Sachs speaking at Global Compact Leaders Summit

The Global Compact has a major role to play in achieving the Millennium Development Goals (MDGs). While the MDGs are sometimes viewed as the responsibility of governments, the Goals can only be achieved through the active partnership of government together with business and civil society. The key is to promote effective and novel forms of government-business-civil society partnerships to address the challenges of poverty, hunger and disease. 

At the very core of economic development lies technology – the ability to meet human wants and needs in new and improved ways.  All major economic progress is predicated on technological advance. The era of modern economic growth, commencing with the Industrial Revolution, is also the age of rapid technological advance. Herein lies the key to understanding the role of business in development.

Modern business is the leading repository of modern technology. While academic scientists may be at the world’s frontiers of scientific knowledge, available technologies for human well-being are heavily concentrated in the actual workings of private sector companies, and often in the patents held by those companies. While there is, of course, considerable technological expertise in the government and non-profit sectors as well, business is indispensable in providing the technologies needed for economic success.

Achieving the Millennium Development Goals is to a large extent about bringing effective technologies to bear to meet the challenges of hunger, disease and income poverty. Consider the treatment of major killer diseases such as AIDS and malaria, two of the targets of the MDGs. AIDS treatment today is based on anti-retroviral medicines, developed and produced mainly by large pharmaceutical companies. Malaria treatment today is based largely on artemisinin-based combination therapies, also produced by major pharmaceutical companies.   

In both cases, partnership between the companies and the public sector is vital to any large-scale success in fighting these epidemics, and the companies are eager to participate. The public sector is needed to help finance the scale-up of basic health services in low-income settings, and to purchase medicines on behalf of the impoverished populations who can not afford them, even at not-for-profit prices. The private sector has the responsibility to ensure that its life-saving technologies reach the poor, for example by setting prices for the impoverished not at the patent-protected prices of the rich-country markets, but at the cost of production instead. This is the philosophy which is now allowing the rapid scale-up of AIDS and malaria control in Africa, based on public financing through the Global Fund to Fight AIDS, Tuberculosis and Malaria, and prices set at production cost (i.e. with no profits) by the major producing companies. Indeed, some companies are bearing significant costs rather than earning profits on these activities.  

The same possibilities for partnership apply in the case of hunger, especially the goal of increased food productivity in subsistence regions. While publicly-financed scientific institutions have developed many of the high-yield varieties of food crops needed to feed Africa, it will be private companies that provide the large-scale seed multiplication, fertilizers and water management equipment needed for a continent-wide doubling or tripling of food production. Only a partnership between public sector financing and private sector technologies can bring about the long-sought African Green Revolution. 

It is, therefore, time for all companies in the Global Compact to join the effort to achieve the Millennium Development Goals.  Of course many have already been doing so, some quite explicitly and others implicitly by supporting poverty reduction activities in the countries in which they are working. Thus, the call to action is to build on what is already started – by having all members of the Global Compact join the effort and intensifying work that is underway. 

There are many ways for a company to join the effort while keeping its legitimate business focus front and center.  Companies are companies, not charities, so sensible strategies must be based on sound partnerships of business, government and civil society, not on faulty models that expect the wrong things from business. Here are three ideas for how companies can become more involved.

First, each company should identify its core technologies and management skills, to identify how it can contribute to the fight against poverty. For example, for manufacturing companies, the issue might be the provision of medicines, or bed nets, or processed foods, or telecommunications and computing hardware, or some other technologies relevant for the MDGs. For service sector companies, the best approach might be the provision of direct services (transport, logistics, information technology and accounting) to help development efforts. 

Second, each company should identify how best to deliver on its core technologies. This might include the company choosing to source its primary commodity supplies from low-income communities, with special care given to operating in a manner that promotes local economic development. It might include training of workers in low-income settings, even in the rural villages. It might include direct provision of the key technologies through donations or at production cost, rather than at high prices which exclude the poorest countries.

Third, each company should actively search for partnerships to expand the reach of its technologies in the poorest countries. Many companies have traditionally simply overlooked the poorest of the poor, since there are no markets today for their company’s goods and services. Yet with public partnerships, such as donor agencies or the Global Fund, there may be ways to use public financing to enable the poor to gain access to vital technologies. Companies can seek advice on how best to do this from the Global Compact Office or the MDG Support Team of the United Nations Development Program (UNDP).  

Many companies are already showing the way. Pharmaceutical companies are expanding the reach of their medicines, vaccines and diagnostics. Food companies are helping impoverished communities to grow more and healthier foods.  Logistics companies are improving the supply response to natural disasters. Accounting firms are helping development projects with expert accounting and consultancy advice. Textile firms are supplying high quality, insecticide-treated bed nets. Telecommunications equipment providers are expanding mobile phone access to the poorest and most remote places on the planet. Many are partnering with the Millennium Villages Project supported by the UNDP. The list goes on and on. 

My proposal is therefore simple. Each company in the Global Compact should identify the best ways that it can partner in the fight to achieve the MDGs, whether as a supplier of technology, a purchaser of village output, an advocate in public discussions, or in some combination. Each company should stretch its own activities, entering into new countries and partnerships, to take on the MDG challenge. Each company should let the Global Compact, and the world community, know what it is doing. This is not only for accountability, but also to share and spread good ideas and novel approaches. And leaders of the fight for the MDGs − in governments, international organizations, and civil society − should reach out to business to realize the power of partnerships to solve global problems and end extreme poverty in our time. 

Jeffrey Sachs is Director of the Earth Institute at Columbia University and Special Advisor to UN Secretary-General Ban Ki-moon on the Millennium Development Goals.