the role of community business for sustainable development in mongolia dr. kee-seon yoo handong...

THE ROLE OF COMMUNITY BUSINESS FOR SUSTAINABLE DEVELOPMENT IN MONGOLIA

Dr. Kee-Seon YooHandong Global University

Table of Contents

Introduction

What is Community Business

• Concept of Community Business

• Background of Community Business

• Classification of Community Business

• Effect of Community Business

Case Examples of Community Business

• Developed Countries: England(Proper Job), Japan(Morutowa)

• Developing Countries: Kenya(Honey Care Africa), Rwanda (Sustainable Health Enterprise)

ConclusionDirection of Mongolian Development Strategy

Mongolia’s Rapid Industrialization, Its Issues and Benefits

Rapid Industrialization of Mongolia, Its Issues and Benefits

[2005. 4th Quarter ~ 2012. 4th Quarter]

Exponential Growth of Mongolia

However, Many Issues Existing on the Other Side

• Reduction of non-mining industries compared to mining indus-

tries centered growth

• Population centralizing phenomenon in the metropolitan – 61%

of Mongolian Population

• Intensification of the gap between urban and rural area

• Mitigating Poverty Rate compared to Growth Rate

Sustainable Development through Community Business

Rapid Industrialization of Mongolia, Its Issues and Benefits

• Gross National Happiness (GNH) is an attempt to define quality of life in a more holistic and psychological terms than Gross National Product.

• GNH is based on the assertion that true development of human society takes place when material and spiritual development occur side by side to complement and rein-force each other

Ranking Mongolia Korea USA

GDP 123/178 25/178 6/178

GNH 56/178 102/178 105/178

Gross National Happiness (GNH)

Top Down Approach

• The top-down model is structured around the use of profes-sional leadership provided by external resources that plan, implement, and evaluate development programs (Macdonald, 1995). • Focused on providing professional leadership to the devel-opment process coupled with supportive concrete services. • Through the process of residents following the external lead-ership and accessing the services offered by the program.•The top-down model dominated the way development pro-grams were structured during the early practice period of de-velopment history (Moore, 1995; Lecomte, 1986).

Bottom Up Approach

• These strategies included: – Comprehensive community participation, – Motivating local communities, – Expanding learning opportunities, – Improving local resource management, – Replicating human development, – Increasing communication and interchange, – Localizing financial access.

• Focused on how people within communities could direct their own development process (David, 1993; Midgley, 1993).

Traditional Economic Devel-opment

• Growth “the bigger the better”/catch the

“silver bullet”• Attract outside large capital projects

withtax credits and other subsidies for thebenefit of outside investors• Assumes that job creation and work-

forcedevelopment will resolve the problems ofthe poor• Residents are passive stakeholders

whoseinvolvement is to give legitimacy to theproject• Control and allocation of resources in

thehands of government and theirdevelopment designees

Community Economic Devel-opment

• Sustainable development “peoplecentered development”• Fosters social transformation to localownership with philanthropic and publicsubsidies to grow local community andresident assets• Assumes that job quality and workforcedevelopment are needed but only part ofthe solution• Residents are active stakeholders whoshould have meaningful control of theircommunity and participation in the

project definition and development process

• Control and allocation of resources should be a partnership with commu-nity

residents

Two Models of Economic Develop-ment

• Conventional CED Perspective– Business development to increase private invest-

ment and employment– Participation of residents to provide legitimacy

• Progressive CED Perspective– Social transformation of the economy to benefit

the grassroots– Include the poor as participants in the project def-

inition and development process

Community Economic Development Objec-tives

(Shragge, 1997)

1) Polarization of the Economy and Deterioration of Employment Status

2) Limitation of Regional Development Relying on External Resources

3) Deterioration of Local Community

Background of Community Business

Deterioration of rural area and low investment phenomenon due to metropolitan-cen-tered development. Resulting aggravate of income gap and polarization-> Create employment from the local, virtuous cyclic process of development in the area by reinvesting the profit generated through community business

Problems of short-sighted government policies and no continuous stimulation for the participation of local people -> Possibilities to solve the fundamental and long-term problems from the participa-tions of the local residents who well understand the situation of the local problem by establish its own rules and regulations for the solution

Deterioration of the local community and the gap between urban and rural area fur-ther expands due to the progress of urbanization However, through community business the local residents can strongly request for required resources, efficiently utilize them and bring positive effect by supporting the economy from activation of its own local economic activity

• CB is a type of social business that 1) local people has initiate 2) to solve the local problems and request of local people 3) tries to achieve the community vision and high quality of life and welfare of local community 4) by using corporative way to make profit.※ Making Profit is just necessary condition, not suf-

ficient condition.※ The concept was introduced in the late 90’s ex) 20% of British private corporations are CB

What is Community Business?

“Contributions to improve the welfare and the life quality of the local residents, who are the principal agents to solve the demands and the issues of the local

community”(Fukuoka, 2003, Local Business Survey)


“The word first established near Scotland, England in 1970-1980, defining economic independence of a local community by creat-ing jobs through sustainable venture business”

“The local residents utilize local dormant resources aim-ing to resolve local issues by performing profitable small

business” (Kyushu Region Community Business Research Report, 2002)

(Pearce,1993)

“Sales activity to expand and to improve the range of service and merchandise that is beneficial to the local community by reinvesting excess profit or arise of local demands”(Lee JaSung), 2010)

Component of Community Business

Community based busi-ness led by

local resident

Business with appro-priate-size

and optimal-profit

Opened Glo-cal Business

Middle of business and

voluntary service

(Social En-terprise)


Ordinary Business Community Business

Interests Simple, Short period of time

Complex, Long period of time

Market-ing

Large-scale, Strong Small-scale, Weak

Concept Competition, Profitability Symbiosis, Grassrooted

Output Efficiency, Productivity Worthwhile, Purpose


Effect of Community Business

Re-Humanization- Self-fulfillment and activa-

tion of community from personal efforts

- Implant of network

Self-Reliance of Community

Business

Succession of Cul-ture

- Accumulation of wisdom

- Creation of di-verse commu-nity and its unique culture

- Organization of community

Solution for Social Issues

- Social service satisfying needs

- Reduction of Environmental Load

Establishment of Economic Base

- Use of technol-ogy and re-sources and creation of em-ployment

- Investment on community

Local Restoration

Utilization of Local Resource

Individual Indepen-dence

Promote rejuvenation to the vacant suburban area and the conventional

market

Classification of Community Business

Environment Improvement

Livelihood Assistance

Intermediate As-sistance Support

Purpose of utilizing local resources such as local specialties and excavat-ing and commercializing attractive re-

sources

Local Restoration

Utilization of Local Re-sourceIndividual Indepen-dence





Service form of community business that supports local resident’s participa-tion in economic activities; its purpose is to support individual employment or entrepreneurship through employment training, entrepreneurship training and

etc

Local Restoration

Utilization of Lo-cal Resource

Individual Indepen-dence





Improve urban life and natural envi-ronment by discovering a source of in-

come in the process of solving envi-ronmental issues from the local or ur-

ban area

Local Restoration


Individual Inde-pendence


Environ-ment Im-provementLivelihood Assistance


Enhance the quality of the local life of resident’s welfare, and provide residential welfare such as health care, medical care and child care

through community business which was once provided by the public

sector

Local Restoration





Liveli-hood Assis-tanceIntermediate As-sistance Support

Supporting the start-up or managing community business provides man-agement and start-up support for

pre-incubating entrepreneurs

Local Restoration








Rural

Prof-itability

Public-ity

Ur-ban

Wel-fare

Nursing supportJob seeking supportLifelong Learning

Tour & NetworkTraditional artcraft

Public Facility Opera-tion

Craft Art BizFood manufacturing

& DistributionPublic Facility Opera-

tion

(Aged, Disabled Support)

Health & MedicalJob seeking supportLifelong Learning

② Rural Public CB

Environ-ment

Region De-velopment

Commer-cial MarketVitalization

① Urban Pub-lic CB

④ Reginal resource us-ing CB

③Local Industry Im-provement CB

Effect of Community Business

Provide Social Service

Job Creation

Participation of Socially Disadvan-taged Class

Preservation of Local Culture

Participation for Environmental Preservation

• Searching and Training Core People of the Community• Figuring out the Local Problems• Sharing the problems and develop the strategy• Building Capacity of Local People• Connecting Local problems and Biz Items• Selecting the first pilot item through item analysis

– Familiar and Experienced Items – Small capital needed Items – Short investment cycle Items– Disseminated effect and prospectus

• Feasibility analysis– Demand and Competitiveness(5 Forces)– Check Financing and Profitability

• Starting Business

Procedures to develop the community by CB

Case Examples of Community Busi-nessEngland – Proper Job

• Proper Job led by the local residents to reduce the use of peat

that cause ecological deterioration, started a Community Compost

Project using composts from food waste.

• Afterwards, organized a community business called ‘Proper Job’

meaning ‘Right work for the community’.

• Utilize compost produce by the local residents to reuse them to

grow and to sell vegetables in the local community

• Operate an organic restaurant by donations from volunteers

and local residents

• Effect of employing 10 full-time employee and 30 part-time em-

ployee

• Effect of Environmental Protection

Case Examples of Community Busi-nessEngland – Proper Job

Case Examples of Community Busi-ness

Japan – Morutowa Co.Ltd( ｧﾓｰﾙﾄｰわ )

• Adachi-Gu in Tokyo is the only region without any meal delivery

business

• Local store owners established a corporation to solve this local

issue and vitalize diminishing stores

• The business began with managing a convenience store in a

nearby hospital extended to various forms of service provider

such as elder meal delivery service and cleaning services for

major distribution corporation


Kenya – Honey Care Africa

• Established in the year 2000 by entrepreneur Farouk Jima and two

other investors as honey distributer and manufacturer

• Purchase high quality honey from the local small farmers, manufac-

ture and sell it in the East African domestic market and specialty

food market in Europe

• Reach business goal of economic, environmental and social perfor-

mance

• The growth of HCA economically profited approximately 7,800 small

Kenyan farmers and made a living for them


Kenya – Honey Care Africa


Rwanda –Sustainable Health Enterprise(SHE)

• Established to provide sanitary and health education about

menstruation and low price sanitary pads for women in devel-

oping countries

• Establish and operate a community business to create sanitary

pads from local resources and not rely on expensive developed

countries’ sanitary pads

• $28, $280, $28 every 28 days,

$2,800


Rwanda –Sustainable Health Enterprise(SHE)


Maesil

Thailand –Maehae Community Enter-prise


Nepal – Nahum Community Enterprise (Hurb)


http://www.google.co.kr/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&docid=c76e5o7LzfyvbM&tbnid=dig7vIa1ji1EDM:&ved=0CAUQjRw&url=http://korean.alibaba.com/goods/herbs-in-nepal.html&ei=RC9nU8XZGofukgWi5oCgDQ&bvm=bv.65788261,d.dGI&psig=AFQjCNEEe1hYQWJk2Vj8zsTnAkN_5sJrBg&ust=1399357629460953

http://www.google.co.kr/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&docid=c76e5o7LzfyvbM&tbnid=dig7vIa1ji1EDM:&ved=0CAUQjRw&url=http://korean.alibaba.com/goods/herbs-in-nepal.html&ei=RC9nU8XZGofukgWi5oCgDQ&bvm=bv.65788261,d.dGI&psig=AFQjCNEEe1hYQWJk2Vj8zsTnAkN_5sJrBg&ust=1399357629460953

Uganda – Dry Mango Project


Chard – Sugarcane Charcoal Project


Nepal - Local School Food Project


Direction of Mongolian Development Strategy

Mongolia and Pastoral

Establish a ‘Utilization of Lo-cal Resource’ Community Business utilizing local pastoral skills

90%

10%

Agriculture

Pastoral Re-lated ValueOthers

1st Industry -Production-

2nd Industry-Process and Manufacture-

3rd Industry-Sales and Dis-

tribution-

Community Business Development based on 6th Industry


Top-Down De-vel-op-

ment Plan

Bot-tom-Up

Devel-op-

ment Plan

Holis-tic

Devel-op-

ment Plan

Community Business and Development Plan

Conclusion and Proposal for Development Di-rection for Mongolia


Hub-City

Small Vill-liage

UrbanArea

Hierarchical Hub System

Thank you

the role of community business for sustainable development in mongolia dr. kee-seon yoo handong...

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