As they prepared for their trips to the World Economic Forum (WEF) Annual Meeting in Davos, the leaders of four global corporations -- Ecolab, Ericsson, HP, and Western Union -- addressed my questions about opportunities for businesses, and their companies in particular, to solve global problems.
With the world's population growing from 7 billion to 9 billion in the next few decades; massive migration to cities, particularly in developing countries; resource consumption equivalent to 1.5 Earths annually; warming of the climate system; and poverty and unemployment already threatening global peace and prosperity, strategic interventions are required. In my new book, A Better World, Inc.: How Companies Profit by Solving Global Problems...Where Governments Cannot, (Palgrave Macmillan, 2014), I contend that multinational corporations have the resources, international scope, and profit incentives to lead the way in solving these pressing problems.
The theme at Davos, from January 22-25 is "The Reshaping of the World: Consequences for Society, Politics and Business." The agenda is "building sustained economic growth, mitigating global risks, promoting health for all, improving social welfare and fostering environmental sustainability." The experiences of four companies that I describe in this post provide examples of how some businesses are actually operationalizing solutions to the problems under discussion at Davos. While more companies need to join in, these examples provide insight into how businesses can leverage their resources and partnerships to advance the global condition while also benefiting their enterprises.
Western Union is an example of a corporation that has the scope and resources far beyond any NGO or government to advance economies in developing countries. Western Union has a global retail network of 515,000 locations in 200 countries and territories provides myriad options for individuals, businesses, and NGOs to send and receive money in more than 100 currencies. This is powerful for SMEs [small and medium enterprises] that account for more than 90 percent of businesses and more than 50 percent of employment worldwide, according to the World Bank. "They are key engines of job creation and economic growth in developing countries," explained Hikmet Ersek, President and CEO and CEO of Western Union. "Yet access to financial services for SMEs remains severely constrained in many emerging markets. The gap is estimated to be between $900 billion and $1.1 trillion. Western Union helps to address this challenge by enabling the flow of money across borders so SMEs can quickly get the funds they need to fuel their businesses."
Western Union also helps people to improve their lives is by providing access to capital sent by friends and family members. "We serve customers in more than 40 countries where remittances make up 10 percent or more of the GDP," said Ersek. "Remittances to many of these countries are nearly 3 times as large as aid and foreign investment combined." These funds are used by migrants moving around the world in search of new opportunities. "30 percent of the people who use Western Union to send international money transfers have sent money to pay for education--education to advance themselves and the next generation," said Ersek. The remaining funds usually pay for rent, food, and medicine.
Ersek believes that helping people and strengthening economies is good for Western Union. "By providing people with better ways to move money, we grow our business and also drive economic growth."
Corporations bring new technologies to bear in solving global problems. En route to Davos, HP Board Director Ann Livermore explained to me that "we are helping to improve the overall health and well-being of people by using technology to connect people to healthcare professionals, even in the most remote areas of the world, and by using big data analytics to identify outbreaks and trends so they can be addressed faster than ever before."
Hans Vestberg, President and CEO of Ericsson agrees that innovations in technology are fundamental in addressing global challenges. "We are building a Networked Society to help end global poverty and create sustainable urban centers where the majority of the world's population will live in the coming decades. We use our core technology -- mobility, broadband, and cloud services--along with the expertise of our 110,000 employees and in partnership with mobile operators in 180 countries around the globe. We build mobile networks, which aside from enabling communication for people everywhere, provide access to health services and educational resources in places where they were never before available. We actively engage with stakeholders and policymakers nationally and globally to inform public policy, and to drive initiatives that will accelerate the potential of broadband to transform cities, reduce carbon, increase efficiency, spur innovation and enhance quality of life." This is good for business and good for the world.
Ecolab's 25,000 employees provide solutions and expertise to help their customers--from dairies, to restaurants, to hospitals, to oil refiners, to paper mills -- at more than 1 million locations, in 170 countries worldwide, to tackle their water and energy challenges. "Progressive companies around the world are setting ambitious goals for water reduction, and we are helping them to achieve these goals," explained Doug Baker, Ecolab's Chairman and CEO. "Ecolab solutions designed to reduce, reuse, and recycle water touched more than 7 trillion liters of water in 2012."
While Ecolab helps to preserve the world's vital natural resources, the company has a business interest in solving water and energy problems. Baker notes that "helping our customers reach their business goals while solving their economic and environmental challenges enables sustainable growth for our customers and our business."
Partnerships with NGOs and other companies are vital for success
All four business leaders talked about partnerships and collaboration as key success factors. "We cultivate relationships and partner with governments, NGOs, our customers and others, to help us address big challenges such as healthcare, energy, education, and economic growth," said Livermore of HP. "The challenge of water stewardship must be addressed at the local basin level by all stakeholders who impact and rely on that water source. Businesses alone cannot transform the way we approach water management," said Baker of Ecolab. "We need to reframe water management as an opportunity for cooperative problem solving and action."
Vestberg agrees. "For a company, to tackle global issues requires engagement with a wide range of stakeholders, including customers, employees, suppliers, industry partners, governments and consumers. For Ericsson, we want to not only engage but be the trusted partner to our stakeholders, and therefore strive to uphold high ethical standards throughout our business operations."