6 April 2020

How to engage businesses in international development

by Ailsa Nicol / in Impact story
  • Incentivising businesses to participate in international development means first and foremost understanding companies’ motivations.

  • Key success factors are: finding where business and development goals align, communicating a purpose that matches with corporate values, showcasing existing business partnerships to build credibility and attract new companies through peer groups, and acting as a neutral facilitator between government and the private sector.

  • Putting a notional monetary value on the in-kind contributions of business, as well as measuring the commercial benefits of development projects to businesses, could further incentivise private sector participation.

When the World Trade Organisation’s (WTO) Trade Facilitation Agreement (TFA) negotiations concluded, WTO members and many businesses recognised that the TFA could only be fully implemented if the public and private sectors worked together. At the same time on the broader development stage, it is widely accepted that realising the UN Sustainable Development Goals depends on tapping into not just the finances but also the human resources, ideas and technologies of business.

The need for businesses to play a hands-on role in tackling global issues seems more important than ever today as the world grapples with the global COVID-19 pandemic. Our first thoughts probably turn to manufacturers of medical supplies donating products or private healthcare companies offering resources to state health services.

Yet, there are other examples of how all types of companies can contribute. For instance, IPSOS, a leading data intelligence firm, is working with the African Centre for Disease Control and the NGO Resolve to Save Lives to gather insights and develop guidance on COVID-19 preventative measures for countries in the African Union. And, three US tech firms are working with the UK’s National Health Service to explore how data could be used to predict where ventilators, hospital beds and medical staff will be most needed.

How can we incentivise businesses to continue to get involved in international development?

The Global Alliance for Trade Facilitation, an initiative working in the aid for trade sphere, has recently taken stock of how it is engaging with the private sector with the aim to improve the ease of trade in developing and least developed countries. The Alliance identified four key insights into what motivates businesses to get involved, and consequently how to position itself to unlock those resources – to the tune of over US$5 million so far.

Insightful engagement

As in any stakeholder engagement campaign, understanding audiences and their motivations is the key to success.

1) Finding where business and development goals align. The Alliance found that companies have fewer resources to lend to areas that are not considered core business functions, so by seeking companies’ input at an operational level rather than solely on high-level policy, they could more easily secure a commitment. In this way, many companies see their role as a core business function that advances their own goals.

For instance, Roanoke Insurance Group has been using its niche expertise in customs bonds to support a project in Vietnam to introduce a modern customs bond system, helping to speed up clearance of goods at the border. Elsewhere, the National Business Association of Colombia gathered experts from its member companies that trade in medical devices to advise technical inspectors working at the border on the different products and the latest innovations, ultimately to help inspectors understand compliance needs more fully.

2) Communicating a purpose that matches with corporate values. Companies seek to engage in initiatives that promote their corporate values and enhance their reputation and brand with both internal and external stakeholders. Incentivising businesses to join efforts by effectively communicating a central goal, for example fostering economic growth and reducing poverty, which is something that businesses want to be associated with and support.

3) Strength and credibility in numbers. Businesses are more likely to engage in initiatives where a number of companies with strong reputations are already active. Many of the Alliance’s more recent global business partners were brought in by their industry peers in the original founding companies, and having a structure of official partners helps to make their involvement visible. Equally, involving a trusted local private sector association involved in projects on the ground often helps to bring in other local businesses and SMEs.

4) A neutral facilitator can wield unparalleled convening power. Particularly in countries where there is a weak relationship between the public and private sectors, a neutral facilitator can be a real catalyst for new public-private partnerships. Many businesses involved in Alliance projects have found it easier to work with governments because of the Alliance role as a mediator that doesn’t belong to either side, but has legitimacy with both.

Could better measurement help build the business case?

Of course, it is easy to measure financial investments, but what about the value of business’ time and expertise?

Putting a notional monetary value on the in-kind contributions of business could be a game-changer for the success of public-private partnerships. Firstly, it could help governments to see the real value of collaborating with the private sector even when there isn’t a financial contribution. And secondly, if we can also measure any financial benefit of the development work to the private sector, we can demonstrate a return on investment to business, further incentivising them to participate.

An Alliance project in Colombia, for instance, demonstrated a US$29 saving to business for every US$1 invested. In the Alliance example, there is an obvious link between facilitating trade and improving the ease of doing business – cutting out delays at the border saves money. But even in more complex areas such as climate change mitigation it could be possible to make this case to business.

The current crisis may have catalysed more businesses into social action, and if so, sustaining that commitment after the crisis has passed is a real opportunity for the development community. These insights could help us do just that.




Read more about the Global Trade Facilitation Alliance’s work in its 2019 Annual Report.

Any views and opinions expressed on Trade for Development News are those of the author(s), and do not necessarily reflect those of EIF.