By Graham Baxter, Global Programmes Director – IBLF
9/11 marked the beginning of a decade in which unbridled economic growth was brought to a shuddering halt by the financial crisis.
It was characterised by large-scale unemployment, marginalised youth and a yawning gap between the rich and poor. That decade culminated in 2011 – the “year of indignation” as aptly coined by Gideon Rachman of the Financial Times – a year in which the frustration of the excluded spilled out onto the streets, from Tottenham to Tunisia.
The International Business Leaders Forum believes the challenge of social exclusion is no longer the prerogative of governments and must be addressed by business - the creator and purveyor of jobs and the main guarantor of social inclusiveness.
The private sector has a vested interest in avoiding social instability. Even without open conflict, the seething indignation of the excluded – whether the Naxalites in India, the urban migrant in China, the ‘rebels’ in Libya, or the ‘hoodies’ in London – damages and destroys social stability and hence business growth.
So what should companies do?
They need to base their business model on the concept of ‘Inclusive Growth’ whereby they consciously include the world’s ‘have-nots’ as employees, suppliers or customers. This is the best opportunity in years for companies to address social exclusion directly, not as part of a philanthropic commitment, but as a core part of their business.
Over the last decade, many leading multinationals have gone out of their way to focus on the excluded in the community through their social investment and employee engagement initiatives. While these programmes should not be denigrated – they deliver tangible results and benefits to many individuals and their families – their impact will always be marginal relative to the scale of the challenge.
It is through their core business activity that companies can make the biggest difference and have the most profound impact on society.
There are already examples of this in action taking place in countries such as India, where for instance telecoms and financial services companies provide the rural poor with access to their services. Or take some of the companies participating in the Business Call to Action initiative in which IBLF is a partner. Through IBLF-run workshops in Mumbai, Jakarta, Hanoi and elsewhere, we have discovered and promoted an exciting range of imaginative approaches by MNCs such as Coca Cola’s Micro Distribution Centres in East Africa, Diageo’s sorghum initiative in Cameroon or Anglo American’s Zimele model (now being transferred to South America from South Africa).
These are tried and tested ideas, not development theories – and they work. Inclusive growth is not an act of charity or mere “social responsibility”, but a way of simultaneously accessing and growing some of the world’s biggest untapped markets, while supporting social development.
Business – working in partnership with governments and civil society – can generate innovative, collaborative business models that specifically include the excluded.
If global business leaders and their companies direct just a fraction of their intellectual and financial resources to this challenge, it would be a mighty contribution to help us move on from a decade of indignation to one of inclusion and widespread prosperity.