Is CSR the Substitute for Government?

Have citizens given up on government? This question applies to developing countries, like Egypt. But the question may also apply to highly developed countries, like the U.S.! In our nation's capitol, Washington, D.C. policy wonks share thoughts and "lessons learned" on corporate social responsibility (CSR) practices. This week, at least four separate events took place in D.C. I am pleased that issues like climate change and education are pushing the private sector to take some responsibility. At the same time, as a small business, I have some mixed feelings because large corporations are playing a role in sponsoring events that review other challenges -- like promoting small business, both here and abroad in the name of CSR. This is a good thing in the end, right?

CSR projects occupy divisions of large multi-national corporations with operations in developing countries -- like in the Middle East & North Africa region. CSR also serves as a backdrop for large MNCs to co-sponsor fora on entrepreneurship. For example on April 9th and 10th, both J.P. Morgan and Chase Bank sponsored the "Democracy That Delivers for Entrepreneurs" organized by the Center for International Private Enterprise (CIPE). A huge theme at the conference: CSR and its role in supporting local communities and local entrepreneurs. Happier terms like "conscious capitalism" also came up and highlighted the role smaller businesses have in promoting their communities.

• Improve governance through transparency and accountability in the public and private sectors.
• Strengthen freedom of association and private, voluntary business organizations.
• Promote an entrepreneurial culture and understanding of how markets work.
• Expand access to information necessary for sound entrepreneurial and policy decisions.

CSR programs recognize this trend of the consumer as a citizen, and may capitalize on it. CSR initiatives also push for public-private partnerships with much of these same goals. For example, at CIPE's recent forum in Chicago, business and social entrepreneurs from Lebanon, Egypt and Pakistan discussed how their models promote employment and job growth. "Lebanese entrepreneurs don't get support needed from its government," says Rami Shamma. He continues "ideally the Ministries (Telecommunications, Environment, and Tourism) would have the good financial status to meet this partnership... but they do not." Consequently, entrepreneurs in places like Lebanon must look outwards and beyond towards groups, like CIPE, that partner with private sector players. In turn, private sector players feel good about promoting entrepreneurship in emerging markets, like Lebanon. Win-win, right?

CSR Pulls In Partners
CSR pulls in public partners. CIPE, for example, holds entrepreneurship and civic education programs. What is the result? According to CIPE's Executive President, John Sullivan, supporting the Young Entrepreneurs Association in Jordan "led to 1,800 small and medium enterprises" in their push to register limited liability companies.

Because of CSR, companies like Coca Cola are "looking at fundamental issues, property rights, informal economies [unlicensed mom and pop shops and vendors]," according to Aurelio Conches of CEDICE from Venezuela.

Better to Be A Citizen or Consumer?
CSR programs target their consumers as citizens who will later make choices as consumers. On the one hand, CSR is a great public relations campaign for the companies. On the other hand, CSR might actually tackle problems, like health, education, or telecommunications' infrastructure development. Is blurring the line of citizen and consumer good in the long run? On the one hand, there is support for solutions with many partners. On the other hand, there is a sense that citizens are giving up government and getting their voices heard as consumers, when businesses are ready to listen.

Here is a sidenote: "The world's largest company, Wal-Mart, has revenues higher than the GDP of all but 25 of the world's countries," according to David Rothkopf, author of Power, Inc.: The Epic Rivalry Between Big Business and Government--and the Reckoning That Lies Ahead.

Maybe the best CSR program recognizes the person as both citizen and consumer. If that is the case, then does that give MENA entrepreneurs a louder voice in the ongoing Arab transition countries -- or Arab revolutions? Does this blurring line between citizen and consumer give large corporations a louder voice too?