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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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.
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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

The role of philanthropy for the SDGs is not what you expect

By Benjamin Bellegy, Executive Director, Worldwide Initiatives for Grantmaker Support (WINGS); Michael Mapstone, Director of International, Charities Aid Foundation (CAF); and Lorenzo Pavone, Deputy Head of Networks, Partnerships and Gender Unit, OECD Development Centre

philanthropy-SDGsWhat will philanthropy do to get the world closer to the Sustainable Development Goals (SDGs) by 2030?

When doctors see symptoms that are associated with common ailments, they are told to think that a typical disease, not an exotic one, is the cause. If a child arrives to a clinic with a fever, doctors first look for a common infection that could explain the symptoms, not Kawasaki. The general thinking is that the most likely explanation is often the correct one. When you hear hooves, for example, think that a regular horse is nearby, not a zebra. What does this have to do with philanthropy and development?

To many, philanthropy is a welcome source of funding for development programmes across the world. The size of philanthropic funds heading to developing countries is anything but trivial and has increased markedly over time: Recent OECD estimates show that philanthropy for development between 2013 and 2015 was around USD 8 billion a year, most of it directed towards health and reproductive health programmes, but also sectors like education and agriculture. The Foundation Center finds similar results for US foundations, estimating international giving at an average of USD 7.5 billion for the same period. Moreover, measures of generosity are increasing on a global scale, particularly in Africa according to the World Giving Index; with the expansion of the global middle class, the possibility for domestic philanthropy to play an even larger role in development is becoming even more salient. These sizable private resources are tackling social issues that other private international flows, like private investment, often can’t reach or aren’t interested in doing so. Because of all this, many are beginning to see philanthropy as a key financing source that could help close the SDG funding gap, estimated at USD 2.5 trillion up until 2030. Continue reading

How can developing countries learn to tax?

By Antonio Savoia, Global Development Institute, University of Manchester; Roberto Ricciuti, University of Verona and CESifo; and Kunal Sen, UNU-WIDER and Global Development Institute, University of Manchester

Development-Finance-shutterstock_524218915The capability to raise revenues from taxes – often called fiscal capacity – is a crucial aspect for the functioning of every state, particularly in developing countries. Two reasons account for this. First, greater fiscal capacity is fundamentally important for state formation, as it is usually associated with the creation of a civilian bureaucracy that can itself provide an enabling environment for the consolidation of statehood. Second, greater fiscal capacity implies greater access to resources needed to provide public goods. Developing countries are only able to raise a small share of taxes over GDP compared to advanced economies. They need higher revenues to invest in a number of economic and social areas that are crucial for their growth, such as healthcare, education and infrastructure. This is also relevant to pursue the Sustainable Development Goals (SDGs) by 2030, an ambitious enterprise requiring far greater resources. Indeed, SDG 17 explicitly refers to the mobilisation of government revenues (Target 17.1).

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The Push toward Gender Equality Will Require More Than Money

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By Laura Frigenti, Global Head International Development Assistance Services (IDAS), KPMG


This blog is part of a special series marking the launch of the updated
2019 Social Institutions and Gender Index (SIGI)


sigi-jan-19Achieving gender equality is critical to achieving each and every one of the 17 Sustainable Development Goals (SDGs). Though few disagree that gender equality is a facilitator and a catalyst for meeting these ambitious targets, too few emphasise the non-capital inputs required to achieve them. A push for capital remains front-and-center in the conversation, but several other factors must be pursued with equal zeal. Good data, disrupting norms and greater innovation are chief amongst them. Such efforts contribute not only to SDG 5 to “achieve gender equality and empower women and girls,” but also pave the way further for achieving the greater 2030 Agenda.

Gathering alongside gender-lens investors, impact investors and shareholder activists at the December 2018 Financial Times Investing for Good USA event highlighted the challenges and opportunities for accelerating progress toward greater gender equality. Unfortunately, the need remains to put in place effective systems and processes to collect data and measure impact in this critical area. Less than one-quarter of the key gender indicators have adequate tracking information, and only 13% of countries worldwide dedicate a regular budget to collecting and analysing gender statistics. The scarcity of data is a disservice to existing efforts, defying effective planning for the future. To address this gap in data and reporting, KPMG, for example, is a founding partner in Equal Measures 2030, an initiative dedicated to linking data and evidence with planning and actions toward gender equality.

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Why understanding the relationship between migration and inequality may be the key to Africa’s development

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By Professor Heaven Crawley, Centre for Trust, Peace and Social Relations (CTPSR), Coventry University, UK


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


Africa-MigrationPick up any newspaper or switch on any TV in Europe over the past five years and you might think that the entire population of Africa is on the move – and heading across the Mediterranean. Images of young men travelling in boats in search of protection and a better life for themselves and their families have become a staple part of the media diet, with the so-called ‘migration crisis’ dominating political debates within the European Union and beyond. The use of development assistance to leverage co-operation and compliance from African countries in limiting migration flows has, in turn, become an increasingly important focus of policy efforts.

But these representations and the policies with which they have come to be associated reflect long-standing biases in how we think about migration in the African context.

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