Jason Saul is author of the book,  Social Innovation, Inc: Five Strategies for Driving Business Growth Through Social Change and CEO of Mission Measurement, a social impact consulting firm. Cheryl Davenport, leads Mission Measurement’s corporate and government practice and is author of a forthcoming USAID report, “Models and Metrics for Private Sector Engagement.”  The views in this blog are their own.

As part of USAID’s 50th Anniversary, the Agency is celebrating Public-Private Partnerships Week October 17-21, 2011 to highlight the mutual benefit that development and business have in establishing public-private partnerships (PPP) and to celebrate the 10th anniversary of the Global Development Alliance (GDA) program.

Harnessing the Engine of Business to Drive Prosperity

At the end of 2009, the United States had invested a little more than $1.2 trillion in emerging and developing market economies.1 Official U.S. Government assistance was $28.8 billion, a dramatic difference that underscores the critical impact the private sector can have in addressing the development challenges that the U.S. Agency for International Development (USAID) also aims to tackle.2 How can we as development practitioners and change agents harness the ability of the private sector to create and distribute solutions that address social issues?

The use of public-private partnerships presents one of the most powerful and readily available opportunities to attract and leverage the enormous resources and talents of the private sector to solve social problems.  But to do so, development agencies need to focus on strategies that can also help companies achieve their business objectives in the process of solving social problems.

Corporations are beginning to realize that some of their biggest business challenges – such as access to a talented workforce – and opportunities – such as access to emerging markets – will require not just a business solution but also a development solution.  We can work with companies to address pressing social issues that are relevant to business success.  But it will take some new thinking and some bold steps.  Here are tips from my firm’s research advising dozens of Fortune 500 companies and analyzing over 70 public private partnerships.

  1. Raise the bar. We’ve got to focus on the highest-value, most compelling opportunities that will be wildly attractive to companies and meaningful from a development perspective.  In order to tap into the incredible outflows of capital being invested in emerging markets, we need to focus on the economic and growth opportunities that go straight to the heart of the corporation’s business strategy.
  2. Focus on shared value.  We’ve got to find these intersections of interest and begin translating our development objectives into language that will resonate with our corporate counterparts.  We call it development. Companies call it emerging markets.  Both government and business share an interest in increasing access to vital products and services (e.g. clean water, food, medicine, and the internet); driving foreign direct investment, building infrastructure, and creating jobs and income.
  3. Leverage the engine, not the fumes.  If we really want to move the needle on today’s development challenges, we need to harness the engine of the business, not the fumes.  Instead of working solely with a corporation’s $30 million foundation, we should be identifying ways to partner with that corporation’s $30 billion business.  We need to ask businesses to do what they do best:  to produce goods and services that meet society’s needs, to market and distribute them to those who need them most, and to create jobs, income, and lasting economic activity.
  4. Innovate.  Companies offer a unique perspective on how to tackle a problem and draw upon different skills and resources.  When we combine their perspective with ours, we can often develop a new, more innovative approach to a social challenge.  This will require us to come to the table as an equal partner with companies, and spend time developing an understanding of each partner’s definition of success.
  5. Produce results, not activity.  We’ve got to start with the end in mind and then figure out the right partner and the best strategy to produce that outcome.  We must prioritize the highest-value outcomes, identify a corporate partner that shares that outcome or will economically benefit from that outcome, and then approach the company with that intention.  For example, if we deem it a priority to increase the earnings of smallholder farmers in West Africa, we might decide to approach Kraft Foods, now the largest buyer of cocoa in the world.

The dynamics of economic growth are in our favor.  Many corporations from the U.S. and other developed nations are expanding overseas. Moreover, by the year 2050, according to the World Bank, some 80% of all consumers will be in developing countries.3

There is business opportunity in driving development and, in turn, there is development value in harnessing business toward social change. We must get savvier about finding the intersections of interests if we want to take the power of public-private partnerships to the next level.

Visit www.usaid.gov/pppweek for continuous updates and new announcements, and to view a live-stream of the October 20th Partnership Forum: The Strategic Value of Connecting Business & Development.

1 Congressional Research Service, U.S. Direct Investment Abroad: Trends and Current Issues, February 1, 2011.

2 Hudson Institute, The Index of Global Philanthropy and Remittances 2011.

3 World Bank: http://www.worldbank.org/depweb/english/beyond/global/glossary.html