Photo: US Mission Geneva
Opportunities and Challenges for Business Engagement
The past twenty years have witnessed a significant increase in business partnerships with governments and civil society in the pursuit of various aspects of the sustainable development agenda. As the international community engages in widespread dialogue on the framework to replace the MDGs, the energy, innovation and resources of the private sector are increasingly recognised to be one of the core drivers of the agenda for economic empowerment, and to redress the current mismatch between aspirations, capabilities and opportunities many countries – particularly but certainly not exclusively African ones – are confronted with.
This involves a much more comprehensive engagement by the private sector than “simply” that of successfully running business. Having had the honour to serve on the UN Secretary General’s High Level Panel of Eminent Persons on the Post-2015 Development Agenda, we had the opportunity to closely interact with many entrepreneurs and managers that are actively engaged in the search for strategies that could create the conditions for their business to thrive in more inclusive, equitable and sustainable economies and societies.
Such an enhanced business engagement in development comes with new opportunities as well as renewed challenges. The acceleration of development progress offers increased opportunities for business as it fosters sustained growth and expanding markets, stronger rule of law and political stability, social cohesion and an increasingly educated and healthy workforce. Beyond the production of goods and services, an expanded development engagement also offers opportunities in the provision of social services such as the delivery of education and health. At the same time, the innovation that drives entrepreneurship can contribute to finding novel ways to address societal problems that could help leap-frog the stages other economies had to go through in their past development paths.
The recognition of the role of the private sector in fostering growth, promoting innovation and providing employment also means that business now has a seat at the table – globally, regionally or nationally – where development policies are defined, with increased opportunities for advocacy on the conditions that facilitate entrepreneurial and market development.
However, these opportunities also involve new challenges and even short-term trade-offs. In this respect, it is necessary to unpack the private sector and recognise that there are very different ways of doing business, some more virtuous than others. It is time for business to set higher standards for its operations and move beyond the current understanding of corporate social responsibility into a new socially and environmentally sensitive business model. This requires action at various levels: the rethinking of corporate reporting standards, the fine tuning of global and national regulations, the strengthening of consumer education and association, and the nurturing of stronger business ethics at all levels. Rather than taking the back seat and waiting for these changes to unfold, the private sector should lead its own transformation in active dialogue with government and civil society. Doing so will also help a great deal in addressing the confidence challenge raised by many watchdogs and civil society networks with regards to the deeper engagement of the private sector with the development policy agenda.
Business increasingly realises that its long term prosperity is at stake if the challenges of poverty and marginalisation are not properly confronted, and economic development patterns do not provide for greater inclusiveness and increased equity of opportunities and outcomes. The frontline involvement by so many companies and business associations in the shaping of the Post-2015 development agenda shows that the private sector is definitely stepping up to co-lead the transformations that are required for these challenges to be tackled and prosperity to thrive.
The critical engagement of the private sector and a new responsible way of doing business are essential for the pursuit of sustainable and equitable development.
This article was co-authored by Stefano Prato, the Managing Director of the Society for International Development and Betty’s Adviser on the High Level Panel on the Post-2015 Development Agenda.