Business in Development Study 2012: Australian Business Leaders Provide Insight into Delivering Business Outcomes with Social Benefit in Developing Countries

Australian multinationals see developing economies as important markets and sources of talent. While their normal activities in these countries can play an important developmental role by increasing prosperity, they are also finding tangible business benefits by undertaking poverty alleviation activities that have societal impact and also ensure the success and sustainability of the business.

Recognizing the significant impact Australian businesses operating in developing countries have on poverty alleviation, and the considerable opportunity that engagement with these organizations represents in terms of achieving its goals, the Australian Agency for International Development (AusAID) commissioned the Business in Development Study 2012. The study aims to establish a body of evidence to characterize the nature of core business activities that Australian multinationals undertake that contribute to poverty alleviation.

Ninety-three percent of Australian business leaders surveyed believe that Australian business can play an important role in contributing to poverty alleviation in developing countries. To this extent, Australian business and AusAID can work together to significantly increase the impact of activities that alleviate poverty within the developing countries in which they mutually operate. 

Survey and interview respondents identified six areas that might assist AusAID in considering a strategic approach for effectively engaging with Australian businesses to maximize scalable and sustainable poverty alleviation outcomes.

Developing economies are important to the future of Australia’s multinational businesses. They are home to powerful mass markets and significant sources of talent, and represent the next wave of economic growth for many industries. As businesses move into new markets in developing countries, they present new opportunities to positively impact development issues and drive change.

AusAID commissioned this study to provide a basis for informed discussion on its business engagement agenda. It aims to establish a body of evidence to characterize the nature of core business activities that Australian multinationals operating in developing countries undertake that contribute to poverty alleviation. The study further aims to identify common ground that will facilitate engagement between these businesses and AusAID, to mutual benefit.

The study was conducted by Accenture Development Partnerships and Business for Millennium Development (B4MD) between January and May 2012 on behalf of AusAID.

• Ninety-three percent of survey respondents agreed that business can play an important role in alleviating poverty.

• Australian business leaders see employment opportunities as the most significant poverty alleviation activity undertaken by business in developing countries (43 percent).

• The key factors that drive business to engage in activities that alleviate poverty are brand, trust and reputation (66 percent).

• The complexity of implementing programs in developing countries was the main challenge in undertaking activities that contribute to poverty alleviation (61 percent).

• Reducing corruption was identified as one of the main enablers for business to operate more effectively within developing countries (57 percent).

• Seventy-three percent of survey respondents said their businesses are increasing activities that contribute to poverty alleviation in developing countries.

To be successful in developing countries, Australian businesses have had to be innovative and expand their capabilities beyond their core competencies to address challenges to business growth. The companies that are thriving are those that have built meaningful, sustainable relationships in the communities in which they operate.

The creation of employment opportunities, the introduction of health and education programs, infrastructure development, the advancement of human rights and labour policies, and establishment of inclusive supply chain practices are not only key in addressing socioeconomic barriers to participation and developing capacity, but they are underpinned by solid business drivers.

To overcome these challenges, Australian businesses are prepared to explore new ways of partnering. While business leaders indicated limited awareness of the activities of AusAID in the countries where they operate, the majority identified AusAID as one of the key organizations that they would seek to engage with in the future (57 percent). They indicated a desire to understand better the priorities of AusAID, and would welcome consultation by AusAID during the design of relevant aid projects.

An important precursor to engaging with business is awareness of the needs, interests, goals and capabilities of potential partners, as well as their willingness to engage. Business leaders see the immense potential of combining efforts to achieve a shared goal—but are also aware of the practical challenges. Survey and interview respondents identified six areas that might assist AusAID in considering a strategic approach for effectively engaging with Australian businesses in order to maximize scalable and sustainable poverty alleviation outcomes in the communities in which they operate.

These six areas are:

• Be strategic. “Push on open doors” and target those sectors, activities and geographies that align with AusAID priorities.

• Be action oriented. Establish activities as quickly as possible by starting small, then advertise success to build momentum.

• Target established businesses. Focus on robust businesses that have a track record of delivery.

• Make priorities transparent. Ensure businesses understand AusAID activities and priorities in their countries of operation.

• Understand businesses. Frame engagement with business realities, then focus on core business activities and the right contacts.

• Match resources to level of engagement. Determine the appropriate level of engagement in an initiative or program and ensure the level of resources allocated matches the need.

Shaun Richardson is a senior manager in Accenture’s Financial Services practice in the United Kingdom, focusing on Accenture’s Capital Markets clients. In his time at Accenture, Shaun has worked across 5 countries for over 20 clients. Shaun supports Accenture’s Sustainability Services practice and Accenture Development Partnerships teams where they work with clients within the Financial Services sector. Shaun holds a double degree in Finance and Economics from Monash University in Melbourne.

Morgana Ryan is the director-Asia Pacific for Accenture Development Partnerships. In addition to overseeing Accenture Development Partnerships’ regional portfolio of work with more than 20 clients, she also provides strategic input and oversight for much of its work with international nongovernmental organizations in the strategy, organizational design and ICT for development areas. Previously, she spent more than a decade working in the oil and gas industry. She has become increasingly involved in cross-sectoral partnerships in line with the growing convergence between business and development. She holds a first class honors degree in Economics from Monash University.