Corporate Citizens - Investing in Prosperity

Photos from UNESCO and NTPC

The old adage states, “Give a man a fish and feed him for a day; teach a man to fish and feed him for a lifetime.”  One of the great obstacles to world prosperity is a lack of basic education and vocational training among the disadvantaged of the world.   In its pamphlet The Right to Education UNESCO states:

“Education is an inalienable human right.  It is also unique in that it empowers the individual to exercise other civil, political, economic, social and cultural rights, attaining a life of dignity, while ensuring a brighter future for all, free from want and fear.” [1] 

While education is not a silver bullet against all the ills of the world, providing the disadvantaged of the world with that lifeline enables them to more effectively overcome the conditions that bind them to their life of ignorance and poverty.

Due to the economic incentive and the self-respect that gainful employment provides, businesses are in a unique position to influence the populations of the countries in which they operate for good.  There are three basic areas where this influence can be manifest.  First, as an employer, the company can provide vocational training.  Second, it can provide incentive and money for education in job-related fields.  And finally, the business can invest in the local school system, enabling a new generation of quality employees and creating a good public image.  The responsible corporate citizen doesn’t strive to merely extract all possible profit from their host country, but to improve the lot of its citizens as well and build lasting prosperity that will benefit them and the people for years to come.

In reality, these economic relationships are symbiotic relationships in which firms provide income, training, education, economic development, and humanitarian aid to the community and the host society provides motivated employees who are ever more capable of contributing to the profitability of the company.

While much of the world’s humanitarian aid merely applies a bandage to the symptoms of poverty by supplying basic provisions, businesses have the will and incentive to treat poverty’s root causes by providing economic incentives to work, go to school, and challenge the political, social, and institutional barriers to personal prosperity.  The first step is giving employees on-the-job and formal vocational training and then paying them for the use of those skills.  A person values what he has earned more than what is merely given to them.  Similarly, a villager in a developing country will take more pride in the bread he has earned than that, which was given to him with no effort on his part.  Although direct humanitarian aid is important, the hand that lifts him out of the cycle of poverty not only fills the belly, but builds pride in oneself by making them a self sufficient provider for their family.

The second area of influence involves programs to provide and encourage formal education.  By encouraging unskilled employees to seek formal and vocational education in a company related field, businesses can build a cadre of well trained employees, who know and understand the local culture and can therefore more effectively lead their coworkers.  Meanwhile, the employee increases his earning power and ability to influence his society by bettering themselves and improving the prospects for their posterity.

The final task, while long term in nature, is arguably the most important.  A company that exploits the workers and resources without contributing to the wellbeing of the community is often resented and does earn the loyalty of its employees or the host populace.  By investing in the local school system, a company improves the lives of the students, while also building a more capable generation of prospective employees.  Additionally, a father that sees his employer making his child’s life better will often be more devoted than one who only sees the monthly paycheck.  The UNESCO’s 2002 report on its “Education for All” initiative states, “…education is important for at least three reasons.  First, the skills provided by basic education, such as being able to read and write, are valuable in their own right...Second, education can help to displace other more negative features of life…Third, education has a powerful role in empowering those who suffer from multiple disadvantages. Thus women who have benefited from education may simply survive better and longer than they would otherwise.”[2]

While humanitarian aid in the classic sense of providing for the immediate needs of the less fortunate is vital, the underlying goal of any aid program should be to remove the underlying causes of suffering.  Responsible businesses can effectively fill this role.  A great example is Western Union’s Our World, Our Family program.  In addition to providing direct humanitarian aid, Western Union also funds education and mentoring programs to help build self sufficiency in migrant communities.  Western Union has provided educational benefits to over 500,000 migrant youth in the United States over the past 26 years resulting in a 94 percent graduation rate.[3] Western Union’s program and similar initiatives of numerous other corporations are making differences in the lives of those otherwise condemned to poverty.[4]  By giving the gift of education these corporate philanthropists are providing the proverbial fishing hole that will likely feed the man and his loved ones for generations to come.[5]

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[1] UNESCO.  The Right to Education (pamphlet).  September 26, 2005.  Paris, France.  <www.unesco.org/education>.  Accessed March 12, 2008.

[2] UNESCO.  Education for All:  Is the World on Track?  2002 EFA Global Monitoring Report.  Paris, France.  <www.unesco.org/education> .  Accessed March 12, 2008.

[3] Western Union.  “Our World, Our Family Program.”  Copyright 2001-2008.  <http://corporate.westernunion.com/ourworld.html> .  Accessed March 12, 2008.

[4] Also see the Indian company NTPC’s corporate responsibility website at https://www.ntpc.co.in/en/corporate-citizenship/empowering-people for another example of how corporations can build sustainable development by investing in the local population.

[5] Other Sources used in this article include: 

-          Bernstein, Jason.  “Is Education the Cure for Poverty?”  The American Prospect.  April 22, 2007. < http://www.prospect.org/cs/articles?article=is education the cure for poverty >.  Accessed March 12,2008.

-          Lodge, George C.  “Using Business to Fight Poverty.”  Working Knowledge for Business Leaders.  Harvard Business School.  August 12, 2002.  <http://hbswk.hbs.edu/cgi-bin/print> .  Accessed March 12, 2008.

-          UNESCO.  “Right to Education.”  <http://portal.unesco.org/education/en/ev.php>.   Accessed March 12, 2008.

-          University of Maryland.  Poverty Rates By Education (graph).  <http://bsos.umd.edu/socy/vanneman/socy441/trends/poveduc.jpg>.  Accessed March 12, 2008.

-          World Bank Group.  “Education and the World Bank, What is the World Bank Doing to Support Education.”  2008.  <http:web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTEDUCATION>. Accessed March 12, 2008.

-          World Bank Group.  “FAQ.”  Updated April 2006.  <http:web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTEDUCATION>.  Accessed March 12, 2008.

-          World Bank Group.  “Education and Development, Why is Education Important to Development?.”  Copyright 2008.  <http:web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTEDUCATION>.  Accessed March 12, 2008.