Tag: business

Covid-19, Employment, Human Development, Latin America and the Caribbean, New social contract, Social Protection

COVID-19 in Latin America: Promoting entrepreneurship and reducing social vulnerabilities

By Jorge Arbache, Private Sector Vice-President, Development Bank of Latin America (CAF)

This blog is part of a series on tackling COVID-19 in developing countries. Visit the OECD dedicated page to access the OECD’s data, analysis and recommendations on the health, economic, financial and societal impacts of COVID-19 worldwide.

Statistics show that economic growth in Latin America is highly volatile, with periods of acceleration and collapse. This dynamic hides perverse implications. The combination of low growth persistence with high-growth volatility is associated with greater risk aversion, which in turn encourages financial speculation and firms to invest in lower risk, but also lower social return projects. Additionally, poverty and other social indicators are also very sensitive to the harmful combination of short growth spells and high volatility.

Continue reading “COVID-19 in Latin America: Promoting entrepreneurship and reducing social vulnerabilities”
Lia Beyeler
Private Sector

The Human-Centred Business Model: An Innovative Ecosystem for Sustainable Development

LJD

By Federico Bonaglia, Deputy Director, OECD Development Centre, and Marco Nicoli, Special Advisor to the Director of the OECD Development Centre

This blog is part of a special series exploring subjects at the core of the Human-Centred Business Model (HCBM). The HCBM 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.

business-sustainability.jpgMany argue that current public policies and business practices are not delivering widespread prosperity for people and the planet (Wolf). During the last ten years, the OECD has gathered a significant body of evidence on the increased inequalities of income and opportunities in many countries. The top 20% of the income distribution earns 9 times more on average than the bottom 20%. The distribution of wealth is even more unequal, with the top 20% keeping half, while the bottom 40% holds only 3%. Corporate profits are at historic highs in many countries: shareholder payouts hit a new record in 2018 as global dividend payments neared the USD 500 billion mark.[1] Simultaneously, median wages and living standards continue to stagnate, productivity growth falters in many countries and whole swathes of citizens are excluded from contributing to, and benefiting from, economic prosperity. Our economic system continues to wreak incredible environmental destruction, the costs of which disproportionately fall on the poor and vulnerable in addition to the planet’s flora and fauna. As United Nations Secretary General Guterres recently stated, “we are losing the race against climate change. Our world is off-track in meeting the Sustainable Development Goals”. Continue reading “The Human-Centred Business Model: An Innovative Ecosystem for Sustainable Development”

Development Matters
Policy, SDGs

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 “What does public procurement have to do with sustainability?”

Development Matters1 Comment
Policy, SDGs, SME

SMEs and SDGs: challenges and opportunities

LJD

By Dr Teodorina Lessidrenska, Consultant, World Bank

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:

Continue reading “SMEs and SDGs: challenges and opportunities”
Development Matters
Policy, Private Sector

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.

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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.
Continue reading “Creating value and doing good: Governance solutions for sustainable enterprises”

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Private Sector

Transforming the Businesses that are Transforming our World

LJD

By Dr Isabella D. Bunn, Research Fellow in Governance and Global Ethics, Regent’s Park College, University of Oxford

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.

 

Mario-KantsukeThe 2030 Agenda for Sustainable Development – under the banner of transforming our world – is a call to action. All countries and all stakeholders are invited to implement this agenda, including the private sector. In fact, the 2030 Agenda acknowledges that ‘’private business activity, investment and innovation are major drivers of productivity, inclusive economic growth and job creation. We call on all businesses to apply their creativity and innovation to solving sustainable development challenges’’ [§67].

But, how is business responding? Around the world, companies of all sizes and sectors are forging new strategies and collaborations to help realise the SDGs. Organisations such as the UN Global Compact and the World Business Council for Sustainable Development offer practical guidance. The UN Development Programme identifies potential projects through its “Business Call to Action.” Multiple institutions are shaping mechanisms for green finance. Further impetus comes from the business case for the SDGs; the Business and Sustainable Development Commission confirms the multi-trillion dollar scale of this opportunity.

The scope of private sector actions, bolstered by diverse partnerships, is impressive. Yet, advancing sustainable development will depend on more than what business might do. It will also depend on what business might become. Thus, the real opportunity is for policy makers, business leaders and other stakeholders to leverage the 2030 Agenda to create lasting change within the private sector itself. Consider the following five themes as potential leverage points for change. Continue reading “Transforming the Businesses that are Transforming our World”

Development Matters1 Comment
Development finance, Private Sector

Getting Private Sector Engagement on the Right Track: Four Essential Ingredients

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By Andrew C. Wilson, Executive Director, and Kim Eric Bettcher, Director, Knowledge Management, Center for International Private Enterprise

To learn more about this timely topic explored during
the Private Finance for Sustainable Development Week,
please visit the PF4SD and GPEDC websites.

kenya-private-sector-andrew-wilson
 The Kenya Private Sector Alliance (KEPSA) engages President of Kenya, H.E. Uhuru Kenyatta, in pursuit of an enabling business environment in Kenya.

Developing countries face complex challenges that require solutions from a strong private sector in partnership with government and society. Many in international development are actively contemplating how to move such partnerships forward. Notably, USAID issued a new Private Sector Engagement Policy to “embrace market-based approaches as a more sustainable way to support communities in achieving development and humanitarian outcomes at scale.” As part of Private Finance for Sustainable Development Week, the Global Partnership for Effective Development Co-operation (GPEDC) is hosting a Specialised Policy Dialogue on Private Sector Engagement through Development Co-operation, which will identify actions to scale up private-sector partnerships in ways that effectively use public resources and attract business investments to create shared value.

Business is now starting to make its mark on the Sustainable Development Goals (SGDs) with innovative initiatives for clean energy, water stewardship and green cities, to name a few. Around 80% of United Nations Global Compact companies are acting on the Global Goals. Business has already been an integral part of past development successes, driving economic growth and creating nine out of ten jobs. Still, the current trajectory is not adequate. The business sector has more to do to fulfill its potential as a responsible investor in emerging markets and an effective partner with the development community.

Continue reading “Getting Private Sector Engagement on the Right Track: Four Essential Ingredients”

Development Matters7 Comments
Africa, Building resilience, Development finance, Trade

Make AfCFTA a reality

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By Abdoul Salam Bello, Advisor to the Executive Director, Group Africa II, World Bank Group; Visiting Fellow, Africa Center, Atlantic Council; and Author of “La régionalisation en Afrique: Essai sur un processus d’intégration et de développement” (L’Harmattan 2017)

Learn more about this timely topic at the upcoming
18th International Economic Forum on Africa

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The March 2018 signing of the framework agreement to form a continental free-trade zone throughout Africa is raising a lot of expectations. In fact, the African Continental Free Trade Area (AfCFTA) would be the largest free trade agreement since the founding of the World Trade Organization. It will include 1 billion people and up to USD 3 trillion of cumulative GDP.

Amongst the AfCFTA’s expectations is a significant boost in intra-trade. At just an 18% share of total trade, Africa has the lowest levels of intra-continental trade in the world. While the continent’s trading blocs have helped to improve these figures, the level of intra-trade in Africa is a far cry from the levels witnessed in Latin America (35%) and Asia (45%). Furthermore, Africa’s intra-continental trade has been substantially outpaced by trade with the rest of the world – often by as much as 90%.

Continue reading “Make AfCFTA a reality”

Private Sector, SDGs

Building Trust: How the development community can engage the private sector

By Janet Longmore, Founder & CEO, Digital Opportunity Trust

Giant puzzle pieces

Fundamental to my organisation’s success in delivering local impact against several of the Sustainable Development Goals (SDGs) has been developing an ecosystem of global and local in-country partners. And critical to this ecosystem is private sector participation: Corporate partners bring a different lens on what we do, a welcome push for innovation, creative approaches and efficiencies, and a business-like approach and priority to sustainability. Through mutual trust, we are now co-designing new initiatives that lead to positive impact for development and businesses.

I am a strong advocate for engaging the private sector in effective development. The private sector is often a strong and effective contributor to local development in the countries, cities and towns in which its offices are located and where its employees live, generously supporting local services. The challenge now is to extend local purpose and responsibility from “down the street” to a global perspective within the SDG framework. I advocate for this on the Business Leaders’ Caucus of the Global Partnership (1).

Continue reading “Building Trust: How the development community can engage the private sector”

Lia Beyeler1 Comment
Africa, SME

Three things we have learned about investing in African small businesses and in fragile countries

By Jean-Michel Severino, CEO of Investisseurs & Partenaires

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Africa’s small and medium businesses (SMEs) form what is often called the “missing middle” of African economies. The smaller the investment ticket is, the higher the transaction and monitoring costs are, reducing the net profitability for investors. In addition, the poorer and more fragile the country is,  the riskier the investments are. These are well-known facts amongst private equity professionals. Small businesses require small investments but also long gestation periods, as well as sizeable personalised financing and access to specific expertise and knowledge. Fragile countries require in-depth knowledge of the environment in all its dimensions to make wise choices. This is why so few investors are willing and able to finance small African businesses and invest in complex local situations. The choice of supporting these businesses and investing in fragile countries is primarily a choice of impact. It implies several adjustments to ensure the sustainability of the investment fund.

Continue reading “Three things we have learned about investing in African small businesses and in fragile countries”

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