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The Business Case for International Development September 2011 - Tara Schmidt - Mark Tuckwood Presented at  Business - Sharing Value?  20 th  September 2011, Edinburgh A NIDOS event  www.nidos.org.uk
© Wood Mackenzie  The business–charity paradigm and perceptions…  Business ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Charity ,[object Object],[object Object],[object Object],[object Object],[object Object]
…  versus the broader perspective © Wood Mackenzie  Longer-term view Economic, environment, and social  Business Charity Empowerment of people Capacity building
Challenging the business–charity paradigm…  to create societal value © Wood Mackenzie  Short-termism “ PROFIT PROFIT PROFIT” “ All in it for the money” Greed Personal gain Lack morals Inefficient Do-gooders “ Don’t live in the real world” “ Hand-outs for lazy people” Is the money going where it should be? Products and services Skills development Operational efficiencies Wealth creation Longevity Stakeholder value Governance Societal value Economic development Motivation & empowerment Innovation Infrastructure development Capacity building SUSTAINABILITY Awareness building  Supply of basic goods and services  Supporting communities Campaigns  Training Opportunities for self-help Business Charity
We are now beginning to see convergence in the global market ,[object Object],© Wood Mackenzie  …  to build strong effective partnerships that can achieve more through working together Societal Value Business   Charity Government The People Regulatory framework, incentives, policies Sustainable income ,  operational efficiencies  Community and individual needs Consumer demand, constituents, supporters
The Business Case for International Development  © Wood Mackenzie  1 Why should a medium sized Scottish business build local capacity abroad? 2   What are the potential benefits to business and to the communities in which they operate? 3  How  could business partner with charities and governments to create value?
Why should a medium sized Scottish business build local capacity abroad? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],© Wood Mackenzie  * Source:  Goldman Sachs Sustainability Index  http://www2.goldmansachs.com/ideas/environment-and-energy/goldman-sachs/gs-sustain/index.html **Source:  Hitachi Foundation “The 2009 State of Corporate Citizenship in the US” survey,  www.hitachifoundation.org
The business opportunity is significant for building local capacity abroad… ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],© Wood Mackenzie  *Source:  John Elkington in his 1998 book Cannibals with Forks: the Triple Bottom Line of 21st Century Business **Source:  Sustainability Challenges and Solutions at the Bottom of the Pyramid , The Shell Foundation, Tara Schmidt & Christine Keating, 2008 ***Source: Survey results from interviews conducted by the authors with managers in 22 multinational business units Challenge versus Reward Profitable 50% Not for profit 5% Unknown 10% Not met targets  discontinued 10% Not met targets  continued 10% Commercially  sustainable 15%   Financial performance*** Motivational drivers*** - 10 20 30 40 50 60 70 80 90 Strategic Financial Philanthropic Responses (%)
Opportunities in Energy Sector © Wood Mackenzie  The provision of sustainable power in developing communities is  THE  empowering enabler Over 1.6 bn people have no access to even rudimentary power source* Lack of access to reliable energy supply affects the lives of around 2 bn people* “ The source of material civilisation is developed power.  If one has this developed power at hand, then a use for it will easily be found… The way to liberty, the way to equality of opportunity, the way from empty phrases to actualities, lies through power.”  Henry Ford (1926) Power is one of the three fundamental inputs that determine the productivity of labour, the other two being materials and information. (*Huber and Mills, 2005) What are the possibilities?
…  especially for more entrepreneurial businesses © Wood Mackenzie  ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Interests of the  right  business can be aligned with the charity sector and government to deliver true sustainable development ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],© Wood Mackenzie
The Business Case for International Development  © Wood Mackenzie  1 Why should a medium sized Scottish business build local capacity abroad? 2   What are the potential benefits to business and to the communities in which they operate? 3   How could business partner with charities and governments to create value?
What are the potential benefits to business…  and to the communities in which they operate? ,[object Object],[object Object],[object Object],[object Object],[object Object],© Wood Mackenzie  Company reputation and business development ,[object Object],[object Object],Employee excellence and skills development ,[object Object],[object Object],Company cohesion locally and globally ,[object Object],[object Object],Robust management of risks (and costs) ,[object Object],[object Object]
The Business Case for International Development  © Wood Mackenzie  1 Why should a medium sized Scottish business build local capacity abroad? 2   What are the potential benefits to business and to the communities in which they operate? 3  How  could business partner with charities and governments to create value?
How could business partner with charities and gov’ts to create value? ,[object Object],[object Object],[object Object],[object Object],© Wood Mackenzie  ,[object Object],[object Object],[object Object],[object Object],*Source:  Sustainability Challenges and Solutions at the Bottom of the Pyramid , The Shell Foundation, Tara Schmidt & Christine Keating, 2008 **Source: Survey results from interviews conducted by the authors with managers in 22 multinational business units Business model Balancing innovation  with mainstream business Products/services Leveraging core capabilities Value chain Strengthening through partnership Industry Market Challenges to the Business Model** 0 10 20 30 40 50 60 Stakeholders Funding Relationships Coordination Corruption Safety Distribution Responses (%)
What’s the link? © Wood Mackenzie  “ When you change the way you see things, the things you see change” Mahatma Ghandi
Contacts © Wood Mackenzie  ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Presented at  Business - Sharing Value?  20 th  September 2011, Edinburgh A NIDOS event  www.nidos.org.uk
© Wood Mackenzie  Global Offices Australia Brazil Canada China India Global Contact Details Europe +44 (0)131 243 4400 Americas +1 713 470 1600 Asia Pacific +65 6518 0800 Email [email_address] Website www.woodmac.com Japan Malaysia Russia Singapore South Korea United Arab Emirates United Kingdom United States Wood Mackenzie is the most comprehensive source of knowledge about the world’s energy and metals industries.  We analyse and advise on every stage along the value chain - from discovery to delivery, and beyond - to provide  clients with the commercial insight that makes them stronger.  For more information visit: www.woodmac.com

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Business - Sharing Value? The Business Case for International Development

  • 1. The Business Case for International Development September 2011 - Tara Schmidt - Mark Tuckwood Presented at Business - Sharing Value? 20 th September 2011, Edinburgh A NIDOS event www.nidos.org.uk
  • 2.
  • 3. … versus the broader perspective © Wood Mackenzie Longer-term view Economic, environment, and social Business Charity Empowerment of people Capacity building
  • 4. Challenging the business–charity paradigm… to create societal value © Wood Mackenzie Short-termism “ PROFIT PROFIT PROFIT” “ All in it for the money” Greed Personal gain Lack morals Inefficient Do-gooders “ Don’t live in the real world” “ Hand-outs for lazy people” Is the money going where it should be? Products and services Skills development Operational efficiencies Wealth creation Longevity Stakeholder value Governance Societal value Economic development Motivation & empowerment Innovation Infrastructure development Capacity building SUSTAINABILITY Awareness building Supply of basic goods and services Supporting communities Campaigns Training Opportunities for self-help Business Charity
  • 5.
  • 6. The Business Case for International Development © Wood Mackenzie 1 Why should a medium sized Scottish business build local capacity abroad? 2 What are the potential benefits to business and to the communities in which they operate? 3 How could business partner with charities and governments to create value?
  • 7.
  • 8.
  • 9. Opportunities in Energy Sector © Wood Mackenzie The provision of sustainable power in developing communities is THE empowering enabler Over 1.6 bn people have no access to even rudimentary power source* Lack of access to reliable energy supply affects the lives of around 2 bn people* “ The source of material civilisation is developed power. If one has this developed power at hand, then a use for it will easily be found… The way to liberty, the way to equality of opportunity, the way from empty phrases to actualities, lies through power.” Henry Ford (1926) Power is one of the three fundamental inputs that determine the productivity of labour, the other two being materials and information. (*Huber and Mills, 2005) What are the possibilities?
  • 10.
  • 11.
  • 12. The Business Case for International Development © Wood Mackenzie 1 Why should a medium sized Scottish business build local capacity abroad? 2 What are the potential benefits to business and to the communities in which they operate? 3 How could business partner with charities and governments to create value?
  • 13.
  • 14. The Business Case for International Development © Wood Mackenzie 1 Why should a medium sized Scottish business build local capacity abroad? 2 What are the potential benefits to business and to the communities in which they operate? 3 How could business partner with charities and governments to create value?
  • 15.
  • 16. What’s the link? © Wood Mackenzie “ When you change the way you see things, the things you see change” Mahatma Ghandi
  • 17.
  • 18. © Wood Mackenzie Global Offices Australia Brazil Canada China India Global Contact Details Europe +44 (0)131 243 4400 Americas +1 713 470 1600 Asia Pacific +65 6518 0800 Email [email_address] Website www.woodmac.com Japan Malaysia Russia Singapore South Korea United Arab Emirates United Kingdom United States Wood Mackenzie is the most comprehensive source of knowledge about the world’s energy and metals industries. We analyse and advise on every stage along the value chain - from discovery to delivery, and beyond - to provide clients with the commercial insight that makes them stronger. For more information visit: www.woodmac.com

Notas del editor

  1. To finished I thought I’d share this with you. Does anyone know the link? The distance between the wheels of a Roman chariot set the standard for carts in Europe, which in turn was used as the standard railway gauge. The design of the solid rocket boosters on the space shuttle was limited by the ability to transport them by train to the launch site, which meant passing then through railway tunnels. The width of which were determined by the track gauge. The limitations of the space shuttle is therefore a function of the width of two Roman horses side by side pulling a chariot. Just because something is the way its always been, doesn’t necessarily means it’s right - even if it is difficult to change. And in the words of Mahatma Ghandi, “When you change the way you see things, the things you see change”. Is this an opportunity to change the way we see deepwater?