The more extreme defenders of businesshave one belief in common with the anti-globalisation protesters: that the relation-ship between business and society is azero-sum game where one can gain onlyat the expense of the other. In thisarticle, the author argues the oppositecase. Recognising the validity of someof the protesters’ concerns, he summarisesresearch and his own experience at theG8 Summit and elsewhere on how theforces which drive business globalisationcan also help social progress.

“Global business as a force for good”. To many people– and not only the protesters at Genoa – this soundslike King Herod writing a manual on childcare.However, although the advance of global business isinexorable, adverse consequences are not. Globalbusiness has immense potential to tackle the problemsof global society and simultaneously serve its owninterests. The question before us is whether, and how,that potential will be achieved.

We must start by acknowledging the fervour of thecurrent backlash against global capitalism. We cannotdismiss the protestors as a naïve, misguided,unrepresentative, or even violent, minority – althoughsome fit that description. For each protestor on thestreet, there are thousands more who privately worryabout the power and influence of global business.

Can Global Businessbe a Force for Good?Vernon Ellis

A common theme for many critics, in all parts of thepolitical spectrum, is that global capitalism has beenblind to its casualties and deaf to social concerns. Theyaccuse it of ignoring the growing gap between theworld’s rich and poor, and the destruction of localsystems which provided a safety net againstdestitution. And the critics are right when they pointout that it has not benefited everyone equally. Thereare excluded underclasses even in the most developedcountries. While the poorest countries remain inrelative poverty, the richest countries have racedahead. In 1960 average income in the richest 20countries was 18 times that in the poorest. By 1999,this gap had more than doubled to a shocking 37times difference.

Global business also faces more specific criticisms.These reflect the highly disparate concerns of theinterest groups who make up the anti-capitalistcoalition: the third world, the environment, labourrights and standards, the welfare of local communities,democratic control and local accountability, and aneclectic range of cultural and spiritual issues.

Not a Zero-sum GameThe response of global business to criticisms hasvaried. Although many businesses continue to searchfor new initiatives to demonstrate their socialawareness, others have reacted to the protestors witha vigorous defence of traditional business values. Thisattitude has perhaps been fortified by the change ofpolitical administration in the United States. MiltonFriedman long ago provided their gospel text: “Thereis only one social responsibility of business – to use itsresources to engage in activities to increase its profits

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so long as it stays within the rules of the game.” (Ofcourse, this does beg the question as to how the rulesof the game are shaped by society and government –and business). Recently, in a much-debated article inthe Financial Times, Martin Wolf highlighted businessconcerns that the trend towards corporate citizenshipis deflecting business from its true goal of enterprise

and wealth creation,and forcing it to bearunnecessary costs inthe process. He saidthat “the role of well-run companies is tomake profits, not save

the planet”. However, all those analysts who read theFT surely accept that the end of the world would havea depressing effect on company profits.

The “robust” school is right to remind business tofocus on activities which are sustainable, make gooduse of its strengths, and which add value to itsoperations. But the more extreme defenders of businesshave one thing in common with the anti-globalisationprotestors. They both tend to see the relationshipbetween business and society as a zero-sum game: onecan gain only at the expense of the other. This is where

both are wrong. Businesshas always had a long-term commonality ofinterest with wider society.Although often resistantat first, business hasconstantly evolved tomeet society’s goals andfuse them into its own

interests. In this way society’s interests come to formpart of the business case for making particular decisions.

An obvious example is health and safety. In thenineteenth century, companies could and did put theirworkers’ health and safety in danger. However,enlightened employers realised that this not onlydamaged worker morale and productivity, but alsoran counter to society’s changing expectations. Theyjoined a campaign alongside civic organisations.Other employers gradually – if often reluctantly –came to accept their case and, over time, business,society and legislation moved forward in a commondirection. Worker safety became, quite simply, “goodbusiness”. I believe that a similar process will happenwith global business: recognition of social goals will

be seen to be good business; neglect of them will bebad business.

Indeed, this process is already happening over theenvironment. Where many businesses once dismissedenvironmental concerns as cranky and irrelevant, moreand more are realizing that a degraded environmentis bad for business as well as society. Moreover,business is learning the commercial value of clear air,clean seas and streams, fine rural and urbanlandscapes, and the preservation of wildlife, if only tosatisfy the huge and growing travel and leisure market.

Sustainable DevelopmentOf course, different countries have different societalexpectations – for example, over the use of childlabour. Critics say that it is these very differences whichare exploited by multinational businesses: in somecases they may be right. But I am certain that therewill be a levelling up of the standards whichcorporations are expected to meet – and that levellingup will be the result of globalisation. Why? First,because supply chains are becoming more and moreintegrated across the world, and good practice in onepart of the chain will be diffused more rapidly intoothers. Second, because faster communications meanthat corporate activities will face greater and greaterscrutiny throughout the world. Precisely because ofglobalisation it is not enough for corporations tobehave as good corporate citizens just in their homecountry. The recent controversy over the selling ofgeneric anti-AIDS drugs in South Africa shows theimportance of business working with, not against, suchbroader societal expectations and the importance ofunderstanding those expectations in the first place.

The theme of the mutual interests of business andwider society is particularly urgent and relevant fordeveloping countries. This is a key message which Ihave promoted in my role as Chairman of the Boardof the Prince of Wales International Business LeadersForum. Supported by leading multinationalcompanies from Europe, America and Asia, theForum is now active in over 40 countries. A goodexample of the work of the Forum was in Polandand China, where my own company linked with othermembers (such as ABB, BP, Coca Cola andGlaxoSmithKline) to show how business practices andproblem-solving skills could be aligned with widerdevelopment objectives to the mutual benefit ofbusiness and local communities.

“The more extremedefenders of businesshave one thing incommon with the anti-globalisation protestors”

“Precisely because ofglobalisation it is notgood enough forcorporations to behaveas good corporatecitizens just in theirhome country”

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This project generated a strategy game called Chuscofor MBA and executive education students, developedby Accenture in collaboration with London BusinessSchool. The students are not told beforehand that thegame is about corporate citizenship. But by playingthe game, winning students learn how they can getthe most effective solutions to common businessproblems only if they work in harmony with otherstakeholders in society.

This new thinking on business, markets, and societyis desperately needed to address the horrific dimensionsof poverty and exclusion. In absolute terms, there havebeen real and substantial improvements in health andliving standards for poorer people in the world overthe last 30 years – driven by globalisation. But almosthalf the world’s 6 billion people still live on less than$2 a day, and one fifth live on less than $1 a day. Ifpoorer countries continue to be excluded from thebenefits of global economic change, the world willbecome an ever more fragile and unpredictableplace. Within the next 25 years, the world’spopulation will grow by about 2 billion, and mostof this growth will be in developing countries. Willthese new people live in exclusion and subsistence orwill they join and expand the world’s markets as newproducers, new consumers, new savers and newinvestors? That represents both challenge andopportunity for global business.

The solution requires a holistic long-term approach,in which business must be willing to work co-operatively with other parts of society – especiallygovernment and civil society – to bring about change.Too often in the past each sector has stayed in its ownsilo, unwilling or unable to see areas of mutualinterest where much more could be achieved byworking together.

Behind the drama of the protests, the Genoa summitprovided real proof of the benefits that such co-operation can bring. One example of this was whenthe leaders of the G8 governments reviewed the workof the Digital Opportunities Task (DOT) Force ontackling the “digital divide”. The “digital divide” iscommonly portrayed as merely about access toinformation technology. In fact, the real divide is socio-economic, and this is the starting-point for Accenture’swork on the DOTForce. Without access to digitaltechnologies, and the markets and opportunities theycreate, existing inequalities will be exacerbated and

developing countries will be forced deeper and deeperinto the margins of global society, with all thedislocations that can bring – for example, massmigration, political instability, or even regionalconflicts. We cannot take such a risk in a fragile world.Our economic systems have been wound up to sucha high pitch of efficiency that they are even morevulnerable to quite small shocks.

To avert major dislocations to global society, we needto find a way of way of creating a cycle of sustainabledevelopment in the world’s poorest countries. Part ofthis rests on the need for much greater co-operationbetween business, government and civil society. It willalso require a change in the way we view informationand communications technologies.

There need be no trade-off between computers anddevelopment needs. On the contrary, we should belooking at all the ways in which digital technology canactually help in health,in education, and increating economic andsocial opportunities.Used in the right way,it can help enablenetworks of local learning and knowledge, improvedproductivity and efficiency, increased access togovernment services, and the creation of new markets.

Five Fundamentals for SustainableDevelopmentTechnology by itself is obviously not enough: it canhelp bring about sustainable development only if theother fundamentals are also right. Accenture’s researchwith the United Nations Development Programme andthe non-profit Markle Foundation points strongly tofive fundamentals as the pillars of sustainabledevelopment. Global business has a major role inbuilding these pillars, but it cannot do this in isolation.It will need to work co-operatively with otherstakeholders – governments, non-governmentalorganisations, and multilateral development agencies.The five pillars are:

● infrastructure

● policy

● education and training

● local relevance

● entrepreneurship.

“The “digital divide” iscommonly portrayed asmerely about access toinformation technology”

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Let us look at these five with particular reference tothe problem of the digital divide.

InfrastructureThis means more than providing the backbones ofcommunication. Nor is it about wiring everyone toa personal computer – an expensive futility in countrieswhere literacy rates are low and people rely on oralcommunication. In such conditions, direct access toa telephone is more valuable than access to theInternet – more than half the world’s populationhas never even made a telephone call. In manydeveloping countries public or community accesscentres have a key role to play in bringing people intothe digital world, as well as generating opportunitiesfor local entrepreneurs.

PolicyThe policy environment must also be right. Take, forexample, the question of liberalising tele-communications markets, which in many developingcountries are state monopolies. This often raises the

need to balanceseveral competingobjectives, such assecuring incentivesfor investment andthe entry of new

operators, while at the same time encouraginguniversal access and preventing too much erosion ofgovernment revenues.

Education and trainingSimply providing computers without the trainingto use them is a sure-fire formula for disaster. Basicliteracy and numeracy are of course important, asare tertiary education and corporate training. Butit is also crucial to ensure a core of knowledgeworkers: people with the technical capabilities tomaintain ICT infrastructure and adapt it to localrequirements.

Locally relevant contentBuilding elaborate Internet networks or providingcomputers is useless if the only software and contentavailable is that designed for people living thousandsof miles away. We must be sure that the technologywill make a real difference to people’s lives, and thatcan happen only if content and software – and ofcourse language – are relevant to the individual cultureand circumstances of developing countries.

EntrepreneurshipFor me the key element of the five is entrepreneurship.Accenture published a major study on it only a fewweeks ago. It is vital for sustainable development,providing the engine for economic growth andgenerating the revenue to pay for social goals. Ofcourse, it is influenced by many factors – not least,access to finance and credit, property rights andcommercial law, a fair taxation regime, andelimination of corruption.

Within this development framework, global businesscan play a hugely important role. It can channel itsexpertise, know how, and other resources to help localenterprise develop on the ground. It can share itsexpertise in education and training, and assist thedevelopment of locally-relevant content. This is notjust theory. I and my colleagues on the G8 DOTForceoffered real resources and real managementcommitment to turn the opportunities into reality. Iam encouraged by the response of the G8.

There are many digital success stories in the developingworld which have been built on these five pillarsthrough collaborative working between business andother stakeholders. The Grameen story in Bangladesh(see box) shows how economic opportunity can bemarried to social goals. It shows how, in making the

GrameenPhoneThe story of GrameenPhone in Bangladeshillustrates the difference that even simpletechnology can make. Its founder, Iqbal Quadir,had vivid memories as a 12-year-old boy ofwalking for miles in the country to buymedicine, only to find the medicine shop closed.It made him realise how simple access to atelephone could save much unnecessary toil.The Grameen Group now loans money topeople in over a thousand villages to purchasecellular handsets. Phone owners then rent thephones out to village farmers and othercommunity members for a fee and also providemessaging services. For the owners, mainlywomen, the scheme has brought new incomeand savings; for the users, mainly farmers, ithas brought productivity gains through accessto market information, weather reports, andpest and disease alerts.

“In such conditions, directaccess to a telephone ismore valuable than accessto the Internet”

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world a better place, a company also makes it a betterenvironment for its own business. It turns neglectedareas into new markets and new sources of supply.Companies which are partners in locally-generateddevelopment acquire new customers and new localknowledge on how to satisfy their needs. Starvingpeople do not make good customers. Uneducatedpeople do not make good workers. Poor people donot make good investors.

The benefits of such an approach are not felt only indeveloping-country markets. Companies are alsoseeing that it helps them in their developed marketsas well. Increasingly, consumers want to buy fromcompanies who are doing good things, not bad things.Similarly, investors want to put their money intocompanies who are working for a better society.Only recently, we saw the launch of the FTSE4Goodethical index. This year the market for sociallyresponsible investment is expected to reach £300bnin the UK alone.

The advance of global business may be inexorable,but its consequences are not. They are matters ofchoice, and business itself has the power of choice.It can choose to ignore the interests and concernsof others or it can recognise them and therebydiscover new means of creating value and serving itsown interests.

A commitment to working with wider society mustnot just be for the good economic times when profitsare high. It needs to continue even when, in factespecially when, times are tough. The best way toguarantee that is to make sure that good citizenship isinstitutionalised within all aspects of the business. Evenwhere good practices exist now they are oftensegmented. But all parts of a business need to be ableto exchange ways in which good practice can enhanceall of their objectives.

A similar challenge for companies is to overcomethe difficulties in taking a holistic view of countries.Under the competitive pressures of globalisation,many companies have moved away from country-based operations. Key functions such as marketing,purchasing, branding, manufacturing and R&D arenow commonly organised along global lines. Profitresponsibility is often aligned with global product,customer or service group distinctions which can leadto a blinkered over-centralised view of the world.

We need to work within global structures, but in away that recognises the importance of individualcountries and communities. Many businesses arealready trying to meet the challenge of restoring anappropriate balance between global and local. Thishas been shown by the emerging new breed of countrymanagers who do not have profit responsibility butwhose job is precisely to act as a focus for thecompany’s strategy in individual countries.

After GenoaThe rise of the global corporation has undoubtedlybrought many benefits: increased business efficiency;rising prosperity for many; dissemination oftechnology; expanded consumption possibilities;greater knowledge andawareness of differentcultures; and manyothers. But globalbusiness needs aframework in whichthese benefits can be transferred and multipliedacross society, without the unintended i l lconsequences that can arise from globalisation. Thatframework must incorporate recognition of theneeds and interests of individual nations andcommunities and greater co-operation betweenbusiness, government and representative organisationsin society.

Disseminating and sharing the benefits of globalcapitalism – that is the greatest task we face in theworld today. The protests at Genoa and elsewhere canbe a perverse inspiration for all those engaged in thetask. They show the perils of divorcing business fromsociety. If society treats global business as a whippingboy – and if business dismisses society’s concerns –then all the world’s ills will deepen and multiply. Theworld’s fragile systems – on which all businessesultimately depend – will move closer to breakdown.

I am old enough to remember the protests of the 1960s.At that time, the rise of the global corporationprovoked only a few challenges and questions over itsrole or place in society. At that time, what mainlyconcerned protesters was promoting a socialistalternative to market-based capitalism. Now, the focusis no longer on non-capitalist means of drivingeconomic and social progress. Not only have the non-capitalist experiments failed; they are mostly perceivedto have failed. In just a few years, protest has shifted

“The advance of globalbusiness may beinexorable, but itsconsequences are not”

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to global corporations, which have become thesubject of a fierce worldwide debate. Personally, Iwelcome this debate. I believe that global businesshas every motive to recognise and assist theaspirations of global society. To quote the founder ofMatsushita: “businesspeople too should be able toshare in creating a society that is spiritually rich andmaterially affluent”.

Vernon Ellis is International Chairman ofAccenture. This article is derived from the“New Statesman” lecture given in London inJuly 2001. This was based on Accentureresearch on globalisation and work towards areport on the digital divide presented to the G8Summit in Genoa.

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