The last decade has experienced the emergence and takeoff of an innovative approach to international development: public-private partnerships (PPPs). This involvement of the private sector signals an alignment of interests between the development community and this previously excluded sector to leverage resources and generate shared value. While some people outside of the development community may be initially perplexed by the private sector’s role in international development, corporations actually have relevant incentives to engage with development partners.
First of all, companies seek to expand their customer base and increase revenue. To incentivize the private sector, international development groups like Resonance can approach corporations with the tools and on-the-ground knowledge and experience to help them expand their operations into emerging markets. This in turn promotes development in local communities, because in order to effectively tap into an emerging market, a company must provide context-appropriate products, services, infrastructure, and/or workforce development. Therefore, whichever community the company decides to expand into will gain those products/services/infrastructure/workforce development. For example, Resonance helped Jubilee Insurance develop an affordable crop insurance product that allowed them to reach the millions of smallholder farmers in Kenya. In this win-win scenario, Jubilee Insurance successfully expanded its market reach, and the farmers gained more financial security, leaving them less vulnerable to the devastating impacts of harvest variability.
A second incentive for the private sector to engage in international development involves corporate social responsibility (CSR). In a consumer culture increasingly concerned with environmental sustainability, social impact, and countering human rights violations, CSR has become a key aspect of today’s corporations. Some companies only have internal CSR initiatives (e.g. supply chain sustainability, environmental sustainability, diversity in the workplace, and internal workforce development), while others additionally promote employee volunteerism. The CSR “All-Stars,” those with large external CSR initiatives directly focused on creating social impact, have an independent branch specifically devoted to philanthropic initiatives. Such a commitment to philanthropy shines a favorable light on the company – especially when comparing it to companies that only have a basic CSR program – as it shows its consumers that it is invested in giving back to the local or global community. Therefore, engaging in international development projects directly benefits private sector actors by improving their corporate image.
A perfect example of this incentive in action is Resonance’s work with Gammon Gold, an international gold mining corporation that was facing increasing pressure from local and government stakeholders in Mexico to demonstrate its commitment to sustainable mining practices. From 2008 to 2011, Resonance developed a comprehensive strategy to integrate CSR initiatives across Gammon’s operations. Through this project, Gammon created a Healthy Communities public awareness program that conveyed a variety of community health messages and launched an innovative workforce-development program designed to increase the number of women in the mining profession. As a result of this proactive engagement, not only did the local communities benefit, but Gammon significantly improved its image as a more sustainable and responsible mining corporation.
While the concept of public-private partnerships is no longer novel in the development community, the role of the private sector in international development still perplexes some people outside of this community. Corporations are recognizing how partnering to solve societal, environmental, and economic issues creates shared value – it benefits both the affected communities and the companies themselves. This shifting mindset (and its resulting implications) provides the business case for the private sector’s role in international development.
by Lindsay Salem, Associate and Jeff Halvorson, Sr. Project Manager