In a world plagued by problems of all sorts such as world hunger, water shortages, deforestation, pollution and global warming, world-renowned planner Michael Porter talks about how to solve them from a business vision.
Governments and NGOs can not solve these problems alone since there are not enough resources for this. While he praises NGOs as an extremely proactive and positive structure but that is always into the challenge of resources lack. And where the resources come from? Well, from business activity, he argued.
His main argument is that most of the wealth is owned and generated by companies and these are the ones that can play a critical role in fighting the problems humanity faces under a scheme he calls ‘shared value’, which means that an economic value is created through business activity and a social/environmental problem is solved.
He mentions that audience is understandably thumbs down on some corporations that have polluted or generated problems. He adds that under old corporate scheme, to gain more companies tended to ignore effects that their activity could have on the environment. Under new scheme he proposes now, companies not only have to become more involved in issues of corporate responsibility, but go further and he says they have an opportunity to become the solution to problems, not being part of them.
Only business can generate economies of scale that can solve these complex problems and only businesses can generate resources, when they have a profit and that profit is the one that allows creating growing solutions to make them self-sustaining. The main challenge is how to make a critical mass of companies to see and act on this new formula, says Porter.
Among positive examples he brings there are Israeli drip irrigation companies that are making a revolution on agriculture by enlarging production and saving the precious liquid. In a world where population is growing, where there is an increased demand for food, particularly in developing countries where living standards are increasing at a breakneck pace but where the amount of soil and water is limited, and even worse the agricultural frontier is shrinking due to desertification and global warming, drip irrigation is a stunning solution because it makes optimal use of a scarce resource and expands production at the same time.
In his presentation, Porter also refers to sustainable forestry companies that sow Eucalyptus rather than extracting timber from native forests. He mentions distance training to remote areas – another area where Israel has much to offer. Then there are the inventions of some companies to medical issues such as AIDS.
Porter is considered the best business teacher of all time. He is Professor at the Harvard Business School. He is also founder of a number of NGOs.