KAMPALA PRINCIPLE 5:MNCs_SUBP 5.A

Sub-principle 5.A

Ensure that a private sector solution is the most appropriate way to reach those furthest behind  

 

Why is it important?

 

When official development assistance is used to support development co-operation projects with the private sector, it does so to trigger investments that businesses would not have otherwise made, to make them happen more quickly, at a larger scale or to improve development outcomes. In short, public support for projects with the private sector depends on a clear demonstration of the added value. In some cases market-based solutions might not be able to reach the intended beneficiaries, such as the poorest and most vulnerable populations in a country. In these cases, there are often other ways to enrol the private sector in a partnership to find a comparative advantage. Recognising this reality and acknowledging one’s own limitations in delivering development results benefits companies in their proactive brand-building and reputation management. The perceptions of customers, shareholders, employees, governments and regulators on whether businesses are “good corporate citizens” determine a company’s brand, reputation and image.

Self-reflection questions
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  • What added value can you bring to a partnership over other actors’ development solutions to benefit vulnerable citizens and communities? Can you provide evidence of the financial and non-financial benefits?
  • Have you identified in which sectors, markets and areas of intervention your private sector solution might be best positioned to bring long-term development outcomes for those furthest behind?

Actions to consider
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  • Be honest about whether there is a valid business case, whether subsidies (public resources) are required, and why public resources are needed and justified for businesses to invest.
  • Participate only in those development projects where you can ensure that development outcomes are sustainable and in line with your envisioned business results.

Pitfalls to avoid
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DON’T…

  • Use official development assistance as a subsidy for continued business opportunities instead of using it to innovate and take risks beyond what’s “normal” to provide for the most vulnerable. 
  • Enrol in PSE projects without a clear vision of your company’s added value.
     

COUNTRY-LEVEL EXAMPLES

Hewlett Packard Enterprise identified product development and innovation as a factor driving engagement in emergency preparedness and response. A version of a digital survey (delivered via an application) developed on a pro bono basis to enable Fundacion Paraguay to conduct needs assessments more efficiently is now sold on a commercial basis by Hewlett Packard Enterprise to other clients.

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