Michael Jarvis's blog

One hears less about the base of the pyramid these days. Instead, "inclusive" remains the clear buzzword of choice for now. The recent UN Millennium Development Goals Summit generated a side workshop on Inclusive Business organized by a roll call of organizations. Now IFC is hosting its own event on Inclusive Business Solutions around the IMF/World Bank Annual Meetings this week. The term is pervasive.

As reported locally, the Employers Confederation of Zimbabwe just completed its strategy workshop with... guess what?—a call for “Inclusive Business” as a means of national healing and sustainable economic development. Nor is it limited to low income country contexts: see last Friday’s event on The Economic Impact of an Inclusive Business Community as reported by the Charlotte Observer, revealing persistent concerns over economic diversity amid the US economic downturn.

The current blizzard conditions in Washington D.C. are testing World Bank staff capabilities to work remotely. Advances in technology no longer mean we have to shut up shop completely - though some no doubt lament the loss of the care free snow day of the past. This new option through technology reminded me of a recent briefing on Harnessing Development 2.0: Creating Opportunities with the Poor, the latest in the World Bank Institute's Business and Development Discussion Papers. The authors make a strong case that technology is helping transform access to markets, money, and skills and driving more inclusive business models through overlapping processes of business development, market development, and network development. 

Zahid Torres-Rahman, one of the authors, has been instrumental in creating Business Fights Poverty - one of the more successful examples of a supporting network that links professionals from a variety of perspectives actively working in private sector development among the poorest communities. Of course, the snow and resulting power loss for many in the eastern US has also provided a timely reminder of the constraints on development 2.0 that are still the frustrating reality for many potential consumers/producers worldwide.

The passing of a decade provokes an inevitable reflection on the state of all things. Looking at the corporate responsibility (CSR) space, it has now been over 15 years since John Elkington coined the term triple bottom line. CSR has continued to be mainstreamed.

Triple Bottom Line is now even in the accepted lexicon of the Economist. However, there is growing complexity. Governance issues and climate change rose rapidly on the priorities of business and society alike in the noughties. Do they merit separate consideration? Should we be talking of a quintuple bottom line? What of human rights?

Companies are likely to resist yet another set of standards, but cannot escape the impacts on their operations, be it of corruption or growing water shortages. Of course, this is before we even consider what issues will force themselves on to boardroom and development agendas in the decade ahead. IFC is inviting comments as part of the review of its performance standards, so it is a good time to get out your crystal balls and suggest where new coverage is needed today and down the line.

This year's Nobel prize for economics went to Oliver Williamson and Einor Ostrom - both known for grounding their work in the real world. The committee perhaps wisely shunned researchers in finance or macroeconomics who are still coming to terms with the financial crisis and global recession. No such shyness from the judges for the Ig Nobel Prizes - committed to showcasing improbable research that makes you laugh and think. They found a way to reward those who have tested financial market models through all too real experience, giving their economics prize to the management and auditors of four Icelandic banks for demonstrating that "tiny banks can be rapidly transformed into huge banks, and vice versa - and for demonstrating that similar things can be done to an entire national economy."

The Ig® Nobel Prizes - now in their 19th year - make for entertaining reading. Where else can you see 3 true Nobel Laureates, including Paul Krugman, wearing brassieres that convert to face masks? Yet they provoke discussion about the purpose of research and the value of unpredictable, unintended results. Could we champion an award to highlight improbable research and projects in the World Bank Group? I welcome nominations.

If you are looking for something a little different to read at the beach, then Peter Leeson’s new book on economics and piracy might fit the bill. In The Invisible Hook, Leeson applies an “economic way of thinking” to the actions of Blackbeard, Captain Kidd and co.

One item that jumps out is the strict system of governance at work on pirate ships, in part a consequence of the ships being owned by their crews. For example a flat pay structure minimized opportunities for abuse, which is in stark contrast to merchant ships where officers took advantage of strict hierarchies.

It seems that today’s CEOs, facing public anger over executive pay, greed and governance failures, might have something to learn from “pirate management”. Those calling for greater employee ownership within struggling firms (as the Financial Times reports in Germany) might find ammunition from this tale of the high seas.

Not another reference to recession-hit corporate behemoths, but more on how to jump start even small businesses in the toughest environments. Somalia and Zimbabwe top the list in the latest Failed States Index from the Fund for Peace and Foreign Policy magazine. The problems facing those attempting to do business there are well documented. However, some of the other countries near the top have large scale private sector operations, or at least potential. What is the appropriate role of business in such states? Can the private sector do more to promote peace and stability?

These questions and more will be debated at an event in London today as part of an excellent series organized by ODI, DfID and Business Action for Africa. It is webcast live (12.30pm EST). For those interested in learning more, the World Bank Institute and George Washington University recently hosted a global eConference on "Peace Through Commerce". The related video and discussion threads are available to all.

The global economic crisis revealed large scale fraud in the financial sector (witness the Madoff scandal, among others). Unsurprisingly, it  has prompted widespread decline in public trust in companies. The Financial Times / Harris Poll released last month suggests three-quarters of people in the US and Europe now have a worse opinion of business.

It is practically impossible for a single stakeholder on their own to effectively address the problems that contributed to this crisis: corruption, greed, a lack of transparency and leadership. Hence there is a case for collective action that enables companies to collaborate with competitors and/or stakeholders from the public and civil society sector to create and maintain fair market conditions. Recognizing this, the World Bank Institute is organizing an Executive Development Program Fighting Corruption through Collective Action in Today’s Competitive Marketplaces precisely on such joint approaches.

Participants from the length of the agribusiness value chain are gathered at the Bank this week for the World Bank Institute’s new Executive Program on Inclusive Agribusiness: Fighting Poverty, Hunger and Malnutrition. Chris Delgado and John Lamb from the Bank’s Agriculture and Rural Development team set the scene on Tuesday morning by laying out the scale and complexity of the challenge facing the food sector. It was not a pretty picture.

Yet as Professor Ray Goldberg of Harvard noted, people sign up for a program like this as they want to do something, and the food crisis offers an opportunity to push for change – “we are in the middle of a revolution” in the food system. Large-scale agribusiness has a lot to gain and to lose, so the incentive is there for companies to engage even when many of the topics from access to land to ensuring affordable food supplies are inherently political. Collective action is needed and the challenge was issued for firms to envision what enhanced corporate responsibility "CSR ++" might look like in the sector. Will they get there? We will see where they stand at the end of the course.