Good business practices of big firms can help end poverty

Written by Economy Bureau | New Delhi, Jul 30 | Updated: Jul 31 2007, 04:07am hrs
Public procurement and tendering processes should include a clause to ensure that large domestic and foreign corporations support small enterprise development through their commercial value chains or community investment activities, states a joint study done by the United Nations Industrial Development Organisation (UNIDO) and Harvard University (John F. Kennedy School of Government).

The study states that large companies can individually or collectively contribute a lot to poverty reduction by implementing responsible business practices to maximise the development impact of existing business linkages.

It adds that alliances between large and small enterprises, public and private players, domestic and foreign entities, as well as between commercial and social investors are essential to enable people in developing countries to come out of poverty.

These are among the key recommendations and conclusions of the report titled Building Linkages for Competitive and Responsible Entrepreneurship: Innovative partnerships to foster small enterprise, promote economic growth and reduce poverty in developing countries.

Focussing on such alliances, the report identified six different models of collective corporate action and multi-sector partnership to increase the scale and effectiveness of small enterprise development through market-driven and public policy approaches.

These includedirect, commercially-driven business linkages; collective business linkage initiatives that bring together groups of companies in the same industry sector or location; extending the development impact and outreach of existing chambers of commerce and other representative business associations; public-private and blended value financing mechanisms that pursue both market-based and broader social returns; enterprise support services that meet the needs of small enterprises in a demand-driven and market-oriented manner; and multi-stakeholder public policy structures focused on improving the overall enabling environment.