The Business of Development: Innovation, Profits, and the Common Good

Wednesday, May 3, 2006

Hear the word “poverty”, and the image of a bright-eyed child with an extended hand staring at you from the TV screen appears in your mind. Put the word “business” next to it, and the mental screen turns off, failing under the pressure of the oxymoron. Business and poverty are almost mutually exclusive; the affluence and life force of one is incompatible with the misery and lifelessness of the other. Or is it?

Over the last few years a handful of organizations turned their attention to the role of business in addressing the millennium’s most grinding problems — the problems highlighted by the U.N. Millennium Development Goals. Among the eight goals proclaimed by all 191 member-states of the United Nations, poverty stands unequivocally first, paving the way for its many offspring — hunger, health epidemics, high mortality, and environmental degradation. Over 4 billion people — more than 60% of the world population — live on less than $1,500 a year. One person dies every 3.6 seconds from malnutrition and related causes, while 8,000 people die each day from AIDS (PDF). Meanwhile, development is still generally considered a governmental or non-profit affair. The private sector, perhaps the most robust institution of society, remains largely disengaged and uninterested in the matter of development and poverty alleviation. So, is there a place for international development in the business of business?

Academics C.K. Prahalad and Stu Hart, whose work on the Base of the Economic Pyramid has recently gained momentum, seem to think so. So do 175 corporate members of the World Business Council for Sustainable Development (WBCSD), which released a very practical report, Business for Development: Business Solutions in Support of the Millennium Development Goals (PDF), in 2005. The intensity of competition and demands for growth leave business no choice but to imagine new markets of the future (that’s where that 4 billion consumers could come in handy), whereas the tremendous opportunities in the developing world, when unlocked, offer sustaining profits for the present. As WBCSD puts it, “business is good for development and development is good for business.”

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