Business Sector Drives Proactive Solutions in Global Development

As the Business Civic Leadership Center (BCLC) has reported in past global development publications, businesses have increased their engagement in social and environmental challenges outside of their home markets. What emerges in this publication is new insight on how they engage.

Significant and noteworthy changes are occurring.  In years prior, businesses primarily played a support role in addressing international social and environmental challenges, but now, leading companies are more proactive in applying business solutions.

In the last two decades, the role of global corporate social responsibility (CSR) inside companies greatly transformed.  Before 1980, U.S. multinationals engaged in limited philanthropy and foreign direct investment (FDI). In fact, the U.S. Agency for International Development (USAID) often cites data showing that during the 1970s and before, 80% of all international fund flows were driven by the public sector. Today, it is reversed; 80% of all international fund flows are driven by the private sector.

During the late 1990s and early 2000s, many companies went through the next iteration in their approach to global development. While earlier forms of engagement were reactive, this next wave saw a critical mass of companies begin to develop competencies in public-private partnerships and stakeholder relationship management. 

The earlier waves of global CSR ushered in sophisticated business functions and increasing public expectations. Today, global CSR strategy goes farther than before, encompassing a broader portfolio and serving as the connective tissue between business growth and healthy communities. The role of business in global development is now much larger, and some companies are at the helm of improvements in the social and environmental conditions in emerging markets.

How do companies tackle this?  The answer naturally varies due to factors such as industry, geography, culture, and competitive environment.

By executing global CSR strategies that utilize business tools, expertise, employees, and, in some cases, funds, companies are able to more effectively tailor community development programs to local markets and meet needs in a more efficient, self-sustaining manner.

In fact, business solutions addressing community challenges are a commonly used approach in global development. Non-governmental organizations (NGOs), government agencies, and social enterprises have all begun to adopt business-minded solutions in their community development programs around the world.

However, many additional factors outside the business sector have also contributed to the rise of business solutions in global development. The number of social enterprises has dramatically increased in many emerging markets, particularly in Sub-Saharan Africa. Social impact and transparency tools and metrics have improved, providing better insight about the value of these solutions.

There has also been a generational impetus. Millennials increasingly seek opportunities to use their business skills for the betterment of humankind. It might have been unthinkable a generation ago, but today, the opportunity to work on social impact projects is a significant retention tool for many companies. Just by doing business, companies create job opportunities for individuals all over the world, but there is a growing understanding that their positive social impact could be even more significant than it is today.

That being said, companies have to prioritize the social challenges that influence and affect their operations on a day-to-day basis.  These challenges range from access to healthcare services, quality of secondary education, access to basic financial services, and gender discrimination, among many others. All of these issues greatly affect the business value chain. This tension between potentially unlimited engagement opportunities and limited resources is one of the reasons why companies increasingly look at shared solutions, crowd-sourcing, networking, and other ways to enhance the business tools they can offer.

Leading companies, like the ones represented in this report, recognize that community engagement programs are a serious component of how they do business at every stage of the business lifecycle.

These companies engage in “pre-competitive” investments to help seed and nourish potential markets. They solicit stakeholder input as they prepare to make investments and gain market insights about potential customers. They enhance their brand, validate their operations, and drive employee retention once they begin operations, and they constantly evaluate and identify ways that they can continue to improve.

Clearly, the role of business in global development has shifted from something that was “nice to do” to something that helps power the business model. This publication highlights ways in which companies, including Abbott, Chevron, Dow Chemical Company, and Microsoft leverage top employee talent, products, and business acumen to tackle issues such as financial literacy, gender equality, access to basic needs, workforce preparedness, sustainable farming, and more.

The global development caravan is full of NGOs, multilateral organizations, and government agencies that are absolutely paramount to reaching our destination, and business drivers are helping us get there much faster and more efficiently than ever before. Buckle up.

As the Business Civic Leadership Center (BCLC) has reported in past global development publications, businesses have increased their engagement in social and environmental challenges outside of their home markets. What emerges in this publication is new insight on how they engage.

Significant and noteworthy changes are occurring.  In years prior, businesses primarily played a support role in addressing international social and environmental challenges, but now, leading companies are more proactive in applying business solutions.

In the last two decades, the role of global corporate social responsibility (CSR) inside companies greatly transformed.  Before 1980, U.S. multinationals engaged in limited philanthropy and foreign direct investment (FDI). In fact, the U.S. Agency for International Development (USAID) often cites data showing that during the 1970s and before, 80% of all international fund flows were driven by the public sector. Today, it is reversed; 80% of all international fund flows are driven by the private sector.

During the late 1990s and early 2000s, many companies went through the next iteration in their approach to global development. While earlier forms of engagement were reactive, this next wave saw a critical mass of companies begin to develop competencies in public-private partnerships and stakeholder relationship management. 

The earlier waves of global CSR ushered in sophisticated business functions and increasing public expectations. Today, global CSR strategy goes farther than before, encompassing a broader portfolio and serving as the connective tissue between business growth and healthy communities. The role of business in global development is now much larger, and some companies are at the helm of improvements in the social and environmental conditions in emerging markets.

How do companies tackle this?  The answer naturally varies due to factors such as industry, geography, culture, and competitive environment.

By executing global CSR strategies that utilize business tools, expertise, employees, and, in some cases, funds, companies are able to more effectively tailor community development programs to local markets and meet needs in a more efficient, self-sustaining manner.

In fact, business solutions addressing community challenges are a commonly used approach in global development. Non-governmental organizations (NGOs), government agencies, and social enterprises have all begun to adopt business-minded solutions in their community development programs around the world.

However, many additional factors outside the business sector have also contributed to the rise of business solutions in global development. The number of social enterprises has dramatically increased in many emerging markets, particularly in Sub-Saharan Africa. Social impact and transparency tools and metrics have improved, providing better insight about the value of these solutions.

There has also been a generational impetus. Millennials increasingly seek opportunities to use their business skills for the betterment of humankind. It might have been unthinkable a generation ago, but today, the opportunity to work on social impact projects is a significant retention tool for many companies. Just by doing business, companies create job opportunities for individuals all over the world, but there is a growing understanding that their positive social impact could be even more significant than it is today.

That being said, companies have to prioritize the social challenges that influence and affect their operations on a day-to-day basis.  These challenges range from access to healthcare services, quality of secondary education, access to basic financial services, and gender discrimination, among many others. All of these issues greatly affect the business value chain. This tension between potentially unlimited engagement opportunities and limited resources is one of the reasons why companies increasingly look at shared solutions, crowd-sourcing, networking, and other ways to enhance the business tools they can offer.

Leading companies, like the ones represented in this report, recognize that community engagement programs are a serious component of how they do business at every stage of the business lifecycle.

These companies engage in “pre-competitive” investments to help seed and nourish potential markets. They solicit stakeholder input as they prepare to make investments and gain market insights about potential customers. They enhance their brand, validate their operations, and drive employee retention once they begin operations, and they constantly evaluate and identify ways that they can continue to improve.

Clearly, the role of business in global development has shifted from something that was “nice to do” to something that helps power the business model. This publication highlights ways in which companies, including Abbott, Chevron, Dow Chemical Company, and Microsoft leverage top employee talent, products, and business acumen to tackle issues such as financial literacy, gender equality, access to basic needs, workforce preparedness, sustainable farming, and more.

The global development caravan is full of NGOs, multilateral organizations, and government agencies that are absolutely paramount to reaching our destination, and business drivers are helping us get there much faster and more efficiently than ever before. Buckle up.

[Editor's note: This article is part of The Role of Business in Emerging Markets.]