By Serina Ng, Head of Business Engagement Hub, Department for International Development
Over the past few decades, much progress has been made on a range of development challenges – including poverty reduction, preventable disease and access to education. Yet much remains to be done and the urgency of dealing with intractable, global problems that put these gains at risk has increased.
With so much at stake, the United Nations’ Sustainable Development Goals (SDGs) are a useful way of focusing action but governments alone are not able to deliver what needs to be done. Only by mobilising and working with civil society organisations, communities and the private sector can we hope to meet these ambitious targets to tackle global poverty, inequality and environmental degradation. The investment gap to achieve the Global Goals in the developing world is estimated to be $2.5 trillion. Closing this gap will require action from the public and the private sector.
This is why DFID has placed economic development at the heart of its work across the globe. Its Economic Development Strategy, launched two years ago, commits UK support for the creation of decent jobs, providing economic opportunities and ensuring no one is left behind.
DFID believes that public-private sector partnerships can enable profitable solutions to some of the world’s biggest development challenges. Which is why business is an essential partner in advancing economic development – by creating jobs and better incomes for the poor, providing goods and services in the communities where they operate, and by investing, paying taxes and finding innovative solutions to development challenges. Trade can also stimulate the investment needed to help countries ultimately move on from a dependence on aid.
Over the last decades, many companies, from large multinationals (MNCs) to start-up enterprises, have embraced the development challenge, first through the millennium development goals (MDGs) and more recently the SDGs. They do this by considering new and innovative ways to bring essential products, services and opportunities to some of the poorest, most fragile and marginalised areas of the globe. However, they have often struggled to scale and replicate these ‘inclusive business’ initiatives. In addition to many external, market-based challenges, there are often internal constraints that inhibit uptake and internalisation of inclusive business models.
As part of its response to the efforts by MNCs, DFID created the Business Partnerships Fund (BPF), a £5 million pilot fund that provides support to some of these MNCs to develop projects that generate commercial value whilst also improving the lives of poor people in developing countries. The BPF co-finances projects that help MNCs overcome the barriers that they face when developing inclusive business models. The BPF also provides support to DFID to engage more effectively with multinational companies and build public-private partnerships. Business models that contribute to meeting the SDGs are being tested and expertise in their delivery strengthened.
Cutting across all of this work is another BPF initiative. The Inclusive Business Boost is concerned with learning and sharing information about the processes and structure through which successful inclusive business models are created. It has commissioned research to identify, and suggest ways of addressing, the constraints that prevent MNCs from replicating successful inclusive business models.
Inclusive Business Boost is also about preparing for extending our partnerships with MNCs and SMEs in the future. We want to make it easier for companies to have social impact as a goal alongside financial returns. This will drive inclusive and sustainable growth. For example, in September 2018, DFID helped to launch the World Benchmarking Alliance at the United Nations General Assembly. This will rank companies on their contributions to sustainable development and enable them to strive for greater impact.
My team, the Business Engagement Hub, is looking for ways to continue working more directly in partnership with the private sector. New programming will build on the learning that is being showcased by Inclusive Business Boost as well as our experience from funding the Business Innovation Facility.
In this regard we look forward to engaging with people who are actively working to develop innovative inclusive business models through the workshops, webinars and online discussions that are part of Inclusive Business Boost. It will be very valuable to hear your views about what support the private sector needs from DFID in order to help deliver the SDGs.
Bio: Serina spent 14 years in institutional investment in the private sector working for M&G and Nomura and has recently held roles as a senior adviser in both climate and waste policy in government. She is a Chartered Financial Analyst and MSc in Environmental Economics and thinks businesses are critical to delivering the SDGs in developing countries.