U.S. Companies Partnering to Vanquish Extreme Poverty

April 26, 2016

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The private sector can play a key role in addressing extreme poverty around the world.

Takeaways

American companies and entrepreneurs are increasingly partnering with aid agencies on global development projects.

Most people typically regard the cause of global development as the domain of government officials, church leaders, charitable NGO directors, and philanthropic rock stars. The development arena, however, is front and center with another cadre of leaders in American life: corporate heads and entrepreneurs.

American companies and our nation’s commercial sector have an enormous stake in global development. Conversely, global development relies on American enterprise. Here are three reasons for this extraordinary synergy: 

  • First, U.S. corporate know-how is crucial for developing faster, cheaper, and better solutions that can meet the most difficult challenges plaguing mankind’s neediest: want of water, food, energy, public health, education, infrastructure, and other life-necessities. 
  • Second, private sector-driven investment and job creation is fundamental for establishing strong democracies and vibrant economies that are Kryptonite to the twin evils of extreme poverty and state failure at the heart of the global development challenge. 
  •  Third, strong development can help turn would-be security hotspots into healthy societies and thriving markets that’ good for people and for business. 

Over 1.2 billion people live on the equivalent of less than $1.25 per day. Such need provides oxygen for terrorist organizations, criminal cartels, demagogues, and insurgents that leverage desperation for their own ends. They know that extreme poverty is hostile to political, social, and economic order. It ripens populations for exploitation, fosters instability and migration, impedes global supply chains, and dampens risk-taking—all of which make their malign work easier. Development, on the other hand, is their enemy. It creates stronger societies and prosperous new markets eager for our ideas, models, goods, services, and solutions. 

American companies and our nation’s commercial sector have an enormous stake in global development. Conversely, global development relies on American enterprise.

Public-private partnerships play an indispensable role in ending extreme poverty and promoting resilient, democratic societies while advancing our security and prosperity. As the U.S. Agency for International Development points out, “Today, 91 percent of financial flows from the United States to the developing world are from private sources, rather than official development assistance. The private sector is therefore, a critical contributor to development progress, and key partner for USAID.” 

This is why it should come as no surprise that leading U.S. companies are working with the U.S. Agency for International Development and its U.S. Global Development Lab. The recently-established bureau works collaboratively within the Agency and with external partners. The Lab’s mission is “to produce breakthrough development innovations by sourcing, testing, and scaling proven solutions; and to accelerate the transformation of the development enterprise through modern tools and approaches.”

American ingenuity and multi-sector partnership have produced the greatest technological innovations known to man. The best is yet to come, as teaming up will yield new technologies, tools and approaches to help lift millions out of poverty.

To help achieve this goal, USAID established over 1600 partnerships between 2001 and 2015 with the private sector to harness its unique capabilities in addressing development challenges.  The Lab supports the agency’s partnership work by employing a broad spectrum of mechanisms such as prizes and challenges to spur life-improving breakthroughs for the development space and get them to scale. 

The nation and the world can look forward with great anticipation to the wonders that such a uniquely American initiative can and will wrought to feed the hungry, water the thirsty, care for the sick, and raise up the neediest human beings via the innovative power of partnership and the magic of free enterprise.