Measuring the impact of business on development

This paper discusses how the impact of business on development can be measured. It argues that international businesses are looking at how to boost their impact on local economies in developing countries. Leaders on this curve are going beyond pure philanthropic donations for local good causes to assess – and adapt – core business practice to support development goals. Abiding by fair labour standards is one step; using procurement power to develop local enterprise is another; while an array of other mechanisms involving mentoring, sharing infrastructure, working with distributors, and tackling log-jams in access to capital are being developed.

However challenges reamin, which include:

• more work is needed on how best to measure the development impact of business per se, let alone the development gain from adoption of more inclusive business practices. Some of the most important impacts are dynamic and unquantifiable. Existing assessment frameworks simply don’t capture this.
  
• The best examples of business linkage programmes aim for the anchor investment to be a springboard for local enterprise development. There is a need to know more about the real costs of creating business linkages, apart from specific budgets of donor-supported linkage projects, or the ring-fenced community development projects of a company
• to serve all three priorities – bringing the laggards on board for wider uptake; continued experimentation and learning from innovation; and greater delivery of results- there is a need to keep building our capacity to capture the development results