The New Role for Government & NGOs
Shared value fosters new relationships between companies, philanthropists, NGOs, and government in addressing social issues and achieving the most impact for the least cost.
Bill & Melinda Gates Foundation
Some organizations, like Root Capital and The Bill & Melinda Gates Foundation, have begun to see the power of working with businesses to create shared value. The Bill & Melinda Gates Foundation, for example, has formed partnerships with leading global corporations to foster agricultural clusters in developing countries. The foundation carefully focuses on commodities where climate and soil conditions give a particular region a true competitive advantage.
The partnerships bring in NGOs like TechnoServe and Root Capital, as well as government officials, to work on competitiveness issues to improve the cluster and upgrade the value chain for all participants. This approach recognizes that helping small farmers increase their yields will not create any lasting benefits unless there are ready buyers for their crops, other enterprises that can process the crops once they are harvested, and a local cluster that includes efficient logistical infrastructure, input availability, and the like. The active engagement of corporations is essential to mobilizing these elements.
new stakeholder roles & relationships
Government and NGOs are facing limited resources and difficulty in scaling social solutions. Businesses have resources and capacity that dwarf those of other stakeholders. However, businesses can’t do it alone.
NGOs need to collaborate with business, bringing new expertise and deep relationships with stakeholders. Governments need to invest in infrastructure, jumpstart markets, and regulate in ways that encourage shared value. For example, the Kenyan government modified banking regulations, which supported the launch and expansion of a revolutionary mobile phone-based money transfer and loan service for low income people.
While the right kind of government regulation can encourage companies to pursue shared value, the wrong kind works against it and even makes tradeoffs between economic and social goals inevitable.
| Traditional Roles | New Roles | |
|---|---|---|
|
Philanthropists
|
Donate to charitable causes | Partner with companies and NGOs to catalyze shared value initiatives |
|
NGOs
|
Receive grants to deliver social services | Partner in implementing new shared value business models |
|
Governments
|
Tax and regulate business; operate social programs | Make platform investments and support shared value strategies; regulate to encourage shared value solutions |
|
Companies
|
Donate to charitable causes or ESG program |
|