Leveraging the Development Impact of Business in the Fight against Global Poverty

Abstract

There is growing consensus among policy makers, development experts and private sector leaders that efforts to spread economic opportunity and growth offer one of our best hopes for reducing poverty. The private sector - domestic and foreign, large-scale and small - has a vital role to play in this process, and in ensuring that both the quantity and quality of economic growth benefits the poor. Efficient markets and good governance, at both the global and national level, are essential conditions for enabling the private sector to fulfill this potential. So too is profitable and responsible business leadership. Leadership based on clear values and a commitment to delivering, or at a minimum protecting, both market value and social value. This chapter illustrates some of the ways that companies are meeting the leadership challenge, through implementing responsible business practices, creating innovative new business models, investment strategies, and partnerships, and working with governments to improve the conditions and institutions needed for good governance and private sector development. While recognizing the crucial development role of small, medium and micro-enterprises, the chapter focuses primarily on the contribution of large companies, both multinationals and large national companies. It suggests a conceptual framework for thinking about the contribution of business to development, focusing on three corporate 'spheres of influence': a company's core business operations in the workplace, marketplace and along the value chain; its social investment and strategic philanthropy activities; and its engagement in public policy dialogue, advocacy and institution building. The chapter provides a set of six strategies that any company can apply to manage its development contribution in a manner that protects or builds both market value and social value, and it recommends some specific areas for action.