What business can do for global development
Aug, 2011
You know the business of development aid funding has changed irrevocably when:
- a multinational company best known for its beer teams up with a textile manufacturer to help Rwanda produce its own anti-malarial bed nets instead of having to buy them overseas; or
- a mobile phone giant teams up with the UNHCR to create a service to reunite refugees via their mobile phones; or
- when one of the world’s largest insurers devises a micro-insurance scheme – where previous attempts had failed - enabling Haitian traders to protect their livelihoods against natural disasters at a reasonable cost.
These are all examples of cross-sector collaboration – partnerships between governments, NGOs and companies. They’re a growing category of aid projects funded by donor governments, and they’re the impetus for the Three Sectors, One Vision symposium at Melbourne Business School on Wednesday 31 August.
This high-level, invitation-only event is hosted by Melbourne Business School’s Asia Pacific Social Impact Leadership Centre (APSILC) and B4MD – a non-profit group that helps Australian businesses identify and develop opportunities in developing communities.
The aim of the symposium is to kickstart a debate within all three sectors about how business, NGOs and governments can work effectively together to eradicate poverty and disease; and the opportunities and barriers. Increasingly, donor governments and NGOs have realised that there are just some things they can’t get done without big business at the table.
As Nobel laureate Mohammad Yunus, founder of the Grameen Bank, has noted: “It is tempting to simply dump the world’s problems into the lap of government and say, ‘here, fix this’. But if this approach were effective, the problems would have been solved long ago”.
The keynote speaker is Peter Baxter, who heads AusAID, the agency responsible for overseeing Australia’s overseas aid program. Baxter’s address comes just weeks after the Federal Government agreed to adopt the recommendations of the The Independent Review of Aid Effectiveness – the first independent review of Australia’s aid programs in 15 years. Among the recommendations was deeper engagement with business.
Baxter will be joined in a panel session by World Vision chief Tim Costello; Nicky Kasnaxis, a mobile money expert who will talk about financial inclusion in the Pacific; and Ian Dixon, of Dixon Partnering Solutions.
As the director of MBS’s Asia Pacific Social Impact Leadership Centre, Professor Ian Williamson, has observed, “the business community has started to accept a role as social change agent”. Companies need to be strategic about this engagement, leveraging off what they do best.
MBS economist Catherine de Fontenay, who is chairing the panel, says NGOs and governments have always turned to the private sector for goods and services. But partnerships are a whole new ballgame. NGOs that may have traditionally have viewed private sector askance need to ask:
“When NGOs are customers of business, they are trying to find the break-even point for the business; the right profit margin so that it’s worth it for business to take on. But in a partnership, it’s fine if business makes a good profit from a venture, so long as it also delivers significant development outcomes. NGOs need to ask a completely new question: Do I get more development bang for my buck in this partnership than in a traditional development project?”
The ideas and models that will be debated in the symposium are set out in the landmark report Convergence Economy: Rethinking International Development in a Converging World. One of the authors, Gib Bulloch, MD of Accenture Development Partnerships (Accenture is an event sponsor), will address participants via video.
Key points in the Accenture report:
- Businesses have woken up to the fact that what they once deemed social is now strategic to their organisations
- Corporations are helping to address complex development challenges in ways that harness their core business, competencies, skills and interests to create value for shareholders and society.
- When 53 global businesses have revenues so large they could be ranked among world’s top 100 economies, NGOs and government would be wise to leverage this reach and influence
- Just as many corporations have disaggregated their ‘value chains’ – breaking with vertical industry models and outsourcing the parts of the business that are not core competencies – so NGOs may need to follow suit
- Convergence is not the silver bullet – development problems are so complex, so large , so persistent, so fluid that they require a wide range of approaches
Image: Solomon islands family after the 2007 tsunami. ©Rob McColl for AusAID. reproduced with permission.
