cooperative participants.  Without careful strategizing for full cooperative participation, the organization will fall short on establishing its essential social structure.

Works Cited:

Hollender, Jeffrey. “A Visit to Mondragon: Interview with Mondragon’s Director of Cooperative Dissemination.” A Visit to Mondragon: Interview with Mondragon’s Director of Cooperative Dissemination. N.p., 01 Aug. 2011. Web. 30 Oct. 2012. <http://www.jeffreyhollender.com/?p=1700&gt;.

Bartlett, Christopher A. “Ingvar Kamprad and IKEA.” HBS Premier Case Collection(1990)

 

Response:

If an enterprise, structured much like that of a CBE, strives for global expansion, they truly have a complex feat to overcome.  Some proven success of privatized growth models may be implemented; however, these enterprises must proceed with great attention to preserve the dynamic culture.  Also since the cooperative model has a member owned and operated structure, the mission must be kept centralized as the ownership is diluted locally to a global presence.

In order to strike an effective balance between a privatized growth model and organic culture, an enterprise could proceed with exploratory growth teams.  This consists of a group of seasoned cooperative members who are solely responsible for establishing the enterprises’ culture and mission among the employees at the new location.  Another group focusing on the actual start up of the new location with regards to logistics required for operational viability.

The group responsible for transferring the core of the enterprise is especially detrimental in expanding an organization like a CBE.  Quite simply, without the mission and the unique culture, the enterprise would be ineffective.  This core growth group would need to focus intently on training.  One of the only ways to impart the beliefs and norms of an enterprise on to new employees is through intensive training.  A constant attention to the key aspects of the mission and the culture should be utilized as well.  This could consist of things as simple as posters reminding the new employees of the core values.  Quite simply a vast attention on human resource management would be essential.

Finally, follow up assessments would need to be utilized to track the effectiveness of the orientation and training.  Industry metrics would be key to determining the new locations evolution.  Deficiencies in this area would clearly suggest problems with the new location’s core.  Ongoing assessment interviews should be utilized to gauge the new staff’s comprehension of the culture as well.  This will ensure they are ready to function more independently from the enterprise’s parent location.

Expansion globally will most certainly never be an easy feat.  The core and culture of organizations must never be put at risk for the sake of sheer growth.  However, a unique balance of a strategic privatized growth model with a core focused growth model should enable enterprises as complex as CBE’s to expand without compromising their true values.

Managing the Commons

Jared Grant

Case Analysis – Managing the Commons

SGM 5119 – Fall 2012

The case of Ixtlan de Juarez presents an excellent example of local ownership and effective management of the commons.  The project started about 30 years ago when the Zapotec Indians in the state of Oaxaca Mexico reclaimed their forests from state owned forestry companies who had been exploiting the region’s forests for years. This exploitation had been driven by corporate greed and a focus on short term gains that, if continued, would destroy the forests and the people and ecosystem that it supported. Now Ixtlan has managed to develop a business strategy that is generating money for the region while ensuring that the forest is healthy and still producing for generations to come.

As with any socially motivated business venture, there are several challenges that the people of Ixtlan face. One that stands out is the fact that there is no physical boundary that can be placed in order to keep out negative influences and motivations.  In this case the Zapotec Indians rely heavily on the traditional values of their people to self-police the lands and the forests.  According to one of the long time foresters in the community, “anybody who tries their own business is harshly judged” by a council of his peers. This view recognizes that the community support structure is so strong that people within the community holding each other accountable for actions is sufficient to maintain order.  This is most likely not the condition that exists in every community, which makes policing efforts on the commons extremely challenging.  The success of this venture is also highly dependent on the recognition by both government and surrounding states.  This creates a potential instability in the future if the government or a neighboring state decides not to honor past agreements and begin foresting operations.

The chief strategic issue with Ixtlan, as with many other socially motivated business ventures is the struggle between the need to make money and a strict adherence to the social mission of the organization.  Ixtlan seems to be performing well enough, having generated an operating profit of $230,000 in 2009. It was able to turn 30% of this profit back to the business to promote growth, and it was able to use another 30% of the profits to focus on forest preservation.  The company needs to make sure that it continues to put money back into business growth to ensure not only the sustainability of the forests but to ensure the sustainability of the business itself. If they do not make the correct moves, then globalization and external competitors could potentially force them out of the market long term. International firms or even other firms outside of the region could swoop in and capture a portion of the business that the Ixtlan counts on to make money.

The fact that the enterprise is not one whose primary goal is to make money presents managerial challenges as well. Motivation of employees beyond the core group who starts the enterprise may be challenging.  Early on, every individual is driven towards the common goal of saving the forests. As expansion and development of the organization and the business occurs, members are likely to recognize opportunities to make more money.  This allure needs to be balanced with the focus on social mission.  In the case of Ixtlan, this motivation is intrinsic.  Family obligation and a sense of pride keep the group focused on preservation of the forests while the secondary focus is making a profit. Another managerial concern is the fact that the endeavor is managed by a very large assembly.  This presents the challenge of timeliness, but it does allow for no one person to lead the team away from its mission.

Ixtlan’s social mission is to ensure that the forests are maintained in order to support future generations in the region. In some regards this mission serves as a restraint to opportunities in the short term and long term.  The preservation of forested lands prevents further development of those lands for agricultural or housing development which could potentially generate substantial food and habitat for the people of the region.  Preservation efforts also limit short term gains that could be realized if larger scale harvesting were allowed. This could stimulate increased furniture and lumber production, which would bring increased cash flows to the region in the short term.

The people of Ixtlan are not concerned with the short term losses.  They are “taking the long view”, and they recognize that what they do today will ensure sustainability of the region. This view is facilitated by the fact that the people of the region plan to stay there as previous generations have.  Again, this view depends on a degree of insularity that cannot be guaranteed if globalization and external competition comes in to play.  Also, if Ixtlan expands its business into Mexico City, as referenced in the article, the next generation may decide to move out of the region.  This could potentially leave the forest open to outsiders who will not have the same sense of duty and loyalty to the forest as the Zapotec Indians.

As stated earlier, the business model of Ixtlan gives back equal parts to business growth and to forest preservation.  This distribution is a direct result of the social mission of the community.  As stated by one member of the community, the people of the community are exercising ”pure simple socialism… and an idea of capitalism, where we say, You know what? We have to be profitable.” Again, the uniformity in belief system and values allows for the people of the community to share evenly what is made and put individual goals aside in order to preserve the forest and make money along the way together.  The resource base available to the venture is also shaped by the social mission.  Ixtlan has taken advantage of support from NGO’s and Government in the past three decades in order to purchase better equipment and better training in the areas of forest preservation and harvesting.  If the social mission of Ixtlan were compromised, the NGO’s would surely sever ties with the group.

In this specific case, the biggest management challenge is in staying true to the social mission of preserving the forests.  This is the focus that will continue to win the support of the local people because of their history and their sense of ownership for the forest.  It is the focus that will maintain a favorable tie with NGO’s to ensure support for training and potential financial support for growth in the future. As stated earlier, this focus requires a very long range perspective by management.  After all, it takes over 50 years for a tree to grow from seed.  If this were a publicly traded company, shareholders would surely struggle with the idea of waiting so long for a return on investment, and many would surely pass on the opportunity to invest in favor of something that will guarantee financial returns immediately.   The model works for Ixtlan though.  This is because the managers and the shareholders are one in the same.  The people here recognize the value in preserving the forest, and they understand the business enough to understand that patience will pay off in the long run by generating a healthier ecosystem first and profits second.

With this secondary focus on profit, management needs to understand that they are likely to experience a smaller overall monetary return.  This is often the case with socially motivated ventures, at least in the short term.  This smaller return is often accepted because the overall impact of the project is much greater than the sum of money earned.  The manager in this case must abandon strictly bottom line thinking and operate under the assumption that doing good will pay in the long run. In conventional business, this is often not the case because management has to answer to outside shareholders first and foremost.  If these shareholders are interested in turning a quarterly profit, then they are unlikely to accept a proposal that will generate less money.

Finally, management by consensus is paramount in this case.  As stated earlier, Ixtlan is governed by a large council of people from the community.  This approach can be very time consuming, but it ensures that the entire group is aligned with regard to achieving both social and financial goals. It also ensures that no one special interest dominates the decision making process. The approach works here, again, because the members of the council are all members of the community, and all of them share the same values and mission.  In conventional ventures, this approach is far more difficult to apply because of different points of view and different motivations.

The case of the Ixtlan is a powerful example of how local ownership is being applied to manage a common space for the better.  By allowing the people for whom the common is valuable to manage it, the Mexican government is ensuring that the common is sustained.  Since the start of this venture, several similar projects have begun throughout the rest of the country, and Ixtlan has been revered as a primary example of responsible forestry.

Urban Commons: A Stakeholder Analysis

Social Entrepreneurship Fall 2012 George Kay

Case Study: Urban Commons: A stakeholder Analysis

The commons are a gray area, neither public nor private, yet at times it is both.  They are nebulous in nature, constantly changing shape and area.  They are defined more by the people that use them, rather than the physical area they represent.  They have a difference value to the different stakeholders that use them.  Each group has different positives and negatives associated with the commons.  Thus, to talk about the commons, you must talk about who is using them, what they are using them for, and why they are being used.

Stakeholders in the commons vary from the poorest of beggars, to the most powerful politicians, and everything in between. To the poorest of the poor, the commons represent a home, and a way of life.  Whether through scavenging, begging, or even fishing, the commons provide sustenance to those who need it.  In fact, “ninety per cent of the world’s fishers rely on small inshore marine commons, catching over half the fish eaten in the world today” (The Ecologist, 4/94).  In addition to fishing the commons can provide fresh water for drinking, cooking, and cleaning.  The trees, forests, and other natural resources of the commons can provide shelter, or shelter can be made from scavenged materials.  Many urban areas must contend with the safety issues resulting from such shanty towns or slums, where lean-tos and small structures are crowded too close, and are shoddily built.  The commons can also provide a livelihood to the poor that inhabit them.  Whether through begging, bartering, scavenging, or even producing their own goods, the commons can provide the space and raw materials the poor need to get by.

On the opposite side of the spectrum, the commons can also serve the wealthy and powerful.  Politicians and city leaders are represented by every part of their city, from down town business centers with skyscrapers and modern city planning, residential neighborhoods, industrial districts, cultural centers and city parks.  Each of these can have a different form of commons within them.  Cities are judged by their good and their bad, with commons falling into both categories, depending on your point of view.  To the urban poor, the commons represent a way of life, a home, a source of their livelihood, whereas the politician may see that as a blight on their city.  A cultural center, museum, or public park on the other hand might not offer the same benefits to the poor, but to the politician, they are a status symbol, a source of beauty and pride in their city.  Both serve different stakeholders, both give very different value, yet both are commons. To the working or merchant class, the commons are a place to do business.

Although they do not operate with the same order and structure as a traditional business district, private property, explicitly delineated, there is a certain method to their madness.  The informal structure of the commons is governed by tradition, with the people who use it, the stakeholders, enforcing their own brand of rules. Vendors set up their stalls, often in the same place they have inhabited for years.  Since space is usually at a premium, sharing and conservation are a necessity.  “It becomes clear that while public space may not always be respected, informal boundaries are well marked within communities of people who know each other.  In the city’s ramshackle shanty towns or along the row of street vendors, anyone who takes up too much space, or the wrong space, or leaves too much of a mess, is brought back into line by neighbors” (Ecologist, 4/94).  Much like how relationships in the community are used monitor microfinance loans in impoverished regions, so too are they used to internally monitor and police the use of the commons.

The commons can also serve a religious or cultural purpose.  Old world cities particularly, are riddled with religious and cultural heritage.  Ancient ruins can sit next to modern buildings.  Churches, mosques, temples, and other religious centers are found throughout cities, most within the commons.  Famous landmarks can serve as an industry in and of themselves.  They offer direct employment of locals, in addition to indirect employment for the business that support the local tourism industry.  It brings foreigners and their money into the community, which benefits the rich and poor alike.  In this sense, the commons serve both locals and visitors alike, as both are stakeholders, in their own different way.

In most cities, basic infrastructure is part of the commons.  Tangible infrastructure such as roads, bridges, levies, canals, sewers, schools, hospitals, and markets for example all make up the commons.  In modern times, intangible infrastructure is also a part of the commons.  Examples of this would be public radio waves, telecommunications networks, and postal systems are also part of the commons.  These, both tangible and intangible, are shared by all, and like other aspects of the commons, serve their various stakeholders differently.  Telecommunications can be used by industry as a vital business function, or they can be used by residents for social communication.  A road can serve as the location for a street vendor, or to ship raw materials to be used in industrial processes.  The uses and benefits are endless. Although the commons are ever shifting, their importance remains paramount.  Protecting the commons and enhancing their value to the different stakeholders that use them are vital for any urban center.  Commons are used by businesses, residents, rich, poor, farmers, fisherman, merchants, and consumers.  A single person can simultaneously fall into several stakeholder categories, or seamlessly switch from one to the other.  Similarly, due to the mercurial natural of the commons themselves, they can also simultaneously serve multiple purposes, to multiple stakeholder groups.

References: The Ecologist. 1993. The commons: Where the community has authority. Whose Common Future, (Philadelphia: New Society Publishers): 3-20

Social Entrepreneurship for Urban Renewal

Philadelphia example

Monday, November 5, 2012                                                FOR IMMEDIATE RELEASE

 

PHILADELPHIA NAMED ONE OF TOP 20 FINALISTSIN BLOOMBERG PHILANTHROPIES’ MAYORS CHALLENGE

 

Philadelphia’s idea selected from more than 300 submissions to compete for $5 million grand prize

 

Philadelphia, November 5, 2012 – Mayor Michael A. Nutter announced that Philadelphia has been selected as a finalist for the Bloomberg Philanthropies’ Mayors Challenge, a competition created to inspire American cities to generate innovative ideas that address major challenges and improve city life – and that ultimately can be shared with other cities across the nation.

Philadelphia joined the “Elite 20” based on its innovative idea that re-imagines how cities’ can tackle urban challenges using entrepreneurial solutions in order to achieve meaningful change. Called the Philadelphia Social Enterprise Partnership (PSEP), this initiative changes how city government interacts with the private sector by engaging entrepreneurs in framing social challenges and seeking innovative solutions. The concept provides a new, sustainable model for urban problem solving with city government as an active partner, providing data and feedback throughout the process. PSEP will be run in collaboration with GoodCompany Group, the leading social enterprise incubator in Philadelphia.

Following a call for ideas, the Mayor’s Office of Grants led a rigorous process to narrow down the 80 solicited ideas. The process of winnowing was carried out by a panel of innovation experts who short-listed and shaped the ideas for the Mayor’s final decision. Philadelphia will now compete with 19 other cities across the country for the $5 million grand prize and one of four additional prizes of $1 million each.

“I am thrilled that Philadelphia has been selected as a finalist for the Mayors Challenge,” said Mayor Nutter. “Our goal is to solve major urban issues by taking a different approach than before. In Philadelphia, we recognize the new ways to engage with citizens and welcome the innovative solutions that they may have for some of the most daunting challenges we face.”

A team from Philadelphia will attend Bloomberg Ideas Camp, a two-day gathering in New York City in November during which city teams will work collaboratively with each other and experts to further refine their ideas. After the Camp, the Philadelphia team will have access to additional technical support to prepare its ideas for final submission. Winners will be announced in spring 2013, with a total of $9 million going to five cities to jumpstart implementation of their ideas.

“Congratulation to Mayor Nutter and the City of Philadelphia for becoming a Mayors Challenge finalist. The response to the Mayors Challenge was extraordinary: bold and innovative ideas were submitted from every corner of the country.  We look forward to welcoming the Philadelphia team to Ideas Camp,” said James Anderson, who directs the Government Innovation program at Bloomberg Philanthropies.

The 20 finalist ideas were rated on four key criteria: vision/creativity, ability to implement, potential for impact, and potential for replication. A specially-assembled selection committee, co-chaired by Shona Brown, Senior Vice President and head of Google.org, and Ron Daniel, Bloomberg Philanthropies board member and Former Managing Partner at McKinsey & Company where he is still active, helped select the finalist cities.

Mayor Nutter’s response to the Bloomberg Philanthropies Mayors Challenge is just the latest example of the Nutter Administration seeking new ways to engage and support Philadelphia’s entrepreneurial community.  Just last week Mayor Nutter launched Startup PHL, an initiative to provide seed-stage funding to Philadelphia-based startups and to support community-building initiatives and programs through a ‘Call for Ideas’.  For more information on Startup PHL please visit www.startupphl.com.

About the Mayors Challenge

Mayors of U.S. cities with 30,000 residents or more were eligible to compete in the Mayors Challenge. 305 cities representing 45 states across the country submitted applications by September 14, 2012.

The Mayors Challenge is the latest initiative of Bloomberg Philanthropies’ Mayors Project, which aims to spread proven and promising ideas among cities. Other Mayors Project investments include Cities of Service, Innovation Delivery Teams, and Financial Empowerment Centers.

To learn more about the Mayors Challenge, visit www.bloomberg.org/mayorschallenge.

Philadelphia Social Enterprise Partnership Infographic 2012

Local Business: Crab Bank

Local Business: Crab Bank

First of all, I feel so excited to share an example of our class discussion – local economy. Like I have mentioned in the first time we met that I came from Thailand, the case that I am about to discuss was actually a project that I had hands-on experience with.

Fishery was an important economic activity for Thailand’s domestic and export markets. Most of the export products are shrimps, fishes, shellfishes, etc. In the year 2005, it appeared that crabs which had been one of the significant fishery items were getting lower in terms of quantity caught and qualified size. The fact was that many fishermen were selling crabs that were ready to spawn. To remedy the problem, local communities whose livelihoods relied on the crab industry joined together with governmental organizations and experts and came up with a sustainable development plan called “Crab Bank.”

A crab bank is a group of holding nets that float on top of the water. When female crabs carrying eggs are trapped in the net, they are then separated from the rest of the catch and deposited in the “crab bank” until their young are born. An adult female crab can carry more than one million eggs.

When the baby crabs are born they are released back to the sea. The crab fishermen then return to collect the adult crabs they deposited and are able to harvest without jeopardizing the next generation.

Crab Bank project started with around 10 small and local fishermen. Now the members are more than 200. In addition, this project increases crab fisherman income and help environmental sustainability with the concept of enhancing crab resources to ensure long-term utilization and creating environmental awareness.

The principle of Crab Bank is to allow mother crabs that were caught by fisherman to lay their eggs in the provided cages considered as crab bank before harvesting. The revenue from gained from selling the crab of the bank shall be used for project activities: purchase of equipments and maintenance, family education, and other loans and revolving funds.

Image

The bank is managed by a leader who came from votes. The leader/bank buys female crabs from fishermen and rears crab in cages for 2 weeks to release eggs. Within the 2 weeks, crabs can lay eggs (approximately 600 eggs per crab) and be fatten. After that, the bank will sell crabs at the better price to the market; profit goes to membership fund.

After almost 8 years, it is proved that crab bank can increase catches and encourage community activities and membership. Membership fund has been increasing in a progressing rate for other family activities and benefits – community micro finance concept. Fishermen have higher price negotiation power for large volume catches. And, most importantly, fishermen, local communities, schools, etc. have environmental awareness and sustainability.

Please see the video link: https://www.youtube.com/watch?v=W1hSRYAXEvE

References

http://www.fisheries.go.th/fpo-prachuap/index.php?Itemid=161&id=7&option=com_content&view=article

http://www.matichon.co.th/news_detail.php?newsid=1308471929&grpid=no&catid&subcatid

http://www.oknation.net/blog/print.php?id=58755

Local Economies Example: Pingshang Bamboo Group

Liudi Wang

Bamboo forests in the central and north China contribute significantly to the supply of bamboo products for both of the residents and export. Bamboo forests and product are the most important source of revenue in many regions. Pingshang, Guizhou province, China is one of the bamboo growing and producing regions.

In 2004, 354 people from 72 families were living in Pingshang village, and all of them are from the Miao ethnic group. The village has an average annual household income approximately $50 (400 CNY), and derived almost exclusively from the sale of forest products.

Pingshang village had a traditional producing system for decades. The main products that Pingshang Village made are rough, unfinished chopsticks and whole bamboo culms. The chopsticks were in basic quality and need further processing, and they were packaged in bulk. The unfinished chopsticks were sold with a very low price, US$0.25 for 10 pairs. The sales channel and transportation are also big problems to the village: the products were collected irregularly, and were taken down the mountains by walk to buyers. Because of information asymmetries, the buyers often took advantage from the villagers. As the rough bamboo product has such a cheap price, the way that villagers make a living is increasing the amount of harvest. This action led to damage of both ecological balance and natural resource.

 

In July 2004, Pingshang Bamboo Group (PBG) was established. It is a community producers’ group that owned by the residents of the village. The process of establishing PBG emphasized “local knowledge and enabled local inhabitants to analyze production possibilities and make more informed decisions about the direction of the community enterprise”. In most areas in China, commercial interests are still controlled by village governments, however, Pingshang village committee along with PBG figured out a way to form a separate management committee to act as director for PBG.

In the village, 50 of 72 families have two or three family members working on the basis for the group. PBG actually changed the economic relationships between residents and consociated them with the same goal. According to the small-mart revolution, it perhaps the most important benefit of spreading LOIS business.

After the formation of PBG, Pingshang village replaced the old production chain with a new system, which allowed the village to produce packaged chopsticks for immediate use. PBG is involved in all aspects of the whole production chain, including “forest management, harvesting, production, packaging, marketing, and delivery”. PBG helped arise the price to US$0.56 (3.5 CNY to 4.5 CNY) per 10 pairs. In this process, with a more sophisticate technic, they improved their product so that enhanced their self-reliance. It is unnecessary to rely on the third party to finish the product, which brought more profit to the village.

PBG has led a significant improvement in the village, which helps the village take the first step: be self-reliant and exporter. However, the village still lack of diversity product to support them to compete globally.

The traditional forest sector is restricted by several policies, including the “log-harvesting quota, the logging ban (a component of the Natural Forest Protection Program – NFPP), high rates of taxation, tenure and rights insecurities, and transportation restrictions”. Since the sustainability of existing bamboo number and species are the primary forest management objective, the rules are even stricter. PBG attracted people’s attention to the sustainable development of natural sources. On one hand, the introduction of new system made the production process more efficient so that reduce the overexploitation of natural resource. On the other hand, PBG rationally planned the use of bamboo, and tried to develop other products so that take use of every part of the bamboo as well.

In this case, rich natural resource laid a solid foundation for the development of Pingshang village. However, the resource of bamboo is the only advantage of Pingshang village. The village is geographically isolated from the county capital, and the mountainous terrain is not suitable for developing agriculture.

Although many villages like Pingshang exist in China currently, they are still struggling with finding an efficient way to maximize the use of limited natural resource, and promote their products as well. However, community groups are still rare in China. Besides the two requirements mentioned in the article, the awareness of residents is also important for the formation of community groups. Many residents don’t trust new technic, and the only resource in their common is too valuable for them to take a risk.

Environmental Partnership with Local Economies

Do Hyun Kim

This case presents a successful partnership between environmentalists and local fishing industry in the California coast.  The partnership has proved to be mutually beneficial for both parties and enable to accomplish each of their objectives – preserve fish stocks and livelihoods of fishing industry.

When Government imposed the strict regulations to protect “essential fish habitat” in 1996 and 2006, the fishing industry has struggled to balance between compliance requirements and financial impacts to the industry (Kaufman, 2011).  The capability of voluntary compliance was limited due to financial hardships, limited tools and resources available.  As a result, government has dictated over the fishing business practices to ensure the compliances to the imposed regulations with the close monitoring.  Although its involvement has improved the compliance rate and fish stocks through the quota system, it has failed to establish sustainable business practice for the fishing industry.

As there are growing concerns of scarcity of natural resources and ecological environment in the global community, it is quite understandable that governments actively impose regulations to protect environments including fish stocks.  However, the government’s direct intervention has proven to be ineffective and created adverse effects as it has threatened local economy and failed to gain voluntary collaborations from the local fishermen in this case.  The role of government should be building an infrastructure with reasonable regulatory environment, but without killing the local economies through direct intervention of business activities.

The mission of the Nature Conservancy is to transform commercial fishing in the region by offering a model of how to keep the industry vital without damaging fish stocks or sensitive areas of ocean floor (Kaufman, 2011).  The conservatory has identified the challenges of local fishing industry to be self-sustainable due to limited access to technological tools, strategic management techniques, and capital resources to further develop into sustainable business practices. Its direct involvement through purchasing fishing boats and licenses has created an opportunity to collaborate with the fishing industry and establish a bridge to meet stricter federal regulations.  The conservancy has designed and implemented a model that empowers regional fishermen to be more responsible and accountable for their actions in fishing operations while encouraging them to be compliant with the imposed regulations.  This empowerment approach has gained active collaboration from the regional fishing industry and it has enabled to establish better conservation practices through them.

The local fishermen are the front line of the fishing industry and they undoubtedly have the most local knowledge of the fish habitats.  The conservancy has recognized that these local knowledge bases are valuable resources for the conservation efforts.  The collaboration of fishermen has opened the access to the local knowledge bases and enabled to establish informational network through the delivery of information technology and effective data collection.  These information networks are found to be valuable database that are shared among the fishermen and the conservancy, which have become a determining factor to transform the fishing industry into sustainable business practices with the conservation in mind.

The case is an excellent example of a local economic development with sustainable business practices.  The local economies are critical components of global economy where they are inter-connected and the local economies are optimized when people have the sense of ownership and access to necessary resources to further develop into sustainable business practices.  The partnership with the Nature Conservancy along with its empowerment approach has enabled to local economy to prosper and accomplish environmental objective.

Works Cited

Kaufman, L. (2011). Partnership Preserves Livelihoods and Fish Stocks.