Growth economists argue vociferously about the “true path to growth”—there are those of the Jeffrey Sachs camp who say that aid has simply never been enough and that we need more, and there are those of the William Easterly camp who criticize the institution itself, arguing that it is ineffective and fosters dependency. However, they all agree that a thriving business environment is both a means to and an end of sustainable economic growth. The intersection between business and policy is garnering more attention and interest in the world of international development, with “systems” and “process” thought increasingly recognized as crucial to sustainable policy.
“Green MBAs” or “sustainable MBAs” mean much more today than careers in social enterprise or environmental hedge funds—they provide an invaluable tool kit for future policymakers. Recognizing this, many business schools—Columbia, Wharton and Harvard included—offer joint programs with their schools of public policy or international affairs, offering would-be policymakers a chance to sharpen their analytical skills and learn process-based ways of thinking about solutions to some of the most challenging problems of our time.
Student organizations at Columbia are mobilizing behind this concept at both the graduate and undergraduate levels. Last month, the Green Business Club, International Development Club and Social Enterprise Club attended the 2009 Social Enterprise Conference, held at the Columbia Business School. Net Impact, an international umbrella organization that takes a business approach to sustainable development, has an undergraduate chapter as well as graduate chapters in the Business School and School of International and Public Affairs. Delta GDP is an undergraduate student group dedicated to promoting fair trade and small businesses in developing countries.
There has been a shift in the intersection between business and development over the past decade—it now extends beyond corporate social responsibility to the promotion of local business as a route to economic development and the integration of business models and ways of thinking in policy formulation.
At Friday’s star-studded conference titled “Peace through Reconstruction,” held in Casa Italiana, most speakers seemed to agree that business is effective in bringing about holistic and sustainable development in war-torn states. In the case of Afghanistan, a focus of one of the panels, Associate Director of the Center on Capitalism and Society Graciana del Castillo cited local entrepreneurship as a powerful driving force in the transition from a unilateral, militaristic, and unaccountable centralized power to a more decentralized, private-sector-driven structure in the nation’s governance. Professor Ishaq Nadiri, former senior economic advisor to Hamid Karzai, stated that in a country where 40 to 60 percent of the population is unemployed, cost estimates of $700 million for the ongoing war fail miserably in accounting for the loss of human capital.
In countries reliant on donor money, the highest paying jobs are often those affiliated with donor organizations, and so the best talent is drawn to charity rather than to entrepreneurship. If the brightest and most talented citizens were drawn to entrepreneurial activities, reconstruction and independence from aid could be more effectively attained.
However, business is only successful if effective leadership, governance, and institutions are present. Which comes first—economic development or effective leadership—is, however, a chicken-or-egg question. Regardless, it is undisputed that business is strongly correlated with sustainable development and economic prosperity.
Business feeds into sustainable development in other ways as well—many challenges in development relate to pricing and supply chains as well as the most efficient way to deliver services and products to communities in need. Organizations such as the The World Bank and Acumen Fund, a nonprofit philanthropy that provides low-interest loans to specific local entrepreneurial projects in developing countries, look to hire MBAs for their understanding of organization, process, and efficiency.
However, the interaction between the two worlds is not frictionless. Over the past two months, several companies including Exelon and Nike, resigned from the United States
Chamber of Commerce because of its questionable policies towards climate change and global warming. Under pressure from activists and shareholders to act on their corporate social responsibility, the companies resigned. This has unleashed a barrage of negative press and media accusations of “denialism” against the Chamber.
“Doing well by doing good” has grown from an idea into a mission statement for many businesses. For Columbia’s politically active and environmentally engaged community, perhaps it is time to see the Business School as more than a stopping point for future investment bankers and consultants. The link between business and development policy is stronger than ever before, and business management has become one of many effective and conventional routes into the world of doing good.
Monica Varman is a Columbia College junior majoring in economics-mathematics and concentrating in sustainable development. She is a senior editor of Consilience and works on the Millennium Village Project. Yours Sustainably runs alternate Tuesdays.
opinion@columbiaspectator.com
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