How can the business sector use development programmes to help identify new business opportunities?The winds are changing in the development community (I am here referring to the development sector of NGOs, UN agencies, and such agencies/institutions). There is now a great interest in engaging with the private sector. However, it is still difficult for business to take advantage of this opportunity and with this article I hope to provide some advice and ideas on how to engage with development programmes and get their assistance in identifying and establishing viable business ventures.
Generally, development programmes funded by international aid agencies are focusing on alleviating poverty and improving health, as well as addressing a number of other issues, such as human rights, democratization, gender equality, HIV/AIDS, etc. At the same time there is a strong feeling in the development community that the business sector has an important role, and if business can address some of these issues whilst earning money and achieving their objectives, this is more effective and more sustainable than the aid programmes.
Books like C. K. Prahalad’s “The Fortune at the Bottom of the Pyramid” provide examples of this concept. Professor Yunus, the founder of the Grameen Bank microfinance system, is further developing one aspect of this concept with the promotion of Social Business; businesses which look to be financially profitable but have social and environmental goals as measure of success and the profit is reinvested in the business.
This change opens a window for private sector enterprises to engage with these programmes. Although tax payers’ money (aid) cannot be used to directly subsidize private enterprises, programmes receiving such support are encouraged to “help” business to get involved. In reality this means that many development programmes are looking for ways to help business to get involved in what they are doing.
Some of the opportunities are only in the area of philanthropy and other forms of grant giving. Whilst this is commendable, all parties realize that this is potentially temporary and not a very resilient solution. Another area is through Corporate Social Responsibility (CSR) initiatives, for which there are dedicated proponents, for example in Asia there is CSR Asia (www.csr-asia.com), and other examples are CSRwire (www.csrwire.com) for news and awareness and Two Tomorrows (www.twotomorrows.com) which offers consultancies in CSR.
These resources provide an opportunity for companies which have CSR as part of their business strategy.
A third interesting opportunity is to engage in business ventures with the target groups of the development programmes. This opens great scope for partnerships, as many such programmes, including the one I am representing, are seeking to develop sustainable alterative or additional livelihoods for their target groups. Viable business ventures are at the top of this agenda.
As an example, in my own programme we are encouraging our partners to help communities to develop ventures such as mushroom, honey, crab, fish, vegetable and fruit production. Technical knowhow in production can often be provided by the aid programmes, but marketing, post harvesting, quality requirements and control are often neglected or outside the scope of the programmes.
This is where collaboration with private enterprise has a lot of scope. In essence programmes are encouraged to find business partners to help in the development, and this means that we are to spend time in working with private business to identify viable business opportunities. Needless to say, aid programmes are not very good at identifying what is viable, but if business has interest in not only making financial profit but also social and environmental “profit” then there is great scope for cooperation.
I believe that this is an untapped potential for businesses which want to diversify their portfolio and are looking beyond financial profit as the bottom line. Indeed we all agree that the engagement should be profitable, but there are many ways of measuring profitability. For the development programme it is central that their target group benefits from the business venture and that it is sustainable and environmentally sound.
The common ground is often rooted in the concept of value. Business ventures which are financially profitable, but also provide positive social and environmental results are providing good value. The business sector is skilled in finding profitable opportunities and development programmes are skilled in providing social and environmental dividend and how to measure it. Now we need to merge these skills to promote profitable business which delivers social and environmental value.
There are now a number of support services for this, such as BiD Network (www.bidnetwork.org) and FairVentures (www.fairventures.com) which aims to connect emerging entrepreneurs with business investment. Next Billion (www.nextbillion.net) is an example of an initiative which aims to bring together the community of business leaders, social entrepreneurs, NGOs, policy makers and academics who want to explore the connection between development and enterprise. There are also training and consultancies agencies focussing on these issues, such as The Spring Field Centre (www.springfieldcentre.com).
In addition to these services there is scope in working directly with development initiatives on the ground. Staff of these programmes is likely to have complementary skills to those of the business sector.
There is much more to successfully addressing poverty than just generating money and development programme staff has knowledge of this, at the same time many “business ventures” initiated by development programmes fail since they do not have the expertise and sense for identifying commercially viable initiatives.
I think now is an opportune moment for businesses who are interested in doing business for more than just the money. Profit is a must for private sector sustainability, but financial profit should be just one measure of the business value. Social and environmental benefits are profits as well, and in a world which is increasingly looking towards a future without extreme poverty and a healthy environment looking towards these opportunities is to create value for tomorrow.
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November 3, 2010
How can the business sector use development programmes to help identify new business opportunities?
The winds are changing in the development community (I am here referring to the development sector of NGOs, UN agencies, and such agencies/institutions). More
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