Look East instead of West for the future global middle class

By Kristofer Hamel, Chief Operating Officer, and Baldwin Tong, Research Analyst, World Data Lab

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South City Mall in Kolkata, India

Poverty is declining worldwide. Yet, reducing poverty is not equivalent to a rising middle class. A large share of the world’s population earns between USD 2 and USD 11 a day (in 2011 purchasing power parity). Only once people start earning more than USD 11 do they tend to have enough extra spending power to make purchases that go beyond basic needs and therefore enter the global middle class. First-time middle-class purchases include personal transportation (motorcycles), housing (first-time renting or low-end purchases), finance (first savings account or loan) and education (tertiary).

Over the next decade, middle-class spending power will shift from west to east due to the huge growth in the middle-class segments (USD 11-USD 110 per day) of India and China. The middle classes of these two countries will represent over 83% of their respective country’s spending power, meaning that businesses should consider their tastes and preferences. Combined, the world’s two most populous countries are expected to represent over 43.3% of the global middle class by 2030.
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How the public sector can support sustainable business

LJD

By Frederique Mestre, Senior Legal Officer, UNIDROIT


This blog is part of a special series exploring subjects at the core of the Human-Centred Business Model (HCBM). The HCMB seeks to develop an innovative – human-centred – business model
based on a common, holistic and integrated set of economic, social, environmental and ethical rights-based principles. Read more about the HCBM here, and check out an event about it here
The HCBM project originated in 2015 within the World Bank’s Global Forum on Law, Justice and Development and is now based at the OECD’s Development Centre

Development-Finance-shutterstock_524218915How can we ensure economic development while advancing social and environmental objectives? How can we promote sustainable growth – a concept that in today’s real world may sound like an oxymoron? These questions are at the core of governments’ concerns at a time when the planet and humanity are faced with greater and more pressing challenges than ever before.

The Sustainable Development Goals (SDGs) are a milestone amongst the many political and legal instruments forming global standards, policies and procedures adopted by the international community for a more sustainable planet. The SDGs call for action to respond to social and environmental challenges. They outline obligations for governments toward their citizens to promote political and social cohesion and a responsibility for them toward future generations to advance long-term sustainable ecosystems.1

In this context, governments should be responsive to virtuous stakeholder initiatives and support them with enabling policies and appropriate legal and regulatory frameworks. And one such stakeholder that can’t be overlooked is the private sector. Recognised as a major driver of productivity, inclusive economic growth and job creation, the private sector has an essential role to play in contributing to sustainable development.2 Continue reading

What does public procurement have to do with sustainability?

LJD

By 
Professor Barbara De Donno, LUISS Guido Carli, Dr Livia Ventura, LUISS Guido Carli, and Andrea De Maio, EPLO 


This blog is part of a special series exploring subjects at the core of the Human-Centred Business Model (HCBM). The HCMB seeks to develop an innovative – human-centred – business model
based on a common, holistic and integrated set of economic, social, environmental and ethical rights-based principles. Read more about the HCBM here, and check out an event about it here
The HCBM project originated in 2015 within the World Bank’s Global Forum on Law, Justice and Development and is now based at the OECD’s Development Centre

Green-cityThe global financial crisis brought significant economic, social and political changes. It fostered the transition from a shareholders’ capitalism model to a new form of stakeholders’ capitalism, moving from maximising shareholders’ wealth to measuring a company’s social responsibility and environmental impact along with its economic value.

The economic, social and environmental dimensions characterise the “triple bottom line” approach, and are at the core of the inclusive and sustainable economic growth promoted by the Sustainable Development Goals (SDGs) and captured, more generally, by the sustainable development concept of the United Nations 2030 Agenda for Sustainable Development. Implementing this ambitious agenda requires strong co-operation amongst governments, the private sector and the civil society. Indeed, the importance of the business sector as a force for social change is, nowadays, undisputed and the role of enterprises in creating equitable and sustainable economic growth has gained traction in recent years. Consequently, governments worldwide have enacted statutes and adopted policies to foster a sustainable business ecosystem. And part of this ecosystem for greater sustainability is different forms of public “preferred procurement.”

Public procurement is when governments and state-owned enterprises purchase goods, services and works. It is a key factor in the economy and represents a strategic policy lever for states to drive innovation and change down through supply chains. Public procurement represents approximately 12% of GDP on average in OECD countries, almost 30% of total government expenditures, and up to 25-30 % of GDP in developing countries. Thus, it has a high impact on a country’s economic development and can play a critical role in promoting the inclusive and sustainable economic growth endorsed by the SDGs. Currently, public procurement – which is generally guided by the principles of fairness, transparency, openness and non-discrimination – is increasingly inspired by several forms of “preferred procurement”, such as “green procurement”, “social procurement” and “sustainable procurement”. Continue reading

The role of fiscal policies for sustainability

LJD

By Karen B. Brown, Theodore Rinehart Professor of Business Law, George Washington University Law School


This blog is part of a special series exploring subjects at the core of the Human-Centred Business Model (HCBM). The HCMB seeks to develop an innovative – human-centred – business model
based on a common, holistic and integrated set of economic, social, environmental and ethical rights-based principles. Read more about the HCBM here, and check out an event about it here
The HCBM project originated in 2015 within the World Bank’s Global Forum on Law, Justice and Development and is now based at the OECD’s Development Centre.

development-financeSustainable enterprises seek to marry models for good business practices with principles of economic, social and environmental sustainability, many of which are founded on the United Nations Sustainable Development Goals (SDGs). These objectives aim to advance human rights, fair wages, healthier and safer working conditions, gender equality, child welfare, environmental protections, and ethical behavior designed to impede corruption, money laundering and tax evasion. The failure to achieve these objectives imposes considerable costs on governments: diminished productivity and quality of life for their constituents, inefficiency in the operation of markets, and reduced economic growth. An important step towards achieving sustainability goals may come through a government’s use of incentives in the fiscal regime.

Governments traditionally use their tax codes to make “tax expenditures” designed to achieve objectives that advance important policy goals or principles. For example, a government may provide a departure from normal tax rules by reducing the capital gains tax and deferring the time for when gains must be reported if a taxpayer invests in certain qualified opportunity zones that are designated low-income communities. In other words, the government is willing to forego the capital gains tax revenue it would otherwise collect in exchange for investment intended to stimulate economic growth in areas where underserved constituents reside. Other examples abound of using tax expenditures to achieve legitimate governmental ends. Consider the following three ways — substantive tax provisions, tax rate reductions and “bright listing ”– that use incentives to encourage the integration of human-centred goals into business practices: Continue reading

SMEs and SDGs: challenges and opportunities

LJD

By Dr Teodorina Lessidrenska, Consultant, World Bank


This blog is part of a special series exploring subjects at the core of the Human-Centred Business Model (HCBM). The HCMB seeks to develop an innovative – human-centred – business model
based on a common, holistic and integrated set of economic, social, environmental and ethical rights-based principles. Read more about the HCBM here, and check out an event about it here
The HCBM project originated in 2015 within the World Bank’s Global Forum on Law, Justice and Development and is now based at the OECD’s Development Centre.

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Women selling eggs in Kigali, Rwanda

Recent studies show that small and medium enterprises (SMEs) account for an overwhelming majority of private sector business and economic activity in both developed and developing countries. Given the role of micro-, small- and medium-sized enterprises (MSMEs)1 in the global economy, it is essential to understand their importance and potential contribution to the Sustainable Development Goals (SDGs)2. 

According to the World Bank3 and the OECD4, multiple reasons explain why MSME development is critical for achieving the SDGs:

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Le rôle essentiel des villes dans la coopération transfrontalière, levier de l’intégration africaine

Par Yvan Pasteur, Chef de la Division Afrique de l’Ouest à la Direction du développement et de la coopération suisse

Depuis longtemps, l’Afrique de l’Ouest est considérée comme une région en voie d’intégration. Des études déjà anciennes ont désigné l’espace SKBo, réunissant les régions de Sikasso (Mali), Korhogo (Côte d’Ivoire) et Bobo Dioulasso (Burkina Faso), comme un exemple de dynamisme et de coopération transfrontalières [i]. Pour autant, dans la zone SKBo comme dans d’autres, les potentiels n’ont encore débouché concrètement que sur un petit nombre de projets transfrontaliers. Il faut donc s’interroger sur les causes de cette progression trop lente. Continue reading

Creating value and doing good: Governance solutions for sustainable enterprises

LJD

By Professor Andrea Zorzi, University of Florence


This blog is part of a special series exploring subjects at the core of the Human-Centred Business Model (HCBM). The HCMB seeks to develop an innovative – human-centred – business model
based on a common, holistic and integrated set of economic, social, environmental and ethical rights-based principles. Read more about the HCBM here, and check out an event about it here
The HCBM project originated in 2015 within the World Bank’s Global Forum on Law, Justice and Development and is now based at the OECD’s Development Centre.

BWO_038

Charitable institutions are an established concept. So is the concept of cooperatives that advance some social goals through business activities. What is relatively new, however, are two related ideas: one is the idea that the pursuit of social goals is the business itself, and the other that the business pursuit of social goals does not mean giving up profits.

In the past decade, many initiatives burgeoned to give legal form to social business. It was necessary before to adapt the legal structures of for-profit companies to not-only-for-profit goals. Adapted standards, however, may not always be effective or may expose entities to legal risks. Now, many jurisdictions provide legal forms for ‘social enterprises’, which are generally expected to pursue only ‘social, environmental or community objectives’, rather than both for- and not-for-profit goals and to reinvest most of their profits.[1] The most important difference between social enterprises and other non-profits is that social goals are pursued by carrying out the business rather than giving out money, goods and services to the needy.
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