UNIT 6.

SOCIAL, CULTURAL AND ENVIRONMENTAL

SETTING.

1. ENVIRONMENT IN ECONOMIC DEVELOPMENT. -

As we have already studied in previous units, entrepreneurs must explore the

environment to detect needs and opportunities, and to do so they must know and know
how to analyse their different areas.

The environment is the space that surrounds us and with which we interact, although it
is not only physical, but also virtual. So, there are three types of environment:

Social environment

We find aspects such as people's living and working conditions, income level, social
institutions or public service structures, among others. They are the conditions and
structures that arise from the interaction and interdependencies between the members
of a community.

Cultural environment

It is determined by shared values, religious beliefs, customs and traditions, family

relationships, language, and education, among other aspects. They are the ideas,
knowledge and values that determine our vision of the world and are passed down from
one person to another and from generation to generation.

Physical environment

It is made up of abiotic material factors, such as climate, soil or geography, and biotic
factors, such as animals and plants, as well as all material elements created by man in
his activities, such as cities, factories or roads. They are the material conditions and
limitations that come naturally to us.

The environment is that makes life possible and from which we extract all the resources
to be able to meet our needs and improve our way of life. However, human activity has
ended up affecting it in a negative way and has caused damage such as pollution,
overexploitation of resources, the extinction of species, the destruction of the habitat of
living beings, etc. In the face of these problems, the idea that economic growth and
development cannot be maintained at the expense of the deterioration of the planet is
increasingly present in our societies, since damaging the environment is damaging our
future.
2. THE SUSTAINABLE DEVELOPMENT GOALS.-

One of the most important proposals globally to address these issues is the Sustainable
Development Goals. In 2015, the Member States of the United Nations approved 17 goals
considered essential for the sustainability of our life on the planet. These goals are part
of the United Nations 2030 Agenda for Sustainable Development, and seek to achieve
progress, with a view to 2030, in solving a series of interconnected problems that are key
to achieving a better and sustainable future for all:

THE UN'S 17 SUSTAINABLE DEVELOPMENT GOALS

☺ Goal 1. End poverty in all its forms everywhere

☺ Goal 2. End hunger, achieve food security and improved nutrition and promote
sustainable agriculture
☺ Goal 3. Ensure healthy lives and promote well-being for all at all ages
☺ Goal 4. Ensure inclusive and equitable quality education and promote lifelong
learning opportunities for all
☺ Goal 5. Achieve gender equality and empower all women and girls
☺ Goal 6. Ensure availability and sustainable management of water and sanitation for
all
☺ Goal 7. Ensure access to affordable, reliable, sustainable and modern energy for all
☺ Goal 8. Promote sustained, inclusive and sustainable economic growth, full and
productive employment and decent work for all
☺ Goal 9. Build resilient infrastructure, promote inclusive and sustainable
industrialization and foster innovation
☺ Goal 10. Reduce inequality within and among countries
☺ Goal 11. Make cities and human settlements inclusive, safe, resilient and
sustainable.
☺ Goal 12. Ensure sustainable consumption and production patterns
☺ Goal 13. Take urgent action to combat climate change and its impacts
☺ Goal 14. Conserve and sustainably use the oceans, seas and marine resources for
sustainable development
☺ Goal 15. Protect, restore and promote sustainable use of terrestrial ecosystems,
sustainably manage forests, combat desertification, and halt and reverse land
degradation and halt biodiversity loss
☺ Goal 16. Promote peaceful and inclusive societies for sustainable development,
provide access to justice for all and build effective, accountable and inclusive
institutions at all levels
☺ Goal 17. Strengthen the means of implementation and revitalize the global
partnership for sustainable development

Each goal has different indicators described that allow its development to be carried out.
Many governments, organizations and economic and social agents take them into
account to guide their development policies and plans, and the United Nations produces
periodic reports that assess how the world is progressing towards achieving these goals.

Applied to the field of economics and human development, sustainability is a concept

that refers to meeting the needs of the present in our societies without compromising the
ability of future generations to meet their own needs. This implies striking a ba lance
between economic growth, care for the environment and social welfare.

3. SOCIAL AND SOLIDARITY ECONOMY

In today's economy there are different proposals that try to overcome many of the
limitations that conventional capitalism presents when it comes to relating to its
environment. The aim is for companies and markets to change the way they work or
change some of their priorities to focus on a more sustainable and win-win economy.
One of these approaches is known as the social and solidarity economy.

The social and solidarity economy integrates a set of socio-economic actions and
initiatives, both formal and informal, that prioritise the needs of people over those of
capital and the profit motive.

The social economy has a democratic, cooperative and civic character; It is an economy
made by society and for society. It arises as a response to the degradation in the living
conditions of workers and the increase in unemployment and inequalities brought about
by the industrial revolution and modern capitalism.
In Spain, Law 5/2011, on the Social Economy, defines the social economy as the set of
economic and business activities of a private nature carried out by entities that pursue
the collective interest of their members or the general interest in the economic or social
spheres, in accordance with the following principles:

1) Primacy of people and the social purpose over capital. This translates into
autonomous, transparent, participative and democratic management, which
implies the direct participation of these people in companies according to their
work contributions or the services provided, rather than according to capital
contributions, and a primacy of the social purpose over the dynamics of capital.
2) Application of the result obtained to the social purpose and according to the work
provided.
3) Promotion of solidarity and commitment to local development, sustainability,
social cohesion, the integration of people at risk of social exclusion, equal
opportunities for men and women, the reconciliation of personal, family and work
life, and the creation of stable and quality employment.
4) Independence from the public authorities.

Cooperatives, such as agricultural cooperatives, are one of the main examples of social
economy.

The social and solidarity economy is sometimes confused with altruistic or welfare
activities or with an exclusive economy for the most disadvantaged groups, but, although
it generally also encompasses this type of activity, it is actually a different way of
understanding the economy.

Currently, the social and solidarity economy is experiencing a moment of revitalization

and consolidation, with an increase in both the number of initiatives and activities and
private and public support for this type of project. However, we still find obstacles that
slow down its growth, such as the lack of citizen knowledge and lack of confidence in the
model.

In Spain there are more than 47,500 companies dedicated to the social market economy,
one of the best-known success stories in Spain is that of the ONCE Social Group and its
Ilunion group of companies, in which more than 36,000 people work.

4. SHARING ECONOMY

The sharing economy, also known as the sharing economy, the peer economy, the on-
demand economy, or the collaborative consumption, is difficult to define, as it
encompasses any activity in which there is an exchange of products or services between
people.
The sharing economy is an economic model in which owners of underutilized goods or
services lend, sell, share, or rent them in exchange for an economic or in-kind benefit.

Due to the economic crisis and the change in values of the new generations, more
interested in use value than property value, peer-to-peer exchanges and care for the
environment, the collaborative economy has emerged as a new model of consumption.
The development of information and communication technologies has also contributed
to this, which make it possible to create highly efficient and dynamic platforms and
systems for exchanges.

It is not a new phenomenon, as barter has existed since Neolithic times, but thanks to
digital platforms it is much easier to match the person who has the good or service (offer)
with the person who needs it (demand). In this way, the Internet has reduced information
asymmetries, i.e. it allows information about what is offered and what is demanded to
be available to everyone everywhere, as well as the transaction costs of any exchange
between two people, which has allowed many more people to participate and changed
the way exchanges are conducted.

The characteristics of the collaborative economy include the following:

1.- Peer-to-peer exchange between strangers. The good or service is offered by a person
who is often not a professional, or is made available to the user on demand (i.e.,
individualized service) by a company.

2.- Use of idle and therefore underutilized resources. The owner of an asset can sell, rent
or lend it at a lower price because transaction costs have decreased thanks to the
Internet. On the other hand, the important thing is not to possess the good or service, but
to have access to it to meet a specific need. These two factors have made it more
attractive to take advantage of resources that were idle or underutilized through
exchange. For example, almost 92% of a vehicle's lifespan is parked time, so the car is
not only underused, but takes up space on public roads that could otherwise be used.
Circulating it for longer through the sharing economy (selling it to someone who will use
it more or renting it by the hour) would be a win-win.

The culture of the collaborative economy has inspired the emergence of numerous
services for renting means of transport in cities, from scooters to electric cars, the
management of which takes advantage of new communication and location
technologies.

3.- Use of information and communication technologies. Through websites, digital

platforms and mobile device applications, users can access in real time to contract or
exchange any good or service. Although they are not necessary for the exchange to take
place, these technologies, and more specifically digital exchange platforms, streamline
the process and in many cases favor and legitimize it by enabling a rating system for
users to give their opinion on the exchange and thus develop the trust that is needed for
future exchanges.

4.- Cooperation instead of competition as a way of working. Networking, member

collaboration, and community building are the priority of this socio-economic
ecosystem. The goal is often to share human, physical and intellectual resources, either
with online or offline tools, to improve the environment.

5.- Altruism or philanthropy. A distinction must be made between companies that seek
to take advantage of this model to operate a business (e.g., Uber, which offers rides that
would not have occurred outside of the transaction on its platform) and companies that
simply, in exchange for a commission, connect users to collaborate with each other (e.g.,
BlaBlaCar). In this second case, there is a greater component of altruism.

The sharing economy is present in almost all sectors of the economy and all phases of
the economic cycle (production, distribution, consumption and financing). We can find
paid collaborative hosting companies, such as AirBnB, Windu or Vrbo, or exchange
companies, such as Couchsurfing, Intervac or Home Exchange; paid transport
companies, such as Uber, Cabify, or interchange, such as BlaBlaCar; knowledge-sharing
platforms, such as Coursera, Udemy, or Wikipedia; platforms for the recirculation of
goods, such as Ebay, Wallapop or Segundamano.es; collaborative finance, such as
Wesura, Verkami or Ulule; and platforms for the exchange of professional services or
collaborative production, such as Freelancer, Fiverr, Workana or Bdtonline.org.

It is an unstoppable phenomenon, however, this model also encounters problems and

obstacles: there is no clear and specific regulation that provides security and protection
to users, there is intrusiveness and unfair competition in relation to traditional economy
sectors, and the increase in the turnover of these activities leads to an increase in the
underground economy that many companies take advantage of to evade taxes.

The sharing economy allows underutilized goods to have a second life by making them
available to people who need them most.

5. ECOLOGICAL FOOTPRINT AND CIRCULAR ECONOMY

The ecological footprint or environmental footprint is an indicator of how human activity

affects its environment. It is calculated as the biologically productive area that is
necessary to produce all the resources that would allow us to maintain our lifestyle, in
addition to the one we need to absorb the waste produced by our activity. It is measured
in hectares (ha) and, according to the latest report by the Global Footprint Network, 2.7
ha per person is needed to meet the needs of humanity, while the planet can only supply
1.6 ha per person. In other words, we would need 1.75 planets to obtain the resources
needed to sustain humanity's current lifestyle.
These values vary according to the regions of the planet: while the United States has an
ecological footprint of 8.12 ha per person and Spain 4.39 ha, Cameroon only has an
ecological footprint of 1.21 ha and Angola 0.86 ha per person. This means that the
inhabitants of developed countries are living beyond the possibilities of ecological
regeneration and causing the sustainability of the ecosystem to be reduced every year.

Closely related to the ecological footprint is what is known as Earth Overcapacity Day,
which is the date on which the demand for ecological resources in a given year exceeds
what the Earth can regenerate in that year. That date, calculated by the Global Footprint
Network, was July 28 in 2022 globally, meaning that on that day the planet had already
consumed everything the Earth was going to be able to regenerate that year. In the case
of Spain, that day was reached on May 12 that same year, a date that was 13 days earlier
than the one recorded the previous year.

This day reminds us that we cannot maintain the current linear model of production and
consumption, based on the overexploitation of natural resources without regenerating
them and on the deterioration of the environment, which is also one of the main causes
of the climate crisis that the planet is suffering.

Many countries (the ones shown on the red map) consume more resources than they can
sustainably generate on their territory (the more intense the red color, the larger the
imbalance). Green countries are the ones that have more resources than they consume.
In all countries as a whole, 1.75 times the resources that the planet can produce
sustainably are consumed each year.

In all countries as a whole, we live as if we had almost two planets at our disposal (it
would be almost three if everyone lived like in Spain... and more than five if we take the
lifestyle of the United States as a reference!). In just over 200 days we ha ve already
finished with the natural capital available for 365 days a year, and we exceed by 74% the
capacity of ecosystems to regenerate natural resources.

How do we reduce the ecological footprint?

The ecological footprint can be reduced if we all take action, including public
administrations, businesses, organisations and consumers. These measures can be
local, national or international, but they must all contribute to a change in the uses and
customs of society in search of a more circular and less linear economy, that is, an
economic model that makes our way of living sustainable and protects the environment.

Local governments and administrations can implement policies and measures to reduce
greenhouse gas emissions and curb the overexploitation of natural resources by passing
new laws, applying new economic and fiscal incentives, promoting agreements between
social and economic agents, and increasing information and raising public awareness
on these issues through advertising campaigns and educational activities. eco -
responsible.

Companies, on the other hand, can use renewable energy and invest in research and
development to offer greener and more environmentally friendly products.

In the case of consumers, we can change the way we consume and acquire more
ecological habits, such as making our homes more sustainable by using energy-saving
light bulbs or improving the insulation of walls and ceilings, recycling, using less polluting
transport in our journeys, such as cycling, or using heating systems in winter and cooling
systems in summer in moderation. I'm sure you'll come up with many other small
changes that will help make a significant difference in the overall tally at the end of the
year.

Many of these actions are part of what is known as the circular economy, which is a
model of sustainable production and consumption that aims to reduce waste to a
minimum in order to make growth compatible with the quality of life and survival of the
planet.

Among the principles of this model we can highlight the following:

1.- Waste as a raw material. Using the waste and residues of an industry that cannot be
recycled as raw material for another production process. For example, the use of the
organic waste we generate in our homes to produce biogas that can be used as an energy
source.

Technology also provides us with more and more options to achieve more efficient
energy consumption.

2.- Extension of the life cycle of products. Design products so that they can be used,
reused and repaired more efficiently by the same industry or by a complementary one. It
is proposed to follow the rule of the 7 R's (reduce, reuse, repair, renovate, recover,
recycle and redesign). For example, some mobile phone manufacturers are now making
it easier for users to purchase replacement parts, such as new batteries and screens, so
that they can repair their devices themselves when they deteriorate and can use them for
longer.

3.- Economy of functionality. Replace the ownership of goods with a license of use, either
to make better use of the useful life of a product by making it possible for many people
to use it, or so that, once they reach the end of their useful life, the consumer returns
them to the company and the company can take advantage of the components that are
still useful in new production cycles. An example is the rental cars for short journeys that
you can find on the streets of many cities, or the return of some containers, such as those
for butane cylinders, so that they can be used again with the same product.
4.- Renewable energies. Reduce the use of and dependence on fossil fuels and non-
renewable energy. It is becoming more common, for example, to install photovoltaic
panels in companies and homes to take advantage of the sun's energy in daily
consumption and eliminate part of the consumption of conventional electricity, which is
still highly dependent on fossil fuels.

5.- Eco-design. Design products and services to minimize environmental impact

throughout the product lifecycle. For example, replacing plastic packaging with
biodegradable packaging, or using fewer materials in product packaging, or using better
quality materials in clothing to make them last longer.

Agriculture, industry, and the production of electricity and heating are the human
activities with the largest ecological footprint.

The European Union is driving the shift towards an increasingly circular economy to grow
sustainably, while creating jobs in new occupations. Among other measures, in 2020 the
European Green Deal was given the green light, which seeks to make the European Union
ecologically neutral by 2050, and one of its pillars, the new European circular economy
plan, was launched.