harnessing private sector ... - world food programme€¦ · a wide range of core business...

World Economic ForumJanuary 2006

Harnessing Private Sector Capabilitiesto Meet Public Needs: The Potential of Partnerships to AdvanceProgress on Hunger, Malaria andBasic Education

COMMITTED TO IMPROVING THE STATE

OF THE WORLD

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World Economic Forum91-93 route de la CapiteCH-1223 Cologny/GenevaSwitzerlandTel.: +41 (0)22 869 1212Fax: +41 (0)22 786 2744E-mail: [email protected]

© 2006 World Economic ForumAll rights reserved.No part of this publication may be reproduced or transmitted in any form or by anymeans, including photocopying and recording, or by any information storage andretrieval system.

REF: 080106

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Contents

Preface 5

Executive Summary 6

Introduction 10

Applying Core Business Competencies to Help Halve Hunger 11

Applying Core Business Competencies to Help Reduce the Incidence of Malaria 22

Applying Core Business Competencies to Help Achieve Universal Primary Education 31

What Works: Effective Partnership Models 41

List of Interviewees 44

References 45

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The World Economic Forum is pleased to issue thisreport, which examines how core industry capabilitiescan be applied to three of the most pressingdevelopment challenges of our time: hunger, malariaand basic education. This project builds on previouswork by the Forum regarding public-privatepartnerships (PPPs), including its 2005 GlobalGovernance Initiative Report, which elaborated fourfundamental modes of business engagement toadvance progress toward the Millennium Goals; the2005 Global Corporate Citizenship Initiative report,Partnering for Success: Business Perspectives onMultistakeholder Partnerships, which distilled lessonsdrawn from PPPs in developing countries; and theFinancing for Development Initiative’s report, Buildingon the Monterrey Consensus: The Growing Role ofPublic-Private Partnerships in Mobilizing Resources forDevelopment. The latter, which was released at theSeptember 2005 UN World Summit in cooperationwith the UN and the Swiss Development CooperationAgency, presented the results of consultations withmore than 200 PPP practitioners on the potential roleof PPPs in delivering development assistance. Thisreport also reflects considerable learnings that theForum has drawn from its role in the Jordan EducationInitiative, a PPP aimed at education advancementlaunched in partnership with the Government ofJordan, and the Global Health Initiative, which advisesand engages in a range of PPPs related to HIV/AIDS,TB and malaria.

A recurrent theme in the Forum’s growing body ofwork on PPPs is that companies are often far moreprepared to apply their business expertise or assets toa problem they see in their operating environmentthan to issue a one-off charitable cash grant. Yetdevelopment institutions have not traditionally viewedthe engagement of core business skills and other in-kind resources as an explicit element of their strategy.As a result, neither they nor other parts of theinternational community have taken the necessary firststep of systematically analysing the possibleintersection of the core capabilities companiespossess and the so-called ‘value chain’ ofdevelopment assistance needs in areas such asinfectious diseases, basic education, water andsanitation, and so on. This report is a first attempt todo so with respect hunger, malaria and basiceducation, drawing upon the communities of expertswithin the Forum’s existing initiatives and participatingcompanies. It is intended to be a practical tool thatcompanies, governments and others can use toidentify new areas of public-private cooperation indevelopment partnerships.

The project was coordinated by Lisa Dreier, AssociateDirector, who helps manage the Forum’s portfolio ofpublic-private initiatives. She drafted the chapter onhunger, using as a starting point the framework for actiondefined by the UN Millennium Project Hunger Task Forcein its 2005 report, Halving Hunger: It Can be Done.Several Task Force members contributed significantly tothis chapter, including Hans Eenhoorn, retired fromUnilever, and Robert B. Horsch of Monsanto Company. Anumber of other colleagues provided valuable andsubstantive inputs including Ludo Oelrich of TNT, David J.Spielman of the International Food Policy ResearchInstitute, Simon Winter and Steven Londner ofTechnoserve, Berangere Magarinos of the Global Alliancefor Improved Nutrition, Bjorn Wille and Ulla Holm of TetraPak, and Kathleen Kurz and Nata Duvvury of theInternational Center for Research on Women.

The chapter on malaria was drafted by a team at theBoston Consulting Group, including Lisa Carpenter, DaveMatheson, Adrian McKemey, Ruchi Warrier and WendyWoods, with input from Lisa Dreier, Francesca Boldriniand David Kim of the Forum’s Global Health Initiative. Wethank the reviewers, Girindre Beeharry of the Bill &Melinda Gates Foundation, Awa Marie Coll-Seck of RollBack Malaria, Phil Davis of Sumitomo Chemical (UK) plc,Chris Hentschel of Medicines for Malaria Venture, PaulHerrling of Novartis, Shiva Murugasampillay of WHO,Steven Phillips of ExxonMobil, and Chris White of theAfrican Medical & Research Foundation. We also thank allthose who provided interviews for this chapter, who arelisted individually in the Annex.

The chapter concerning primary education was drafted byJulie Kennedy of Millennium Promise and Lisa Dreier, withinputs from Andreas Cox and Alex Wong of the Forum’sGlobal Education Initiative. We thank Tom Cassidy of theHarvard University School of Graduate Education; KristinEhrgood of Sapientis; Michelle Selinger of Cisco Systems;Tim Unwin of Royal Holloway, University of London; andJim Wynn of Microsoft for their valuable review and inputson the chapter.

We thank all of these colleagues for collaborating with uson this important analysis. We hope that it provides asense of the larger possibilities for meaningful public-private partnership in the development arena.

Richard SamansManaging DirectorWorld Economic ForumJanuary 2006

Preface

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Executive Summary

A wide range of core business capabilities arehighly relevant to the Millennium DevelopmentGoals, a framework agreed to by the world’sgovernments to make major inroads intoeradicating poverty by 2015. A recent Forumstudy involving more than 200 practitioners ofdevelopment partnerships concluded thatprogress could be accelerated if the internationalcommunity were to integrate private sectorcapabilities into development assistance effortson a more systematic basis.

Many firms have already discovered thatcompelling opportunities exist to apply corecompetencies to public-private partnerships(PPPs) in ways that clearly benefit their business.This report builds on the previous work of theForum’s Global Corporate Citizenship, GlobalGovernance, Financing for Development, JordanEducation and Global Health initiatives to examinein greater depth the private sector competenciesthat are particularly relevant in three developmentareas: hunger, malaria and basic education.

There are four main ways in which businessestypically engage in the process of economicdevelopment :

• Through core business practices, forexample by creating employment, developinginnovative new products and finding efficient,profitable ways to deliver affordable goods andservices.

• Through public-private partnerships –usually a combination of business andphilanthropic activity that has an economicrationale but does not generate a market rateof return.

• Through strategic corporate philanthropy andsocial investment, using cash donations orin-kind contributions of products or expertiseto catalyse and complement businessengagement, or fill gaps in public financing toaddress fundamental human needs.

• Through transparent and responsible businessengagement in public policy dialogue, rulemaking and institution-building – operatingindividually, through industry and tradeassociations, or in partnership with non-business actors.

The greatest leverage for society and thecompany is often found through the application ofthe company’s tangible assets (such as

equipment and distribution networks) or intangibleassets (such as management expertise, brandingand marketing strength) rather than throughissuing a cheque. Indeed, some of the mostsuccessful partnerships have involved the in-kindapplication of such core company competencies,which have often resulted in a larger corporatecommitment than would have otherwise beenpossible.

Applying Core Business Competencies toHelp Halve Hunger

Hunger affects more 850 million people – themajority living in Asia (particularly India and China)and sub-Saharan Africa. Famines form a smallpart of this picture, however the vast majority ofhungry people suffer from chronicmalnourishment, which undermines the health ofboth individuals and national economies. Theimpact is particularly severe on the young,causing 6.5 million child deaths per year; lifelonghealth and cognitive impacts; and significantlosses in national economic productivity.

Eliminating hunger requires an integratedapproach that addresses poverty, builds marketsand infrastructure, boosts agricultural productionand nutrition, focuses on health and enableswomen’s empowerment. Collaborative privatesector efforts to reduce hunger are rare, but havetremendous potential to bring both practicalsolutions and political action to hungrycommunities. Key opportunities for applying corebusiness competencies to the fight againsthunger include:

1. Increasing food production andstrengthening market systems in hungryregions

• Sourcing from small-scale producers.(e.g. food and beverage manufacturers andretailers; agribusiness)

• Developing small and medium enterprises(SMEs) for producing, processing anddistributing food and agriculturalproducts. (e.g. financial, information technology (IT), foodand agriculture, and extractive industrycompanies)

• Expanding farmers’ access to new andexisting products and technologies. (e.g. agricultural input, food and beverage,engineering and energy companies)

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1. Innovation of new technologies andproducts to prevent, diagnose and treatmalaria

• Discover and develop new vaccines anddrug treatments.(e.g. pharmaceutical and biotechnologycompanies)

• Invent less expensive, easier to usetechnologies for diagnosis.(e.g. diagnostics and medical supplycompanies)

• Develop innovative integrated vectormanagement solutions.(e.g. consumer goods, energy and chemicalcompanies)

• Transfer technology and build localcapacity to reduce costs and delivery time(e.g. healthcare companies producing malariacommodities)

2. Operations and project management forsupply chain and logistics

• Share tools and skills with the publicsector to improve efficiency, for examplein the areas of forecasting demand andproject management.(e.g. logistics and consumer goods companies)

• Leverage distribution networks and retailchannels to increase access.(e.g. food and beverage and logisticscompanies)

• Implement malaria control programmesfor the workplace and surroundingcommunities.(e.g. all companies operating in malaria-endemic areas, such as mining and tourism)

3. Advocacy for public support andfacilitation of multistakeholdercooperation

• Build public and political support foradvance purchase agreements andsubsidizing malaria commodities.(e.g. pharmaceutical companies, media andpublic relations companies)

• Provide a forum to convene shareholdersto address policy issues.(e.g. healthcare and energy companies)

• Leverage distribution networks and retailchannels for community education.(e.g. food and beverage, energy and retailcompanies)

• Extending essential services andinfrastructure to hungry areas.(e.g. telecommunications, water, energy,transportation and financial service companies)

• Acting to reduce the spread of HIV/AIDS.(e.g. transport, mining, agricultural, media andpharmaceutical companies)

2. Improving nutrition through fortifiedproducts and consumer education,particularly for mothers and youngchildren

• Fortifying food and beverage products forthe bottom of the pyramid. (e.g. food, beverage, retail and consumergoods companies; biotechnology and seedcompanies)

• Empowering and educating women andgirls.(e.g. retail, food, beverage, agribusiness, IT,financial service and media companies)

3. Strengthening governments’ commitmentand capacity to act against hunger

• Building public and political support forincreased investment in hunger reduction.(e.g. media, public relations, retail andconsumer companies)

• Partnering with public agencies and NGOsto strengthen their capacity.(e.g. professional and financial servicecompanies, law firms and others with technicalskills)

Applying Core Business Competencies toHelp Reduce the Incidence of Malaria

Between 350 and 500 million clinical episodes ofmalaria occur each year, with a death tollexceeding 1 million – primarily among childrenunder five years of age. The disease is endemic inparts of Asia and Latin America, but Africa isworst affected, suffering more than 80 % ofworldwide fatalities. Despite existing preventive,diagnostic, and treatment options, malaria deathshave increased since the 1970s. There are threebroad incentives for the private sector to apply itscompetencies to malaria reduction: to enablemarket opportunities; to address the risks tohuman resources and assets or capital; and toenhance intangible assets such as corporatemorale, reputation and goodwill. Keyopportunities for applying business competenciesinclude:

Executive Summary

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3. Fostering effective educationmanagement

• Promoting performance-oriented, results-driven management and innovation.(e.g. IT, logistics and transport, media andprofessional services companies)

• Developing financing mechanisms andplanning.(e.g. financial, professional services, IT andtelecommunications companies)

4. Engaging in advocacy • Building public support and political

commitment to improve education.(e.g. all companies, particularly those requiringhigh skill levels such as technology firms)

• Creating new models that engage allstakeholders in collaborative PPPs.(e.g. all companies, including both multinationaland national firms)

What Works: Effective Partnership Models

For many companies, public-private partnershipsamong business and governments, NGOs, ordevelopment agencies provide an effectiveavenue for tackling hunger, malaria or educationissues. Such partnerships, when structured andmanaged well, can combine businesscompetencies with the local knowledge, technicalexpertise and public reach of other groups. PPPsare highly diverse and can focus on the designand delivery of pro-poor solutions or strategic in-kind contributions of personnel, expertise,equipment or services.

The involvement of business personnel in apartnership project often produces managementefficiencies, innovation and a performance culturethat can be as valuable as the financial resourcescommitted. However, broader use of the PPPapproach is constrained by financial, informationaland cultural barriers. More outreach, information-sharing, brokering and financing is needed toovercome existing obstacles and scale upeffective partnership models. Significantinvestment in fostering and growing local capacityis essential in order to sustain such initiatives overthe long term.

Applying Core Business Competencies toHelp Achieve Universal Primary Education

More than 100 million school-aged children donot attend school; 60% of them are girls. Thevast majority (96 %) are in the developing world,particularly sub-Saharan Africa and South Asia.Among children who do enrol, many drop outbefore completing primary school. Developing-country education systems face significantchallenges. The cost of reaching the educationMDG is estimated at between US$ 7 to US$ 17billion per year, which is unlikely to be attained bypublic funding alone. An effective educationsystem is critical for economic growth and for thedevelopment of a thriving private sector, therebyincreasing productivity while raising incomes andpurchasing power. Key opportunities for applyingcore business competencies include:

1. Establishing the basic conditions foreffective learning

• Improving school infrastructure.(e.g. construction, engineering, energy,telecommunications and banking companies)

• Developing and supplying appropriatesupplies and equipment.(e.g. information technology (IT),telecommunications, pulp and paper, andtransport companies)

• Providing school meals and healthservices.(e.g. food and beverage, agribusiness,healthcare and pharmaceutical companies)

• Expanding access to affordable, qualityeducation.(e.g. all companies with an interest inphilanthropic support of educationalopportunities)

2. Improving educational content and skillbuilding

• Strengthening curriculum, content andteacher training.(e.g. IT, telecommunications, media, publishing,scientific and technology companies)

• Enabling appropriate 21st century skillbuilding for employability.(e.g. IT, telecommunications, professionalservices, financial and engineering companies)

Executive Summary

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Table 1

Hunger, Malaria and Education Interventions Relevant to Industry Competencies

Industry Hunger-relatedCompetencies

Malaria-relatedCompetencies

Education-relatedCompetencies

Engineering/Construction Develop and market low-cost,efficient water pumps, cookstoves and energy sources

Build mosquito-proofstructures; vector control atbreeding sites

Build school infrastructure;develop technical trainingand curricula

Energy Implement small-scale energygeneration for water pumpingand food processing

Malaria safe reservoirs; publicadvocacy; workplaceprogrammes

Electricity and connectivity forschools

Food, Beverage andAgribusiness

Expand agricultural inputdistribution; produce and marketfortified foods; source from smallfarmers; invest in SMEdevelopment, local foodprocessing and supply chains

Apply marketing expertise,retail and distributionchannels to expand malariacommodity usage; workplacehealth programmes

Fortified home-grown schoolmeals and take-home rationsfor girls; promote bestpractice among growers (e.g.quality, sustainability)

Health Provide health and nutritionextension services; clinical carefor malnourished children

Develop new drugs,diagnostics and vaccines;medical infrastructure andtraining; advocacy

Basic health care andeducation in schools; healthextension services

Information Technology Provide information access forimproved nutrition, agriculturaltechniques and market prices

Surveillance systems to trackand predict outbreaks; healthmanagement systems

IT equipment, electroniccurricula, teacher training,teaching effectiveness

Media and Entertainment Expand public awareness andundertake advocacy on hungerissues

Global/local malariaawareness and education

Educational content inpopular media; extendingeducational reach

Mining and Metals Implement community nutritionand health programmes

Workplace and communitymalaria interventionprogrammes

Investing in communityeducation; skills development

Professional Services Conduct institutional capacitybuilding for government andNGO hunger alleviation efforts

Strategic approaches tohealth systems andmultisectoral initiatives

Institutional capacity buildingfor education management;skills development

Financial Services Provide microcredit andbanking services for smallfarmers and SMEs

Provide microcredit for healthcosts; support workplaceinterventions in SMEs

Finance school infrastructure;advise on schoolmanagement and studentskill development

Retail and Consumer Buy and process food locally;distribute nutritive/fortified foodsto hungry communities

Packaging for consumereducation; distributionnetworks for malariaproducts

Educational supplies;business skills training

Telecommunications Provide service in rural/poorareas; collaborate on mobile-based market/health systems

Mobile-based healthmanagement systems;remote data capture

Provide wireless telephoneand Internet connections;national broadband networks

Logistics and Transport Expand transport networks tolink hungry regions to markets;deliver food aid

Transport for commoditydistribution; Supply chainlogistics training

Improve delivery of essentialsupplies

Aviation, Travel/Tourism Increase public awareness andadvocacy in hungry areas

Malaria control programmesin the workplace andcommunity

Invest in education andtraining for future workforce

9

Indirect Fit

Strong Fit

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There are four main ways in which businessestypically engage in development-related activity:

• Through core business practices, forexample by creating employment, developinginnovative new products and finding efficient,profitable ways to deliver affordable goodsand services.

• Through public-private partnerships –usually a combination of business andphilanthropic activity, which has an economicrationale but does not generate a market rateof return.

• Through strategic corporate philanthropyand social investment, using cash or in-kinddonations to catalyse and complementbusiness engagement or fill gaps in publicfinancing to address fundamental humanneeds.

• Through transparent and responsible businessengagement in public policy dialogue, rule-making and institution-building, operatingindividually, through industry and tradeassociations or in partnership with non-business actors.

The greatest leverage for society and business isoften found through the application of acompany’s tangible assets (such as equipmentand distribution networks) or intangible assets(such as management expertise, branding andmarketing strength) rather than through issuing acheque. Indeed, some of the most successfulpartnerships have involved the in-kindapplication of company resources, which haveoften resulted in a larger corporate commitment.

Public-private partnerships are highly diverse andcan focus on design and delivery of pro-poorsolutions or strategic in-kind contributions ofpersonnel, expertise, equipment or services.PPP practitioners have noted that theinvolvement of business personnel in apartnership project often produces managementefficiencies, innovation and a performanceculture that can be as valuable as the financialresources committed.

Public-private partnerships are not a cure-all, butwhen applied effectively to certain developmentneeds they can bring significant gains in bothbusiness and development terms. This reportidentifies high-leverage opportunities where suchwin-win benefits may be realized.

This report reflects the emerging thinking of abroad community of stakeholders and expertslinked to the World Economic Forum’s work onhunger, malaria and education. The generalconsensus is that there is significant, untappedpotential for greater application of business skillsand competencies to development issues. Thisis paired with a strong belief that suchcompetencies can be most effectively applied inpartnership with other stakeholders, such asgovernments, civil society groups, developmentagencies and experts.

There are certain things that the private sectordoes extremely well. These include operatingefficiently at a large scale, delivering essentialproducts and services where markets arefunctioning, developing innovative solutions totechnical or operational obstacles to meetcustomer needs, and taking a performance-oriented, results-driven approach tomanagement. All of these competencies areneeded to deliver development solutions on alarge scale. The private sector also has the abilityto tap additional financial resources fordevelopment through direct investment, loans orphilanthropy, which can help close the financegap for meeting the MDGs.

Other types of organizations have different andcomplementary strengths. Governments providenational and local leadership, politicalcommitment and the necessary legalframeworks, together with the infrastructural,administrative and funding authority forprogramme and service delivery. Developmentagencies and private donors have conveningpower, financial resources and technicalexpertise, often acting as a catalyst for newapproaches. Non-governmental organizations(NGOs) are best equipped to operate at thecommunity level, developing solutions andimplementation strategies appropriate for thelocal context and mobilizing public support tomeet development goals.

Introduction

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I. Introduction

In 2005, one-seventh of the world’s population isunable to access the food and nutrients neededto live a healthy and productive life. Hungeraffects more than 850 million people, themajority of whom live in Asia (particularly Indiaand China) and sub-Saharan Africa. Faminesform part of this picture, however, the vastmajority of hungry people suffer from chronicmalnourishment – a silent tragedy thatdevastates the health of both individuals andnational economies. The toll on young children isparticularly devastating, leading to 6.5 milliondeaths per year and for those who survive, alifetime burden of impaired cognitivedevelopment and reduced immunity. Worldleaders have repeatedly pledged to eliminatehunger, but the problem persists and isworsening in much of sub-Saharan Africa. TheMillennium Development Goal on hunger calls forhalving the proportion of underweight childrenand undernourished adults by 2015.

Hunger is complex. It is more a symptom ofeconomic, social and governance failurescombined with agro-ecological constraints thana force in itself. People go hungry when theycannot grow or buy enough nutritious food;when mothers and girls lack education; whencommunities lack adequate health services andclean water, and when climate, conflict or natural

disaster disrupt food systems. People also gohungry when they lack the bargaining power toaccess government welfare services; when theylack the education to obtain paying jobs, andwhen competitive markets, particularly foragricultural products, do not function efficiently.

These problems, while enormous in their scope,can be solved. Most are not technically complex,but they are systemically complex. As a result,eliminating hunger requires an integratedapproach, addressing employment creation,markets and infrastructure, agriculturalproduction, nutrition, health and women’sempowerment, public policy and institutionalcapacity.

The Business Case for Action againstHunger

Business plays a vital role in the systems thatsustain healthy communities, reduce poverty andprevent hunger. By generating employmentopportunities; creating markets; growing,manufacturing and distributing food; providinghealth and nutrition-related products andservices; building and maintaining infrastructure,and educating producers and consumers, theprivate sector is an essential player in sustainingand nourishing healthy communities. It is nocoincidence that areas with widespread chronichunger often have little private sector activity.


Figure 1 Prevalence of underweight among children under the age of five

Source: CIESIN, Columbia University

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The vicious circle of poverty and malnourishmentkeeps business out and hunger in. However, byworking with local partners business can makeinroads that bring needed opportunities, goodsand services to these areas.

The ’business case‘ for companies to engage inhunger-reduction efforts varies by industry, bycompany, and by the company’sactivity. It can includeaccessing new andemerging markets,building brandrecognition andreputation,stimulatingconsumer demand,motivatingemployees orenacting corporatevalues of social and civicresponsibility. For companieswith developing-country operations, working toreduce hunger can help develop a healthy andproductive local labour force, strengthencommunity and government relations andcontribute to economic development.

The opportunities for business engagementoutlined below are similarly varied and can beapplied across a range of industries. The bottomline is that there is something every business cando to help reduce hunger that builds on its ownunique goals and competencies.

II. Top Opportunities for Applying Business Capabilities

The food production and nutrition value chain(illustrated in Figure 2, page 21) encompasses acomplex range of activities from farmland to foodconsumption. Beginning with the farm and theinputs needed to produce food and otheragricultural commodities, the chain extendsthrough agricultural processing, distribution,retailing and ultimately, preparation andconsumption. Effective operation of the valuechain requires that certain vital factors be inplace, including a viable natural resource base,input and credit markets and technical capacityamong farmers.

Also key are roads, transportation services andmarket intermediaries to move commodities toand from the farm; agro industries and relatedservices to process, package and market foodproducts; health and education services forfarmers, workers and consumers engagedthroughout the chain; and good governance toencourage growth and development. The statusof women, and women’s ability to accessproductive assets as well as public health andeducation services, is vital across the chain.

Nearly every step in the food production andconsumption process offers opportunities forsome type of business involvement. Theseinclude developing new technologies; adaptingbusiness models to better distribute existingproducts; using companies’ human, operational


Box 1 Hunger: Top Opportunities for Applying Business Capabilities

1) Increasing food production and strengthening market systems in hungry regions• Sourcing from small-scale producers. • Developing and supporting small and medium enterprises (SMEs) for production, processing and distribution of

food and agricultural products.• Expanding farmers’ access to new and existing products and technologies. • Extending essential services and infrastructure to hungry areas.• Acting to reduce the spread of HIV/AIDS.

2) Improving nutrition through fortified products and consumer education, particularly for mothers andyoung children• Fortifying food and beverage products for the bottom of the pyramid. • Enabling and educating women and girls.

3) Strengthening governments’ commitment and capacity to act against hunger• Building public and political support for increased investment in hunger reduction.• Partnering with public agencies and NGOs to strengthen their capacity.

Two years after launchingits Moving the World

partnership with the UN WorldFood Programme, TNT’s ranking in

the lead industry survey rose from 26to 5. Employee morale is up: 66% ofTNT employees report feeling pride

in TNT’s contribution to thepartnership.

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and economic assets to benefit poorcommunities; and engaging strategically inphilanthropic and advocacy activities tocomplement those activities. Through public-private partnerships companies can also helpstrengthen essential features of the enablingenvironment, for example in the areas of publicpolicy, public institutional capacity andinfrastructure.

There exist many potential opportunities forinvolvement in efforts to end hunger. Thosewhere private sector engagement could leveragethe highest potential impact are highlightedbelow. They fall under three broad categories,outlined in Box 1 and summarized in thefollowing text.

1. Increasing food production andstrengthening market systems inhungry regions

1.1 Sourcing from small-scale producers inhungry regions

Because approximately half the world’s hungrypeople are small-scale subsistence farmers, agood opportunity for business engagement is touse supply chains to procure produce from smallfarmers to boost their incomes and productionlevels. Such efforts are usually constrained byhigh costs and difficulty in ensuring that productquality standards are met. Companies canovercome this obstacle by partnering withfarmers’ organizations, NGOs and extension

agencies to develop marketing associations thataggregate small farmers’ produce andstrengthen their capacity to meet product qualitystandards.

This approach works for high-margin nicheproducts, such as organic coffee, nuts and otherhorticultural products, where customers areoften willing to pay an extra premium that coversthe additional transaction costs. Wherecompanies are not directly engaged inprocurement, they can still encourage theirsuppliers to buy from smallholders or to engagein procurement practices that supportsmallholder agriculture, rural agro-enterprise anddevelopment in rural communities.

Women grow, process and prepare most food inhungry regions. In Africa, women produce 80%of food supplies, yet they own 1% of the land,receive 7% of agricultural extension and access10% of available credit. To be effective, efforts tolink markets to small producers must provideaccess and support to women producers. KeyIndustries with the capability to leverage demandfrom small producers through their supply chainsinclude: • Food and beverage manufacturers, retailers,

packaging companies and agribusinesses canbuy agricultural products from smallproducers.


Box 2 Examples of Sourcing from Small-Scale Producers

In South Africa, Pick ‘n Pay and the Black Economic Empowerment fund provided funding and expertise to acommunity project growing fresh produce, to assist growers in meeting Pick ‘n Pay quality standards. The ShoshungovePick ‘n Pay Family Store provides a guaranteed market for the produce, plus ongoing mentoring.

In Nigeria, Tetra Pak is working with state and federal government and local entrepreneurs to expand cassava, maizeand sorghum production to replace imported ingredients in its heavily fortified NutriSip drinks. The drinks are distributedto 75,000 children through a school feeding pilot programme, fully funded and administered by the Nasarawa stategovernment. The project plans to reach 450,000 children by the end of 2006.

In Uganda, SAB Miller’s subsidiary, Nile Breweries, has partnered with the government to assist local farmers inproducing sorghum, from which it produces a new low-cost beer. In 2006 Nile Breweries plans to spend US$ 1 millionon sorghum – 60% of which will go to the farmers, with the other 40% going to transport, procurement and processing.

Nestlé provides free technical assistance to over 300,000 farmers supplying fresh milk to its factories in Chile, China,Colombia, India, Mexico and Pakistan. The company also assists coffee producers to implement environmentallysocially and economically sustainable farming practices.

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Box 3 Examples of SME Development for Food and Agricultural Products

income communities to sell nutritious, low-priced food products.

In Kenya, Safaricom worked with the Kenya Agricultural Commodity Exchange to develop a market price informationsystem to assist farmers in finding the best prices for their crops using mobile phone networks.

Olam, Technoserve and Global Trading collaborated to develop 14 SME cashew processors in rural Mozambique thatsell to global markets.

ExxonMobil’s strategy of distributing anti-malarial bed-nets and medicines through its gas stations could be adopted byother energy, retail or food and beverage companies using their distribution networks to distribute agricultural ornutritional products and information.

In India, Hindustan Lever’s Shakti initiative trains underprivileged rural women to become distributors and salespersonsfor low-cost personal care and hygiene products, securing market share in India’s large rural market while creatingeconomic empowerment for the women involved. The i-Shakti initiative provides villagers with information on health,agriculture, education and other relevant topics that can be downloaded from computers in small kiosks.

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1.2 Developing and supporting SMEs forproduction, processing and distributionof food and agricultural products

Developing small and medium enterprises(SMEs) by providing financing, communicationsaccess and business education opportunitiescan help strengthen market systems and createa thriving private sector to drive improvements infood production, nutrition and economicdevelopment in hungry regions. In Africa andIndia, rapidly growing urban food marketspresent an opportunity for rural producers. If thisdemand is not captured, external suppliers will fillthe gap.

A major constraint to increasing food productionis farmers’ lack of access to agricultural inputssuch as fertilizer, improved seeds and adequatewater supplies, as well as training on how toeffectively use them. Producers of fortified foodsand agricultural inputs can benefit fromexpanding their distribution networks tounderserved markets in hungry regions bysupporting the development of rural agro-dealers, small-scale retailers and franchisedistribution models.

To assist farmers in marketing their produce,companies can help provide storage facilities,telecommunications services with market priceinformation systems, and business developmenttraining. Companies can also invest in local agro-processing facilities to capture more added valueat the local level, while increasing productioncapacity. In some cases this requires innovation

to be economically competitive. Investing in localproduction is particularly cost-effective forproducts with high transport or refrigerationcosts, such as milk or fresh produce. Industrieswith the capabilities to advance small businessdevelopment include:• Financial services companies can develop

new business models to provide credit andbanking services to SMEs.

• Telecommunications companies can developapplications useful to SMEs, such as SMS-based market price information systems.

• Information Technology firms can provideInternet access, rural telecentres, low-costhardware and software applications useful tosmall-scale rural entrepreneurs.

• Companies with rural distribution networks(producers and retailers of food, beverages,energy, agricultural and medical supplies) thatbenefit from expanded distribution networksand aggregated points of sale in rural andunderserved regions and can actively helpdevelop them.

• Food processors and producers, who caninvest in local food processing businesses.

• Extractive industry companies can developsmall suppliers in remote areas and providedistribution outlets, for example in petrolstations.

• All companies with managerial, technical orbusiness-development expertise can assist inSME development as a philanthropic or PPPactivity.

Applying Core Business Competenciesto Help Halve Hunger

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In Brazil, Nestlé’s Nutri program combines business and social inclusion by recruting and training residents of very low-

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1.3 Expanding farmers’ access to new andexisting products and technologies

Farmers need effective tools and technologies toproduce their goods, yet in many hungry regions itis prohibitively costly or difficult to access basicsupplies such as improved seeds, fertilizer orsmall-scale water pumps. In many cases, publicpolicy, targeted education and capacitystrengthening programmes are key to broaderdistribution and adoption of farming technologies.Particular attention must be paid to encouragingwomen producers to adopt such farmingtechnologies. Private sector innovation andtechnical skills can be directed towards developingnew low-cost, accessible products that serve theessential needs of hungry and food-insecurepeople. Of particularly high priority aretechnologies that increase yields, enhance thenutritional content of food crops and improve theenvironmental sustainability of cultivation. Theseinclude drought-resistant and/or nutrient enrichedfoodstuffs, water management technologies suchas harvesting and micro-irrigation, as well asenergy-efficient processing and cookingtechnologies. The need for new productsrepresents opportunities for innovation to tapemerging markets. Key industries with thecapabilities to develop such new products include:• Agricultural input companies can develop

improved or nutrient-rich varieties of staplecrops, such as hybrid maize, improved wheatand soybeans.

• Food and beverage companies can use theirbuying power to help increase demand forimproved crops.

• Engineering and energy companies can developand market efficient, small-scale energygeneration technologies for use in agriculturalproduction, agro-processing and foodpreparation.

1.4 Extending essential services andinfrastructure to hungry areas

Hungry and food-insecure regions often havelittle or no access to essential infrastructure,including transportation, communications andenergy. A number of companies areexperimenting with new ‘’bottom of the pyramid’business models that extend infrastructure andservices to underserved markets. For example,several companies are investing intelecommunications services to rural areasthrough low-cost handsets, prepaid callingcards, community radio and shared leasing ofradio towers.

Other companies are exploring opportunities inthe financial services sector, such as wirelesselectronic transaction networks and otherapproaches. In energy and engineering,companies are innovating with off-grid energysources based on solar, wind, biomass andsmall-scale hydro facilities. New products forlow-cost home lighting – such as rechargeablebattery lamps – are being developed. However,most of these activities are still at experimental orpilot stages, constrained by technology,transaction costs or poorly developed markets.Large multinational companies could createsignificant gains by developing and scaling upeffective business models, using their economiesof scale. Women often face greater economic,social and educational barriers in accessingmarkets and new products, which can beovercome by appropriate business models.

In areas with inadequate health and nutritionservices, companies can sometimes find ways toextend such services through their operations.Employee health and nutrition programmes canbe extended to the community through co-

Box 4 Examples of Expanding Access to New and Existing Products and Technologies

The Rockefeller Foundation invested in developing vitamin A-enriched rice and has brokered IPR-sharing agreementsfor staple crop varieties, establishing the African Agricultural Technology Foundation to facilitate technology transfer andhumanitarian product development. It also successfully expanded rural input markets in East Africa by linking large agri-input businesses to small-scale rural stockists, using credit guarantee facilities to lower risks to the private sector.

BASF partnered with Western Seed Co. (a Kenyan firm), the Kenya Agricultural Research Institute (KARI) and theInternational Maize and Wheat Improvement Center (CIMMYT) to develop insect-resistant seed coatings for maizecultivated by Kenyan smallholders.

Monsanto Company is developing drought tolerant maize varieties that will be provided on a humanitarian basis tosub-Saharan Africa. It has donated rights to staple crops such as golden rice, virus resistant cassava and sweet potato,and insect resistant cowpea.

HarvestPlus provides challenge grants to fund development of nutrient-rich staple crop varieties.

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investment with other partners. Locally basedcompanies can also invest in water purificationand land and watershed restoration to recoverenvironmental assets that are essential to localfood security. Key industries with the capabilityto extend essential services and infrastructureinclude:• Telecommunications, water, energy and

transportation companies can develop newbusiness models and adapted technologies toprovide accessible and affordable services tohungry regions.

• Financial services firms can transform theirbusiness models and adopt new technologiesto extend credit and banking services tounderserved areas.

• Engineering and construction companies candevelop new approaches to enable access topro-poor products and infrastructure.

1.5 Acting to reduce the spread of HIV/AIDSIn parts of sub-Saharan Africa, on-farm labourcapacity is being devastated by HIV/AIDS.Because the virus tends to strike adults of primeworking age, areas with HIV prevalence rates of30 % or more may lose an even higherpercentage of their labour capacity. At the sametime, hunger weakens human immune systemsand can accelerate the onset or progress ofAIDS. The result is a vicious circle of HIV/AIDSand hunger that can drive entire communitiesand regions into severe food insecurity. Theprivate sector can play an important role in bothprevention and treatment of the disease. Keyindustries with the capability to reduce thespread of HIV/AIDS include:

• Transport, mining, and large-scale commercialfarming companies have mobile or migrantworker populations that often serve as vectorsfor spreading HIV/AIDS. They can implementworkplace or community programmes forprevention, diagnosis and treatment of thedisease.

• Media and public relations companies canadvise public health agencies on effectivepublic awareness campaigns for prevention.

• Pharmaceutical, medical supply and healthadministration companies are directly engagedin HIV/AIDS treatment.

• All companies operating in endemic regionscan implement workplace or communityprogrammes for prevention, diagnosis andtreatment of the disease.

2. Improving nutrition throughfortified products and consumereducation, particularly for mothersand young children

A total of 700 million people worldwide are atrisk of micronutrient deficiencies. In Africa, 350million women and children suffer fromdeficiencies in iron, vitamin A and folic acid.Such deficiencies bring enormous societal costs:throughout the continent, iron deficiency alonecauses US$ 1.5 billion in productivity losses peryear and puts 2 million newborns at risk of deathdue to maternal anaemia. Among survivors, itlowers average intellectual capacity by 10 to15%. Vitamin A deficiency kills more than600,000 children under five years of age eachyear. Subtler forms of vitamin and mineraldeficiencies – often with no clinical symptoms –


Box 5 Examples of Extending Essential Services and Infrastructure to Hungry Areas

In Tanzania, Ericsson worked with the United Nations Development Programme’s Growing Sustainable Businessinitiative to develop a new business model to expand its telecommunications infrastructure to rural areas. Cashewfarmers in the area, who currently hike to distant hilltops to use their mobile phones, are eagerly awaiting the service.

Visa established a partnership with the nonprofit Foundation for International Community Assistance (FINCA), whichprovides loans, savings programmes and technical support to small-scale entrepreneurs. and the United States Agencyfor International Development (USAID). The partnership is working to expand and increase the efficiency of microfinanceservices to the poor.

In a post-conflict area of Angola, BP Solar developed the Paranhos Solar Pilot Project with support from BP Angola andthe UK Government. It provides solar energy to the community school and medical centre, as well as for household andother uses. The program trains local technicians on maintenance, and is being evaluated as a model for nationwideapplication in rural areas.

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challenge, as P&G found with its fortifiedpowdered drink mix, NutriStar, which generatedexcellent medical results but insufficient marketdemand. Broad partnerships with public healthgroups and sustained social marketing can makea difference in building sufficient demand forsuch products. Multistakeholder engagementcan also help promote breastfeeding rather thanusing breast milk substitutes, a practice codifiedin international marketing codes. Key industrieswith the capabilities to fortify food and beverageproducts for the bottom of the pyramid include:• Food and beverage manufacturers can

develop, distribute and market fortifiedproducts.

• Retail and consumer goods companies cansell fortified products, marketing themeffectively to poor and hungry populations.

• Biotechnology and seed companies candevelop and distribute vitamin-enriched cropvarieties to malnourished regions.

2.2 Empowering and educating womenand girls

Mothers’ health and education are essential toproviding adequate care and nourishment toinfants and young children, particularly in the vitalwindow from birth to 24 months. As the primaryproducers and processors of household food,they are key to addressing hunger. Many of thestrategies above will particularly benefit womenby expanding their access to technology, marketopportunities, adequate nutrition and services.Expanding women’s access to credit andfinancial services, commercial distributionnetworks, information and training services alsosupports them to become consumers.

can impair cognitive development, compromiseimmune systems and cause birth defects. Foodfortification is widely recognized as a highly cost-effective solution, yet in many developingcountries its implementation is limited. Withoutregulation and high public awareness, manyfirms choose to avoid the cost and complicationof fortifying their products.

2.1 Fortifying food and beverage productsfor the bottom of the pyramid

In hungry regions, there is a major need andopportunity for production and marketing of foodand beverage products fortified with essentialvitamins and minerals. Commonly consumedand available foods are the best targets: flourcan be fortified with folic acid, iron, and Bvitamins; edible oil with vitamin A; andcondiments (such as bouillon cubes) with ironand zinc.

Lack of nutrition education and awareness is asignificant factor in malnutrition, particularlyamong mothers and children. Consumereducation campaigns can raise awareness aboutnutrition and sanitation issues,stimulating consumerdemand for fortified foodand beverages.Unilever hassuccessfullystimulated demand forits soap and fortifiedfood products throughpublic educationcampaigns. In some cases,however, changing consumerhabits and creating sustained demand can be a


Box 6 Examples of Fortifying Food and Beverage Products for the Bottom of the Pyramid

The Business Alliance for Food Fortification (BAFF), co-chaired by Unilever, Danone and Coca-Cola, encouragesbusiness leadership in eliminating vitamin and mineral deficiencies. Facilitated by the Global Alliance for ImprovedNutrition, BAFF encourages voluntary fortification by food and beverage producers based on international guidelines,while working with governments to develop national fortification plans.

In Ghana, Unilever worked with the national government to develop and market Annapurna iodised salt, capturing halfthe refined salt market within three years. In Cote d’Ivoire, the company worked with the National Fortification Alliance tofortify oil with vitamin A.

Tetra Pak is involved in school feeding programmes in 45 countries, providing packaging for over 1 billion litres offortified milk.

1 UNICEF and the Micronutrient Initiative, “Vitamin & Mineral Deficiency: A Damage Assessment Report for Nepal,” 2004.

“Probably noother technology

available today offers aslarge an opportunity to

improve lives and acceleratedevelopment at such low cost

and in such a short time.”

The World Bank1

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Women’s education levels are one of the leadingfactors in successful efforts to reduce hunger.Investing in girls’ education has proven to be ahighly cost-effective investment, not only forhunger alleviation but also for broadercommunity health and development. One way toimprove girls’ educational outcomes andnutrition is through home-grown feedingprogrammes, which improve performance andincrease school attendance(particularly for girls).Providing take-homerations to girls can alsoprovide a strongincentive for families tokeep them in school,delaying marriage andgaining knowledge thatwill help improve their futurechildren’s nutritional status. Bypurchasing school lunch and ration supplies fromlocal producers, these programmes can helpstimulate local agricultural production. Somecountries, such as China and Thailand, havesuccessfully used school milk programmes tocatalyse the development of thriving dairyindustries. By working with others along thevalue chain, agricultural and food companies caninitiate a similar approach. Some companies alsoprovide school lunches on a charitable basis.

The private sector can also play an importantrole in building public support for women’sempowerment. Promoting women role modelsinside and outside the business, practicing andadvocating for equal treatment of women andengaging in partnerships to improve public policyand institutions to serve women are all avenuesof potential engagement for committedcompanies. Key industries with the capabilitiesto empower, nourish and educate women andgirls:

• Retail companies can distribute productsimportant to women, such as labour savingtechnologies. They can also promote andadvocate for women’s empowerment.

• Food, beverage and agribusiness companiescan develop products and distribution modelsthat meet the needs of women as bothmothers and farmers.

• IT and financial service companies canprovide access to information and finance forwomen, while fitting local cultural contexts.

• Media companies can increase publicawareness of gender issues and promotepositive role models for women.

• Education and professional services firms canexpand education and professional trainingopportunities available to women.

3. Strengthening governments’commitment and capacity to actagainst hunger

3.1 Building public and political support forincreased investment in hungerreduction

The hungry are among the most politicallydisempowered members of society, often lackingorganized political representation or a unifiedpolitical voice. As a result, a lack of political will,poorly constructed policies, legislative andregulatory barriers, weak institutions andinsufficient public expenditure often exacerbatetheir plight. These governance failures contributegreatly to food insecurity.

Coordinated advocacy on hunger issues is rarelyseen in the private sector, but it has potential tosignificantly influence global and national actions.On other issues such as health, businessalliances have proven to be an effective vehiclefor the private sector to coordinate advocacy


“Our experiencein Thailand and China

confirms that school milkprogrammes can catalysethe commercial growth of

dairy products.”

Ulla Holm, Tetra Pak

Box 7 Examples of Empowering and Educating Women and Girls

In India, the World Economic Forum’s Rajasthan Education Initiative has engaged a group of IT companies (includingMicrosoft, Cisco, AMD, Infosys, Wipro and Intel) and the state government to provide improved curricula, teachertraining and schools meals in 100 girls’ schools.

In several states in India, Infosys, through the Akshayapatra Foundation, funds school feeding for more than 300,000children, based on a belief that improving education contributes to developing a skilled workforce and improves nationaleconomic competitiveness. School meals are known to improve girls’ enrolment rates.

The Nike Foundation makes grants to projects promoting adolescent girls’ empowerment in developing countries.

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efforts, establish common priorities andprinciples, exchange best practices and engagegovernments in pro-poor policy reform. Abusiness alliance against hunger could makesignificant advances in raising the public profileof hunger issues and advocating pro-poorsolutions in food and agriculture in cases thatcorrespond to business interests.

Committed, individual leadership from thebusiness community can also have a significantimpact. By targeting key issues and audiencesthrough public and peer-to-peer advocacy,business leaders can use their knowledge andcredibility to leverage change at the highestlevels. This includes advocacy for pro-poor tradepolicy reform, funding for girls’ education,elevating the statusof women,increasinginvestment inagriculturalresearch andagro-industry,andestablishinglegal propertyrights for the poor.Many of these topics receive insufficient attentionfrom policymakers and could significantly benefitfrom greater private sector advocacy. Businessescan also tap their marketing skills to craftcompelling messages, gain public and mediaexposure and call for action by political leadersto end hunger. Key Industries with thecapabilities to build public and political supportinclude: • Media and public relations companies have

targeted communications skills and outletsthat can be applied to raise awareness andcatalyse action on hunger on an in-kind orpartnership basis.

• Food, beverage, retail and consumercompanies can use their marketing expertiseto deliver key messages on hunger to a broadpublic audience.

• All industries can potentially engage in policydialogue and advocacy efforts, individually orcollectively.

3.2 Partnering with public agencies andNGOs to strengthen their capacity

For the food production and nutrition system towork, an enabling environment must includeinfrastructure, health services, education, soundenvironmental management and concern for thestatus of women. Most of these essentialunderlying factors are extremely weak in hungryregions. The public sector normally bears theprimary responsibility for addressing theseissues, but it often has neither the capacity northe resources to do so effectively. The privatesector can engage in public-private partnershipsto address these weaknesses, applying its corecompetencies to strengthen public institutionsand service delivery.

Collaborative capacity building efforts often takethe form of PPPs among companies,government or public agencies and/or NGOs.The application of private sector technical andmanagerial skills to strengthen the capacity ofpublic agencies and NGOs can often bringgreater long-term value than cash or in-kinddonations. For example, TNT estimates that thetechnical advice it has provided to improve theWorld Food Programme’s supply chain efficiencyand accounting has a benefit-cost ratio rangingfrom 5:1 – 20:1, in dramatic comparison to cashdonations (1:1) and in-kind donations oftransportation equipment and services (2:1),making it by far the highest-leverage activitywithin the partnership.


Box 8 Examples of Building Public and Political Support for Hunger Reduction

Globally, TNT helped found and is a primary sponsor of the UN World Food Programme’s annual Walk the World event,involving its 161,000 employees. The company also engages in outreach to promote public-private partnerships toaddress hunger.

Ernst & Young is piloting a staff fellowship programme that offers high-performing North American managers anopportunity to work for up to three months with Technoserve, a US non-profit organization that designs and implementsbusiness solutions to problems of rural poverty.

“Corporations havethe communications

capacity to advocate on alarge scale; we need to do

more of that.”

Ludo Oelrich, TNT

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For public agencies, business partnerships canserve as a vehicle for catalysing efficiencyimprovements and use of performance-basedmetrics, potentially leveraging much broaderchange within the development system. Suchcollaborations provide professional andleadership development opportunities for allinvolved and can serve as an additional incentivefor staff recruitment and retention at companies.Key industries with the capabilities to strengthenthe capacity of public agencies and NGOsinclude:• Professional consulting and accounting firms

can advise on strategy development,operational and organizational improvements,management and transparent accountingtechniques. They can also advisegovernments and other public sector bodieson policy and regulatory issues, benchmarksand best practices;

• Law firms can advise on policy design,regulatory frameworks and judicial systems.

• A wide range of other companies willing towork with partners on transferring specializedtechnical expertise (in engineering, logistics,marketing, or nutrition, for example) or generalmanagement advice (improving efficiency,communications or accounting).

III. Conclusion

Hunger encompasses many issues, but alsomany business-related opportunities to engagein solving the problem. In rural areas with highlevels of hunger, the distribution of agriculturalinputs and improvement of market linkages isthe essential first step towards boosting foodsupplies, nutrition and incomes. Second, thehigh impacts and low costs of micronutrientfortification make it a priority across the board inboth rural and urban areas. Finally, advocacy andstrengthening public institutions is a relativelyunderused opportunity for the private sector tomake a significant impact upon hunger. Theseactions, together with a focus on empoweringwomen, local communities and developingcountry institutions, will create sustainablesolutions to end world hunger.

Box 9 Examples of Partnering with Public Agencies and NGOs to Strengthen their Capacity

The global mail, express and logistics provider TNT partnered with the UN World Food Programme (WFP), dedicatingprofessional support to improve the efficiency of WFP’s emergency food aid delivery systems, and to improveaccounting practices to increase transparency of agency operations. The company estimates that such knowledgetransfer projects are by far the highest-leverage activities within the partnership.

Accenture sponsors a not-for-profit group, Accenture Development Partnerships (ADP), to provide business andtechnology consulting expertise to NGOs in international development. It offers unique professional development toAccenture staff while providing high quality capacity-building services to NGOs at accessible rates. ADP has worked witha number of organizations in the international development sector on a variety of projects including strategy andplanning, supply chain and logistics, ICT, organizational development, change management and operationaleffectiveness.

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Figure 2 The Food Production and Nutrition Value Chain

Climate regularity(temperature, rain)

Soil health(fertility, topsoil)

Biodiversity(plant, animal, insect)

Water resources (rainfall, groundwater,aquifers)

Land access(tenure, lease, co-ops)

Policy(environmental, landtenure andinheritance)

Communitypractices(environmentalmanagement;land/resourceaccess)

Crop varieties andquality Seeds(suited to climate andpurpose)

Fertilizer(natural, chemical)

Water(rainfall, irrigation,pumping, no- till,harvesting)

Crop protection(IPM, herbicides,pesticides, etc.)

Market access(retailers, transport)

Financial access(income, credit,vouchers)

Knowledge(training, extension,education)

Policy(public finance,regulation)

On-farm labour(capacity, availability,productivity)

Paid labour(finance, access,skills)

Animal labour(access, finance,training)

Technology/Mechanics(access, finance,policy, information)

Processingfacilities(commercial, small-scale)

Knowledge(education,extension, training,information)

Infrastructure(transport, energy)

Policy(labour,import/export)

Producersassociations(price information,training, storage,wholesaling)

Access to buyers(consumers, brokers,retailers,manufacturers,exporters)

Financial servicesand credit(rural banking, creditaccess)

Transportationinfrastructure(local, regional,internationaltransport networks,hubs, storage)

Education(literacy/numeracy,businessdevelopment training)

Communicationsinfrastructure(telecom, price infosystems)

Policy andregulation(policy and publicfinance; legal andregulatoryframeworks, productquality standards)

Access to food(physical, financial,social access; foodaid and safety netswhen needed)

Adequate nutritionand quality of food(access to necessaryfoods and nutrients;product quality andsafety)

Consumerinformation/education(nutritionprogrammes,education, media)

Ability to use food(safe water, cookingfuel, adequate healthstatus)

Mothers' healthand status(nutrition, education,health care access,breastfeedingsupport, access toproductive assets)

Child nutrition andcare(education andnutritionprogrammes)

Policy andregulation(trade, food safety,women's rights,community nutritionprogrammes)

EnvironmentalAssets

Productionand Processing

AgriculturalInputs

Food andAgricultureMarkets

FoodConsumption and Nutrition

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Multiple events and initiatives have brought thedisease back to the centre stage of globalconcerns. Examples include: creation of TheGlobal Fund for AIDS, TB, and Malaria;6 recentpress coverage of the grants made by the Billand Melinda Gates Foundation to malariainitiatives; activities of the World Bank’s GlobalStrategy and Booster Program;7 and creation ofthe US President’s Malaria Initiative.8

The staggering human cost of malaria providesan overwhelming case for public sectorinterventions. This next section explores thebusiness case for the private sector to helpreduce the burden of malaria.

22

I. Introduction

Between 350 and 500 million clinical episodes ofmalaria occur each year, with a death tollexceeding one million, primarily among childrenunder five years of age.1 The disease is endemicin parts of Asia and Latin America, but Africa isworst affected (Figure 1), suffering more than80% of worldwide fatalities.2 The impact on bothhealth and economic output is severe. Yet theburden of disease is actually rising as resistanceto the drugs used for treatment has increasedsharply in the last 30 years. Despite existingpreventive, diagnostic and treatment options,malaria deaths have increased since the 1970s(see Figure 2)3 and the Millennium DevelopmentGoal of halving its incidence by 2015 will bedifficult to attain.4

Malaria is caused by a parasite carried by thefemale Anopheles mosquito and injected into thehuman bloodstream by the insect’s ’bites‘ duringits nightly feeding forays. The parasite invadesthe patient’s liver and red blood cells andproliferates to the point where it infects anotherfeeding mosquito, thus continuing the cycle ofdisease transmission. Malaria produces severefever, vomiting, headache and other flu-likesymptoms and can eventually lead to death.Young children and pregnant women areespecially vulnerable.5


Figure 1 Global Incidence of Malaria Episodes per Person

Figure 2 Increasing Burden of Malaria(3)

Source: World Malaria Report 2005.

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The business case for actionEnvisage a situation where a company plans toinvest US$ 2 billion dollars to add another plantto an existing site in Southern Africa. However,the investment is compromised by lowproductivity due to malaria absenteeism.Suppose that corporate leadership decides notto abandon the project but to improve thebusiness case by addressing the public healthissue. Imagine that this intervention succeeds inincreasing productivity to a level that more thanjustifies the investment and that the new plantreduces overall costs to the company, addingmaterially to the bottom line while also enabling atourist industry in the region.

This is not a hypothetical example. It is the realstory of an aluminium smelter operated by BHPBilliton in Maputo, Mozambique. A partnershipwith three governments made it possible, andresulted in reducing malaria incidence by nearly80 % within a 100,000 square kilometre areaover a five-year period.9

Incentives and capabilities to intervene in malariacontrol differ across sectors. Examples fromindustries as diverse as energy, chemicals,pharmaceuticals and travel and tourism provideevidence that intervening against malaria can bethe ’business of business‘. From an incentivesperspective, tackling malaria can:• Address the risks to human resources and

assets/capital.• Enable market opportunities.• Enhance intangible assets such as corporate

morale, reputation and goodwill.

Address the risks to human resources andassets/capitalFor companies with operations in malaria-endemic regions, malaria is a risk toemployee health and to thehealth of workers’ families.This translates intosignificant costsassociated with acutehealthcare expensesand depressedproductivity.10 Byimplementingworkplace programsto roll back malaria,companies can protectthemselves from thesedirect and indirect costs.

Enable market opportunitiesMalaria is a key barrier to economicdevelopment. It perpetuates a vicious cycle ofpoverty and disease that negatively impactsproductivity and investment. The disease isestimated to slow economic development by upto 1.3% each year.11 Interventions can increaseproductivity, encourage market expansion, boosthousehold spending and change consumptionpatterns.12 In particular,companiesparticipating in themarket forprevention ortreatment ofmalaria havethe incentiveto not onlyenhance theirbrand and/orsupportcorporate values,but also to facilitatemarket growth andprofitability. Key products include insecticide-treated mosquito nets, insecticides andantimalarial drugs. Serving this market requiresexpansion of existing infrastructure and betteruse of both public and private channels.

Enhance intangible assets such ascorporate morale, reputation and goodwillAs the corporation hasbecome a dominantglobal and nationalinstitution, society’sexpectations havechanged.Companies thatare able tocontribute toglobal health areexpected to do so.Companies with theunique capability todirectly impact malariaare expected to do so, andnot taking action creates the potential forreputational risk. For example, pharmaceuticalcompanies currently face significant publicpressure to engage in neglected diseasesolutions.


“When people arenot well or are absent

because of malaria, we have tohire temps, train them and bear the

medical costs of treatment andinsurance. That gets to be expensive.

We have found prevention to be a cost-effective way to protect our employees.”

Ursula Lebuso, HR Officer:Employment Equity and HRProjects, Sun International

“As with any consumergoods company, we recognize

that controlling malaria can be goodfor our bottom line. Alleviating the

malaria burden improves economies andopens up a broader range of choices for

our existing and potential futurecustomers.”

Dr Murray Coombs, BusinessGroup Doctor, Unilever.

“Our commitment toa core principle of ‘Zero

Harm’ enhances our license tooperate, discover and add value toresources. Proving the concept of

responsible mining generates goodwillwhich has translated into stakeholder

value.

Andre van der Bergh, RegionalAdvisor, Southern Africa Health,

Safety, Environment, andCommunities, BHP

Billiton

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Current malaria interventionsMost stakeholders believe that the effectivecontrol of malaria requires a multi-prongedapproach that includes intervention in the threeareas of prevention, diagnosis and treatment. • Prevention can be achieved either by inhibiting

the mosquito, so-called integrated vectormanagement13 (involving reducing water poolsthat serve as mosquito breeding grounds,indoor residual spraying, and insecticide-treated nets), or by the use of pharmaceuticalproducts, including anti-malaria drugs andpotentially vaccinations when they becomeavailable.14

• Diagnosis is an underutilized intervention. Thisis changing, particularly in Asia whereexpensive ACT drugs are making diagnosismore routine. However, symptomaticdiagnosis remains dominant, which leads to asignificant number of treatments of non-malarial fever. This in turn increases parasiteresistance to treatment drugs.15 Laboratorysmear tests are also used, but the equipmentis expensive and requires sufficientinfrastructure and proper training. Althoughrapid diagnostic tests have entered themarket, they are relatively expensive.16

• Treatment typically involves a course oftablets. The World Health Organization nowrecommends artemisinin-based combinationtherapies of two drugs as first-line treatmentto delay malaria parasite resistance.17 Severecases of malaria can require hospitalizationand intravenous drug treatments.

Interventions need to be managed as a collectiveportfolio through coordinated effort amongprivate and public sector stakeholders. Public-private partnerships (PPPs) have madeconsiderable progress as a vehicle to aligncapabilities, incentives and needs. For example,the Medicines for Malaria Venture (MMV), theFoundation for New Innovative Diagnostics(FIND) and the Malaria Vaccines Initiative (MVI)with substantial support from the Bill andMelinda Gates Foundation, have significantlyadvanced the R&D agenda on malariainterventions.18

Private sector interventions in malaria will bemost effective where business incentives andcapabilities coincide with activities required bythe value chain, as described in the next section.

The public health value chain for malariaEmploying malaria interventions requires a set ofunderlying activities – an effective ’value chain‘(see Figure 3) ranging from research anddevelopment to marketing and distribution.Activities in the malaria value chain seek toensure the availability, affordability andaccessibility of effective interventions. Each stepof the chain has a unique and complex set ofchallenges that must be addressed to ensureoptimal impact.19

As the malaria parasite continues to developresistance to prevention and treatment options,effective interventions will increasingly depend onthe invention, development and delivery of newtechnologies such as vaccines, long lastingmosquito nets, new drug therapies, and so on.


Figure 3 Challenges Along the Malaria Value Chain

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For example, securing a sufficient number ofnew therapeutics will cost hundreds of millions ofdollars in research and development alone.Sustainable mechanisms are required to coverthese costs and thereby enable the applicationof private sector innovation.

Just as crucial are timely and well-informedpolicy decisions to ensure the availability of themost appropriate technologies and to protectagainst counterfeits. Adopting and implementingeffective policy requires coordinated stakeholderengagement, global and local advocacy forchange, and information sharing on new productcharacteristics.

Financing, procurement and manufacturing havea direct impact on the affordability ofinterventions. While accurate demandforecasting is needed to ensure a sufficientsupply of affordable options, it is difficult to makesuch forecasts in data poor environments.Reducing the cost of goods sold (COGS)through efficient supply chains and establishingeconomies of scale can drive down newintervention costs. Affordable prices, particularlyin the private sector, require a competitivemarket environment and, in some cases,consumer subsidies, such as vouchers forinsecticide-treated nets.20

Current distribution infrastructure for malariainterventions is often insufficient to reach thosemost in need, particularly in remote communities.Effective health service delivery systems requirebuilding local capacity, extending distributionreach and supporting logistics coordination toensure access to prevention, diagnosis, andtreatment.

Finally, education activities are needed to optimizeuptake by increasing awareness and acceptability,stimulating demand and ensuring proper trainingof healthcare providers. Global advocacy toincrease awareness of malaria needs is also criticalto securing continued international commitment tothe malaria agenda.

Each link of the value chainrepresents an opportunityfor private sectorengagement. Below,Section II identifies andillustrates examples ofthe ways in which theprivate sector caneffectively leverage itscore capabilities tomeet some of the mostpressing challenges inmalaria intervention.

II. Top Opportunities for ApplyingBusiness Capabilities

Business has three main sets of capabilities thatcan be deployed to address the needs along themalaria value chain: innovation, operations andproject management, and facilitation and advocacy.

As with any business decision, malariainterventions require that a corporation considerhow its core competencies can be leveraged.Business has three main sets of capabilities thatcan be deployed to address the needs along themalaria value chain: innovation, operations andproject management, and facilitation andadvocacy. Box 1 maps these capabilities againstthe needs identified in Section I.


Box 1 Malaria: Top Opportunities for Applying Business Capabilities

1) Innovation of new technologies and products to prevent, diagnose and treat malaria• Discover and develop new vaccines and drug treatments.• Invent less expensive, easier to use technologies for diagnosis.• Develop innovative integrated vector management solutions.• Transfer technology and build local capacity to reduce costs and delivery time.

2) Operations and project management for supply chain and logistics • Share tools and skills with the public sector to improve efficiency, such as in forecasting and project management. • Leverage distribution networks and retail channels to increase access. • Implement malaria control programmes for the workplace and surrounding communities.

3) Advocacy and facilitation of multistakeholder cooperation • Build public and political support for advance purchase agreements and subsidizing malaria commodities.• Provide a forum to convene stakeholders to address policy issues.• Leverage distribution networks and retail channels for community education.

“Its key to understand firstwhat’s needed, then what your

company would consider acompetitive advantage in this space,

and then join the dots to determine whatcan actually be done.”

Dr Steven Phillips, Medical Director,Global Issues and Projects,

ExxonMobil

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Box 2 Examples of Private Sector Product Innovation

Becton Dickinson developed the Quantitative Buffy Coat (QBC) apparatus for malaria diagnosis, which acted as acatalyst to create a tropical diagnostics industry.21

ICI, a British chemical company, led the development of the pyrethroid family of insecticides and established a unit forlow-cost distribution of the compound.22

Companies such as Bayer CropScience, Syngenta, Siam Dutch and BASF are involved in developing insecticidetreated nets (ITNs) for vector management.23

Novartis has developed an arteminisin-based treatment therapy that has been approved as a first-line treatment by theWorld Health Organization. GSK has a vaccine in development, and Ranbaxy is developing a synthetic version of anarteminisin-based combination treatment therapy.24

By directly associating business capabilities withneeds across the value chain, it is possible toidentify value-creating scenarioswhere, for instance,courier companiessupport distributionand the bio-pharmaceuticalindustry developsvaccines. Thissection highlightssome of thesedirect associationsand alsodemonstrates, throughcase studies, thatcompanies can contributebeyond their intrinsic strengths by creatingsynergistic partnerships across the private andpublic sectors.

1. Product Innovation

The new product development capabilities ofcorporate R&D (fostered by intellectual propertyprotection) are required to create new solutions.Examples of key industries leveraging innovationcapabilities are:• Bio-pharmaceutical companies can discover

and develop vaccines and therapies.• Diagnostics companies can invent simpler,

cheaper technologies.• Insect control companies can improve current

technologies for integrated vectormanagement, such as spraying and mosquitonets.

1.1 Case Study: Enabling early adoption ofinnovative insecticide-treated nettechnology for vector management

This case study describes how a consortium oforganizations joined to innovate and deploy anovel insecticide treated nettechnology. Conventionalinsecticide treated bed-nets provide protectionfor up to six monthsand then must be re-treated. The shortlifetime and the effortrequired to re-treatthe nets limits theireffectiveness atpreventing malariatransmission.25

A partnership betweenExxonMobil, whose operations in Africa arealmost entirely in malaria-endemic regions;Sumitomo Chemical, a Japanese chemicalscompany; Acumen Fund, a venture philanthropyfund; A to Z Textile Mills Ltd., an African bed-netmanufacturer; WHO and UNICEF, resulted in theintroduction of a new mosquito net technologywith a lifetime of up to five years - the longlasting insecticidal treated net (LLIN). The A to Zplant now has the capacity to produce threemillion Olyset LLINs per year.26


“To make a difference, youhave to be smart in picking

projects that support your strategyand core business. Success comes

through operational partnerships wherebenefits and risks are shared across the

stakeholders.

Phil Davis, Managing Director forEnvironmental Health, Sumitomo

Chemical (UK)

“One has to constantlyadapt the model for innovation.Royalty free technology transfer

worked on a small scale of three millionnets, but expanding to a global capacityof 23 million is requiring a joint venture

approach.”

Phil Davis, Managing Director forEnvironmental Health, Sumitomo

Chemical (UK)

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The key elements of private sector involvementin this case include:

• Incentive: ExxonMobil and SumitomoChemical set an internal standard that amalaria death should be considered asunacceptable as any other safety-relatedfatality, thereby putting malaria on an equalfooting with other operational business issues.As one of the largest and lowest-costmanufacturers of bed-nets in Africa, A to Zwanted to establish and later expand itscapacity to produce the Olyset LLIN.

• Innovation: Sumitomo Chemical transferredthe Olyset LLIN technology to A to Z royaltyfree and delivered the raw materials. AcumenFund provided US$ 325,000 of initial debtfinancing to fund the technology transfer to Ato Z and to build manufacturing capacity. Ithas also invested an additional US$ 675,000to establish alternative channels to develop acommercial market, for example using directsales agents.

• Operations and project management: Toassist with technology transfer, ExxonMobilcontributed technical and projectmanagement assistance and granted US$250,000 to UNICEF to support purchase anddistribution of LLINs to the most vulnerablepopulations. Sumitomo continues to supportA to Z’s quality control programme, which iscritical to ensuring global standards.

• Advocacy and facilitation: ExxonMobil andSumitomo Chemical supported advocacy andawareness activities, such as staging a highprofile music concert focused on rolling backmalaria that raised funds to buy 50,000insecticide treated nets. Vouchers have beenintroduced by several partners, includingUNICEF, Population Services International(PSI), NetMark and GFATM to generatemarket demand for insecticide-treated nets.

Today, A to Z and Sumitomo Chemical areleveraging their distribution networks across thecontinent to extend LLIN reach to the mostremote communities and most vulnerablepopulations. Vouchers reducing the cost ofLLINs by US$ 2.75 to US$ 3-5 are distributed atprenatal clinics to pregnant women and can beredeemed at local retail outlets. Additionally,ExxonMobil has leveraged its network of retailgasoline service stations to distribute some ofthe voucher-subsidized Olyset nets. Currently,more than one million lives are protected byOlyset LLINs manufactured in the A to Zfactory.27


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2. Operations and Project Management

Many malaria-endemic regions suffer from weakinfrastructure, not only in medical services, butalso in areas such as supply chain management,forecasting and tracking tools and distributioncapabilities. Some specific opportunities toleverage private sector operations and projectmanagement capabilities are:• Food and beverage companies can promote

malaria products, stock channels and trackusage.

• Energy companies can leverage their fueldistribution infrastructure and network of retailoutlets (e.g. petrol stations) for malariaproduct distribution and/or education.

• Healthcare companies can educate and trainhealth workers in medical competencies, suchas good laboratory practices and effective useof treatment options.

2.1 Case Study: Productivity gains at asmelting plant

This case study describes how a companyleveraged its operations and facilitationcapabilities to strengthen regional vectormanagement initiatives through a public-privatepartnership.

In 1999 malaria was one of BHP Billiton’s mostformidable enemies. Their Mozal smelter hadmore than 6,000 recorded cases of malaria, 13fatalities, and falling productivity throughabsenteeism and sickness. Constructiontimelines were at risk and the future of thesmelter, an investment of more than US$ 2billion, was threatened.30

At about the same time Mozambique, SouthAfrica and Swaziland signed an agreement forjoint economic development and promotingtourism in the Lubombo area.31 Key malariaintervention activities for the partnership includedindoor residential spraying (IRS) of insecticidesand ensuring early effective treatment of malariacases by implementing rapid diagnostic malariatests (RDTs) and highly effective artemisinin-based combination therapy (ACTs)32. BHP Billitonrecognized the connection between malaria andeconomic development and decided to join theLubombo Spatial Development Initiative (LSDI) in2000.

BHP Billiton brings core business capabilities tothe partnership, including robust financialcontrols and oversight, metrics to trackperformance and project management skills. TheRegional Malaria Control Commission providestechnical management, training and IRS, RDTand ACT deployment across the three countries,working in close collaboration with eachcountry’s ministry of health.33 As it grew, the unitcosts of running the programme declined andoverall quality increased. For BHP Billiton,malaria control was a cost-effective investment


“One of the mostimportant things we do is

training around good laboratorypractice. The return may not beimmediately measurable, but the

training facilitates building infrastructureand capabilities for future markets.”

Krista Thompson, Vice President/General Manager, HIV/AIDS of BD

(Becton, Dickinson andCompany)

Box 3 Examples of Operations and Project Management

Novartis is partnering with the Tanzanian Ministry of Health, Swiss Development Cooperation, the Swiss TropicalInstitute and NGOs to improve access to comprehensive anti-malarial services for poor communities in sub-SaharanAfrica.28

DHL worked with the Roll Back Malaria Partnership (RBM) to transport testing equipment to support the delivery of780,000 insecticide-treated mosquito nets for a nationwide campaign in Togo.29

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which enhanced their bottom line and the long-term sustainability of the plant investment.34

Key elements of private sector intervention in thiscase include:

• Incentive: Malaria is a threat to humanresources and physical asset productivity. BHPBilliton’s actions at regional level were toprotect not only its own workers, but also thecommunity in which it had invested.

• Innovation: A novel trilateral public-privatepartnership facilitated regional developmentthrough massive scale indoor residual spraying,covering more than 1.8 million structures35. Thepartnership included BHP Billiton, The BusinessTrust and multiple public sector partnersincluding the South Africa, Mozambique andSwaziland Ministries of Health; The SouthAfrican Medical Research Council and theUniversity of Cape Town.36

• Operations and project management: BHPBilliton provided cornerstone funding of US$480,000 in the first year to support the trilateralinitiative. It has continued to increase financialsupport over the last five years and has alsosupported project management for the largescale spraying operation. The GFATM has alsoprovided financial support to the initiative.37

• Advocacy and facilitation: Together with LSDI,BHP Billiton provides support and a neutralforum to convene local and regionalgovernment bodies.

Today, the LSDI hascompleted indoorresidual spraying(IRS) over 100,000square kilometresof contiguouscontrol area,protecting apopulation of 4.7million people.Malaria prevalence inthe Mozal region hasbeen reduced by nearly80% allowing construction ofsecond smelter which considerably decreasedincremental operational costs.

Small business development, mainly in tourism,has created about 1,000 jobs.39 The initiative hasalso engaged in local capacity building, which isof critical importance in Africa. This has includedbuilding research, technical and othercompetencies required for locally driven effectivemalaria intervention. The initiative’s successderives from a fully integrated approach whichrequires countries to work together to harmonizeintervention strategies.

3. Advocacy and facilitation

The convening and coordinating power thatcorporations bring to bear on governments andNGOs to lobby for favourable legislation andtrade rules is a valuableasset in addressingpolicy and regulatoryissues. For instance,corporations havetaken up the causeof highlighting theshortage ofmedical expertise,technology transfer,consumer educationand the dangers ofcounterfeits. Examples ofthe kinds of companies withcore capabilities for advocacy and facilitation are:• Media and public relations companies can

advise public health agencies on effectivepublic awareness campaigns for malariaprevention.

• Energy and pharmaceutical companies thatcan provide support to NGOs andgovernments to help shape policy.

• Any company with a strong brand that can beleveraged to raise awareness of thehumanitarian and economic burden of malaria.

• Companies with marketing expertise that canbe used to create demand for and ensureproper use of malaria interventions such asinsecticide treated nets.


“For us, the role ofbusiness is more than charityand a bottom line; it is to be a

catalyst for economic developmentthrough real action and a sustainable

development agenda. This is about morethan malaria control – by addressing malaria,

we are removing a key obstacle to human andeconomic development in the region.”

Andre van der Bergh, Regional Advisor,Southern Africa Health, Safety,

Environment and Communities, BHPBilliton

“We have developedgreat lobbying, coordinating

and marketing skills and haveapplied these core competencies in

our efforts to increase consumerawareness of malaria as well as other life

threatening diseases.”

Jenni Gillies, HIV/AIDS Specialist,SABMiller

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• What is the overall roadmap?• How can we appropriately set expectations?• Where can we contribute uniquely?• Where can we partner complementarily?• How can we start small and scale up based

on key learnings?• Who will provide credible, sustainable

leadership for the corporation?

A structured and systematic approach toanswering these questions can provide corporateleadership with actionable strategies to effectivelyengage in efforts to control malaria.

III. Conclusion

Even given appropriate incentives andcapabilities, private sector interventions inmalaria are not without risk. Demand scenarioscan be volatile, break-even projects can easilysustain losses and under-delivery can recast thebest intended actions as part of the problemrather than a solution, creating PR challenges.Activities must also be carefully coordinated toavoid replicating work already being done. Bestpractices from successful interventions suggest10 key questions for companies to ask tostrategically determine opportunities for actionon malaria:

• What is our credible self-interest? (How do webenefit?)

• What is the value proposition? (How do othersbenefit?)

• How will we establish sufficiency? (How muchis enough?)

• How can we manage our involvement tocreate a measurable result in business terms?


Box 4 Examples of Advocacy and Facilitation

GlaxoSmithKline’s African Malaria Partnership committed US$ 1.5 million in 2005 to the Malaria Consortium to expandinternational malaria advocacy to increase resources for prevention and treatment.35

Unilever has initiated workplace programmes providing education, preventive care and treatment to employees on all oftheir agricultural plantations in Africa.36

Sun International promotes a Malaria-Free Zone highlighting its malaria-free gaming resorts, which receive more than1,000 tourist visits every month. Accompanying integrated vector management programmes have sprayed almost31,000 households in a 17-kilometre radius.37

Since 2000, ExxonMobil has focused on advocacy for increased international awareness and resources through itsAfrica Health Initiative. To date, it has spent more than US$ 11.5 million on R&D, advocacy and field malaria controlprojects and is continuing to invest with a focus on African countries with major ExxonMobil operations and employeepresence.38

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I. Introduction

The Millennium Development Goal (MDG) oneducation pledges to ensure that by 2015children everywhere – boys and girls alike – willbe able to complete a full course of primaryschooling. However, since 2000, much of theworld is not on track to meet this goal. Morethan 100 million school-aged children do notattend school; of these, 60% are girls. The vastmajority (96%) are in the developing world,particularly sub-Saharan Africa and South Asia.Among children who do enrol, many drop outbefore completing primary school. In sub-Saharan Africa, primary school enrolment is 58%and the completion rate just 33%.40

Developing countries addressing educationchallenges fall into two distinct groups. Manygrowing or middle-income countries have seenmajor improvements in enrolment rates in recentyears. These schools are still under funded; theylack supplies and modern curricula and needadditional resources to provide quality education.However, the more severe challenge is in someleast developed countries where enrolment ratesare very low. These schools also lack essentialsupplies, but the first priority is to create anenvironment suitable for learning by addressingbasic needs for school infrastructure, as well asstudents’ health and nutrition.

The cost of achieving the education MDG isestimated at between US$ 7 to US$ 17 billionper year41 – figures unlikely to be attained bypublic funding alone. In poor countries,challenges extend across the education system.Developing country education systems facesignificant challenges. One of the most visible isthe lack of sufficient funding, which reflects weakpolitical commitment at national and global levelsand frequently poor management of existingfunds. Additionally, many schools lack basicamenities, including teaching materials, electricityand sanitary facilities. There is an acute shortageof teachers, and existing educators may bepoorly trained or frequently absent. Curriculummay not meet national or international standardsor effectively prepare students for skilled jobs,especially those in technology-focusedindustries. Transforming attitudes and expandingopportunities to raise the perceived value ofeducation is often needed in poor countries. Forexample, many poor children do not attendschool because their household or workresponsibilities represent a more immediateimperative for the family than potential futureincome that may be gained through education.Girls in particular often miss school due to homeresponsibilities or because the school does notoffer them a safe or culturally appropriateenvironment.

Applying Core Business Competenciesto Help Achieve Universal Primary Education

Figure 1 Educational Attainment Worldwide

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Education is critical to all countries and isrecognized as a necessary condition forsustained economic growth. Education is closelylinked to health byreducing HIV/AIDSinfections, maternaland child mortality.Educating girlsand women wasa major factor inreducing hungerfrom 1970 to1995. There isalso a moralimperative toprovide children withthe opportunity foreducation, which is recognizedas a fundamental right in the 1948 UniversalDeclaration of Human Rights.

The Business Case for Improving Education

An effective education system is critical toeconomic growth and developing a thrivingprivate sector. Improving education benefits theprivate sector in several significant ways by:• Building a skilled labour force. Education

expands the pool of qualified workers, whichattracts foreign investment and leads to jobcreation.

• Increasing purchasing power. Well-educatedchildren are more likely to have higher payingjobs as adults, giving them more purchasingpower and boosting the country’s economicgrowth.43

• Improving productivity. Primary education is akey factor in manufacturing productivity inleast developed countries, while post-primaryeducation is necessary for innovation.44

Improving education around the world is in thelong-term interest of every business. Individualfirms may benefit from engaging in educationprojects in a variety of ways, including:• Enhancing skills of workers. Firms operating in

a developing country can invest in the futureof its workforce by helping to improve thecountry’s education system.

• Developing new markets. By collaboratingwith local partners, companies can test newbusiness models or products and gain accessto new markets. Education partnerships canalso help facilitate new business relationships.

• Enhancing brand reputation and strengtheningcommunity relations. Corporate engagementin educational programmes can build brandrecognition. Long-term investments ineducation infrastructure can solidify the firm’spresence in the community.

• Employee motivation. Engaging in education-related projects can bolster employee moraleand retention.


Box 1 Basic Education: Top Opportunities for Applying Business Capabilities

1) Establish the basic conditions for effective learning• Improve school infrastructure. • Develop and distribute appropriate supplies and equipment. • Provide school meals and health services. • Expand access to affordable, quality education.

2) Improve educational content and skill building• Strengthen curriculum, content and teacher training.• Enable appropriate 21st century skill building for employability.

3) Foster effective education management • Promote performance-oriented, results-driven management and innovation.• Develop financing mechanisms and planning.

4) Engaging in advocacy • Build public support and political commitment to improve education. • Create new models that engage all stakeholders in collaborative PPPs.

“For India to maintainits competitive advantage in

the global knowledge economy,we need people with strong technical,

business and communication skills. Thisrequires industry-academia partnerships

to help prepare students to meet thedemands of the industry and integrate

their theoretical knowledge with practicalexperience.”42

Nandan Niklekani, InfosysTechnologies

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II. Top Opportunities for ApplyingBusiness Capabilities

The education value chain (shown in Table 1,p. 40) presents opportunities for involvementamong a wide range of industries. These rangefrom helping to meet infrastructural andeducational supply needs to improvingmanagement systems at local and nationallevels. Even if their core business does notdirectly relate to the education sector, manycompanies find their core competencies can addsignificant value. For education, the mostsustainable private sector interventions are oftenthrough public-private partnerships, althoughthere is also significant scope for philanthropicsupport. The high leverage opportunities forbusiness engagement outlined below are thosewhere a significant private sector competencycan be applied effectively to high need areas inthe education system.

1. Establishing the Basic Conditionsfor Effective Learning

1.1 Improve school infrastructure In extremely poor regions, many schools lackbasic infrastructure, such as weatherproofbuildings, sufficient classroom space, cleandrinking water, sanitation facilities, electricity andfurniture. Providing basic facilities can have far-reaching effects. For example, a study in Ugandaconcluded that the lack of separate latrines forgirls was a major factor forcing girls out ofschools.45 In these countries, capital investmentis urgently needed before capacity can beincreased in other areas of the education valuechain.

Philanthropic contributions, although notsustainable over the long term, can providefunds for basic school infrastructure. Expertiseand resources from the private sector deployedwithin a public-private partnership can helpaccelerate progress, particularly in regions wherethere has been little recent improvement.

Industries with particular competencies on thesefronts include:• Banking companies can establish financing

mechanisms for capital investment.• Construction and engineering companies can

assist in the design, construction andmaintenance of new or upgraded facilities.

• Energy companies can provide generators soschools can have electricity.

• Logistics and transport companies candistribute supplies necessary for capitalimprovements.

• Telecommunications companies can connectschools to communications networks to allowfor telephone and Internet access.

1.2 Develop and distribute appropriate supplies and equipment

Many developing country schools lack the mostbasic traditional supplies such as textbooks,notebooks and blackboards, not to mentioncomputer, laboratory or other equipment. Bothas manufacturers and as philanthropicsupporters, private sector firms can play a role inproviding sufficient supplies to prepare studentsfor 21st century economies. Industries withcapabilities in this arena include:• Information technology and

telecommunications firms can produce lower-cost equipment that meets the educationalneeds of a developing educational market.

• Logistics and transport companies can deliversupplies and equipment.

• Pulp and paper companies can provideresources for books that meet therequirements of local curricula.

• Retail and consumer companies cancontribute and deliver school supplies and/orequipment through their rural distributionnetworks.


Box 2 Example of Improving School Infrastructure

Shell has invested in improving Nigeria’s education system byfunding infrastructure and equipment (science supplies andtextbooks), teacher training and adult literacy programmes. Itawards 2,600 secondary school and 850 universityscholarships annually. To involve the community, localauthorities conduct the tests for the scholarship.

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1.3 Provide school meals and health servicesIn many poor countries, students’ health andnutrition levels are an essential need that must beaddressed in order to make further progress in theclassroom, in terms of both attendance andperformance. Schools offering basic meals,healthcare and health education may become the“front line” providers of such services in thecommunity. In least developed countries, schoolfeeding programmes are one of the most effectivemethods for significantly increasing enrolment,particularly for girls. As one expert noted, “A hungrychild can not concentrate…Hungry children areunlikely to stay in school. School-based feedingprogrammes have proven effective in encouragingenrolment, increasing attention spans, andimproving attendance.” Studies in Pakistan,Cameroon, Morocco, Jamaica, Niger and othercountries have confirmed these conclusions.46

Schools can also provide micronutrientsupplements such as iron and iodine to significantlyimprove students’ nutritional status at very littlecost.

Providing basic health services and education canalso increase attendance. Annual de-worming costsjust US$ 0.20 per child and can dramaticallyimprove attendance. For example, in Kenya aschool based treatment of hookworm reducedabsenteeism by 25%.47 Health education andtraining are critical components of a poor student’seducation and should be integrated into theeveryday curriculum. Many private sector industriescan play a role in improving student nutrition, forexample:• Agribusiness, food and beverage companies can

provide fortified food, supplements and set upschool meals programmes sourced from locallyproduced food.

• Healthcare and pharmaceutical companies cansupport the provision of basic services,medicines and basic health education forchildren through extension workers.

1.4 Expand access to affordable, qualityeducation

Reducing the cost of education can dramaticallyincrease educational access and enrolment. Thiscan be achieved through providing scholarships,eliminating school fees or providing cashtransfers conditional on school attendance.Often the greatest increase in enrolment is seenamong girls. For example, when Ugandaeliminated school fees, total enrolment nearlydoubled in two years and enrolment among thepoorest girls rose from 46% to 82%.48

Scholarships to post-primary educationalinstitutions also offer both incentives andopportunities for students. By producing morehighly educated students, scholarships may alsoexpand the pool of potential teachers.

All industries can support scholarships on aphilanthropic basis. Companies with long-termfixed investments – such as energy firms –increasingly are investing in education as part oftheir community relations building activities. Thiscontributes to a skilled workforce, improvedcommunity relations and enhanced companyreputation.

34

Box 4 Example of Expanding Access to Affordable Education

The Bradesco Foundation is Brazil’s largestprivate provider of free education. The Foundation’s39 schools across the country providekindergarten, elementary, high school and technicaleducation to nearly 50,000 students, with another50,000 attending adult education classes eachyear. Dropout rates are lower than 3%. Half amillion students have been through the schools inthe last 50 years.


Box 3 Examples of Providing School Meals and Health Services

Infosys Technologies helped found and lead the Akshaya Patra foundation, an NGO that serves midday meals tohundreds of thousands of children per day in several Indian states. The programme, which targets poor and food-insecure populations, has improved student enrolment, retention and participation, while dramatically reducing nutritionrelated problems such as skin infections, anaemia and underweight. It plans to serve 1,000,000 children daily by 2010.Its operations are audited by KPMG.

ExxonMobil employees volunteer at the Mukuru Promotion Centre, which provides services to slum children in Nairobi.Run by the Sisters of Mercy, the Centre includes schools that provide daily hot meals to over 4,200 students.Attendance increased with the provision of clean sanitary and washing facilities for students. The Centre also serves asa “front line” provider of community health services, giving medicine and meals to students’ family members if they fall ill.

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2. Improving Educational Contentand Skill Building

2.1 Strengthen curriculum, content andteacher training

In many countries, schools are already able toprovide the most basic needs to create asuitable learning environment. However,significant barriers to learning remain, includinginappropriate or insufficient textbooks, outdatedcurricula and teachers who lack required skills.For many schools, increased use of ICT is thebest way to improve educational content andquality, while at the same time building essentialemployment skills. Where teaching expertise islow, ICT can be used to improve learning andunderstanding for both teachers and students. Itcan also be used to develop a collaborative andpersonalized approach to learning, whichremains uncommon in many developingcountries, or to reach students outside theclassroom. Curriculum improvement efforts needto be adapted to local cultural contexts andshould be designed for both social and practicalrelevance. Support is also needed to developcurricula and assessment frameworksappropriate for 21st century and local needs.

Teacher training institutions often need significantsupport to undertake effective curriculum designand execution. Many education systems indeveloping countries also have to contend withmajor shortages of qualified teachers; newmodels of teaching through electronic resourcesand community involvement may be required toovercome this shortage on a large scale. Anumber of industries have specific capabilitiesthat can be applied to improving educationalcontent and training:• Information technology and communications

companies can provide equipment, softwareand staff time that can be used by teachersfor training and by students in the classroom.

• Media and publishing companies can developupdated educational materials suitable for thelocal market.

• Science and technology firms can collaboratewith local partners and educational experts todevelop appropriate and updated curricula.


Box 5 Examples of Strengthening Curriculum, Content and Teacher Training

China has faced severe environmental challenges as a result of its rapidly growing economy and its traditionaldependence on coal. BP is part of the Environmental Educators Initiative, a partnership with the World Wildlife Fund andthe Chinese Ministry of Education, to develop environmental content for the national curriculum. After a pilot phase thatreached 1.5 million people, the Ministry of Education developed National Environmental Education Guidelines, which itestimates will have an impact upon 200 million students by the end of 2005.

In 2005, Sun Microsystems co-founded the Global Learning Portal (GLP), a free network of online education-relatedcommunities and tools designed to improve education quality through connectivity, exchange, teacher empowermentand innovation. GLP allows educators to find colleagues, content and communities online. Successful pilot programmeshave been run in Brazil, Ethiopia, Nicaragua and Uganda; there are members in 78 countries. GLP was founded withpublic and private seed capital and is run as a PPP to ensure flexibility and innovation, with financial and technicalsupport from governments, multilateral agencies, corporations, NGOs, higher education institutions and others.

Microsoft partnered with the Government of Namibia on the African Pathfinder Initiative, to incorporate computertechnology into schools and teaching curricula. The initiative developed a blueprint for incorporating ICT into thecurriculum based on four components: leadership, 21st century skill development, digital inclusion and innovativesoftware solutions. It also undertook teacher training to develop local capacity and sustainability.

Through the Jordan Education Initiative, Cisco Systems and the Cisco Learning Institute partnered with theGovernment of Jordan and a local technology company, Rubicon, to develop a progressive, interactive mathematicscurriculum for grades 1-12 that is now being rolled out to all of Jordan’s 3,200 schools. It has catalysed broader effortsto improve infrastructure, classroom technology and teacher training. Several other countries are considering adaptingthe curricula for use in their education systems.

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2.2 Enable appropriate 21st century skillbuilding for employability

One of the most significant challenges in schoolsystems in the developing world is enablingdigital inclusion, to ensure low-income studentsaccess to IT-based skills and technologies. Inaddition to basic skills such as reading,mathematics and science, technological literacyis becoming essential for long-term success increating a more skilled workforce. Private sectorfirms can provide the tools and training for suchlearning, as well as coaching and mentoring tostrengthen students’ career development skills.These can include softer “process” skills such ascollaborative work, time and informationmanagement, all of which are important foremployability. The suite of skills needed variesnecessarily with the cultural and economicsetting; modern skills needed in rural areas areoften quite different than those applied in urbanand technologically developed job markets.Industries with core capabilities in these areas ofskill development include:• Information technology and

telecommunications companies can provideequipment, software and training to foster IT-based skills.

• Professional services, financial andeducational firms can provide training ontechnology applications, skill building trainingand coaching on career development.

• Engineering and construction firms canprovide scientific and technical training tostudents.

3. Fostering Effective EducationManagement

3.1 Promote performance-oriented, results-driven management and innovation

Many developing country education systems arewoefully under funded and often poorlymanaged. Improving the management ofeducation systems can bring significant gainsand at the same time ensure that newinvestments are effectively used. Many privatesector firms have management expertise thatcan be of significant value to schools inimproving resource allocation, human resourcepolicies, transparency and operational efficiency.Companies can assist school administrators andlocal, regional and national authorities inadopting performance oriented, results drivenmanagement practices. This includes ongoingmonitoring and evaluation of educationalperformance and teaching methods, as well asdata-driven decision-making at the administrativelevel. Strategies to retain high-performing, skilledteachers are important for systems alreadystruggling with severe shortages of qualifiedteachers. Driven by improved dissemination ofinformation, multistakeholder partnerships cangive local communities more direct oversight ofschool policies, which can engage parents andlead to improved educational performance.

New management practices inevitably bring newchallenges to education administrators.Currently, the ad hoc nature of management anddecision-making in many education systems indeveloping countries is a major constraint tomore efficient use of resources. Private sectoradvising and partnerships can encourage


Box 6 Examples of Enabling Skill Building for the 21st Century

Recognizing the gender gap in the information technology field, Cisco Systems established the Institute GenderInitiative in 2000. This project seeks ways to increase girls’ access to IT training and career opportunities, beginning withthe Cisco Networking Academy Program, which has operated in more than 160 countries. Cisco is working to collectand disseminate information on best practice recruitment and retention strategies and is developing recruitment toolsand resources designed to attract more women into IT-oriented careers. The company has partnered with numeroustrade associations and NGOs to extend its reach.

In 2000, Coca-Cola Romania brought a career orientation programme for high school students to major cities acrossthe country. Students received coaching from professionals on how to choose a career that matches their skills, write aresume and apply for a job. After a successful test phase, the programme was extended to 150 high schools andreached 23,000 students. An extensive public relations programme was created to support the initiative and to buildbrand awareness and goodwill.

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innovation, help administrators manage changeand promote discipline in work routines andprocesses throughout the supply chain.Developing the capacity of local management tomake decisions within a country-wide frameworkis also important. Industries with capabilities tocontribute on this front include:• Information technology and communications

companies can build information systems forimproved efficiency and transparency ofeducation system management.

• Logistics and transport firms can work withschools and suppliers to develop businessmodels that use distribution networks forschool purposes.

• Media and publishing companies candisseminate basic information about schoolperformance to increase accountability.

• Professional services firms can develophuman resource policies and managementpractices for national, regional and localeducation authorities.

• All firms can fund scholarships and studytours for education administrators to attendprofessional development programmes andvisit model education programmes.

3.2 Develop financing mechanisms andplanning

An important component of educationmanagement is effective financial oversight andplanning. Schools often face considerablefinancial shortages to meet basic operationalneeds. In addition, administrators often lack thecapacity to efficiently manage or innovativelyleverage available resources. Decentralization of

education funding can lead to more effective useof funds, but only if adequate training andcapacity are available at the local level. Privatesector firms with core competencies in theseareas can make significant contributions bypartnering with education authorities and localNGOs to help modernize financial systems andencourage transparency, efficiency andinnovation.

New revenue streams to supplement publicfinancing and philanthropic contributions canhelp close existing financial gaps. Using schoolfacilities and equipment to generate revenue isone option that has shown promise, but careneeds to be taken to ensure that such strategiesdo not undermine the school’s educationalquality or physical infrastructure.49 The privatesector can add value both by generating newrevenue and, more importantly, by helping tomanage existing and new finances. Industrieswith applicable capabilities include:• Banks can develop financial management

strategies for new and existing revenue.• Information technology and communications

companies can provide equipment andsoftware needed to update financialaccounting systems and partner with schoolsto rent facilities and computer equipment forrevenue generating purposes.

• Professional services firms can collaboratewith local, regional and national administratorsto create systems that encouragetransparency in budgeting and reporting andto teach rigorous accounting practices.


Box 7 Example of Developing Financing Mechanisms and Planning

In 2002, Accenture, a global management consulting, technology services and outsourcing company, formed apartnership with WorldLinks, a non-profit organization. In India, the partnership increased students’ access to technologyby converting existing school computer labs into revenue generating community access centres when schools were notusing them. With funding from Accenture, five labs were transformed. Individualized business models helped schoolsmeet the monthly expenses of their computer labs, which sometimes turned a profit. Accenture helped develop abusiness and operational model, a school selection process and training materials. Local Accenture staff assistedthroughout the implementation process. Based on lessons learned, this model has been applied to schools elsewhere inIndia, as well as the Dominican Republic and Uganda.

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4. Engaging in Advocacy

4.1 Building public support and politicalcommitment to improve education

Organized private sector advocacy efforts canmake a significant impact upon governmentdecisions on educational resource allocation andpolicy. Strong leadership is critical to bring abouteffective education reform, and sustained privatesector advocacy can help strengthen political willto provide such leadership. Companies can bepowerful allies in advocating for and supportinggovernment development of a comprehensive,nationally owned education strategy thatincludes curriculum development and teachertraining, as well as guarantees credible budgettransparency.50 Private sector leadership canalso help change public attitudes about thepurpose and modality of education.

Advocacy efforts by a broad array ofstakeholders – local communities, NGOs and theprivate sector – have potential to bolster nationalstrategies and can drive “a new paradigm foreffective partnership”.51 All industries can play arole in advocacy by:• Supporting bold political leadership,

government transparency and reform.• Advocating for increased public financial

support for education.• Acting as a convener for public-private

partnerships and business coalitions. • Developing awareness campaigns to build

public support for education.• Mobilizing parents and communities to

become involved in local education.

4.2 Creating new models that engage allstakeholders in collaborative PPPs

Collaborative PPPs – those engaging a widearray of different stakeholders – can provide thebroad public support and range of expertise thatis needed to strengthen entire educationalsystems at local or national scales. The privatesector can play a key role in such collaborativePPPs. An important requirement is strongpolitical commitment, best evidenced by theexistence of national reform frameworks andexisting public-sector efforts to improveeducation. Through collaboration, stakeholdersrecognize that by combining the strengths ofgovernment, the private sector and developmentcommunity partners, greater impact is achieved.A key element of success is a joint commitment,among partners, to create innovative and robustmodels for education advancement that are bothscalable and sustainable in the long term tomeet the community’s specific developmentneeds. Successful “win-win” PPP models involvepartners who both contribute value and reapbenefits through their engagement. Companieswith core capabilities to contribute tocollaborative PPPs include:• Multinational companies in the IT and other

technical sectors can bring technical skills,government access and financial resources topartnerships, and have a strong incentive tocontribute to an educated workforce.

• Local companies in various professionalsectors, which have a strong understanding ofthe local markets, policy and cultural contexts,as well as a strong investment in the value ofeducation.

• Stakeholders in other sectors who play vitalroles in leading and facilitating educationPPPs, including government, donors and civilsociety. These are outlined fully in Table 1 ofthe following section.


Box 8 Example of Building Public Support and Political Commitment

In February of 2005, Sun Microsystems hosted its annual Worldwide Education and Research Conference, a gatheringof more than 600 education leaders from 45 countries to discuss technology innovations in education. The Conferencewas followed by Sun’s second annual Lifelong Learning Forum, a gathering of industry and government leaders from 20countries to discuss best practices and technologies for global education and research. At the conference, a globalnetwork of thought leaders in education discussed online tools and technologies for improving education, researchcurriculum and teaching methods.

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challenge for committed private sector firms is tomatch their core competencies to specific needswithin the education system. Private sectorintervention can be as simple as providing directfinancial assistance to education relatedcharities, but for many businesses the mostvaluable contribution is the application of coreskills and knowledge through public-privatepartnerships.

III. Conclusion

There are many intervention points within theeducation system where highly valuable privatesector competencies can be applied. Achievingthe goal of universal primary education requiresan integrated approach to ensure that the entireeducational value chain develops in parallel andthat capacity is increased in all areas. The


Box 9 Example of a Collaborative PPP Involving All Stakeholders

The World Economic Forum’s Global Education Initiative

The World Economic Forum’s Jordan Education Initiative (JEI) is a multistakeholder partnership of more than 45 partnersworking to support the government of Jordan’s efforts in education reform. Initiated in 2003 by Forum membercompanies in the Information Technology and Telecommunications industries, with the support of His Majesty KingAbdullah II of Jordan, it looks at every element of educational practice, from curriculum design, pedagogical processesand student assessment to lifelong learning needs. It has helped teachers and government officials to develop a newapproach to the education system reflecting worldwide best practice. The initiative will ultimately reach 100 DiscoverySchools with more than 50,000 students, with plans to scale up proven approaches to all Jordan’s public schools infuture. Partners in the JEI – including 17 global corporations, 17 local firms and 11 governmental and non-governmentalorganizations – have contributed more than US$ 25 million to the initiative to date.

In partnership with the Forum, the JEI approach is now being adopted for use in other developing countries according totheir specific needs. In the Palestinian Territories, the initiative will support grade 1 to 12 education in more than 148schools, adopting a decentralized approach led by individual districts with strong participation from community basedorganizations and NGOs. In India, the Rajasthan Education Initiative will focus on empowering young girls to participatein the knowledge sector through ICT skills and e-curricula. At the same time, it will address important enabling factorssuch as school construction, health and sanitation and midday meal programmes.

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Table 1 The Primary Education Value Chain

Policy design andreform(nationalframeworks)

Appropriations(public & privateinvestment)

Educationstandards(testing, evaluation,licensing)

Administrativestandards(transparency,meritocracy,efficiency)

Leadership(local, national &global level)

Communityempowerment(leadership andsupport of localeducation throughinput, engagementand oversight)

Finance(funding,procurement)

Site procurement(land access,permits, security ofacces / location)

Design (economic,practical, andculturalappropriateness;community multi-use options)

Services(energy, water,internet)

Facilities(sanitation, kitchen,science, athletic,vocational, arts)

Security(physical security ofstudents, teachersand property;information security)

ManagementStructure (national, districtand school levelleadership;communityengagement;decentralization)

ManagementEfficacy(efficiency, capacity,performance- anddata-drivendecision-making)

ManagementInnovation(goal setting;innovation;partnerships;changemanagement)

FinancialManagement(financing models;transparentbudgeting andreporting)

Human Resources(recruiting andretention; capacitybuilding)

CurriculumContent andDesign(design of contentappropriate to localstandards, cultureand employmentopportunities)

Partnerships(input from newpartners, andsharing ofresources, to fosterinnovation incurriculumdevelopment)

TeacherAvailability(budget availability;licensing; recruiting;retention)

Quality ofTeaching(training andcapacity building;gender and culturalawareness;outcomes-basedmethodologycurriculum and ITtraining)

Supplies andEquipment(funding andprocurement;student andteaching materials;IT hardware andsoftware; science /technicalequipment)

Nutrition(school meals,nutritionsupplements, cleanwater, nutritioneducation, take-home rations)

Health(health monitoring;de-worming;physical activity;health and hygieneeducation)

Access(physical securityand cultural factorsaffecting girls'attendance;economic

access toschooling)

CommunitySupport(parentalinvolvement inschooling andhomework;community input tocurriculum andschoolmanagement)

Goal Setting(establishingperformance goalsand standardsrelevant to allstakeholders)

Testing(ongoing evaluationto measureperformance)

Monitoring(monitoring ofbudgetexpenditures andadministrativeefficacy;benchmarkingprogress towardeducational goals)

Reporting(transparent metrics;public reporting;communityconsultation/feedback)

Dissemination(exchange ofeffective modelsand lessonslearned)

Public Policy& Engagement Infrastructure Administration

Curriculum &Teaching

StudentPerformance

Monitoring &Evaluation

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Another important element of success is aligningprivate sector efforts with broader policyframeworks and strategies. At the national level,this can mean a specific strategy (such asKenya’s “Njaa Marufuku Kenya” hunger strategy),departmental policies or the Poverty ReductionStrategy Paper. At the global level, this canmean broad campaigns or commitments, suchas the World Declaration on Education For All orthe Millennium Development Goals.

Principles of Effective Partnerships

Companies that have been successful in publicprivate initiatives often begin by assessing theirown interests, goals andassets, then think creativelyabout how those couldbe applied to best meetdevelopment needs.Learning from others’experiences is key tosuccess; much can begained from sharingsuccess stories andprinciples of effective PPPmanagement. In consultations with the WorldEconomic Forum, PPP practitioners recommendthe following key guidelines (Box 10):

I. Think Globally, Partner Locally andBuild Local Capacity

Development efforts have often failed becausetheir sponsors, though well meaning, lackedsufficient knowledge about the local context ordid not design their programmes for long-termsustainability. Companies engaging in the typesof opportunities outlined inthis report havegenerally been mostsuccessful whenworking incollaboration withlocal organizations.By partnering withgovernments, NGOsor other agencies,companies can access localknowledge, which allows them to moreeffectively assess opportunities, risks andpotential markets. They can then develop newbusiness models suited to the environment andengage effective implementation partners.Ensuring sustainability also requires investing incommunity leadership – involving the communityin decision-making from the start, then buildinglocal capacity to carry the work forward as otherpartners disengage.


"Partnership iscritical to effective

problem solving of thechallenges facing businessand the developing world."

Jane Nelson, HarvardUniversity

“For a PPP to besustainable in business

terms, the companyshould get a measurable

benefit out of it.”

Ludo Oelrich, TNT

Box 10 Guidelines for Successful PPPs

• Find motivated partners and agree on common goals, acknowledging different competencies and approaches.• Choose the partnership model best suited for the goal.• Identify a well-connected “champion” to ensure continuity and success of the partnership.• Create a win-win partnership with measurable benefits and results.• Define partners’ roles and responsibilities clearly from the onset and build capacities to fulfill them.• Develop strategies for sustainable PPP financing and management in the early stages of partnership planning.• Focus on meeting the needs of customers and stakeholders, rather than external actors such as donors. • Represent and include all stakeholders in the planning and life cycle of the partnership. • Agree on clear targets, monitor progress, and agree on an exit strategy where appropriate.• Manage PPPs as a business unit within the company. • Provide strong coordinating mechanisms and effective governance for collaborative PPPs.• Convene public and private stakeholders to catalyse and broker partnerships, share best practices and guidelines,

and identify funding sources.• Conduct consistent and long-term monitoring and evaluation studies to evaluate PPP outcomes.

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Collaborative PPPs: BuildingMultistakeholder Commitment

Diverse, multistakeholder PPPs can foster cross-sectoral collaboration and resource sharing thatyields significant benefit. Collaborative PPPshave the advantage of bringing together a broadrange of partners to pool their competencies andresources towards a common goal. The JordanEducation Initiative, described in Box 9, is oneexample of such a collaborative approach,involving 45 partners from the private sector,government and civil society. Table 1 illustratesthe range of stakeholders that engaged in thiscollaborative PPP, outlining what each brings toand gets out of the partnership.

II. Securing Financing for PartnershipActivities

Despite the growing number of promisingexamples, progress in scaling up PPPapproaches continues to be hampered byinformation gaps and divergent perspectives that

make it difficult for potential partners to find andengage with each other. The costs of initialnegotiations and feasibility studies also create abarrier. Greater brokering and financing services,together with broader fora to share effectivepractices, can help scale up workable PPPapproaches.

Financing public-private partnership activity isoften a challenge. Multilateral developmentbanks and bilateral aid agencies are increasinglydedicating seed funds to help catalyse PPPactivities, but often have difficulty identifyinggood projects. Commercial loans can beunattractive if the PPP activity generates little orno revenue to cover interest costs.

For poor communities in particular – where basicinfrastructure, services and market activity arescarce – philanthropic, donor or publicinvestments in community production levels andhealth are often needed to kick-start marketsystems. The traditional approach to corporatephilanthropy, involving direct funds transfer to


Table 1 Roles in Multistakeholder Public-Private Partnerships

Partner Inputs Contributed Benefits Gained

Global private sector Core business competencyStrategic philanthropyPolicy advocacyProject leadership

Local accessImplementation experienceNew skills

International donors ResourcesDevelopment expertise

Fulfilling institutional goals

International NGOs Global networksImplementation experience

Exposure to PR and partnersBest practices learning

Academic institutions Education expertiseMonitoring capabilities

New experienceKnowledge

Local industry Local leadershipEntrepreneurshipExecution on the ground

Global expertiseNew business relationships

Local government Vision and leadershipOpen the door to innovation

Access to resources

Local NGOs Development expertiseLocal networks

Global knowledgeAccess to resources

Source: Adapted from McKinsey & Company, JEI, 2005.3

3 McKinsey & Company, “Building Effective Public Private Partnerships: Lessons Learnt from the Jordan Education Initiative,” May 2005.

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III. Maximizing Synergies to AdvanceProgress on Hunger, Malaria andEducation

Hunger, malaria and education are linked.Hunger and malaria reinforce each other,particularly among children whose immunity iscompromised by malnutrition, creating adownward cycle of child health. Bothmalnutrition and malaria also reduce schoolenrolment and performance. On the positiveside, education – particularly for girls – is part ofthe solution, improving communities’ health andnutrition status. Taking an integrated approach tothese three interlinked issues can leverageresources and extend programme impacts. Oneintervention that targets all three issues isinvestment in girls’ education through directeducational programmes, provision of home-grown school meals to improve enrolment andperformance, or through community health andagricultural extension to reach those who are notin school.

IV. Leveraging Enlightened Self-Interestfor the Public Good

The strategies for private sector engagement inhunger, malaria and education initiatives whichhave been outlined in this report vary widely frommarket development to philanthropic andadvocacy oriented initiatives. Yet they all have acommon theme: they engage the corecompetencies of business and yield some typeof benefit to the company, in the course ofadvancing progress toward public goals. Suchintersections of public and private interests holdtremendous untapped potential for development.Unleashing that potential requires carefulinvestigation to identify potential matches,together with greater public and private supportfor scaling up proven models when they arefound. The end result has the potential to betransformative, changing the management andperformance of health, education and foodproduction systems while empowering poorcommunities with the tools they need for a self-sustained future.

local organizations (usually NGO) can be highlyvaluable in filling financing and capacity gaps forurgently needed programmes. This represents agrowing funding stream for developmentprogrammes, and amounts to several billiondollars per year globally. However, directphilanthropy is not sustainable at a large scaleover time.

An alternative that is increasingly being applied isstrategic philanthropy, that is, using philanthropicfunds to catalyse and complement businessactivity around a certain goal. An example wouldbe a food manufacturer or retailer that usesphilanthropy to increase small farmers’productive capacity and improve their businessorganization, then buys theirproduce for businesspurposes. In suchcases, philanthropicinvestments caninclude financingtrainingprogrammes,providingbusinessdevelopment andtechnical assistanceservices, developingmarket associations andproviding free or subsidizedinputs. Another example would be companiesthat make in-kind donations of products (such aswater purification powder) or services (such asmobile phone market price information systems)as part of their philanthropic efforts to improvehealth and incomes. The key concept isinvesting cash or in-kind philanthropic resourcesin building capacity and catalysing self-sustainingsystems.


“To unleash thepower of the private sector to

serve the rural poor, we need tolower the high risks and transactioncosts they face in working with poor

farmers. This is where strategicphilanthropy can play a major role, by

supporting new institutional arrangementsand investments.”

Akinwumi Adesina, TheRockefeller Foundation

PhilanthropicInvestment

Public-PrivatePartnership

Self-SustainingMarkets

Figure 1 Financing Models for Different Stages of Business Engagement

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Hunger

Gareth M. Ackerman, Deputy Chairman, Pick‘n Pay Holdings, South Africa

Akinwumi Adesina, Associate Director, FoodSecurity, Rockefeller Foundation

Glenn Denning, Director, MDG Centre,UN Millennium Project

Hans Eenhoorn, Retired Senior Vice President,Unilever

Ulla Holm, Global Director, Tetra Pak Food forDevelopment Office

Eusebius Mukhwana, Executive Director,SACRED Africa

Herbert Smorenburg, Director, Unilever HealthInstitute Africa, Middle East and Turkey, UnileverSouth Africa Foods (Pty) Ltd

Bengt Wattenstrom, Business DevelopmentDirector, Ericsson

Bjorn Wille, Programme Director Africa, TetraPak Food for Development Office

Malaria

Andre van der Bergh, Regional Advisor,Southern Africa Health, Safety, Environment andCommunities, BHP Billiton

Dr Murray Coombs, Business Group Doctor,Unilever

Phil Davis, Managing Director for EnvironmentalHealth, Sumitomo Chemical (UK) plc

Jenni Gillies, HIV/AIDS Specialist, SABMiller

Zaiton Idrus, Regional Head of CorporateAffairs, Africa, Standard Chartered

Ursula Lebuso, HR Officer: Employment Equityand HR Projects, Sun International

Melinda Moree, Director, The Malaria VaccineInitiative

Dr Shiva Murugasampillay, Malaria CountryOperation Support, WHO - RBM Department

Dr Steven Phillips, Medical Director, GlobalIssues and Projects, ExxonMobil

Hans Rietveld, Global Marketing Manager forTropical Medicine, Novartis

Anuj Shah, Chief Executive Officer, A to Z TextileMills

Krista Thompson, Vice President/ GeneralManager, HIV/AIDS, Becton, Dickinson andCompany

Brian Trelstad, Chief Financial Officer, AcumenFund

Juan-Manuel Urrutia, Deputy Director,NetMark

Chris Weeks, Director, Disaster ResponseTeam, DHL

List of Interviewees

We thank the following individuals for their contributions in providing thoughtful input to the respective reportchapters through interviews.

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1 WHO, World Malaria Report 2005 (Snow estimatesa broader range, between 300 – 660 million clinicalepisodes of malaria. Snow, Robert. et al, Theglobal distribution of clinical episodes ofPlasmodium falciparum malaria, Nature: 434, 10March 2005.)

2 Basic Facts on Malaria, Roll Back MalariaInformation Sheet, 2005.

3 Carter, Richard and Mendis, Kamini N.,Evolutionary and Historical Aspects of the Burdenof Malaria, Clinical Microbiology Reviews:15 to 4,October 2002 for 1950-1997 data; World MalariaReport 2005, Malaria-at-a-Glance, RBM March2001 http://rbm.who.int for 1997-2001 data.

4 Unicef, Millennium Development Goals: 6. CombatHIV/AIDS, Malaria and Other Diseases.

5 WHO, World Malaria Report 2005.6 GFATM, www.theglobalfund.org.7 World Bank, Rolling Back Malaria: The World Bank

Global Strategy & Booster Program. AdvanceEdition, 2005.

8 White House, News Release, 30 June 2005http://www.whitehouse.gov.

9 BHP Billiton, Case Study: Malaria, 18 April 2004. 10 Economic Costs of Malaria, Roll Back Malaria

Information Sheet 200411 Sachs, Jeffrey and Pia Malaney, The Economic and

Social Burden of Malaria, Nature: 415, 7 February2002.

12 Sachs, Jeffrey, Macroeconomics and Health:Investing in Health for Economic Development,Report of the Commission on Macroeconomicsand Health, WHO, December 2001.

13 Centers for Disease Control and Prevention,Malaria: Vector Control, 2005.

14 MVI currently has 10 vaccine development projects.Malaria Vaccine Initiative, Malaria VaccineDevelopment Projects, 2005.www.malariavaccine.org.

15 New Perspectives: Malaria Diagnosis, WHO, 2000. 16 Ibid.17 Management Sciences for Health, Changing

Malaria Treatment Policy to Arteminisin-BasedCombinations: An Implementation Guide, Roll BackMalaria, GFATM, USAID, March 2005.

18 Moran, Mary, et al, The New Landscape ofNeglected Disease Drug Development,Pharmaceutical R&D Policy Project -London Schoolof Economics, Wellcome Trust, September 2005.

19 Boston Consulting Group, Malaria Vaccine Initiative,Medicines for Malaria Venture Analysis, 2005.

20 Juan Manuel Urrutia, Interview, 17 November 2005.21 Spielman, Andrew, et al, Industrial Anti-Malaria

Policies, prepared for the World Economic Forum,2002.

22 Ibid.

23 Improving ITN and LLIN Supply, NetMark Africa,September 2005, http://www.netmarkafrica.org.

24 Management Sciences for Health, ChangingMalaria Treatment Policy to Arteminisin-BasedCombinations: An Implementation Guide, Roll BackMalaria, GFATM, USAID, March 2005; Chemicaland Engineering News, Fighting Malaria, Vol. 83,No. 43, 24, October 2005.

25 Africa Malaria Report, WHO, 2003.26 Anuj Shah, Interview, 16 November 2005.27 Phil Davis, Interview, 21 November 2005. 28 Novartis Corporate Citizenship Overview,

www.novartis.com29 DHL and the IFRC, DHL Corporate Citizenship,

2004.30 Andre van der Bergh, Interview,16 November 2005.31 Lubombo Spatial Development Initiative: Malaria

Control Program, www.malaria.org.za.32 Ibid.33 Andre van der Bergh.34 Lubombo Spatial Development Initiative: Malaria

Control Program, www.malaria.org.za.35 Ibid.36 Readhead, Pamela, Report from the Field,

Humanitarian Affairs Review, Summer 2004.37 Ursula Lebuso, Interview, 18 November 2005.38 Ibid.39 Ibid.40 Center for Global Development, www.cgedv.org.41 UN Millennium Project, “Toward Universal Primary

Education: Investments, Incentives andInstitutions,” 2005.

42 Nilekani, Nandan, President, CEO and ManagingDirector, Infosys Technologies. World EconomicForum interview, November 2005,www.weforum.org.

43 Bloom, David E. , Craig, Patricia H., BasicEducation and Competitiveness in Central America,June 1998

44 Papageorgiou, Chris, Distinguishing between theeffects of primary and post-primary education oneconomic growth, date?

45 Toward Universal Primary Education: Investments,Incentives, and Institutions, UN Millennium Project,2005.

46 Ibid, p. 57.47 Ibid, p. 57.48 Ibid, p. 5449 Building on the Monterrey Consensus: The

Growing Role of Public-Private Partnerships inMobilizing Resources for Development, WorldEconomic Forum, 2005.

50 Herz, Barbara, Sperling, Gene, What works in Girls’Education, 2004.

51 Ibid, p. 54.

References

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MDG_PPP_Report_03 13.1.2006 10:31

Photo Credits:

Children’s education project (India):Photograph by Lisa Dreier.

Malaria health education (Africa):Courtesy of GlaxoSmithKline Africa MalariaPartnership Photo Library.

Women hulling cashews (Mozambique):Courtesy of the United States Agency forInternational Development.

Agricultural fields (Kenya):Photograph by Martha Stack.

MDG_PPP_Report_03 11.1.2006 10:24

The World Economic Forum is an independentinternational organization committed to improvingthe state of the world by engaging leaders inpartnerships to shape global, regional andindustry agendas.

Incorporated as a foundation in 1971, and basedin Geneva, Switzerland, the World EconomicForum is impartial and not-for-profit; it is tied tono political, partisan or national interests.(www.weforum.org)

MDG_PPP_Report_03 11.1.2006 10:24

harnessing private sector ... - world food programme€¦ · a wide range of core business...

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