From Hammer to Toolkit: An Overview of Value Creation for Conserving Tropical Diversity

When it comes to using markets for conservation, organisations become adept at applying a particular approach. However, there’s a danger that you end up with a hammer in search of a nail, rather than choosing the right approach that fits the challenges and opportunities of a particular place, culture or landscape. This article provides a broad overview of the options for value creation in the context of tropical conservation. Does your particular approach fall into one of them?

Project vs Organisation Actors seeking to change the incentives for conservation generally take a fixed-term project approach, and in an era of fixed funding cycles this makes sense to a degree – but often the market failure is due to the absence of a key organisation from the value chain. Projects can end up trying to push local actors to perform a role they simply might be better off doing themselves or setting up a new organisation to do, and, unlike with a project, an enduring commitment to a community or a landscape ensures that the outcomes don’t cease when the project ends – look at the Africa Parks’ approach to biodiversity conservation for example.

Trading vs Funding Although often seen as demanding, complying with the requirements of a funding agreement is generally easier than making a success of a social impact business model. Funding does have an important role, and if you can get it – why not? But it does have limits in scale and sustainability of the impact. Often, earning income and obtaining funding go hand in hand, and the more successful your social enterprise is, the more attractive you are to donors. This was certainly the case at Larrakia Nation.

Profit vs Operational Impact – As Venturesome points out, social purpose businesses fall into two basic types – one type is run as a straightforward commercial business to maximise profit which is then reinvested in social impact activities, and the other generates the impact through its operations, like a social enterprise that employs homeless people. The second type is more robust – as long as you are trading you are making an impact, no matter how profitable you are, but there’s limits to what sorts of activities can be embedded in business operations.

Customer vs Operational vs Financial Innovation – Alexander Osterwalder and Yves Pigneur’s Business Model Generation has become the go-to guide to business design (if you’re not using it – why not?).  It provides a great guide to thinking through how to design new businesses, with the added bonus that its method is perfect for using in group workshops. They point out that innovation either occurs in the front end – innovation in your value proposition to customers, or in the back end – innovation in what and how your produce something. There’s also innovation in the financial side, from new forms of investment to new payment models.

Shared Value – Although we are now seeing an evolution of the concept though the articulation of an ecosystem approach, shared value has been the key concept used over the past few years to identify and articulate the benefits of cooperation between business and society – working together can create more value than working in isolation, and businesses can profit from doing good. Partnerships have become de rigeur in the sector, but shared value allows us to identify the added value from cooperation.

Beyond working to start up or improve an enterprise, there are also the range of Enabling Conditions approaches – the new name for economic development. I will look at these another day. In my next article I want to talk about assessing a place and choosing an approach, so keep an eye out.

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