Three ways businesses can boost sustainable development

What does a procurement manager in Managua have to do with
the Sustainable Development Goals (SDGs)? Or a Kenyan
farmer’s mobile-phone plan with the World Economic Forum’s
development discussions?
When it comes to long-term development solutions – well,
everything. Given the increasing involvement of the private
sector in developing countries, ordinary aspects of doing
business have become essential building blocks of development
goals.
The 2015 agreement to create a new set of SDGs offers the
private sector an opportunity to commit to delivering
development impacts in line with those goals, contributing
directly towards the creation of a more prosperous, equitable
world. But achieving this will depend on translating those
commitments into positive, sustainable change on the ground.
This is our mission at TechnoServe , a non-profit specializing in
business solutions to alleviate poverty. With much of our staff
hailing from the private sector, we help small enterprises and
multinational corporations alike translate high-level
“sustainability commitments” into daily reality, to benefit both
businesses and local communities.
Here, we offer some on-the-ground insights into how to do this.
Make local supply chains benefit your business
One of the best ways for businesses to help reduce poverty is to
integrate local producers into their supply chains. But how do
you coordinate deliveries, contracts, payments or extension
services with thousands of small suppliers over hundreds of
miles, with bad roads and patchy internet access?
We work on these questions through a public-private partnership
with Vodafone and USAID, developing mobile applications that
provide technical advice, market information, data management
and payment systems for agribusiness working with local
farmers.
But, unlike many similar projects, farmers don’t pay for the
technology: the agribusiness does. This is because it clearly
benefits the company, saving it the time and money associated
with making multiple trips to the field and managing farmers’
contracts and payments. The mobile company also benefits from
an attractive business-to-business market for its applications.
Incentives like this for players throughout the supply chain help
ensure that local sourcing not only benefits small producers but
businesses as well, which is essential for sustainability.
Don’t re-invent the wheel: retool it
While providing agronomic training to help coffee farmers in
East Africa increase their yields, we realized that sustainably
increasing their incomes meant facing more complicated
challenges. To access the lucrative international coffee markets,
for instance, it required processing beans with a large, expensive
piece of equipment called a wet mill. To buy this, farmers
needed to obtain affordable outside financing. Then they would
face the daunting process of marketing and negotiating prices
for their coffee with international buyers.
However, there was an existing market player who could
address all these challenges: local coffee exporters. We provided
them with technical assistance while helping them partner with
financial institutions that could provide capital for on-lending.
The resulting Coffee Service Providers (CSPs) helped fund new
wet mills, used their marketing expertise to get premium prices
for the farmers’ coffee, and provided risk-management services
to protect farmers against crop losses. In doing so, the CSPs
were also able to expand and improve their own businesses.
This model was an integral part of an initiative that has resulted
in millions of dollars of additional revenues to coffee farmers in
the past five years.
To boost employment, look beyond traditional training
It sounds easy, right? If companies want to hire more local
employees and reduce unemployment, they should just train
them in the necessary skills for the job. Well, yes, but it’s often
more complicated. Companies may offer training programmes in
skills such as accounting, cooking or engineering, but to get to
that point, potential workers need an unspoken array of “soft
skills”, such as a professional demeanour or the ability to work
in a team.
And that’s when companies are hiring; in labour markets where
supply so greatly outpaces demand, entrepreneurship is also
essential in reducing unemployment.
One way to address this is to provide a different type of
workforce training for youth. Supported by the MasterCard
Foundation, TechnoServe launched the Strengthening Rural
Youth Development through Enterprise programme in 2011,
which offers instruction in skills such as professional
effectiveness, entrepreneurship, business planning and personal
finance. The nearly 15,000 youths trained to date have seen an
average 233% increase in their income, with many going on to
participate successfully in more formal employment
programmes, such as Coca-Cola’s 5by20 initiative. We are now
refining and scaling the programme to reach 48,000 more young
people.
Without question, the face of international development is
changing. These days, it can look like a major beverage
company sourcing more of its juice from smallholder farmers, or
a local food processor learning how to fortify its products for
increased sales.
If we are to achieve the ambitious post-2015 development
agenda, then we need to harness this potential. That means
aligning private-sector commitments with global goals such as
the SDGs, and recognizing companies that promote positive
development. And most of all, it means helping businesses and
other stakeholders to get the details right when they turn their
commitments into action.