At the time of this column I will be travelling on a trip that will cover China and San Diego – more of which I will talk about in my next column.
This month the column is in the safe hands of Rob Hardeman, Deputy Chairman of Matrix, the NI Science and Industry Panel. Rob looks at the topic of ‘shared value’ described by Michael Porter as ‘generating economic value in a way that also produces value for society by addressing its challenges.’
In a period where there is increasing perception of misalignment between the intentions of “fat cats” of business and the real needs of the wider population, those inequalities have driven an even sharper scrutiny of business. Local entrepreneur and academic, Roger Warnock, used his time as a Clore Social Fellow, supported by BiTC NI and Matrix, to study Shared Value, the much more synergistic relationship between business, its workers and its customers.
Shared value, is, like many of the best things, not at all new. Successful entrepreneurs from all ages, like Sir Henry Wellcome, have become better known for their philanthropy than their businesses as the two often diverged rapidly after their death. Most companies today are well aware of “Corporate Social Responsibility”; usually a small budget reserved for doing good things for the community. A few like TATA in India and Almac here in Northern Ireland go further and build the machinery of their corporations inside charitable elements to enable a dual focus on a wider social agenda alongside their economic aspects.
All these models, however and possibly inadvertently, continue the sense that business remains separate from society, however the profit that is made may be spent. Some millennial start-up companies have dramatically changed this view and have shown that businesses need to understand the power that comes from a convergence of stakeholder interests, a greater support from customers and enhanced attractiveness to prospective employees adds shareholder value.
When one considers alliances such as Fairtrade, small local social enterprises or the incubation of start-ups by mentor companies, it is clear that the model has many out-workings. The common factor is to identify and expand the business’ connections between societal and financial progress, which in turn leads to a greater total pool of economic and social value.
Among many facets of these changes described by Roger, Rob offers three as immediate food for thought: -
e.g. how could a green energy revolution empower disadvantaged communities and help alleviate unemployment and fuel poverty ?
e.g. how could novel methods of mobile payments and co-operative working enable small specialists in remote locations gain access to new markets ?
e.g. how could supporting a circular economy in a local area offer growth for a cluster of companies at all stages of the value chain from design to remanufacture ?
You can read more about Shared Value in Roger’s recent report – Sustainable Shared Value – which can be downloaded from the Matrix website (matrixni.org) or for those who would like to look deeper, we recommend a paper in Harvard Business Review in 2011 by Porter & Kramer ‘Creating Shared Value’.
Shared value and the opportunity it affords for more sustainable business models could be a major factor as we try to build, in Northern Ireland, a viable model for economic success against the headwinds caused by nationalistic reactions to the negatives of globalization and the digital world not being shared with the positives.