Weekly Wrap: The State Department’s ‘Impact Economy’ Aim
The Human Genome Project, the Apollo Program, the Manhattan Project, the U.S. Defense Advanced Research Projects Agency (DARPA) project that laid the foundation for the Internet. These are the government/industry collaborations we consider particularly Earth shattering (both figuratively and literally in the case of the Manhattan Project). They resurfaced this week at the State Department as diplomacy, development and business intersected toward the mission of reducing poverty and building an “impact economy” that advances U.S. interests and the world’s. Secretary of State Hillary Clinton opened U.S. State Department’s Global Impact Economy Forum by speaking the language of “shared value” in the global economy.
In a world in which “one out of three people in the world today living on less than $2 a day,” Clinton said, “We believe expanding economic opportunity is fundamental to achieving our own national interest.
“So if we can open the doors to new markets and new investments, we can tap as many as 1.4 billion new mid-market customers with growing incomes in developing countries,” Clinton told about 250 leaders of NGOs, academics, investors, entrepreneurs, diplomats and other thought leaders. “Taken together, they represent more than $12 trillion in spending power.”
And how do we nudge these doors ajar? The most tangible example announced during the forum was a new $44.5 million Global Development Alliance between the U.S. Agency for International Development (USAID) and the Skoll Foundation. The partnership “pairs USAID’s expertise in scaling sustainable development innovations with Skoll’s decade-long experience cultivating the world’s most successful social entrepreneurs.” The two organizations aim to identify and invest in social enterprises focused education, water, and food security. More on the partnership is here, and Clinton’s full comments and a video of the speech is here.
Kris Balderston, special representative for Global Partnerships at the Global Partnership Initiative in the Office of the Secretary of State, wrote in Business Fights Poverty about what State can bring to the social enterprise table. Balderston noted that a key barrier of entry into emerging markets is often the lack of on-the-ground knowledge and networks. He discussed harnessing the department’s local expertise “and strategic position through US embassies to serve as a connector and to help the private sector and civil society make a difference.” This type of interaction might be a new modus operandi for State, but not for government historically, Balderston wrote, citing the aforementioned public/private projects that shared missions.
“When companies proactively integrate environmental and social impact into their business models, they are well positioned to provide investment performance over the long term as well as to affect corporate and ultimately market behavior for the greater social good. That’s why the US State Department is focused on the impact economy—because we believe that the more the market moves toward incorporating the externalities of doing business and advancing the impact economy, the more our foreign policy goals of good governance, stability, and inclusive economic growth are accomplished.” he wrote.
Balderston also participated in a conversation with Kirsty Jenkinson, director, Markets and Enterprise Program, World Resources Institute on Investing with Impact: Building Partnerships for a Better Tomorrow. (WRI is a co-partner of NextBillion). The conversation, featured in the video below nicely frames the issues both private enterprise and government development face, and how to complement one another.
The forum keynotes were followed by several workshops. If anyone in the NB community happened to attend, please let us know what you thought of the proceedings. Do you believe this forum went beyond the rhetorical toward the action-ready?