Sharing to create Shared Value

By Andreas Fransius, Peace Is Profitable Contributor

Generating profits that create value and sharing the proceeds across communities increasingly calls for collaborative efforts. Such initiatives serve to break down the barriers between the private sector and civil society, and leaving behind the confrontational approach that has long marred their relations. At the same time, governments also have a role to play in helping markets work effectively. Partnerships of this kind can have particularly powerful effects in post-conflict areas, and successful examples can be found in many parts of Africa.

In a recent article in the Financial Times, Nestlé’s global head of public affairs, Janet Voûte, argues that “For a company like ours to prosper over the long term we have to create value for the communities in which we operate. And we fundamentally believe that we cannot create shared value – not just for shareholders but for society – alone.” Indeed, companies are increasingly combining their own entrepreneurial spirit and efficient management systems with the know-how and grassroots networks of Non-Governmental Organizations (NGOs) to create values for local communities.

Such partnerships are currently providing job opportunities in post-conflict zones, such as Sudan and Uganda. The brewing company SABMiller has established partnerships with NGOs in Uganda to provide high-quality sorghum grains for its beers. Similarly, Hand in Hand International has a long history of cementing partnerships between business and civil society in countries such as India and Afghanistan. This work not only promotes economic development and profitable business activities, but crucially serves to provide the local population with work opportunities that help them to rebuild war-ravaged communities.

At the same, time it is important not to forget the crucial role that governments can and should continue to play in order to make markets work effectively in poor countries. I recently completed a consulting assignment together with the Government of Rwanda, the United Nations Industrial Organization (UNIDO), and the East West Management Institute. By studying the value chain for essential oils, we identified how the government can support this nascent export industry, notably by facilitating access to land and irrigation. Such initiatives are crucial for new sectors of the economy to emerge and to facilitate both development and national reconciliation.

Creating positive relationships between companies and communities frequently calls for partnerships with both governments and civil society to identify needs and suitable strategies to overcome them. I will explore these broad themes in greater detail in future posts.

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