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Thursday, February 01, 2007

Convergence of the Corporate Sector and Civil Society?

By Al Hammond

CKPrahaladPhoto.jpgC.K. Prahalad has done it again. He?s come up with an idea as radical as his and Stuart Hart's suggestion 5 years ago that there was significant value to be found in business engagement at the base of the pyramid. [Full disclosure: C.K. is a friend, a partner, and a WRI Board member.]

With apologies to the musical Oklahoma, what he and co-author Jeb Brugmann suggest is that the farmer and the cowman should be friends?indeed, even business partners.? That farmer (development NGOs and grassroots community groups) and the rancher (multinational companies) should be friends and partners goes against our preconceived notion of both groups.? Moreover, C.K. suggests that in such partnerships and co-created value chains we find the elements of a new social compact that will benefit both the bottom line and the BOP.If C.K. is correct, this is a transformative vision. His article suggests how to harness market forces and the power of civil society to bring tangible benefits and full citizenship in the global economy to 4 billion people.? He points to lots of examples that show beneficial co-existence (stage 1), cooperation (stage 2) as corporate CSR and NGO enterprise development efforts overlap, and a few examples of full engagement (stage 3), where companies and NGOs create businesses together. And he argues that full engagement is the future.

Like the BOP idea itself, this will initially seem counter to the conventional wisdom and wrong for all sorts of reasons. Disagree with it if you like?but don?t ignore it.

What would this vision mean? If it led to widespread business partnerships between civil society and business, would that represent the co-opting of civil society?or a new, smarter development strategy?? Would it mean a more sustainable NGO movement, not subject to the whims and fashions of philanthropy?? Would we see businesses seconding up-and-coming execs to NGOs to gain experience? Would rural communities, and the NGOs that serve them, gain new and powerful corporate advocates for local empowerment via policy change? Would the co-created businesses provide an opportunity for the legion of socially-minded young MBAs?? Clearly, it?s too early to call.

Based on our experience at WRI, we can say that the cocreation vision jibes with what we are seeing in our work on small- and medium-sized enterprises in the field and in our surveillance of the broader BOP market via NextBillion.net. It also characterizes what, increasingly, we are doing ourselves and with our partners in attempting to catalyze and expand BOP markets?more details of which will appear here in coming months. ?

In the mean time, kudos to Prahalad and Brugmann for doing it again.? If you don?t subscribe to the Harvard Business Review, this one is worth the paid download, or a trip to the local library to use the copy machine.? For a bit of history, consider reading C.K. Prahalad and Stuart Hart?s seminal article in strategy+business, or an article that C.K. and I wrote a few months later for the Harvard Business Review.
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