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omotingdevelopment.htm

How Business Is Promoting Global Development

By Stephen Jordan and Don Eberly

As the UN General Assembly meeting draws near and with it,

discussion of the status of the Millennium Development Goals,
development agencies, multilateral organizations, and governments
in poor countries are waking up to the fact that multinational
companies may be vital for their success.

Public-private partnerships have never been hotter—multinational

corporations view them as an opportunity to practice corporate
citizenship and expand their markets, while their public partners in
low-income nations see them as sources of much-needed
investment and vehicles to achieve a higher living standard.

In the past, development organizations viewed companies as

passive sources of philanthropic gifts for relief and development
projects, or as obstacles and challenges. Today, companies are
using their core marketplace competencies to deliver novel new
business opportunities in low-income countries, often while
contributing to social and economic development through social
investments.

Increasingly, the poorest countries are defined by the absence of

business, and many of them are working hard to improve their
social and economic investment climate. The best thing that can
happen to the poor in low-income countries is to be discovered as
customers, entrepreneurs and business partners, and then linked to
the emerging global economy. A growing number of low- and
moderate-income countries, such as Colombia, the Philippines and
Ghana, are developing robust local stock exchanges, enabling local
firms to raise capital from the considerable untapped pool of local
wealth to create more home-grown businesses and jobs.
Multinational companies are playing an increasingly important role
in aiding and abetting this process.

Corporations are making their mark all across the globe with
projects aimed at improving the planet's health, education and
ecological problems. In a globally connected planet, business is
more interested than ever in "doing good and doing well."
Two-thirds of the Fortune 500 now actively monitor and track their
corporate social responsibility programs. The Business Civic
Leadership Center, an affiliate of the U.S. Chamber of Commerce,
has found that more than a third of international American
Chambers of Commerce have some kind of corporate citizenship
program.

Growing numbers of companies are taking an interest in building

customers among the consumer class and "newly affluent" in
emerging markets. Procter & Gamble is scaling its basic consumer
products such as soap and shampoo to be viable in low-income
communities worldwide. Citigroup announced the launch of a major
"down market" banking presence throughout emerging markets in
Asia. GE has tailored its business growth strategy to reach low-
income consumers and expects revenues from emerging markets to
expand by 30% to 40% by 2010. New customers, new markets, and
new partnerships in a flattening global marketplace are producing
unprecedented opportunities for smaller indigenous firms to build
ties to regional and global markets as suppliers and distributors.

Coca-Cola is making major investments to stem the spread of HIV-

AIDS. IBM is sponsoring a global "reinventing education" program
that is confronting some of the toughest educational problems.
Marathon Oil is involved in malaria eradication in Equatorial New
Guinea. Pharmaceutical companies like Abbott, GlaxoSmithKline,
Merck, and Eli Lilly are some of the largest private-sector donors to
emerging markets in the world.

Corporate citizenship is not just dominated by massive corporations.

Armed with innovative problem-solving technologies and motivated
by an entrepreneurial spirit, an entirely new class of social
entrepreneur is emerging as the latest actor in international
development. Not interested in large aid programs generated by
top-down command and control bureaucracies, these social
entrepreneurs are turning instead to small-scale experimentation
based on business models and buy-in from low-income
communities. In Kenya, Fairmount Minerals is making available
innovative technologies to
provide clean drinking water to low-income communities, and the
alternative energy company E+Co is developing solar systems for
households in rural Uganda, to name just a few.

A new generation of "venture philanthropists" is determined to

challenge older notions of charity by directing resources to projects
with proven track records and by bringing to philanthropy the strict
performance measures once limited to business enterprise. Many
are investing their resources in a new movement to spur bottom-up
business development in the form of micro-enterprise, micro-
franchising, partnering with small to medium-size businesses and
even developing private equity initiatives to invest in promising
developing-world companies.

As the UN General Assembly convenes to take stock of the

Millennium Development Goals, and leaders like former president
Bill Clinton make unprecedented calls for charity, one of the most
positive trends in recent memory is the convergence of social and
economic interests. Now the burden on policy makers is not just to
recognize the benefits of corporate citizenship, but to do what they
can to realize the potential of this emerging movement.

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Stephen Jordan is Executive Director of and Don Eberly is a

contributor for the Global Corporate Citizenship Program at the
Business Civic Leadership Center, an affiliate of the U.S. Chamber of
Commerce.