Profitable Ways to Tackle Poverty and Inequality

Robert S. Kaplan

George Serafeim

Eduardo Tugendhat

<article-ideainbrief class="article-ideainbrief">
 <h4 class="ideainbrief-title">In Brief</h4>
 <div class="ideainbrief-contents">
  <h5>The Problem</h5>
  <p>Although growth has raised the standard of living in the developing world, more than a billion people remain in extreme poverty and outside the formal economy. Traditional corporate social responsibility programs have done little to alleviate the situation and rarely produce transformational change.</p>
  <h5>Why It Happens</h5>
  <p>Companies’ projects are not ambitious enough. Instead of trying to fix local problems, corporations and other actors need to reimagine the regional ecosystems in which they participate.</p>
  <h5>How to Fix It</h5>
  <p>Ecosystem reinvention requires searching for systemic, multisector opportunities and mobilizing complementary partners. Corporate financing can be supplemented with start-up capital from private and public organizations with a mission to alleviate poverty.</p>
 </div>
</article-ideainbrief><p>Global corporations and market-driven capitalism have generated tremendous growth since World War II, considerably reducing overall rates of poverty. That growth, however, has not benefited everyone. In developed economies, a small fraction of the population has captured the most recent gains, while many people in working-class rural and especially urban communities have experienced socioeconomic decline.</p>

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<p>More than a billion people in the developing world remain in extreme poverty and outside the formal economy. Traditional CSR programs have done little to alleviate the situation and rarely produce transformative change.</p>
<p>Instead of trying to fix local problems, the authors argue, corporations need to reimagine the regional ecosystems in which they participate. They should search for systemic, multisector opportunities; mobilize complementary partners; and obtain seed and scale-up financing from organizations with a mission to alleviate poverty. They should also align the various stakeholders around the new strategy, using proven tools such as a co-created strategy map.</p>
<p>These principles are informed by the authors&#8217; experience with several successful inclusive-growth projects. An initiative in Uganda is bringing small maize farmers into the mainstream regional economy, while a training program in El Salvador is giving unemployed youths the skills to work in the country&#8217;s growing service sector.</p>

Inclusive Growth: Profitable Strategies for Tackling Poverty and Inequality

More than a billion people in the developing world remain in extreme poverty and outside the formal economy. Traditional CSR programs have done little to alleviate the situation and rarely produce transformative change. Instead of trying to fix local problems, the authors argue, corporations need to reimagine the regional ecosystems in which they participate. They should search for systemic, multisector opportunities; mobilize complementary partners; and obtain seed and scale-up financing from organizations with a mission to alleviate poverty. They should also align the various stakeholders around the new strategy, using proven tools such as a co-created strategy map. These principles are informed by the authors’ experience with several successful inclusive-growth projects. An initiative in Uganda is bringing small maize farmers into the mainstream regional economy, while a training program in El Salvador is giving unemployed youths the skills to work in the country’s growing service sector.

Inclusive Growth: Profitable Strategies for Tackling Poverty and Inequality

Summary.

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