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Business leader challenge international aid with commerce

A month that has seen newspaper reports of UK Government aid money being spent on apparently frivolous projects and the arrival in London of Microsoft founder Bill Gates to urge young people to help eradicate poverty through the Global Citizens initiative looks a good time to assess how wealthy industrialized countries go about helping their counterparts in the developing world.

There does seem to be a shift away from the assumption that aid is the preserve of governments and NGOs such as Oxfam and Save the Children. Partly that is down to a realization that, even with globalization helping poorer nations by giving their citizens access to markets in the developed world, the scale of the problem is too great for the public sector and charities to combat on their own. But there is also an increasing questioning of whether just giving aid really helps – and a corresponding willingness to test the notion that business might provide more effective solutions.

One of those taking this approach is Leila Janah. The founder of Sama Group earlier this summer told the annual Silicon Valley Comes to Oxford conference at Oxford University’s Said Business School how using business as a lever for social impact can change the relationship between the government of a developing country and its people. Governments that are highly dependent on overseas aid tend to answer to the donors rather than their people. However, that can change if a business such as Sama – which helps individuals in poorer countries do basic computing and similar tasks for companies in the industrialized world – becomes involved. Once people have a job and start paying taxes they start to take more of an interest in how their country is run and so demand that their leaders become answerable to them, she says.

Her approach is not without its critics – notably in developed countries, where some say she is assisting with the export of low-level jobs (an idea she dismisses as nonsense) and others suggest she is just teaching people to become drones (her response is that the basic jobs people start with serve as an entry point just as assembly-line positions did for factory workers in previous generations). But she is adamant that this sort of initiative can have a bigger impact than fair trade in commodities such as coffee because – thanks to technology – it is relatively easy to connect people in the developing world with companies in industrialized nations – and so achieve some progress on making good on the promise of globalization.

Technology is also at the heart of a program announced earlier this month by the UK-based business software company Sage. As an organization focused on serving small and medium-sized businesses that has grown in a decentralized manner around the world, it believes it has a “unique understanding” of the issues in the countries in which it operates, says Ivan Epstein, chief executive for Africa and Asia. Epstein is also the chairman of the just-launched Sage Foundation, which has been set up to oversee the company’s philanthropic efforts around the world. “It is really, really important to give back to the communities where we do business or where we reside,” he says.

The formal structure – there will be directors of the foundation covering each of the territories where the company operates and the company is committing to a 2+2+2 formula akin to that associated with fellow software company Salesforce.com, whereby 2% of employee time (5 days a year), 2% of “free cash flow” (notionally equivalent to revenues from the non-profit sector in the 2014 financial year) and two Sage products will be offered to charities, social enterprises or non-profit organizations – is new. But Epstein and his colleagues insist that this is really a continuation of existing practice and not just a PR gimmick. Lee Perkins, Sage UK and Ireland managing director, says: “So many companies treat Corporate Social Responsibility as a tick-box exercise which completely misses the point. Lots of Sage employees are already involved in volunteering and grant programs –we’re extending and building on this.”