THEORETICAL FRAMEWORK

 Establishing many dynamic and ground-breaking business

initiatives that empower low-income people and foster sustainable livelihoods.

 The principles that underpin CSR provide the foundation on which

these new business models are built.  These business models are highly transferable and can have a much

greater sustained development impact.

3 Exploring new ways of

The ground-breaking initiatives featured:

doing business

 Companies are pushing far beyond the conventional boundaries of

corporate philanthropy to demonstrate how ‘inclusive business’  Inclusive business – business that includes all social groups –

companies are committed to investing resources to develop their potential

 These initiatives create valuable community resources, and some of

the benefits are clearly visible and can be directly attributed to the success of these business ventures

4 Maximizing opportunities Create more opportunities for the poor: for the poor

 Opportunities for access to all basic need.  Opportunities to earn a living, to accrue income and to invest in the

family’s future  Broad-based access to market-led opportunities is essential to kick

start the virtuous cycle of economic and human development.

Business and Entrepreneurial Review Hermien Triyowati 87

5 Playing to each other’s Involve public-private partnerships & many new partnerships models. strengths

 Recognition that the private sector brings technology, resources,

effective delivery, global reach and an understanding of how to bring a product to market

A shared vision and forward-looking strategies provide an unprecedented opportunity to work together toward poverty alleviation.

Source: WBCSD, 2004

By investing in new business ideas that provide innovative products and services and create jobs and skills in low-income communities, companies act as a powerful catalyst for market-based development. Transforming these ideas into commercially-viable realities enables companies not only to invest large amounts of capital into implementing these; it also allows the scaling up of successful pilot projects, thereby improving the lives of significantly more people.

By recovering initial costs and becoming self-financing, these business solutions can grow and spread far beyond the limited possibilities of even the best corporate philanthropy projects. Though each region is unique in terms of the challenges it presents and each calls for a tailored solution, these business models are highly transferable and can have a much greater sustained development impact.

3. Exploring new ways of doing business The ground-breaking initiatives featured, show how companies are pushing far beyond the conventional boundaries of corporate philanthropy to demonstrate how ‘inclusive business’ – business that includes all social groups – can make a difference to people’s lives. These companies are committed to investing resources to develop their potential so that it can strengthen the business role in the concerted global effort to reduce poverty. These initiatives create valuable community resources, such as new income streams for impoverished families, improved living conditions and the provision of essential services. Some of the benefits are clearly visible and can be directly attributed to the success of these business ventures. However, for many projects it is still early days, and it will take time for the tangible benefits to feed through. In addition, their innovative nature means that there are very few widely accepted indicators and monitoring mechanisms to quantify development benefits. This makes assessing these more challenging.

4. Maximizing opportunities for the poor ‘Pro-poor’ businesses aim to create more opportunities for the poor to improve their own lives: opportunities for access to safe water, food, housing, education, medicines, transport and energy; opportunities to earn a living, to accrue income and to invest in the family’s future. These opportunities help the deprived to foster their own development. Broad-based access to market-led opportunities is essential to kick start the virtuous cycle of economic and human development. For a local economy to thrive, both the supply and the demand side of the market equation must be stimulated.

88 Business and Entrepreneurial Review Vol. 11, No. 1, October 2011

In the developing world, small and medium-sized enterprises (SMEs) are major drivers of innovation, entrepreneurship and employment. Building up a healthy mix of quality large, medium and small companies is essential to strengthen and broaden the economic base. We strongly support strategies to build capacity for local entrepreneurs and to invest in training to ensure a skilled workforce to develop the local economy.

5. Playing to each other’s strengths Many success stories involve partnerships with government agencies and NGOs, and many new partnership models are being created.

Business can benefit enormously from the on-the-ground expertise of development organizations and vice versa. There is growing recognition within the development community that the private sector brings technology, resources, effective delivery, global reach and an understanding of how to bring a product to market, none of which are core competencies of development agencies but all of which can be used to help meet development needs. Over the last decade, the business and public policy agendas have drawn closer. A shared vision and forward-looking strategies provide an unprecedented opportunity to work together toward poverty alleviation.

Figure 7: The Mapping of Local Economic Development

LOCAL ECONOMIC DEVELOPMENT – THE MAPPING

COMPREHENSIVE PROGRAMS : GOVERNMENTS

LOCAL

SYSTEM ANALYSIS :

SWOT ANALYSIS &

L. E. A. PACKAGE :

 Creating Wealth And Opportunities

IMPROVED

 Economic Assessment

 A strong regulatory and

 Leveraging Business Core Competencies legal framework

 Targeting Diagnostics

 Exploring New Ways Of Doing Business  Building the capabilities of local enterprises

 Policy Analysis

 Maximizing Opportunities For The Poor  Core infrastructure

S .A .

TE GY

 Playing To Each Other’s Strength s

IV 1. JOINT

PRIVATE SECTOR

J R E  Entrepreneur

 Coordinator B  Human building B A  Facilitator

A 3. BUILD

 Financial building

 Stimulator

 Capacity building

PRIVATE SECTORS

MEASURED:

HUMAN DEVELOPMENT

NON GOVERNANCE ORG N

- ECONOMIC BASE MODELS

COMMUNITY BASE ORG

- HUMAN DEVELOPMENT

- ECONOMIC GROWTH WITH EQUITY

DONOR / CREDITOR E - MACRO ECONOMIC PARADIGM

6. TOOLS

- FULL EMPLOYMENT

- HIGH PROSPERITY EXPERTISE

INDICATORS

- GREEN DEVELOPMENT - ERADICATE POVERTY

Business and Entrepreneurial Review Hermien Triyowati 89

Figure 8: The Flow Diagram of Local Economic Development