Now is the time for the private sector to offer solutions
With a sharply divided government and fraying social fabric, America needs leadership from new directions. The business community can and must be a primary contributor, deploying its talents and resources to more ends than just market share.
Climate change, the opioid addiction crisis, the lack of affordable housing, and disparities in incarceration and police encounters are just a few arenas in which we need new actors and fresh ideas to drive social change. And increasingly, consumers expect today’s corporate sector to step into that role and deliver; they are calling on companies to lead change instead of simply taking direction from lawmakers.
This demand for meaningful corporate responsibility is also coming from the market itself. BlackRock CEO Larry Fink recently made clear that corporate social responsibility will matter when BlackRock invests its clients’ assets. “Society is demanding that companies, both public and private, serve a social purpose,” Fink wrote. “Without a sense of purpose, no company … can achieve its full potential.”
Now is the moment for business leaders in thriving firms, big and small, to be bold in their efforts to do good and ensure a future in which all can do well. Corporate social responsibility can take many forms:
- At a minimum, firms can ensure products are safe for customers, employees, communities, and other stakeholders. Protecting consumer data, rights, and privacy is just one example.
- Social change also comes from products and services core to a firm’s business. By offering a new product that improves a consumer’s productivity or quality of life or lowers costs, companies bring rewards to society as well as their shareholders.
- Firms are increasingly using their visibility and market power to advance causes important to their customers. For instance, Starbucks lends support to Dreamers and Citigroup sets new standards for its retail sector clients’ gun sale practices.
And successful firms are increasingly a major source of philanthropy, which not only supports communities and innovative organizations but also conveys to the firms’ constituents who they are and what they value.
Beyond donations and high visibility, firms can offer what makes them successful in the marketplace: talent, vast data, and the capacity for rapid innovation—all applied to our great social challenges. Structural barriers can make it more difficult for government to lead in deploying new technologies and mining data for better performance. But when the private sector embraces a greater public purpose, new partnerships can help do what government alone cannot.
The boldest firms are doing even more: contributing to solving social challenges beyond their core business because they have the talent and know-how and an appreciation of shared interests. Increasingly, the Urban Institute is finding new partners in firms that bring their own key assets to the table. One such trend is data philanthropy, where firms give researchers like ours the ability to query their business data to find insights that can lead to new solutions. In other cases, engineers applying their tech savvy to tackle social challenges get a huge head start by collaborating with our experts. Our understanding of what works and what hasn’t can help direct corporate investment and philanthropy where it can do the most good.
In welcoming new private-sector partners to social purpose, I do not suggest that the public sector’s role is unimportant or should be relinquished. Rather, I look forward to having more partners working with us to advance solutions at a time of dizzying change.
The future of work
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