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Convergence Economy: Rethinking

International Development in a
Converging World
Gib Bulloch, Peter Lacy and Chris Jurgens
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Contents

Gib Bulloch
Introduction............................................................................................................................ 4
Executive Director
Foreword.................................................................................................................................. 5 Accenture Development Partnerships

Convergence Economy: Rethinking International Development


in a Converging World......................................................................................................... 6

New definitions of “convergence”.................................................................................... 8

What’s driving convergence now..................................................................................... 10


Toward the convergent value chain................................................................................. 14
Convergent business models...................................................................................................................... 14
Case Study: Mercy Corps and Fulwell Mill............................................................................................. 15
Case Study: Refugees United..................................................................................................................... 17

The case for convergent delivery models............................................................................................... 18


Case Study: Bed nets to control malaria in Rwanda.......................................................................... 19
Case Study: Barclays CARE Plan "Banking on Change"..................................................................... 21
Considering convergent approaches to funding.................................................................................. 22
Case Study: Fonkoze, Swiss Re and Caribbean Risk Managers Ltd................................................ 23
Case Study: The Southern Agricultural Growth Corridor of Tanzania (SAGCOT)....................... 25

Imagining the future............................................................................................................ 26

Case Study: PATH Malaria Vaccine Initiative........................................................................................ 27

Authors.................................................................................................................................... 30

Acknowledgements............................................................................................................... 31

Specific References.............................................................................................................. 32

Case Study References........................................................................................................ 33

About Accenture Development Partnerships................................................................ 34

3
Introduction
In 2009, Accenture Development but 78% of CEOs believe that their of our respective teams all working
Partnerships wrote its first Point companies should engage in industry at the ‘coal-face' of an increasingly
of View entitled "Development collaborations and multi-stakeholder convergent economy, for their valuable
Collaboration: None of our Business?". partnerships to address development perspectives on the nature of cross-
It sought to share insights from goals. And while they are making sector convergence.
over five years of privileged access real progress, they told us about the
We hope you enjoy reading it as much
to the "engine rooms" and indeed challenges of achieving scale and real
as we've enjoyed writing it. Most
boardrooms of some of the largest ‘systems solutions’.
importantly we offer ‘The Convergence
non-governmental organizations
Set against this backdrop, of an Economy’ as a platform for dialogue,
(NGOs) in the world. The core thesis
increasing reality of and desire for debate and action that catalyzes
centered around the crucial role
convergence amongst both our real impact through accelerating the
that international NGOs had to play
development sector and commercial alignment of global market forces and
in influencing and channeling the
clients, we felt it was time to stretch international development.
latent power of the private sector
this thinking further, and also to
towards improved development
create our first collaborative point
outcomes. Success would require
of view. We are witnessing a more
transformational change however;
profound discontinuity which goes
in strategy, organization and in
beyond collaboration to convergence;
governance. Collaboration would
a convergence of issues, of interests
be core to success. The ensuing
and therefore by necessity, of
global credit crisis has acted as a
solutions. The world of development
catalyst for these trends and an
is changing dramatically and the next
opportunity for bold leadership
decade will be quite different from
to accelerate transformational
the last. The new paper "Convergence
change within the sector.
Economy: Rethinking International
In parallel, Accenture Sustainability Development in a Converging
Services embarked upon an important World" is an attempt to share some Gib Bulloch
study for the United Nations, of the learnings from Accenture
partnering with the Global Compact Development Partnerships combined Managing Director, Accenture
to conduct the world’s largest study with the experience of Accenture's Development Partnerships
of global CEOs on their attitudes to commercial practice, particularly
social, environmental and governance within Sustainability Services, but also
issues – “A New Era of Sustainability”. elsewhere across our business, across
The study found that more than 766 our recent work operating increasingly
global business leaders across 25 at the nexus of the sectors;
industries and 100 countries believe public, private and civil society.
aligning business strategies, operations
We don't pretend to have all the
and supply chains with sustainable
answers. But it is an attempt to build
development outcomes was not only
on our own project experience, on in-
desirable from a societal perspective,
depth client interviews, and on other
but also increasingly a business
Accenture research, to imagine a very
imperative. More than 93% of CEOs
different future for development. A
told us that they believe sustainability
future where silos give way to systems,
will be important or very important to
competency trumps incumbency and Peter Lacy
the future success of their business.
markets matter more than historical or
Even more importantly, from the Managing Director, Accenture
outdated mandates.
perspective of the ‘Convergence Sustainability Services
Economy’, they believe cross- We are very grateful for all the
support we've had from many Europe, Middle East, Africa and Latin
sector collaboration is essential to
clients during the interview process. America
achieving their business objectives
and sustainability goals. Not only has Also, we would like to give a huge
the number of companies engaged thank you to our co-author, Chris
in multi-stakeholder partnerships Jurgens who is Director of Global
around development issues risen Programs for Accenture Development
by nearly 50% between 2007-10, Partnerships, as well as other members

4
Foreword

This new paper by Accenture governance institutions that combine


Development Partnerships focuses a hybrid of commercial, public and
on two important trends in the field philanthropic resources and interests –
of international development that what Accenture describes in this
have been gathering momentum paper as ‘cross-sector convergence’.
over the past decade. First, the These trends are still at a relatively
increasingly strategic engagement early stage. The jury is out on
of corporations in helping to address whether they will become mainstream
complex development challenges in approaches and whether they can
ways that harness their core business scale. They call for new ways of
competencies, skills and interests and thinking and operating that cross
that explicitly aim to create value traditional organizational, functional
for both shareholders and society. and sector boundaries. They call for Jane Nelson
Second, is the emergence of multi- rigorous analysis and evaluation on
Director, Corporate Responsbility
stakeholder alliances between for- what works and what does not. And
Initiative
profit companies, social enterprises, they call for increased dialogue and
non-governmental organizations shared learning between leaders Kennedy School of Government,
(NGOs), foundations, public donors from different sectors. Drawing on Harvard
and governments that are moving examples from some of the world’s
beyond one-to-one project-based leading corporations and NGOs, this
collaboration to deliver solutions at a paper makes a useful contribution to
more systemic level within particular the dialogue and captures the spirit of
development sectors and/or particular innovation that is needed to tackle the
locations. In some cases these complex development problems that
alliances are leading to the creation the world faces.
of totally new business, financing and
Jane Nelson
delivery models or new

5
Convergence Economy: Rethinking
International Development in a
Converging World
Although NGOs and government agencies have been
able to slow some of the effects of poverty, disease
and other chronic global development challenges, they
are nowhere near overcoming them. However, new
research points to promise in the coming convergence
of solutions among businesses as well as NGOs and
governments. Already there are positive signs of
collaboration that spans sectors. Here’s what cross-
sector convergence could look like—and why it must be
considered as part of a portfolio of responses.

Will we ever be able to eradicate that recognizes convergence, not Later in this paper, we’ll give a detailed
malaria? Can humankind make a real just cooperation among NGOs, the definition of convergence as we
dent in childhood malnutrition or in private sector, government agencies and our international development
gender inequities in primary schools and others involved in international partners think of it. For now, suffice it
worldwide? Is it realistic to expect that development. Already organizations to say that it refers to the alignment
most people on the planet will have such as Barclays, Care and Plan are of issues, interests and therefore
access to clean water within the life working together on a large-scale local solutions across all sectors. It is
spans of those alive today? community finance project that aims becoming apparent in the new forms
to reach 300,000 to 500,000 people of business-NGO collaboration now
Not if we have only our present
across Africa, Asia and South America. in play. And it is relevant to large
solutions and structures to rely upon.
complex development issues—from
That’s the blunt answer to these Put simply, Accenture Development
childhood malnutrition to access to
and many similar questions about Partnerships anticipates a cross-
medicines or primary education—
international development. Entrenched sector convergence of solutions to
that are treated largely as isolated
problems such as these—and let’s development problems—an approach
problems today.
label them problems, not challenges, that puts the needs of those most
because that’s exactly what they are affected squarely at the heart of As Accenture Development
to those who must endure them day the matter. Whereas cooperation Partnerships sees it, cross-sector
after day—have long resisted the very among development partners to convergence will be entirely inclusive
best efforts of the most able non- date has been largely episodic and of business, and the presence of
governmental organizations (NGOs) event-driven, convergence implies corporations will be its most visible
and the most committed governments constant shared commitment with sign. Of course, that in no way implies
and development agencies. recognized “wins” for all parties. But that the private sector somehow
what best characterizes such cross- knows best. However, NGOs and the
These hard truths have been exposed
sector convergence is that it is not public sector would now be wise to
in surveys, interviews and focus groups
constrained by the original structures apply the leverage that the for-profit
conducted recently by Accenture
and behaviors of the organizations sector can bring to global development
and its partners in the international
that have the resources to help. problems. Fully 53 global businesses
development community. Collectively,
today have revenues so large that they
the findings point to another way
could be ranked among the world’s
to address these problems—a way

6
‘We need to know priorities,
and have clear objectives—in
that way the advantages will
outweigh the disadvantages.’

‘The best way to


understand the future
is to shape it.'

‘Most of the time the term


‘partnership’ was theoretical
and didn’t actually work in
reality. Now is the time for
action.’

top 100 economies. Procter & Gamble the Fortune Global 100 in 2010— And among business leaders, there is
has almost four billion customers on a gives us a valuable vantage point a clear sense that their sectors have
planet of less than seven billion—and for our convergence perspective. a duty—as well as an opportunity—to
claims that it will add another billion Our Sustainability Services practice make a difference.
in the next decade. That is influence. recently teamed up with the United
So the question for leaders in business,
That is reach. Nations (UN) Global Compact to
in NGOs and in government offices
poll more than 750 chief executives
To be clear: Convergence is not the is about how best their organizations
worldwide on the outlook for
“silver bullet” and it is not a revolution. can open up to new approaches to
sustainable performance in emerging
It is an emerging option. Development entrenched development challenges.
markets. And Accenture Development
problems are so complex, so large, This paper frames our point of view
Partnerships—chiefly serving NGOs—
so persistent, so fluid that they in ways that we hope spark fresh
has hosted workshops and led
require a wide range of approaches. debate and action. We welcome
interviews with a wide range of global
So while we believe that in many thoughtful critiques—and we urge
development leaders from non-profit,
cases, convergent models will bring readers to share their ideas with us
public and private sectors as well as
the desired outcomes more quickly, in and with others in the international
from academia.
more scalable and more sustainable development community.
ways than has been possible with The collective results of our research
historic aid-driven approaches, those show that just as the for-profit world
traditional approaches will endure is being pushed and pulled by the
because they will continue to play forces of globalization, so the world of
vital roles. NGOs will still do essential international development is changing
community-based work; organizations quickly, and for the better. There is
such as UNICEF will still lead the a growing realization among non-
charge on humanitarian relief. profits that new answers are required
to combat today’s most intractable
We believe that Accenture’s
problems. There is greater willingness
extensive work with both for-profit
to relinquish rigid development
and non-profit organizations—our
approaches that have their origins
commercial practice served 93 of
in the years following World War II.

7
New definitions of “convergence”
Figure 1: World Economic Forum: Risks Interconnection Map 2011

Copyright World Economic Forum


www.weforum.org/globalrisks2011

Let’s start with what development Convergent solutions will not have entrenched those mindsets are. (For the
convergence is not. It does not refer to neat straight lines around them with record, the UN has begun investigating
basic partnerships between, say, NGOs clearly defined organizational and a more integrated approach to
and businesses—occasional cooperation sector boundaries. Accenture sees presenting and pursuing the MDGs.)
or arm’s-length agreements—or an opportunity for more complex
The World Economic Forum uses
the more usual types of funding of forms of collaboration that involve
a global risk map to highlight the
development initiatives by government multi-stakeholder coalitions and that
systemic nature of challenges facing
agencies (recognizing that there are not seek to affect systemic change on
our planet today (See Figure 1.)
really standard funding approaches). wide-ranging issues. It’s important to
It is absolutely not about short-term, note that convergent solutions will
one-off projects and programs. be anchored in two prerequisites:
Convergence of interests
convergence of issues, and convergence Convergence of interests refers to
Accenture defines convergence, in the
of interests. Each is worth a closer look. the growing number of scenarios in
context of global development, as the
which what’s good for NGOs turns
convergence of issues and interests and,
most importantly, of solutions, with an
Convergence of issues out to be good for business and vice
versa—the opposite of the conventional
unwavering emphasis on the outputs Convergence of issues refers to
wisdom that says that the objectives
and impact rather than on organization the many instances where global
of businesses and NGOs are often at
structures and long-established development problems are not easily
odds. For instance, General Electric
and often stereotypical roles. defined, let alone dealt with in isolation
and Vodafone have discovered that
from one another. For instance, disease
Convergence of solutions means that the process of tackling emerging-
prevention has clear links to lack of
all participants pivot continually market challenges such as healthcare
access to education and to clean water
around the same sets of requirements or access to finance can become an
and sanitation. When issues are so
of those in need. Those living in poor invaluable source of innovation. Both
tightly interconnected, it is especially
communities clearly do care about companies are actively looking to bring
difficult to try to resolve them using
obtaining access to clean water, health the learnings and innovation from their
conventional approaches rooted in
care, and education – but exactly how emerging-market solutions back into
siloed mindsets. The very fact that the
these services are delivered and paid traditional Western markets. Many
UN’s Millennium Development Goals
for makes little difference, provided others are doing the same.
(MDGs) themselves are discrete rather
the services meet the needs of the
than systemic gives a clue to how
communities themselves.

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Convergence of interests is already partner or partners that have the best ‘There needs to be
coming to light in the many early capabilities for delivering, regardless of
examples of cross-sector convergence sector, tax status or brand. an understanding
where roles of and boundaries of responsibility and
between public, private and non- Convergence of solutions expectations—for us it’s
profit sectors become less distinct.
Convergence of solutions also means not just about challenging
It will lead to a renegotiation of
a higher premium will be placed on
roles and responsibilities across
collaboration among parties, not only resources but rolling our
value chains and ecosystems—a
fundamental recalibration of
among agreement-bound partners sleeves up and getting our
but among a wide range of potential
global development systems.
contributors throughout a development hands dirty and getting
That does not mean that cooperative “ecosystem.” It will also shine a light on involved fully.’
agreements and familiar business- the distinctive competencies of each
NGO partnerships will have no place player, forcing a re-examination of who ‘If you think modus operandi is
in tomorrow’s global development does what best—again, with the best bringing funding, then you are
landscape. In practice, they will outcomes in mind. At root, it is about
occupy one aspect of a spectrum the alignment of business opportunity
removing 75% of the value
of approaches, while, cross-sector with positive social, economic or you could bring to the table.’
convergence characterized by new environmental impacts on development.
convergent value chains that involve
We also characterize convergent
“mix and match” delivery and hybrid
approaches as sustainable and
funding models will occupy another.
scalable—providing solutions that
are maintained over time and not
Accenture Development Partnerships
dependent on any one funding source.
believes that tomorrow’s convergent
Those solutions may harness the
approaches will share several
power of market forces. Although
attributes. To begin with, they will
the solutions may become quite
be organizationally agnostic, always
complex—and will often involve
putting output before input. So they
considerable customization—they will
will first evaluate what outcomes
become scalable when they have been
are required, and then identify the
developed and proven systemically.
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What’s driving convergence now
Figure 2: Almost all CEOs believe that sustainability issues should be part of ‘NGOs often view peer
their organizations’ strategies in future
organizations that engage
Very Important Important the private sector with a mix
Overall 54% 39% 93%
of disdain (for potentially
selling out on mission) and
Asia Pacific 57% 41% 98%
envy (for gaining access to
Latin America 78% 19% 97% the private sector’s resources).
The question is always—“How
Africa 97%
60% 37% tainted is the money?....How
Europe 48% 45% 93% close is the smoking gun?”’
North America 59% 31% 90%
‘We need to focus on
outcomes over organisational
Middle East & North Africa 22% 57% 79%
parochialness.’
Source: United Nations Global Compact CEO Survey 2010 (based on 766 completed responses)

If ever there was any doubt that Considering cross-sector of talent, and sources of political
conventional development approaches convergence as one important new stability—or turbulence. Accenture’s
struggle to respond to the world’s category of response, it’s worth 2010 report—“Africa: The new frontier
big problems, it was dispelled in examining what is driving the for growth”—gives a glimpse of this.
September 2010, at the 10-year trend. Here is what we’ve found. In aggregate, African nations have
checkpoint for the UN’s Millennium seen a sharp increase in economic
Development Goals (MDGs). Although The rising power of performance, with their combined GDP
many East Asian nations have growing by an average of 6 percent
succeeded in meeting and in some
the emerging-market between 2002 and 2008, making
cases even exceeding their MDGs, consumer. Africa the world’s second fastest-
the shortfalls across parts of Africa, growing region.
Businesses have woken up to the fact
South Asia and elsewhere—especially
that what they once deemed social is
in countries wracked by conflict—are
now strategic to their organizations.
People are already
nothing short of tragic.
Not only do they understand that rethinking capitalism.
This is not the place to dwell on facts there is money to be made in doing
Capitalism 4.0, by Anatole Kaletsky,
about aid budgets being frozen and good, but they see long-term
makes the point that capitalism’s
resources being trimmed. We know value in presenting themselves as
strength is ultimately about its
enough about the broken promises exemplary corporate citizens in
adaptability. Kaletsky describes three
of the G8 summit in Gleneagles in terms of social responsibility.
waves of capitalism, as defined by
2005, and about the impact of the
With the rise of the multi-polar the tension between government-
recent financial crisis on international
world—a world defined by multiple led economies and market-led ones.
development budgets. Similarly,
centers of economic activity in which In the 19th century, the two were
one doesn’t need to look far for
emerging markets possess increasing distinct; right up to the 1980s,
statistics that confirm the prevalence
geopolitical and economic clout—it notes Kaletsky, the idea was that
of diseases such as malaria or the
becomes clear that those at what has the government knew best. From
persistence of poverty worldwide.
been called “the base of the pyramid” the 1980s onward, the prevailing
These are reasons enough to think
in emerging nations represent sentiment was an almost religious
anew about how society can respond.
powerful mass markets, sources belief in the power of markets in every

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part of society—often at the expense expense of the community—business Changing role for NGOs as
of government. The recent recession leaders need to believe that creating
proved that thinking to be flawed. societal benefit is a powerful way they warm to business.
to create economic value for the It has become increasingly clear that
Now, Kaletsky argues, there is room
firm. Many examples are emerging if society is to make real progress
for a new version of capitalism—a
that demonstrate that there doesn’t in the next decade and beyond, the
more pragmatic form that is guided
have to be a trade off between profit development community must harness
by needs and capabilities. In this
and societal value. Porter continues the latent socioeconomic power of
context, convergence is a pragmatic,
that companies are starting to business. “The role of the private
outcome-based trend that breaks
understand that when they think sector is increasingly important
down preconceptions about which
about the environment for example— for humanitarian assistance,”
sector “should” deliver development
they reduce energy consumption noted António Guterres, UN High
goals and replaces it with which sector
and travel—and make more profits. Commissioner for Refugees. “Lending
“could” best deliver those outcomes.
Also that products don’t need to be their knowledge and expertise…
Coincidentally, Harvard Business contrived. Food products that are is crucial as many of these projects
School professor Michael Porter has nutritionally good and environmentally would otherwise be outside of our
spoken out recently on the topic good are what consumers want—and reach.” Adds Barbara Stocking,
in his “principle of shared value”–a that again leads to more profits. Oxfam’s chief executive: “Businesses
term brought to the forefront by FSG are starting to consider how they
Framed in this context, convergence
Social Impact Advisors. In Porter’s source their produce to have an impact
is not only about a new era of
most recent article-Creating Shared on the lives of people living in poverty.
development; it is also a new,
Value: How to reinvent capitalism—and New ethical business models which
pragmatic trend toward shared
unleash a wave of innovation and incorporate marginalized farmers are
value in capitalism as a whole.
growth–he expands this principle– an exciting step forward and a solution
This perspective breaks down
asserting that to create shared value, that can bring business benefits too.”
preconceptions about which
we need to think differently—and that She cites Unilever as among the first
sector should deliver development
ultimately what’s good for society global food manufacturers to make a
goals and replaces it with ideas
is actually also good for business. commitment on this scale.
about which sector can best
Instead of assuming that making a
deliver development outcomes.
profit is all that matters—often at the

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Figure 3: Nearly 60 percent of CEOs view consumers as the most important ‘It’s about playing to your
influencers of their organizations’ approaches to sustainability
strengths—each sector
Over the next five years, which stakeholder groups do you believe will
have the greatest impact on the way you manage societal expectations? bringing something to the
Respondents identifying each factor in their top three choices table. Business can bring
58%
capital and knowledge on
Consumers
50% how to shape things in a
Employees
39%
45%
commercially viable way.’
Governments
32%
39%
‘This will be a journey of
Communities
28% education—showing examples
29%
26%
of successful projects as well
Regulators
25% as demonstrating that brand
Media
25%
24%
recognition is so much higher
Investment 22% in emerging markets than
community 19%
expected.’
15%
Suppliers
5%
15%
NGOs
27%
14%
Boards
16%
Organized 7%
labor 7%
6%
Other
4%

2010 2007
Source: United Nations Global Compact CEO Survey 2010 (based on 766 completed responses). 2007 data from
McKinsey UN Global Compact survey.

In 2010, only 15 percent of CEOs Business leaders “get it” The same study shows that 78 percent
polled in our UNGC study identified of CEOs believe their companies should
NGOs as a key stakeholder in terms and are getting involved. engage in industry collaborations and
of influencing their approach to There is now plenty of evidence multi-stakeholder partnerships to
sustainability, compared to 27 percent that today’s captains of industry are address development goals.
in 2007. (See Figure 3.) This may keen to understand fully the broader That confirms the gradual shift
point to the fact that NGOs are no impacts of their businesses, both away from the purely philanthropic
longer setting the agenda in terms of good and bad. For instance, nearly narrative hitherto typical of business.
policy and issues, or that the degree four-fifths of the CEOs polled in Interestingly—and importantly—CEOs
of pressure that they are exerting the Accenture-UN Global Compact in emerging nations are even more
on business is beginning to wane. survey indicated that collaboration is convinced of the need for convergence
But our conversations with CEOs the only way in which they can keep and tackling sustainability issues
tell a different story. Indeed, they their sustainability commitments. than are their developed-world
indicated that although NGOs may Certainly, most attuned CEOs now counterparts. Those corporate chiefs
have shifted their tone and strategy have a sense of the carbon footprints are particularly affected by the
over recent years, they remain an of their business operations and are proximity of sustainable development
important and influential player. taking steps to reduce them. More challenges—in other words, many of
Through our discussions, we have seen progressive businesses are also trying the most pressing development issues
examples of NGOs partnering and to understand their “water footprints” are right in their backyards.
collaborating with business to achieve or even their “poverty footprints”—a
specific, local development objectives,
part of a wider shift from NGOs as
term developed by Oxfam. Socioeconomic metrics
pressure groups to delivery partners. Fully 93 percent of the chief are a reality.
In addition, some 78% of CEOs told executives polled in the recent
Accenture-UN Global Compact study Some for-profit organizations are
us that they believed their company
say they believe that sustainability dropping quarterly earnings guidance
should engage in multi-stakeholder
issues should be fully embedded within to the investment market in favor of
partnerships to address development
their strategies and core businesses in a focus on long-term performance.
goals—although there is currently
the future. (See Figure 2.) That’s what Paul Polman, chief
a performance gap that varies by
executive of Unilever, did not long
industry. (See figure 4.)
after joining the company. Non-profits

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Figure 4: 78% of CEOs believe that their company should engage in ‘If there is no conflict of
multi-stakeholder partnerships to address development goals. However,
this ambition isn’t being met and varies by industry
interests the partnership can
be done very well. The major
Performance Gaps between ‘companies should’ and ‘my company does’
engage in multi-stakeholder partnerships to address development goals.
problems come when the
% Respondents who ‘Agree’ or ‘Strongly agree’ Performance Deltas
private sector organisation is
78%
merely trying to promote their
Overall -14%
64%
86%
own products and/or have
Automotive -29%
57%
alternative agendas to the
83%
Banking 68% -15%
NGO.’
83%
Health & life sciences -12%
71%

Communications
59%
81%
-22% ‘NGOs are often worried about
Utilities
80%
-4% ‘selling their soul’ – but they
76%

Professional Services
79%
-9%
also recognize their own
70%
79%
limitations in that they are
Energy -5%
74% not known for performance-
79%
Metals & Mining
66%
-13%
focused delivery. NGOs
Infrastructure & transportation
66%
76%
-10% may find themselves more
Industrial equipment 45%
76% -31% acceptable in government
Consumer Goods & services
64%
75% -11% situations if business is also at
Electronics & high-tech 72%
-13%
the table.’
59%
71%
Chemicals -4%
67%

Should Does

are active too. Oxfam has developed Technology is enabling Agricultural Commodity Exchange has
a comprehensive methodology for linked up with Safaricom, the country’s
measuring the positive and negative new collaborations. largest cell phone provider, to equip
socioeconomic impacts of the broader The proliferation of collaborative farmers with up-to-date commodity
business operations of a number of software, the growing popularity market prices over their phones. The
multinationals. The methodology of cloud computing (think Google’s GSMA Development Fund—affiliated
came out of Oxfam’s and Unilever’s Gmail service), and the surge of with the GSMA, a trade group for the
seminal study of 2003, which smartphone sales all help make it worldwide mobile communications
highlighted just what enormous power easier for organizations of every industry—leverages the expertise of
businesses can have, not by exercising type to work with one another. New its members to accelerate mobile
their corporate social responsibility communications channels and media— solutions for people living on under
(CSR) budgets but by leveraging tools such as Cisco’s Telepresence US$2 per day.
their core business operations. videoconferencing system—are
becoming more affordable. Some,
Citizens want such as Skype and Google’s video chat
sustainability. service, are free.

Citizens are consumers and employees At the same time, e-learning


too. The Accenture-UN Global is transforming education. It
Compact CEO study found that 58 is expanding the capacity and
percent of CEOs cite consumers as the effectiveness of teachers, opening up
most important stakeholder group that access for hard-to-reach communities,
will affect the way that business will and enabling simultaneous modes of
manage societal expectations. (See education. Mobile phone technology is
Figure 3.) CSR is not just an agenda arguably the most important enabling
item in the West; it is on the rise factor in e-learning. Globally, the
as consumer demand in developed number of mobile phone subscribers
countries seeks more sustainable and has increased dramatically. In Kenya
value-driven approaches. Businesses alone, the number of mobile phone
are responding accordingly. subscribers increased by 300 percent
between 1999 and 2007. The Kenyan

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Toward the convergent value chain
Figure 5: Cross Sector Convergence
Sector Axis Industry/Thematic Axis

From “Issue” To “Outcome”


Supply Comms &
R&D Operations
Chain Marketing

Resource Field Monitoring &


Advocacy
Mobilisation Programmes Evaluation

Service Social
Policy & Reg Treasury
Delivery Security

Private Sector Third Sector Public Sector

Convergent business be autonomous, standalone entities or encourage social business initiatives.


they may reside or be incubated inside This financial tool was launched in
models another organization and operate December 2007 with a clear mandate
So if we assume that convergence of semi-autonomously within a broader to expand Danone Foods by building
solutions has a place in the portfolio governance structure. additional plants in Bangladesh, to
of tomorrow’s development responses, support social business consistent
There are already quite a few
what exactly will convergent with Danone’s mission, and to expand
examples of these models. The best
development organizations look like? the fund’s support community.
and most celebrated are the “social
In the future we are likely to see a new businesses” created by Muhammad The convergent business models
breed of organization that doesn’t fit Yunus’s Grameen organization in can be initiated by for-profit
neatly into the standard descriptors conjunction with multinationals such organizations (Danone’s Riboud was
used in the private, public or non- as Danone, Adidas and BASF. Grameen certainly a prime mover) but they
profit sectors. These will be hybrids— Danone Foods has placed social are not exclusively a private sector
organizations that have some of the and environmental concerns at the phenomenon. For instance, Mercy
attributes of each or all. Their leaders heart of its business model. Its first Corps recently spearheaded the launch
will think and act in terms of a hybrid offering was a dairy product aimed of a fair trade raisin-growing and
value chain—a flexible model in which at combating infant malnutrition export business in Afghanistan. (See
different participants play different in Bangladesh. Launching the new page 15.) The non-profit partnered
roles at different times, according to venture in 2006, Franck Riboud, with British food producer Fullwell Mill
the recipients’ needs and according to Chairman and CEO of Groupe DANONE, and received funding from USAID to
which entity has the necessary mix of commented: “I'm deeply convinced set up an unusual partnership with
skills and resources. that our future relies on our ability a regional Afghan raisin producing
to explore and invent new business association. For its part, Fullwell Mill,
The convergent development models models and new types of business a niche company, sees the venture as a
will resemble conventional social corporations.” strategic opportunity to succeed amid
enterprises but they may or may not many far larger players. Customers
be profit-making; however, they are Since then, Danone and Grameen
such as Community Foods, a British
very unlikely to be profit-maximizing. have gone on to set up a social
supplier of natural and organic dried
They will combine a market orientation innovation fund with a target
food, have agreed to buy the Afghan
with a broader social impact. They may value of €100 million, designed to
raisins this year and next.

14
Mercy Corps and Fulwell Mill
Convergence Project Type Convergent Business Model

Industry Agriculture

About Mercy Corps has launched a raisin export business model in Afghanistan in
an effort to bring the practices and profits of the fair-trade movement to
Afghanistan, a country now synonymous with conflict and war. Since 2001,
Afghanistan has re-entered the global market for raisin production, with output
hovering at 25,000 to 30,000 metric tons annually for the past several years.
The country now accounts for 3 percent of the world’s raisin production, with
the biggest producers — the United States, Turkey, China, and Iran — collectively
supplying roughly three-quarters of the world’s consumption. With competition
stiff and Afghanistan still struggling to recover from the destruction of war,
farmers have been hard-pressed to sell their goods any farther away than
Pakistan, leaving them at the mercy of local markets — and local prices. So Mercy
Corps and Fullwell Mill set out to change that with a new model of delivery.

The Parwan Raisin Producers Cooperative (PRPC), a network of farmers formed by


Mercy Corps, has begun working with Fulwell Mill—a niche food supplier based
in the UK—to provide Fairtrade-labeled raisins to British consumers. Following a
process of due-diligence and consideration, the Fairtrade Labeling Organizations
International (FLO) chose not to send staff to war-torn Afghanistan. To earn an
exceptional form of Fairtrade status, the farmers and the NGO-led team had
to provide detailed product information and undertake intense negotiations.
The raisins—25 metric tons of them this year—will be the only Afghan Fairtrade
item sold in the UK. The effort, which includes two months of technical training
each year for the 300 Parwan farmers in the program, is part of a three-year, $2
million Mercy Corps program started in June 2008 with financing from the U.S.
Agency for International Development.

Business Rationale New markets: Accessibility to global markets for local farmers; opportunity to
benefit from Fairtrade certification

Development Impact MDG 8: Develop a Global Partnership for Development

Geographic Scope Afghanistan

15
16
Refugees United
Convergence Project Type Convergent Business Model

Industry Telecoms

About Ericsson, UNHCR & Clinton Foundation have worked together to create a service
that reunites refugees via mobile phone technology. In support of the hundreds
of thousands of refugees who have fled from conflict and disaster areas, Ericsson
and Refugees United, in partnership with the United Nations High Commissioner
for Refugees (UNHCR) and mobile operator MTN in Uganda, have launched
the first project to locate and reconnect refugee and IDP (Internally Displaced
Persons) families (displaced by war, persecution or natural disasters), through
the innovative use of mobile phones and internet. The innovative system allows
people with even the most basic of handsets to quickly register their details via
SMS, and be matched up with those looking for them.

The program enables refugees to use mobile phones to register themselves, search
for loved ones and connect via an anonymous database. It is estimated that 36
million refugees globally could benefit from this service, which is being piloted
in Uganda with plans to roll out elsewhere. At present more than 4,500 refugees
have registered, a considerably higher number than possible with traditional
methods.

Business Rationale New Markets

Development Impact MDG 8: Develop a Global Partnership for Development

Geographic Scope Uganda (pilot scheme)

17
The case for convergent to leverage their assets more fully. thinking about what constitutes
(See “Development Collaboration: a value chain and where it might
delivery models None of Our Business?” 2009.) In the apply. So, for example, an NGO
Convergent value chains will involve case of international development, might use one value chain to address
delivery models that break with however, the alliance will span not malnutrition issues in a particular
the NGO convention of delivering just organizations but sectors. geography and another in the same
services using their own resources. geography to tackle deficiencies in
Specifically, convergence will see
Even when non-profits partner with primary-level education. The issues
more NGOs actively seeking to
businesses—companies that may would remain the same, but there
harness the technology, logistics
be quite used to outsourcing non- would be different goals, different
expertise, skills, competencies, people,
core parts of their operations—the partners and different outcomes.
and scale of partners from other
businesses usually assume that the sectors—particularly the private In other situations, re-evaluation
non-profits will be the organizations sector. Just as many corporations have of the delivery model may involve
that directly “touch” those in need. disaggregated their “value chains”— more use of local resources than has
But these days, NGOs—and breaking with vertical industry been typical previously. In Rwanda,
government agencies, for that models and outsourcing the parts for instance, the partnership among
matter—may not be the best at of their businesses that are not core the Heineken Africa Foundation,
managing the necessary delivery competencies—so NGOs may need to Bayer Environmental Science (ES),
channels. It’s well documented that follow suit. After all, the typical NGO’s the Rwandan Ministry of Health,
Wal-Mart was far more effective advocacy work calls for very different BRALIRWA brewery, and Rwandan
in its response to the devastation skills and resources than does its on- textile manufacturer Utexrwa
wrought by Hurricane Katrina than the-ground, in-country relief work. responded to a need for bed nets in
was the US or state government. Rwanda with a sustainable, locally
Convergence forces all participants
sourced solution. The Heineken Africa
So there is a strong case for NGOs to challenge conventional wisdom
Foundation purchased 140,000 bed
to think in terms of the airline about the value chain—to think about
nets over three years and also helped
alliance model, where, rather than disassembling the elements of the
Utexrwa to invest in equipment
having many airlines’ planes flying chain and re-assembling them with
for infusion of insecticides into the
partially empty to and from the same non-traditional components and
netting material. (See page 19.)
points, the airlines work together contributors. It even calls for fresh

18
Bed nets to control malaria in Rwanda
Convergence Project Type Convergent Delivery Model

Industry Healthcare

About The partnership among the Heineken Africa Foundation, Bayer Environmental
Science (ES), the Rwandan Ministry of Health, BRALIRWA brewery and Rwandan
textile manufacturer Utexrwa responded to a need for bed nets in Rwanda with a
sustainable, locally-sourced solution. The Heineken Africa Foundation purchased
140,000 bed nets over a period of three years as well as helping Utexrwa to invest
in equipment for impregnation of insecticides into the netting material.

Before the partnership began, all antimalaria bed nets in Rwanda were produced
in other countries. The partners focused on transferring technical knowledge to
the only textile manufacturer in Rwanda, Utexrwa, so that the company could
produce World Health Organization-approved, long-lasting insecticide-treated
bed nets within the UN’s country.

Heineken brought more than 50 years of experience working in Rwanda, along


with seed funding for the project, while Bayer ES contributed its knowledge
of pesticide production and bed net treatment, as well as carrying out quality
control activities. The current program is expected to generate up to 150 new
jobs for Rwandans in the near term. Following a plan to scale up production
to 4.5 million nets per year, the enterprise is expected to employ 1,000 people.
Heineken contributed its knowledge of Rwandan business and government and
its beverage distribution networks-which will be used to distribute bed nets as
they are produced. Bayer ES meanwhile put its core competence in pesticide
manufacturing and bed net treatment to use in order to build local capacity.

Business Rationale Fighting disease, creating jobs, local capacity building, extending links with
Rwandan business and government.

Development Impact MDG 6: Combat HIV/AIDS, malaria, and other diseases


MDG 8: Develop a Global Partnership for Development

Geographic Scope Rwanda

19
From Uganda comes another excellent Indeed, convergence may demand
example. There, communications- some topsy-turvy thinking about
equipment maker Ericsson, the UN’s efficiencies. Coca-Cola is a case in
High Commission for Refugees point. A paragon of high-volume
(UNHCR), and the Clinton Foundation efficiency, Coke and its bottlers
have teamed up to create a service might be expected to set up large
that reunites refugees via mobile warehouses to achieve economies of
phone technology. Working with the scale when entering new markets. But
NGO Refugees United and with mobile Coke went in the opposite direction—
operator MTN in Uganda, the partners and is significantly burnishing its
launched the venture in September CSR credentials as a result.
2010. It has been strikingly successful:
In nations such as Tanzania and
More than 4,500 refugees have
Ethiopia, Coca-Cola SABCO, one of
registered, a far higher number than
Coke’s largest bottlers in Africa (it is
possible with traditional methods. It
20 percent owned by Coca-Cola), uses
is now being extended to Congolese
micro distribution centers (MDCs) to
camps in western Uganda—with more
distribute its products. Collectively,
than 70,000 women and children—and
the MDCs employ tens of thousands of
Dadaab camp in Kenya—the world’s
women entrepreneurs to disseminate
largest refugee camp, with more
products. The MDC approach has been
than 500,000 people. (See page 17.)
validated by the UN’s call to action
NGOs are not the only entities that to empower young women—arguably
may need to rethink their delivery the most effective development
models. The private sector may intervention that can be made. The
find value in engaging NGOs— effort is in no way peripheral to
beyond the usual arm’s-length Coke’s business; the beverage maker
agreements managed through the expects that the MDCs will soon
CSR department—to reach new account for a sizable proportion of
consumers in emerging markets. its product distribution in Africa.

20
Barclays CARE Plan ‘Banking on Change’
Convergence Project Type Convergent Delivery Model

Industry Banking

About Barclays, CARE International and Plan International are working together on an
initiative to extend and develop access to basic financial services to people across
Africa, Asia and South America. This ‘Banking on Change’ partnership consists of
microfinance projects which support the creation and development of savings and
loans groups managed by local communities themselves. The programme focuses
on meeting the needs of populations who are excluded from or have limited
access to formal or informal financial services through development of new add-
on services (such as enterprise training) and improvement of existing savings-led
community finance methodology. Barclays is investing £10m in Community-based
Finance over three years to work with Plan and CARE to reach up to 400 000 new
clients in eleven countries.

The Accenture Development Partnerships team was asked to help set up the
three-way partnership, which included drafting the three year strategy for the
Initiative, establishing the governance and management structures, developing
the Monitoring & Evaluation approach, the learning approach and implementation
plan for the initiative.

The program leads the way in cross-sector partnerships by moving away from
the standard donor-charity relationship. Each organization takes an active role in
the partnership at the global level and within the project countries. As a global
financial institution, Barclays supports the program by increasing access to
banking products and services. As non-governmental organizations specializing
in developmental projects, CARE and Plan contribute to the partnership through
their extensive experience in community finance and their knowledge of local
communities.

Business Rationale New markets – reaching customers who were previously ‘unbanked’

Research opportunities – ways of linking the formal and informal financial sectors

Intellectual Property - the partnership continuously identifies and tests


improvements to the community finance methodology to maximize the potential
of savings-led community finance

Development Impact MDG 8: Develop a Global Partnership for Development

Geographic Scope Africa, Asia and South America

With the exception of Peru (which is listed as “high”), each country has been
listed as “low” or “medium” on the UNDP 2010 Human Development Index ranking
and CARE is leading projects in Uganda, Mozambique, Vietnam and Peru whilst
Plan is leading projects in Tanzania, Zambia, and Indonesia. In Kenya, Ghana and
Egypt their field offices are working collaboratively to implement projects and
share knowledge and resources.

21
Figure 6: Convergence Economy - Possible Future State

From “Issue” To “Outcome”

Private Sector Third Sector Public Sector

Considering convergent Already there are signs that donors are There’s another powerful example
increasingly willing to fund innovation of hybrid funding models at work.
approaches to funding in the development sector. One of the The PATH Malaria Vaccine Initiative
In the same way, funding models most visible and oft-cited examples (MVI) is a global program established
are starting to shift. The traditional is M-PESA, the mobile-phone-based at PATH in 1999 with a vision of a
(or more regular) approach has seen money transfer service operated world free from malaria. The program,
donors funding non-profits that by Safaricom in Kenya. Initially backed by the Bill & Melinda Gates
are then tasked with delivering on sponsored by the UK’s Department Foundation, is currently active in seven
development programs. Conventionally, for International Development (DFID), African nations: Burkina Faso, Gabon,
NGOs write proposals to solicit grants M-PESA has been a huge success Ghana, Kenya, Malawi, Mozambique,
from bodies such as The Wellcome in Kenya. Versions of the service and Tanzania. (See page 27.)
Trust and the Ford Foundation. Public have been rolled out in Tanzania and
funding can play a role, although the South Africa and are being planned
line is drawn at public funds that could as far afield as India and Egypt. Today
benefit private businesses. there is healthy competition between
operators.
These paradigms are now being re-
examined. A whole school of thought DFID is now forging closer links
is emerging around social investment; with the private sector. Its Business
the concept of a “social stock market,” Innovation Facility, launched in March
where investors fund companies and 2010, is intended to strengthen
ventures that support the causes partnerships between DFID and the
they believe in, has been voiced by private sector. The objective is to take
microfinance pioneer Muhammad advantage of market opportunities in
Yunus, among others. We contend that developing countries and to make the
NGOs need to develop something of most of the transformational impact
a venture capital mentality, viewing of business by including the poor as
funding as investment rather than consumers, employees and producers.
the giving of grants and embracing
investing concepts such as patient
capital and blended returns.

22
Fonkoze, Swiss Re and Caribbean Risk
Managers Ltd
Convergence Project Type Convergent Business Model

Industry Banking

About Fonkoze is ‘Haiti’s Alternative Bank for the Organized Poor’. Serving more
than 45,000 borrowers, and more than 200,000 savers, Fonkoze is the largest
microfinance institution (MFI) in Haiti, with 41 branches across the country.

Since many of the small-scale traders who make up the informal sector in Haiti
are particularly vulnerable to natural disasters, Swiss Re - one of the world’s
largest reinsurers - has formed a partnership with Caribbean Risk Managers
Limited, Guy Carpenter Micro Risk Solutions, and Fonkoze to design a micro-
insurance scheme for catastrophes in Haiti. The project will allow vulnerable
Haitians and micro-entrepreneurs in Haiti to protect themselves from natural
disasters at reasonable cost.

Previous efforts to establish micro-insurance schemes in Haiti have found it


difficult to establish a model that meets the needs of the low-income clients,
and is simultaneously able to remain attractive to international reinsurers. The
new initiative overcomes this problem by using parametric indicators to identify
disaster-affected zones - and by creating a capital fund to cover severe losses
outside these zones.

Institutions such as the International Development Bank (IDB), The UK Department


for International Development (DFID) and Mercy Corps will provide capital for
this fund to establish a structured, targeted mechanism that has the ability
deliver relief rapidly. In the event of a natural disaster, the insurance will provide
for a lump-sum payout directly to affected clients, as well as the repayment of
the client’s loan – protecting the client through both short- and medium-term
economic assistance. Fonkoze will be the first partner to offer the product to its
borrowers.

Business Rationale New markets – insurance customers

Economic stability and GDP

Development Impact MDG 7: Ensure Environmental Sustainability

MDG 8: Develop a Global Partnership for Development

Geographic Scope Haiti

23
‘The distinction between the
state, not for profits and
the market is valuable. It’s
important not to blur the
boundaries too much, as we
don’t want this becoming one
indistinguishable enterprise.’

24
The Southern Agricultural Growth
Corridor of Tanzania (SAGCOT)
Convergence Project Type Convergent Business Model

Industry Agriculture

About Launched at the World Economic Forum in 2010, The Southern Agricultural Growth
Corridor of Tanzania (SAGCOT) is a public-private partnership aiming to boost
agricultural productivity in Tanzania. A partnership between private sector local and
international agribusinesses, the Government of Tanzania and donor organisations,
SAGCOT aims to deliver rapid and sustainable agricultural growth, with major
benefits for food security, poverty reduction and reduced vulnerability to climate
change.

Tanzania’s southern corridor links the port of Dar es Salaam to Malawi, Zambia and
the Democratic Republic of Congo. It benefits from good ‘backbone’ infrastructure –
including road, rail and power – and passes through some of the richest farmland in
Africa. The area could become a globally important producer of crops and livestock.
Today, however, its agricultural potential is largely dormant and the majority of the
rural population remains poor and food insecure.

By catalysing large volumes of responsible private investment, the initiative will


provide opportunities for smallholder producers by incentivising stronger linkages
between smallholders and commercial agribusinesses – enabling smallholder
farmers in the vicinity of large-scale farms to access inputs, extension services,
value-adding facilities and markets. SAGCOT will also support smallholder producer
associations, helping them enter into equitable commercial relationships with agri-
processing and marketing businesses.

The SAGCOT Investment Blueprint describes how at least $2.1 billion of private
investment will be catalysed over a twenty year period, alongside public sector
commitments of $1.3 billion. The result is expected to be a tripling of the area’s
agricultural output. Approximately 350,000 hectares will be brought into profitable
production, much of it farmed by smallholder farmers, and with a significant area
under irrigation, and it is anticipated to permanently lift more than two million
people out of poverty.

Business Rationale New Markets

Economies of Scale

Increased production and profitability

‘Early win’ investment opportunities where rapid progress can be made

Development Impact MDG 1: End Poverty and Hunger

MDG 7: Environmental Sustainability

MDG 8: Global Partnership

Geographic Scope Tanzania

25
Imagining the future
Figure 7: The Pathway to Vision 2050
People's Human Economy Agriculture Forests Energy and Buildings Mobility Materials
value development power
2050 One World Basic True value Enough Recovery Secure and Zero-net Reliable and Zero waste
Vision People and needs met food and and low carbon energy low carbon
Plane biofuels regeneration energy buildings mobility
2040 All products Billions Externalities Output Deforestation CO2 All buildings Near 4-10 fold
Measures of success sustainable lifted from internalized doubled halted emissions zero-net universal efficiency
poverty halved energy access improvement
2030 Sustainable Ecosystems True value Better trade, Forest GHGs peak Smarter Smarter Closing the
Transformation living and markets yields and protection and decline buildings and mobility loop
Times enterprises carbon and user
management production
2020
Change Trust and Redefining Knowledge Carbon Re-adjusting Energy Holistic Doing more
Turbulent Teens through inclusiveness progress intensive incentives energy mix efficiency approach to with less
cooporation agriculture mobility
2010
"Must haves' New measures of success Global, local Training of Commitment Global carbon Energy awareness Landfills
and corporate farmers to carbon price phased out
by 2020 leadership cuts
Deeper Access to Removal of Freer and Agree on Tough energy Biofuels Closed loop
local and basic services subsidies fairer trade how to efficiency rules standards design
environmental manage GHGs
understanding
Economic empowerment Commitment Yield gains Cost of Infrastructure investment Value chain
of women to true value renewables innovation
pricing lowered
Incentives of Opportunities Long-term Water Yield gains Integrated Energy
behavior for an aging financing efficiency transport efficiency in
change population models solutions production
More agri Demand-side efficiency More efficient
R&D and alternative
drivetrains
Integrated Dissemination New crop Business
urban of technology varieties models inegrate
management Water efficiency all actors Innovation with cusomers
Source: World Business Council for Sustainable Development, Vision 2050

So what will global development informed perspective that projects policy; and government agencies will
activity look like in the future? Those that in 10 years’ time, many of the perpetuate their delivery of services to
kinds of questions are already on the convergence models described in citizens. But we do expect the blurring
lips of leaders from the private sector this paper will have taken shape and of boundaries. In some instances,
as well as from NGOs and government. begun to make a difference to some of there may be profound structural
humankind’s most troubling problems. change in the scope and boundaries at
The questions are apparent in the
an enterprise level.
Vision 2050 study—a compelling report We are not predicting a wholesale
from the World Business Council for recasting of current structures and When it comes to global development
Sustainable Development that lays out purposes, of course; but we can activities, competency will matter
detailed ideas of what a sustainable imagine a future where a number far more than incumbency. The
global economy might look like four of counter intuitive business models development and aid movement as
decades from now. The report— do come into being. So, whilst Save a whole will become much more
compiled by 29 global companies the Children is not about to set up of a marketplace for development
and drawn from inputs from more a financial services company and outcomes. As a consequence,
than 200 organizations worldwide— Wal-Mart is not about to spin off a traditional definitions of sector roles
states that the world already has the humanitarian logistics operation—and will become less relevant where
resources needed to attain the Vision we are not going to witness an entire convergent models are involved.
2050 goals and maps out what must metamorphosis of existing roles and The role of business will be far
happen between now and 2050 for structures—we are going to see some more invasive and impactful than
those goals to be realized. distinctly new and different business it is today, with the private sector
models and organizational entities embracing a broader definition of
The Vision 2050 ideas provide plenty
emerging. value. Comparable changes are coming
of food for thought—and a useful
to the non-profit sector; for instance,
platform for the discussion of the roles In the meantime, businesses will
there will almost certainly be a proxy
that global development participants continue to be vehicles for providing
for “shareholder value” or impact—
will play. Envisioning those roles, goods and services and creating
measurable development outcomes,
Accenture Development Partnerships wealth; NGOs will continue to be the
in effect. When NGOs are funded
has opted for a shorter horizon—an experts in advocacy and development
or engaged based on their outcome

26
PATH Malaria Vaccine Initiative
Convergence Project Type Convergent Funding Models

Industry Healthcare

About Financially backed by the Bill & Melinda Gates Foundation, the PATH Malaria
Vaccine Initiative (MVI) is a global program established at PATH in 1999 with a
vision to see a world free from malaria. Since 2001, PATH has been working in
collaboration with GlaxoSmithKline Biologicals (GSK Bio) to develop GSK Bio's
malaria vaccine for children in Africa. The project is working to expand clinical
evaluation of the world's most advanced malaria vaccine candidate, known as
RTS,S. The model is based on setting a price for the vaccine that covers GSK’s
costs and generates a small return to be re-invested in research and development
for next-generation vaccines. GSK have committed to donating at least 12.5
million doses of RTS,S (if approved for use) to PATH.

To advance the development program, African research centres in five countries,


and collaborating institutions, joined the partnership. The trial, which is expected
to involve up to 16,000 children, is on schedule, with more than 15,000 children
already enrolled. This is the largest trial ever conducted in Africa of a vaccine
specifically designed for use with African children. The goal for PATH’s private-
sector collaboration is to achieve maximum sustainable benefit for public health
through engaging private-sector collaborators to apply their development,
manufacturing, and distribution strengths toward innovative technologies that, in
the absence of PATH involvement, would not be a private-sector priority. For GSK,
the long-term attraction is the prospect of new markets and the opportunity to
conduct large-scale research using donor’s funds.

Business Rationale New markets, Research opportunity

Development Impact MDG 4: Reduce Child Mortality

MDG 6: Combat HIV/AIDS, malaria, and other diseases

Geographic Scope Seven African Countries: Burkina Faso, Gabon, Ghana, Kenya, Malawi,
Mozambique and Tanzania

27
metrics, they can more easily be It’s likely that entirely new For Business Leaders:
compared with one another. The result: development organizations will be
• Find news ways of harnessing the
a non-profit sector that operates with formed—not only spin-offs but also
latent social and environmental value
greater transparency, accountability entrepreneurial start-ups. Meanwhile,
as well as the economic value in your
and efficiency many incumbents will disappear. The
value chains and broader business
2008–2009 recession has already
By 2020, we expect that high- ecosystems.
acted as a catalyst for quite radical
performing businesses (and
structural change within the NGO • View developing economies as new
development agencies and NGOs, for
sector—changes that will only engines of innovation and market
that matter) will have developed an
accelerate in a convergent world. As potential in the development of
ability to collaborate seamlessly with
the ability to raise funds gives way to products and services that serve both
a set of non-traditional partners that
the ability to deliver tangible results, consumer needs and societal needs
span today’s sectoral boundaries.
fewer, stronger NGOs are likely to symbiotically.
The organizations that adopt new
remain.
convergent business models will not • Adopt a more integrated approach
easily be pigeonholed into today’s It’s natural to ask how global to investment in emerging market
“business” or “non-profit” categories. development parties should begin to operating environments that is
prepare for this new future. Detailed inclusive of the needs of both national
In terms of governance of those new
recommendations are beyond the governments and local communities.
structures, there will be much more
scope of this paper; our primary
cross-sector interaction. We may For NGO Leaders:
objective was to signal the changes
well see as many chairmen and senior
we anticipate and to provide starting • Re-orient the relationship with the
executives of NGOs on the boards
points for discussion. However, in private sector from one centered
of for-profit corporations as we see
terms of broad direction we would on philanthropy to one centered on
businesspeople on the boards of NGOs
recommend the following: collaboration and co-creation of
today. In fact, Jasmine Whitbread,
convergent solutions to development
CEO of Save the Children has recently
challenges.
joined the board of BT.

28
• Shift from program funder to an There are no simple fixes for the We hope this paper galvanizes new
investor mind-set that finds ways of world’s development challenges. As thinking in your organization—and
making markets work for the poor. one new idea—one new response prompts new actions. The vision
to those challenges—cross-sector of development convergence is
• Drive a top down willingness to work
convergence holds great promise, but a tantalizing one. But it will take
with and through a broader set of
it is a long and rocky road. We don’t everyone’s best efforts to become a
local stakeholders that will include not
pretend that NGOs and businesses will reality. We look forward to hearing
just community groups but also local
start seeing eye to eye next year or the your ideas about how that can
businesses and social enterprises.
year after that, even if they do begin happen. We very much welcome your
For Leaders of Government and Public to reconcile some of their short-term engagement.
Donors: vs. long-term mismatches. And we
don’t expect any easy resolution to the
• Donors: Create the necessary
convergent issues that span several of
platforms and incentives upon which
the MDGs—the most far-reaching and
inclusive and convergent business
intractable problems such as poverty.
models can flourish, providing
catalytic funding to address market But responses to those problems
failures. must begin somewhere. Our research
confirms that there are many catalysts
• Emerging Market Governments:
for convergence, and many leaders in
Build the necessary local capacity,
every sector who are willing and ready
regulatory and policy environments
to help transform the convergence
in which convergent economies can
trend into viable, scalable solutions for
flourish.
the world’s least advantaged.

29
Authors Chris Jurgens Peter Lacy
Director, Global Programs, Managing Director, Sustainability
Gib Bulloch Accenture Development Partnerships Services Europe, Africa, Middle East
and Latin America
Executive Director, Accenture Chris is Director of Global Programs for
Development Partnerships Accenture Development Partnerships Peter leads Accenture’s Sustainability
(ADP). Chris oversees ADP’s global Services business in Europe, Middle
Gib is the Founder and Executive
portfolio of work with over 50 East, Africa and Latin America. He is
Director of Accenture Development
organizations in the international a senior executive partner based in
Partnerships (ADP), a not-for-profit
development sector, and he directly London and a member of Accenture’s
consulting group within Accenture,
manages ADP’s client relationships Global Markets and Corporate Strategy
whose clients include many of
with organizations including CARE, leadership teams.
the major international NGOs and
Catholic Relief Services, the Gates
development agencies. ADP’s main Peter is a strategy consultant by
Foundation, Grameen Foundation, IFC,
focus is bringing affordable business background with more than a decade
PEPFAR, and Women’s World Banking.
and technology expertise to the of experience on aligning sustainability
international development sector and In his tenure at ADP, Chris has helped with policy, strategy and execution.
promoting private sector engagement significantly expand ADP’s network His experience spans Andersen
in sustainable development. of partner organizations in the Consulting, Accenture, McKinsey and
international development sector, with he was the founding executive director
Launched in 2003, ADP’s “self-
a particular focus on microfinance of the European Academy of Business
sustaining” business model has been
and cross-sectoral partnerships. He in Society.
used as an example of corporate
has directly led several ADP strategy
best practice in social innovation in Peter sits on the boards of - University
consulting engagements, including
a number of publications including of Nottingham Business School,
working with the IFC to launch a major
WhatIf’s book “Everyday Legends” Cranfield School of Management
enterprise development initiative in
highlighting the stories of 20 leading Doughty Centre, European Academy
Bolivia, and developing a new strategic
social entrepreneurs and by John of Business in Society, Corporate
plan and organization structure for
Elkington in “The Social Intrapreneur: Governance Journal and Ethical
Women’s World Banking.
A Field Guide for Corporate Corporation Magazine, and supports
Changemakers”. Chris has a Masters of Science in several other not-for-profits in his
Foreign Service from Georgetown spare time.
In 2007, ADP was awarded
University, and a BA in Economics
the Management Consulting He is currently a business fellow at
from Miami University, where he was a
Association (MCA)’s Corporate Social Oxford University’s Smith School
Harry S. Truman Scholar and Harrison
Responsibility Award and in 2008, of Environment and Economics, an
Scholar. Previous employers include AT
Gib was named as the Sunday Times alumni of INSEAD and holds a first
Kearney, Zurich Financial Services and
sponsored Management Consultant of class degree from the University of
the U.S. Department of Transportation.
the Year in the Best Partner/Director Nottingham. He was honoured as a
category. In his role as Executive Young Global Leader in 2010 by the
Director of ADP, Gib travels and works World Economic Forum and chairs the
extensively in developing countries initiative’s Taskforce on ‘Sustainability
and is a regular speaker on the role of and Evolutionary Business Models’.
business in development, corporate
social entrepreneurship and cross-
sectoral partnerships.

30
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Chris West, CEO, Shell Foundation
Development Partnerships and Peter Business Review, (FSG Social Impact
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Services, with the extensive input Africa, World Vision
Michael Porter and Mark Kramer, The
from the Accenture Development
Euan Wilmshurst, International Competitive Advantage of Corporate
Partnerships team including:
Government Relations Manager, Coca Philanthropy, Harvard Business Review
Trip Allport, Phoebe Bennett, Brian Cola ( FSG Social Impact Consultants, 2011)
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Development Alliance (USAID) Needs
Lauren Weinstein.
Marianne Mwaniki, Standard Paul Collier, The Bottom Billion: Why
With additional gratitude to our
Chartered the Poorest Countries are Failing and
clients and colleagues for input on
We also owe a debt to the authors of What Can Be Done About It? (New
content are due to:
the following documents: York: Oxford University Press, 2007)
Graham Baxter, CEO, IBLF
Accenture Development Partnerships, Shell Foundation, Enterprise
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Our Business? (Accenture 2009)
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Joaquim Croaca, Head of Vodafone
world: The new globalization playbook
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(Accenture 2009)
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Agriculture, Kraft UK
growth: (Accenture 2010) Economic and Social Affairs, 2007)
Will Day, Chair of the Sustainable
Accenture, The Rise of the Multipolar William Easterly, The White Man’s
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Chris Elias, President, PATH the Rest Have Done So Much Ill and So
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Communications and Public Affairs at Developing Leaders, Supporting Policy
Nestlé and Practice. CSRI 2nd Anniversary
Jane Nelson, Director, Corporate Social Report 2004-2006. (Corporate Social
Responsibility Initiative Kennedy Responsibility Initiative, 2006) CSRI
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February 2007

31
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Economic Growth and Trade in sub-
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us/progressreport/775/
Proctor and Gamble http://www.
investmentu.com/2009/December/ GSMA Development Fund http://www.
blue-chip-company-proctor-and- gsmworld.com/our-work/mobile_
gamble.html planet/development_fund/index.htm
Accenture, A New Era of Sustainability: Page 14:
UN Global Compact-Accenture CEO
Muhammad Yunus: Building Social
Study (Accenture, 2010)
Business: The New Kind of Capitalism
Page 8: that Serves Humanity’s Most Pressing
Needs
United Nations Millennium
Development Goals: http://www. Page 18:
un.org/millenniumgoals/
Russell S. Sobell and Peter T. Leeson,
World Economic Forum www.weforum. Government’s response to Hurricane
org/globalrisks2011 Katrina: A public choice analysis,
Page 10: Public Choice (2006) 127: 55–73
Africa: The New Frontier for Growth Accenture Development Partnerships:
(Accenture, 2010) Development Collaboration: None of
Our Business (Accenture 2009)
Anatole Kaletsky, ‘Capitalism 4.0: The
Birth of a New Economy’ (Bloomsbury, Page 20:
2010)
Jane Nelson, Eriko Ishikawa and
Page 11: Alexis Geaneotes, Developing
Inclusive Business Models: A Review
The Big Idea: Creating Shared Value,
of Coca-Cola's Manual Distribution
HBR.org, http://hbr.org/2011/01/the-
Centers in Ethiopia and Tanzania
big-idea-creating-shared-value/ar/1
Written (Harvard Kennedy School and
FSG Shared Impact Advisors http:// International Finance Corporation
www.fsg.org/nl/csr/creating_shared_ 2009)
value/index.html
Page 22:
Michael E. Porter: How to Fix
‘Creating a World without poverty’
Capitalism: HBR.org: http://blogs.hbr.
http://www.muhammadyunus.org/
org/ideacast/2011/01/how-to-fix-
Publications/creating-a-world-
capitalism.html
without-poverty/
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Archived Content DFID and the
Oxfam, Oxfam Poverty Footprint: Business Innovation Facility http://
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to Development (Oxfam International uk/+/http://www.dfid.gov.uk/About-
2009) DFID/Who-we-work-with1/Business/
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UN Global Compact-Accenture CEO GSK, World’s largest malaria vaccine
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Forbes India, http://www.forbes. media/pressreleases/2009/2009_
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uk/resources/policy/trade/downloads/
unilever.pdf, (Oxfam 2005)

32
Case Study References The PATH Malaria Vaccine Initiative
(MVI)
MercyCorps and Fulwell Mill Kenya's Siaya District Hospital
improves health care thanks to
When Entrepreneurs need a boost:
malaria vaccine studies: http://www.
http://www.mercycorps.org.uk/
malariavaccine.org/
countries/afghanistan (December
2010) An Initative for Hope: The Malaria
Vaccine Initiative to accelerate vaccine
Raisin Awareness – Fairtrade Raisins
development http://www.path.org/
from Afghanistan http://www.
projects/mvi.php
fullwellmill.co.uk/news/pressrelease9-
afghanraisin%20Oct2010.htm The Southern Agricultural Growth
(October 2010) Corridor of Tanzania (SAGCOT)
Ericson and Refugees United SAGCOT – Southern Agricultural
Growth Corridor of Tanzania
Mobile Application Reconnects
http://www.africacorridors.com/
Refugees with Loved Ones , September
sagcot/index.php
22nd, 2010, http://www.ericsson.com/
news/1446236
Refugee reunification http://www.
ericsson.com/article/refugee-
reunification_1109914193_c
Heineken and Bayer
‘Bed Nets to control Malaria in
Rwanda’ http://africafoundation.
heineken.com/projects.html
Community Investment Award
Commended (2010): Heineken
Africa Foundation and Bayer http://
www.gbcimpact.org/itcs_node/9/0/
award/2614
Barclays, CARE, Plan “Banking on
Change”
Barclays: Banking on Change http://
group.barclays.com/Sustainability/
Community-investment/Banking-on-
Brighter-Futures/Banking-on-Change
Care International: CARE, Plan and
Barclays: Banking on Change http://
www.careinternational.org.uk/what-
we-do/working-with-business/who-
we-work-with/care-and-barclays-
banking-on-change
Fonkoze
http://www.fonkoze.org/aboutfonkoze/
whoweare/howworks.html

33
About Accenture About Accenture
Accenture is a global management Sustainability Services
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Accenture Sustainability Services
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helps organizations achieve
more than 215,000 people serving
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sustainability approaches into
generated net revenues of US$21.6
their business strategies, operating
billion for the fiscal year ended
models and critical processes. Our
Aug. 31, 2010. Its home page is
holistic approach encompasses
www.accenture.com.
strategy, design and execution
to increase revenue, reduce cost,
About Accenture manage risk and enhance brand,
Development Partnerships reputation and intangible assets.
We also help clients develop deep
(ADP) insights on sustainability issues
Accenture Development Partnerships based on our ongoing investments in
is a group within Accenture designed research, including recent studies on
to operate on a not-for-profit basis consumer expectations and global
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