Where does development come from?

In a speech at the United Nations, which Zahid (from Business Action for Africa) blogged about yesterday, new British Prime Minister Gordon Brown called for a renewed, collective drive to achieve the Millennium Development Goals laid out in 2000. He declared, “For too long we have talked in the language of development without defining its starting point in wealth creation – the dignity of individuals empowered to trade and be economically self-sufficient.” Alone here in my office, I said “YESSS!!!” and pumped my fist and highlighted the sentence in agreement. It sounded like Gordon Brown might dig our Economic Opportunity Program.

But what is the role of private sector firms in creating and expanding economic opportunity? The Prime Minister is right that it goes way beyond generosity. Instead, it is the private sector’s aptitude for “wealth and job creation that, if fully mobilized for global purpose, will help meet our goals.” Stated another way, the comparative advantage of business in development is rooted in core, profit-making business activity and the natural multiplier effects it engenders.

It’s time to break down the association between altruism and social value creation. Companies can create social value without altruistic motives, and altruistic motives don’t guarantee that social value will be created. For a long time companies seemed to fear mixing motives, and used one set of tools for shareholder value creation and another, distinct set for social value creation. Today we find leading companies combining these tools to leverage core business interests, assets, and activities for enhanced development impact. And if these companies manage to enhance their own long-term business prospects in the process? All the better.