The Role of Business in Recovery and Development

January 25, 2010

At the time of this writing, the business community has already raised over $106 million in the span of less than ten days in response to the earthquake in Haiti.  This does not include the role the networks or radio stations or online community have played in raising millions more from individuals through telethons, text or click donations.  It is truly amazing what companies can do.  And yet…

And yet, if you really want to upset someone in the corporate social responsibility (CSR) field, all you have to do is equate CSR with philanthropy.   What we have seen so far is a very human reaction from the companies.  Who could not be deeply moved by the images of people trapped under piles of rubble, loved ones sobbing helplessly nearby and yet so far away? 

But there are systemic things that the private sector can do that may be equally humanitarian, but not nearly as dramatic.  For example, we are hearing about bottlenecks at the airport.  

Manta.com lists 53 smaller U.S. companies that specialize in airport construction, not to mention companies like Parsons or Bechtel.  Logistics companies like UPS, FedEx, and DHL could help coordinate traffic flows, and Navistar has already offered 11 heavy duty trucks, some equipped with cranes to help re-plant infrastructure and get shipments out to the countryside.

In terms of medical issues, companies like Abbott, GlaxoSmithKline, Merck, Baxter, BD, and others are doing everything from providing medical equipment to supporting the development of medical clinics.  They have years of expertise in dealing with extreme medical emergencies. 

Perhaps equally important is information and communications technology.  Microsoft has already generously donated over $1 million in cash and product, but perhaps their best contributions are yet to come.  Did you know they helped develop a refugee identification system in Kosovo during the 1990s that helped refugees reunite with their families?  It wasn’t their philanthropy, but their technology that made that profound human impact happen.  The same is true with IBM, Motorola, Cisco, and Intel after the Sichuan earthquake in China or other disasters around the Pacific Rim’s ring of fire.  Computer systems, walkie-talkies, video conferencing, cell phones, and other information and communications technologies are indispensable for picking up the pieces.

You are going to hear this point made many times over from this column this year – connectivity is a foundational tool for recovery and development.  The internet and telecommunications of all kinds enable people to connect with more people, learn and share ideas, develop relationships, and make transactions.   Connectivity is a platform for productivity, for increasing division of labor, for coordinating activity, making sure things get done, and for transparency, evaluation, and accountability.  Increasing the connectivity of Haiti to the rest of the world is going to be vital for its future recovery and development.  Connectivity is going to be vital for enabling Haitians to stay in Haiti and realize their dreams for their country.

But it’s not just high tech, but low tech business that will also contribute to the recovery.  During my 24 hours in Guatemala last week to meet the regional business leaders in disaster recovery at a Pan-American Development Foundation conference, I was able to steal away for a few hours to visit with Steve Miller, the CEO of Dillon Gage, a financial planning and precious metals trading boutique based in Dallas. 

Miller also happens to be the Co-Founder and President of HELPS International.  He’s used his business acumen to help some of the poorest people in Guatemala to improve their farming, cooking, and water purification techniques.  Because so many Guatemalans used open air stoves in their huts, they were very susceptible to catastrophic fires, carbon caking their roofs, deforestation, and health care issues.  Miller and his team figured out a way to reduce wood consumption by 70%, while increasing heat and reducing carbon emissions.  He showed me an ingenious low-tech water filtration system that can purify up to 10 gallons of water a day and lasts for a year.  He’s shipping 7000 of the units, which only cost $35-40 each to Haiti now.  His corn program has enabled farmers to get out of debt and created surpluses that give them money in their pocket.   I hope he can replicate many of these lessons learned in Haiti.

And the list goes on and on.  Imagine how vital Cemex, Lafarge, and Waste Management could be if they are able to help the Haitians with their debris removal and environmental hazards problems.  Housing specialists throughout the Caribbean, Central America, and the U.S. have been contacting us about the issues the Haitians are going to face in terms of transitioning from tents back to more permanent structures.  Utility firms have been worrying about the water, sewage, and electrical challenges.  ITT has already started to work with its partners to figure out some of the issues related to the water space.  There have been significant bottlenecks associated with wire transfers, and Western Union has already announced they want to help with this challenge. 

The question is how to bring all of these resources and competencies to bear?   These processes don’t happen with the wave of a magic wand.   Costs have to be covered.  Shipping has to be arranged.  Permissions have to be granted.   The demand has to be there.  Private enterprise and free markets depend on the VOLUNTARY exchange of goods and services, but how do you help people who have lost everything?  How can suppliers respond when the customers are flat broke and need everything?

The answer is that Haiti needs partners, and it needs experienced people who believe in its future.  But before the private sector can play its role as effectively as possible, it needs the Haitian people and the Haitian government, the international donor community, and non-governmental organizations to succeed.   Get the framework right, and there are a million different ways the private sector will be able to help, but that is the challenge that is looming ahead.