Business Citizenship for Social Investment: New Initiatives for Shaping the Built Environment
Akhtar Badshah, Ph.D.	© & Author Info

Abstract

This paper investigates a growing urban phenomenon where business leaders in partnership with urban leaders are developing new approaches to the urban challenge in cities around the world. This paper analyzes new tools and techniques used in projects initiated by business leaders in partnership with local government and community. It identifies the issues surrounding business citizenship, determines what drives businesses to undertake such partnerships, establishes why certain city officials are able to capitalize on business citizenship and develop working partnerships, the obstacles these partnerships face and how they are overcome, and areas where success is most likely. In this paper, I show how business leaders are developing programs of social investments that have made a significant difference to developing cities that are more economically vibrant, have social stability, and a healthier, more engaged citizenry.

Introduction

The consequences of poorly managed urbanization have become clear. Although urbanization is a problem in our own country, cities in the developing world especially face many shortages and problems: insufficient housing, water and power; inadequate transportation; lack of public safety; unemployment and underemployment; increasing traffic; uncollected garbage and smog. This phenomenon is even more significant considering the disproportionate concentration of economic activity centered in and around cities. Aside from poor planning, other causes for this lag include inappropriate government solutions, lack of investment in infrastructure and skill-building, and fundamental problems in decision processes shaping the contours of the local political economy. Challenges facing urban planners include:

• mistrust and lack of a common perspective shared by key stakeholders;
• absence of a clear methodology to engage stakeholders in a purposeful and substantive interchange;
• unclear mapping of strategies;
• lack of leadership to lead and manage the urban decision-making process;
• poor transformation of ideas into solutions and solutions into results; and
• lack of a mechanism to exchange and leverage relevant global experience, thereby increasing the perceived costs financial and cultural of locally adapting and implementing solutions tried and tested elsewhere.

The economic, political and social context in which the city operates is also changing rapidly. The ability to draw direct investment to a city is predicated significantly on a government’s ability to improve infrastructure and create a vision that supports new economic activity. Politicians are increasingly being held accountable for their performance due to better informed constituencies. Also, as central government intervention decreases, it is being replaced by decentralization and devolution policies and creating a need for a new development framework in cities.

The recent economic crisis has widened the disparities between the rich and the poor. It has highlighted the nexus between globalization and urbanization, showing that cities throughout the world are linked both politically and financially. What happens in Atlanta or Bangkok is no longer of consequence only to the people of the United States or Thailand, but affects the entire world. It has also forced people to look at the wider consequences of economic development. Politicians, businesspeople, and nonprofit organizations understand that building a newly industrialized country requires solid political, economic, and social foundations—and that these three areas, once thought to be separate, are indeed tied at the core.

Let us take the role of the business sector first. It is important to recognize that businesses are not in the business of urban development, therefore the role of each sector is distinct in this process. Governments must introduce decentralization initiatives, undertake economic reforms, and liberalize policies. Non-governmental organizations and community groups that understand local needs and must lend their special expertise in program implementation and service delivery at the grassroots level.

Traditionally, the role of the business sector in community development has been that of philanthropist. But businesses benefit substantially from reforms and programs that foster stable, healthy communities, and can do more than create wealth. They can also widen economic opportunity, invest in human capital, promote environmental sustainability, and enhance social cohesion. Increasingly, they are becoming equal partners and contributors in efforts to create sustainable cities.

A recent study "Business a Partnership in Development: Creating wealth for countries, companies and communities," (1) undertaken by the Prince of Wales Business Leaders Forum, was a first major step in reviewing the issues surrounding this question of why businesses should be partners in development activities. Another study by the Committee for Economic Development "Rebuilding Inner-City Communities: A New Approach to the Nation’s Urban Crisis" (2) further highlights the role of businesses in city development and identifies some successful projects in the United States. A third "Global Corporate Citizenship – Rationale and Strategies" (3) by the Hitachi Foundation highlights ho companies have developed their strategies for social investment and its impact on the built environment. These and other studies argue that businesses have an interest in viable communities with healthy and thriving populations. Most businesses understand that livable cities need adequate housing, electricity and water; good transportation and sanitation systems; low unemployment and clean air; and safety for its residents, among other things. In addition, businesses may be more receptive to the needs of the communities they are helping.

Although businesses have found they cannot replace government or community organizations, either as donors or policy designers, they do bring special capacities to a partnership. They possess a focused energy and goal orientation that helps to court other partners.

Corporate Citizenship

The need to build social capital across traditional notions of private sector, public sector, NGOs and other multisectoral actors is now more apparent than ever. The private sector has a unique role in building social capital in this context. Given this new reality, corporate responsibility is at the forefront of the urban governance and development debate. Given the reduction in spending by governments all over the world, businesses are increasingly being asked to play an active role in development efforts. At the heart of the debate on governance procedures and the roles of government, business and civil society lies the tension between economic competitiveness and social cohesion. It is a tension that is unlikely to disappear and there are few certainties about the outcome, other than that interaction and partnership among different sectors will be crucial.

Several major studies one undertaken by the Prince of Wales Business Leaders Forum (4) and the other by the Hitachi Foundation (5) show a correlation between creating shareholder value and societal value. Both of these publications argue that the leadership companies of the future will be those that base their missions and their corporate strategies around creating measuring and managing value. Running their business with a clear and strong commitment to building shareholder value-added, but recognizing the potential for building societal value-added as an integral part of the same process. Jane Nelson the author of Building Competitiveness and Communities calls this SV²  Shareholder value-added x Societal value-added. She has developed the five pillars of performance in companies that are creating shareholder value-added and societal value-added. (6)

Through her studies of 36 of the world’s most respected Financial Times 500 companies she has been able to show that these companies are contributing in three keys ways to development and progress by maximizing core business activities, increasing social investment, and engaging in policy dialogue.

David Logan and his colleagues show in their work, that as free markets take root globally, societies everywhere have begun to look for coinciding expressions of corporate responsibility or corporate citizenship. As we move into the 21^st Century global corporate citizenship is becoming one of the most dynamic issues. What is interesting is that the field of corporate responsibility is also changing from philanthropy to social investment. Today some of the major companies are developing innovative and sustainable funding mechanisms, are mobilizing core competencies, are developing partnerships, and undertaking community capacity building efforts.

These changes are not happening in a vacuum, there are several trends that are shaping the practice of corporate citizenship and these relate to how companies can and do engage in the process of building and strengthening society.

Global Corporate Citizenship  Key Trends (7)

• Companies are adopting investment and operating strategies requiring that all corporate activities serve "strategies" business purpose.
• Globalization of "corporate responsibility" rhetoric and expectations is occurring, particularly as transnational corporations carry practices to their bases of operation worldwide.
• "Doing more with less," is challenging companies to complete more work with flat or reduced resources, particularly human and financial resources.
• Companies are shifting emphasis in the kind of resource and action offered in their corporate citizenship activities.
• Corporate citizenship activities are being aligned more closely with business objectives and capacity, with the coinciding choices generally being more strategic and corporate –oriented and less "personal."
• Corporate citizenship/strategic social investment is increasingly being subjected to "bottom line" measure of accountability.
• The emphasis and distribution of activities increasingly reflects global profits and employment.
• Business is significantly influenced by the competing forces of homogenization versus hybridization.
• As global competitiveness yields price and quality purity, consumers are increasingly basing their purchasing decisions on the socio-economics, cultural, and environmental distinctions among companies.

Poverty in city neighborhoods harbors the most concentrated and difficult social problems that city managers have to face. Business commitments to help rebuild these communities are relatively new, encouraging opportunities for cooperative decision making. Until recently, businesses have largely avoided the inner cities, and have been uninterested in investing in the rebuilding of cities. The scale of problems has seemed to doom corporate initiatives to failure, threatening to open the way for unlimited claims on corporate resources.

Now, however, many corporations are joining with government and community groups as partners in rebuilding strategies. In part, this commitment acknowledges that business is a stakeholder in the success or failure of an entire urban region. Deteriorating surrounding neighborhoods can jeopardize a business, and the productivity of its work force threatened when youths are subjected to poor schooling or drawn into criminal activity.

Businesses have found that, even though they cannot replace government or community organizations as funders or policy designers, they can bring special capacities to a partnership. They possess a focused energy and goal orientation that can help galvanize their other partners.

From Responsibility to Enlightened Self-Interest

At the outset, it is necessary to reiterate and clarify the role of businesses in society, in order to avoid confusion and misinterpretation. The role of industry and business is to create wealth through the production of goods and services. The production of goods and services is to be carried out within a legal framework. Among other things, industry is expected to obey labor laws, pay taxes to the government, and respect the environment. Businesses and industries working within this framework are, according to many industry leaders, fulfilling their "social responsibility." To them, since social development is not the business (or responsibility) of the corporate sector, it is incorrect to "expect" the corporate sector to involve itself in development at all. (8)

Nevertheless it is well known that there are certain business and industry leaders who have, since their inception, made special efforts to go beyond the normal idea of business. In the United States, Europe, and parts of the developing world, corporate leaders have played a significant role in building the cities that we see today. Done traditionally under the enlightened philanthropist mode, corporations have lent support to the building of significant urban institutions that have shaped the urban landscape and increased the well being of generations to come.

Until recently, corporations largely avoided the more dilapidated areas and were not interested in participating in urban reinvestment efforts. Now, however, many are joining with government and community groups as partners in revitalization strategies. In part, this is an acknowledgment that business is a stakeholder in the success or failure of an entire urban region. Deteriorating surrounding neighborhoods can jeopardize the headquarters of businesses, and threaten the productivity of its work force when the locale’s quality of education is poor and its youth are drawn into criminal activity.

This surge of corporate activity is also partly driven because many corporations and businesses are facing greater scrutiny from their external community as well as from their internal members. These organizations are recognizing the need to adopt and display new beliefs and values regarding social responsibility. To do so requires the leadership to adopt new sensitivities to the social realities of the cities in which they reside and to take action. It is no longer financially feasible for an organization to be inattentive to the impact it has on the local community.

As a result, businesses are moving beyond the role of the traditional philanthropist and actively participating in projects that are aimed at improving the quality of life of a larger segment of the city population. They are recognizing that businesses benefit substantially from reforms and programs that foster stable, healthy communities, and can do more than create wealth. The private sector also has financial, technological, and management resources as well as a proven track record of providing lower production costs, delivering services more efficiently, maintaining capital equipment at a higher standard, making decisions faster than public bureaucracies, and offering consumers greater choice. They can also widen economic opportunity, invest in human capital, promote environmental sustainability, and enhance social cohesion. Increasingly, they are becoming equal partners and contributors in efforts to create sustainable urban environments.

As partners and contributors, businesses can play a role and have been doing so increasingly over the last two decades. Over the last ten years there has been a fundamental change in the approach of the business sector to environmental issues than in any other sector. (10) While there are far too many companiesmajor players as well as millions of small-scale enterprisesthat are adding to the planet’s environmental problems with little thought of their consequences, a growing number of corporations and small businesses have made a genuine and substantive commitment to increased awareness, management and improvement of their environmental impacts. For many businesses it is a commitment that recognizes not only the responsibility, but also the corporate advantage, of environmental leadership. This foray into environmentally sustainable issues has opened other avenues for business involvement in sustainable development.

The business sector has a critical role to play in the drive towards urban sustainability by:

1. Helping to tackle poverty and other social challenges through contributions to economic and human development
2. Partnering with the government and civil society to undertake programs and projects addressing urban challenges
3. Investing in cleaner production and promoting more sustainable consumption patterns
4. Developing products that are "green"—consume less energy and materials and have fewer adverse environmental consequences than conventional technologies and methods

Seeing the Possibilities

While businesses cannot replace government or community organizations as funders or policy designers, they possess a focused energy and goal orientation that can help galvanize government and community efforts. Where a clear, long-term benefit to all stakeholders is identified, business partnerships based on trust, accountability, transparency, and a sense of shared purpose, can be a powerful tool in support of sustainable urban development.

The public-private partnership modelwhere the public and private sectors assume co-ownership and co-responsibility for providing high-quality innovations and servicesis an alternative to both public sector monopoly and full privatization. Involving three sets of actors in sustainable joint municipal ventures is developing public-private partnerships among 1) international and national companies; 2) local companies; and 3) municipal or state agencies. (11) Each partner brings its unique talents, resources, perspectives, practices, and expertise. As partners in mixed capital companies and enterprises, public and private sector participants’ work to turn urban environmental problems into viable business opportunities and sustainable, economically sound, and socially conscious investments. This arrangement can result in both municipalities and private companies meeting their own objectives, and city dwellers enjoying an enhanced quality of life.

How does the private sector play a responsible role in the urbanization process and serve the interest of the community? What kinds of partnerships need to be formed to ensure equitable and sustainable urban environments? It is important to note that business can play other roles besides creating wealth. They can widen economic opportunity and participation, invest in human capital, promote environmental sustainability and enhance social cohesion. Investing in stakeholder partnerships, with both primary and secondary stakeholders, they can play a valuable role in enhancing a company’s reputation, competitiveness, productivity, efficiency, risk management, innovativeness and long-term survival. Such partnerships can range from:

• Commercially-driven alliances and joint ventures
• Socially-driven alliances and joint ventures
• Ventures which combine both commercial and social objectives

Five case studies three in the United States, one in India and one in the Philippines highlight some of the opportunities that are possible outside the conventional public-private partnership realm. (12) They demonstrate how business citizenship can improve the quality of life for everyone with a stake in the city and can be a win-win solution for both companies and communities. The first case in Atlanta, Georgia shows how several corporations in multi-faceted partnerships with the community can provide not only financial support but also managerial and technical support in inner-city urban revitalization efforts. The second project in Brooklyn, New York shows how a large corporation can effectively participate in urban redevelopment efforts as a way of doing business in a rapidly globalizing and changing environment. The third also in New York shows how business and the local community can effectively form partnerships to revitalize vital city areas. The fourth in Ahmedabad, India highlights the benefits and challenges of business sector partnerships with urban mangers to redevelop a major city artery that benefits both the city dwellers and local businesses. The fifth in Iligan, the Philippines highlights how businesses and the city can effectively partner in the solid waste management efforts within a city.

Comprehensive Community Development, The Atlanta Project, Atlanta (TAP), (13) announced by former President Jimmy Carter in October 1991, is the logical culmination of the model of direct corporate partnerships, and one of the most ambitious community projects ever taken on by the corporate sector. The project matches 20 "cluster" neighborhoods in the city with corporate partners within a supportive central structure.

The project’s goal is to empower citizens to solve problems they identify in their neighborhoods and to foster lasting connections among neighborhoods and government agencies, non-profit service organizations and the business community. TAP’s comprehensive approach focuses on six major areas: community development, economic development, education, housing, health, and public safety.

TAP hired cluster coordinators who reside in the neighborhoods to encourage a true "bottom-up" approach to problem solving. The corporate partner of each neighborhood is responsible for helping the community prepare a strategic development plan that reflects the community’s priorities and capitalizes on its assets. Each corporation loaned an executive who worked with the cluster coordinator and the neighborhood steering committee for five years.

This long-term intense level of commitment is an essential feature of the project. The project relies heavily on corporate volunteers, but also looks to corporate partners as strategic implementers. Vaguely defined community aspirations are sought and translated into feasible partnership programs that merge the needs of both the organizational and city community.

To support the project, 22 corporations each agreed to provide an executive for five years. Some have provided additional in-kind donations and other support to clusters and the project. In return for their investment, the corporate partners expect results. While they do not envision the eradication of poverty and urban decay, they expect to see measurable progress toward neighborhood goals.

Several local and national philanthropies have stepped forward to support the project, as have more than 3,000 individuals and organizations representing 100,000 potential volunteers. A number of successful projects have been initiated and undertaken by the clusters and many specific projects have been remarkably successful.

Broadway Triangle Urban Renewal Project, Williamsburg-Brooklyn, New York City, (14) is an exciting corporate urban renewal project initiated and supported by Pfizer Inc. as part of their ongoing commitment to the Williamsburg community in Brooklyn. Williamsburg was the site of the original Pfizer plant. However, over the years the community has fallen prey to urban decay, blight, and loss of jobs. Rather than abandon Brooklyn in the face of urban decay, Pfizer committed its resources and talents to improve the neighborhood around its plant. In 1984, they started a four-phased urban renewal project in collaboration with New York City’s Public Development Corporation.

Pfizer began working with the city and local community groups to develop an urban renewal plan that would be sensitive to the neighborhood’s needs while maintaining its traditional residential/industrial mix. In 1984, in partnership with the city’s Public Development Corporation, Pfizer announced the Broadway Triangle Urban Renewal Project. With Pfizer’s support, 300 units for lower- and middle-families earning $25,000 to $53,000 a year were developed in partnership with the New York City Department of Housing and Preservation and the New York City Housing Partnership.

Several other projects, including a focus on children’s education through a bilingual public elementary school located in a former Pfizer facility, have also been initiated and supported. The relocation of other corporations and businesses to this area was Pfizer-initiated. Arlington Press Inc. became the first tenant in an industrial park, investing $1.8 million to renovate a Pfizer owned building and employing more than 80 community members.

The participation of other organization contributes to the sustainability of this project. The New York City Partnership has designated the Broadway Triangle as a "pilot site," eligible for special assistance in housing, schools, job creation and public safety. The Enterprise Foundation has agreed to rehabilitate 200 city-owned, low-income housing units within a 14-block radius of the plant. And along with Pfizer, other companies, such as, Brooklyn Union Gas Company, American Express Company and the Federal National Mortgage Association have provided financial support. By 1998, Pfizer’s total investment in the Williamsburg community will amount to $50 million.

Even the smaller gestures have future meaning. Recently fifty trees were planted each honoring a child from the neighborhood. Pfizer’s vision is that 20 years from now, when the trees are strong and beautiful, the children will be mature and successful and the neighborhood will be well established as an example of how a corporation and its people can work with a community to make a difference.

The Times Square Business Improvement District (BID), New York City, (15) was established to make Times Square clean, safe and friendly. The BID works in collaboration with city agencies, private businesses, community boards and other local not-for-profit organizations. Using revenues raised from mandatory assessments on local property owners, the BID provides supplemental security and sanitation services, homeless outreach (in partnership with Project Renewal, Inc.) and tourism services. The BID also acts as an advocate for the area’s interests and undertakes public improvements, including the lighting of sidewalks and enhancement of pedestrian passageways. And the BID promotes the area locally, nationally and internationally in a variety of ways, including New Year's Eve and Broadway on Broadway.

In 1990, when New York State's project to rebuild 42^nd Street was on hold because of the real estate depression, a group of property owners in the area formed a committee to see what they could do to clean up the area. This committee drew up a plan for a Business Improvement District, in accordance with enabling legislation originally passed by the City and State in 1982. The District Plan outlined the proposed boundaries, services, and improvements, described the budget and method of assessment, identified membership and composition of the Board of Directors. The committee reached out to each property owner, merchant, and resident within the boundary to inform him or her of the process and include them in discussion of the proposed BID. The BID was approved by a majority of its constituents, the local Community Boards, City Planning Commission, and the City Council. In July 1991, Mayor David Dinkins signed a five-year contract to establish the Times Square BID. The BID officially opened its doors in January 1992. The Times Square BID's contract was renewed in 1996 for another five years.

Assessments for the Times Square BID are based on property values as determined by the City's Department of Finance. The assessment rate is not fixed from year to year; rather, the operating budget of the BID is determined, and then that figure is divided by the total assessed value of the District in order to arrive at a percentage. This form of assessment allows for property owners to share equitably in the costs of running the BID. Residential owners pay one dollar per year, and not-for-profits are exempt. The City collects the BID assessment without charge to the BID, and then forwards it to the BID.

The success of Times Square BID has been in the areas public safety, sanitation, community services, public improvements, economic development, tourism and special events promotion. Crime has been reduced by 58.6 % since 1993. A midtown court has been established to handle misdemeanors committed in Times Square. Over 50 sanitation workers sweep, scrub and paint the area seven days a week. A major study on the secondary effects of the concentration of pornography in Times Square has led to a legislation to dramatically decrease the number of adult establishments. Tourism has increased with the development of a Times Square Visitors center, and finally preparations are underway for Times Square 2000 a global celebration at the crossroads of the world.

Public-Private Partnerships for the Urban Poor: Slum Networking Project, Ahmedabad, India, (16) is an innovative corporate sector initiative that was started by the Arvind Mills in partnership with the Municipal Corporation of Ahmedabad, and SAATH a local NGO. The project was the brainchild of Himanshu Parikh, an environmental and infrastructure professional who convinced Mr. Sanjay Lalbhai, Managing Director of Arvin Mills, of the value of slum upgrading through a slum networking strategy. Lalbhai and his team saw the project as an excellent way to improve the quality of life in Ahmedabad. With this a pilot project was initiated with the above partners with the following objectives: improving the basic physical and non-physical infrastructure facilities within the selected slum areas; facilitating the process of community development; and building a city level organization for slum networking and infrastructure development.

The project has been successful in implementing the physical component of the pilot project at Sanjay Nagar  a two-hectare plot of land owned by the Municipal Corporation. Sanjay Nagar has about 181 households and a population of 1,200 people. Improvements included building of new pathways with storm water drainage, installation of sewerage lines with manholes and inspection chambers, and water pipes connections to each household. This has been a significant achievement with Arvind Mills providing the leadership in both implementing and managing the project.

One of the strengths of the project was the participation of the community in the decision-making process from the design of the infrastructure to the payment of bills. Some of the shortcomings were that being a pilot project the basic idea of networking the infrastructure among different slums was not possible. Also, there has been a low level of community development activities as part of the project. Further, the aim of this project was to mobilize and galvanize participation of other business and industries for slum up-gradation and networking projects. But this has not been possible simply because of the bureaucratic hurdles that had to be surmounted in carrying out the project. Nevertheless, the experience learned by the participants will go a long way in mobilizing future support for corporate sector participation in urban development in Ahmedabad.

Corporate-Led Solid Waste Management Initiative, in Iligan City in North-Central Mindanao, Philippines (17) is an innovative effort to reduce the volume of solid waste generated in the city. Iligan City has the country’s heavy steel, cement, chemical and flour industries and home to more than 250,000 residents. Research conducted by Philippine Business for Social Progress (PBSB) revealed that city residents generated an average of 1,300 cubic meters of household waste per day, and the city government was only able to collect 17% of the waste.

As a result in 1994, the Iligan City business community with support from the Philippine Business for Social Progress and three local government units embarked on a waste management program that would mobilize communities towards reducing the volume of waste at the household level. With support from the Judge Guillermo Guevara B. Foundation inc., Mabuhay Vinyl Corporation, MCCI Corporation, and the Iligan Cement Corporation the project was launched. The business sector besides financial contribution also provides administrative and managerial support. At the community level, several community organizations have conducted a house to house campaign on educating the residents on waste minimization. The women of Barangay Buru-un were also able to organize themselves into a Buru-un Women’s Association to sort and segregate solid waste materials and sell it to junk shops.

PBSP is working to codify all existing ordinances on waste management and at least seven barangays have installed household waste sorting/segregation systems. Verification is being conducted on industrial waste recycling techniques on behalf of an industrial community in Iligan City, which will soon go into commercial production of decorative blocks and hollow blocks out of fine industrial dust particles.

The major difficulties faced during the two-year period were 1) the limited market for waste products in Iligan City; 2) the need for capital to initiate waste-trading/recycling activities; and 3) in the need for storage facilities to stock recycled products.

To ensure sustainability and to maximize the gains of the past years, the focus for the next period are on: a) The continuation of the education and information campaigns and expanding the coverage from seven to ten barangays; b) creation of a mechanism to systematize the flow of information and technology exchange on existing low-cost recycling technologies to communities; c) provision of technical assistance for financial systems installation and capacity-building for the groups to be able to have access to funds for revolving or seed capital.

The possibilities of the types of corporate partnerships and alliances are as yet being explored. The sustainable benefits from these partnerships are untested. A number of recent partnership-based projects have led to some innovative projects with measurable impacts. These global partnerships have provided inspiration and tangible proof that innovation in strategic decisioning and collective efforts can have positive and significant impacts on communities.

The potential for social, economic and environmental progress is open to ongoing and constructive interaction by those capable of exercising a positive impact on urban societies. The cities in Asia are expressing an increased and demonstrated interest in pursuing these efforts.

The Value of Business Citizenship

The primary goal of any business, as we have stated earlier, is to earn money. While there may be other considerations in some circumstances, the primary criterion any corporation will consider in making any decision is whether a given course of action will increase profits. One of the most important factors for ensuring the profitability of a business is the stability of the environment in which it operates. Stability brings the predictability that is necessary for corporate decision-makers to make rational decisions. Without sustainable development, this stability, and the predictability that goes with it, is impossible. A stable and predictable business environment requires both political development and physical infrastructure.

Source: Business As Partners In Development, Prince of Wales Business Leaders Forum, 1996.

Aside from pure profit motives, corporations also have an interest in ensuring sustainable urban development because they are members of the community that benefits. The owners and employees of a business live in the city where the business is located, and therefore benefit from positive urban development policies. Again, only by taking an active role in the decision-making and planning processes can corporations ensure that urban development is carried out in a way that is beneficial to all interests.

Up until now, most corporate activity in development has been on an ad hoc basis, generally only for specific projects. As a result most businesses do not have a strategy of how to participate in such development activities. Whether such activities are being carried out consistently on a long-term basis is generally not important for top management. Also, companies are not likely to invest in a large number of highly skilled persons for such activities. This is because most development activities, because of their target groups, have to be run on a not-for-profit basis. Companies view their social development wing as a "cost center."(18)

We believe that corporations can and should get involved in development, as we have shown in the above examples. However, to do so they have to have a vision–a vision of a desirable society and the role of the company in that society. The second is the desire to go beyond the role of a mere donor or financier of development, to become an active partner and contributor. The third and most important is that the driving force behind the company’s desire to participate should stem from enlightened self-interest. From the above experiences, unless the company has a stake in social development, borne out of its own enlightened self-interest, it will not make a whole-hearted effort to bring about the necessary internal and external changes for the successful implementation of the development.

Some of this enlightened self-interest leads to a common vision—a vision that is generated when corporate leaders take an active role as members of the decision-making institutions of cities. Such active corporate citizenship will help to ensure that the business sector has a meaningful say in the formulation of local urban policies, and that there is a chance for corporate executives and representatives from other segments of society to exchange ideas about the appropriate policies to follow.

The above examples show that businesses are in a unique position to contribute to the development of their cities in two ways: through contributing capital and through sharing skills. One of the effects of financial globalization is that governments, in order to compete with other governments for business, are reluctant to levy substantial taxes. Furthermore, many local and national governments are very inefficient in their ability to make use of the funds they expend. The result is that governments are often unable to come up with the money needed to finance major development projects. The private sector, especially when several businesses get together, have the means to pursue innovative and useful development projects that would otherwise be impossible if left solely to the state to fund. Also, when businesses actively participate in funding development activities they are able to influence the development agenda. More often in developing countries in Asia the development assistance is through international donor agencies, which influence, and at times set the development agenda.

Finally, the business sector has the management and organizational skills to carry out policies. Particularly in many developing nations (including those in Asia), governments cannot afford to hire the best and the brightest of society. Many of the most qualified and best-educated people are working in the private sector. By contributing the skills of their workers, corporations can help to make sure that the development policies adopted are carried out in a competent and beneficial manner.

Upgrading of skills of people living in distressed areas is the most difficult task to accomplish in any development project. Unfortunately it is also the most neglected. The task of upgrading skills is the most important task because of the rapidly changing economic scenario and technical development. Paul Kennedy has aptly described the effect of the changing economic scenario. He observes, "Economic change and technological development, like wards or sporting tournaments, are usually not beneficial to all. Progress, welcomed by optimistic voices from the Enlightenment to our present age, benefits those groups or nations that are able to take advantage of the newer methods and science, just as it damages others that are less prepared technologically, culturally, and politically to respond to change."(19) It is in the enlightened self-interest of business and corporate leaders to see beyond today’s bottom line and to participate in creating a world where future generations are also able to contemplate the bottom line.

Endnotes

Nelson, Jane. 1996. Business as Partners in development: Creating wealth for countries, companies and communities. London: The Prince of Wales Business Leaders Forum.

Committee for Economic Development. 1995. Rebuilding Inner-City Communities: A New Approach to the Nation’s Urban Crisis. New York: CED.

Logan, David, Delwin Roy and Laurie Regelbrugge. 1998. Global Corporate Citizenship – Rationale and Strategies. Washington D.C.: The Hitachi Foundation.

Nelson, Jane. Building Competitiveness and Communities – How world class companies are creating shareholder value and societal value. London: The Prince of Wales Business Leaders Forum, 1998.

Logan, David, Delwin Roy and Laurie Regelbrugge. Global Corporate Citizenship – Rationale and Strategies. Washington D.C.: The Hitachi Foundation, 1998.

Nelson, Jane. Building Competitiveness and Communities – How world class companies are creating shareholder value and societal value, p. 6.

Logan, David, Delwin Roy and Laurie Regelbrugge. Global Corporate Citizenship – Rationale and Strategies, p. 18.

A survey of more than 647 companies and 75 Chief Executives in India was undertaken by The Social Rural Research Institute and commissioned by ActionAid shows that though most Chief Executives agree that corporations do indeed owe some responsibility to the society, they do not feel that this is mandatory. Changes, April – June 1997, pp. 3-4.

Steingard, Davis S. 1997. "Values Integration in Socially Responsible Business: From Separation to Spiritual Reality." Unpublished dissertation, Case Western Reserve.

Nelson, Jane. Business as Partners in development: Creating wealth for countries, companies and communities, p. 157.

Faulkner, J. Hugh. 1997. "Engaging Private Sector Through Public-Private Partnerships," in Bridges to Sustainability: Business and Governments Working Together for a Better Environment, ed. By Luis Gomez-Echeverri, Yale University: New Haven: 159-60.

These case studies are not the only examples in India. There are several other cities in India such as Chennai, Cochin, Calcutta, Pune, New Delhi, Indore, where successful business efforts have resulted in an improved urban environment.

The Conference Board, Inc. 1994. "Corporations as Partners in Strengthening Urban Communities," Research Report Number 1079-94-RR: pp. 21-23.

Committee for Economic Development. 1995. Rebuilding Inner-City Communities: A New Approach to the Nation’s Urban Crisis. New York: CED, p. 52.

Information provided by the Times Square Bid.

Tripathi, Dwijendra. 1998. Alliance for Change. New Delhi: Tata McGraw-Hill Publishing Company Limited.

Information provided by the Philippine Business for Social Progress.

Excerpted from Chauhan, Uttara and Niraj Lal. Un-dated. "Public-Private Partnerships for the Urban Poor: Slum Networking Project in Ahmedabad", unpublished case study.

Kennedy, Paul. 1997. Preparing for the Twenty-First Century, London: Harper Collins, pp. 15 and 59.

Dr. Akhtar Badshah
Executive Director, Asia and Pacific Cities Forum, and
Affiliate Professor,
College of Architecture and Urban Planning,
University of Washington