New partnerships: how business can contribute to development in difficult local environments

New partnerships: how business can contribute to development in difficult local environments

Getting companies to contribute towards development.

This paper debates the issues around business contribution to development. It is derived from the proceedings of a conference organised by the European Office of the Konrad-Adenauer-Stiftung and IFOK GmbH.

The authors points out the 'golden rules' for multinationals in contributing to development agendas which include; localise value creation (mainly working in emerging economies), and innovate- try to find new, more sustainable solutions for a multi-stakeholder environment where success is unlikely through working alone. However, it is also argued that Small to Medium Sized Enterpirises (SME’s) contribute much more to employment than multinationals, and they contribute substantially to Gross Domestic Product (GDP) if they are managed wisely. SMEs are often under tremendous pressure and exposed to different activities of government ministries. So it is necessary to understand the role of SMEs in a national economic environment. On the whole, business can move beyond a focus on shareholder value to a focus on stakeholder value. This involves building bridges and trust, and is about understanding the strengths and limitations for each actor in such a multi-stakeholder environment.

Three key recommendations from the World Business Council for Sustainable Development (WBCSD), for businesses working on sustainable development are highlighted:

  • work on awareness-raising and common understanding. WBCSD has done this by developing long term scenarios for water (to 2025) and energy and climate (to 2050).
  • it is necessary to measure the impact of sustainable development initiatives in a transparent way so further improvements can be made
  • it is necessary to work with others. This is not an easy task, because it is often a complete change in the way a company is managed. It may be easier for multinationals compared to small and medium-sized businesses, which often lack the capabilities to address these topics.
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