Building Sustainable Global Value Chains
As companies around the world strive to create sustainable value chains, they are paying increased attention to the operations and management practices of their suppliers, distributors, and partners. A recent joint research project of the American Society for Quality, the Corporate Responsibility Officers Association, and the Institute for Supply Management with Deloitte Consulting LLP took a closer look at what improves the effectiveness of sustainable value chains. The project gathered almost 1,000 responses from sustainable supply chain executives.
The responses measured how much a given management practice can increase an organization’s sustainable value chain effectiveness, as compared to respondents not adopting the practice. Not surprisingly, among the top 10 such management practices, the top five have to do with engagement, organizational culture, and incentives (percentages represent an increase in sustainable value chain effectiveness):
Celebrating International Youth Day
This year International Youth Day highlights the theme “Building a Better World: Partnering with Youth.” The importance of engaging young people in political, economic, and civic spheres is evident just by looking at the numbers: more than one in six people on the planet are between the ages of 15 and 24. Yet these adolescents and young adults are all too often neglected when it comes to opportunities to lead a fulfilling and prosperous life.
One reason is the pace of demographic change: according to the UN Population Division, the number of young people globally has been steadily increasing since 1950 and will continue to rise – with a concentration in low- and lower-middle-income countries – for at least another two decades. As the Arab Spring shows, if governments cannot provide satisfactory prospects for their growing populations, social unrest may follow.
Beyond economic exclusion, which manifests itself in high youth unemployment (or employment in the informal sector), political exclusion of youth is another reason why young people often feel neglected. In many countries political parties and state institutions remain dominated by older officials who may not understand the needs and concerns of youth, and are unwilling to seek out the views of young people. CIPE works with local partners in countries around the world to counteract the exclusion of youth in all aspects of public life and to partner with the next generation of leaders. Here are a few examples:
Why Do States Fail?
This year’s edition of the Failed States Index (FSI) is out. The Index is a ranking of 178 nations compiled by the Fund for Peace in cooperation with Foreign Policy magazine based on events in 2011. Perhaps somewhat misnamed, the index does not designate state failure per se but rather susceptibility to failure, quantifying pressures on states as well as their capacity to deal with these pressures. It consists of 12 key political, social, and economic indicators triangulated from content analysis of public reports and information, quantitative data, and opinions of experts. Based on these factors, nations are categorized into Alert, Warning, Moderate, and Sustainable bands.
Although the bottom of the ranking, Somalia, and its top spot, Finland, were occupied by the same countries as last year, the current FSI does show some dramatic shifts. Civil war in Libya and the tsunami in Japan caused the most precipitous drops in the ranking: 16.2 and 12.5 points year-on-year, respectively. Japan still is a distant 151st on the list of states most likely to fail while Libya is only 50th, highlighting the profound differences between the two. At the same time, Japan’s problems illustrate that even wealthy, democratic countries are not immune to shocks that test their strength.
The FSI raises important points about the factors that increase the risk of state failure, ranging from demographic pressures and uneven economic development to unaddressed group grievances. Whether a state can withstand pressures generated by these factors depends on the capacity of its institutions, which include leadership, law enforcement, the judiciary, the civil service, civil society, and the media. When pressures mount and these institutions are too weak to cope, states become susceptible to collapse.
State vs. Market – a False Dichotomy
Reasonable people can disagree about the role of state in economic affairs, especially in times of crisis, and what types of services governments should provide to citizens. It is up to each society, through its political process, to formulate economic and social policies that fit each country’s unique situation. However, what’s often lost in these debates is a key aspect of the role that any state plays in the economy: establishing the rules of the game.
In a market economy, that means creating and supporting institutions such as property rights, contract enforcement, freedom of enterprise, etc. States must also be able to provide basic infrastructure to facilitate economic activity in order for these institutions to meaningfully function. In most Western countries, the impulse fueled by the global financial crisis has generally been to reduce the size of the state. Yet for many developing countries the real question is not whether to reduce the size of the state but how to make the state perform better, whatever its optimal scope may be.
The Business Case for a Green Economy
Rio+20 Conference concluded on what many observers describe as a lackluster note: no grand agreements have been reached and even the closing paper ended up not being called a “Rio+20 Declaration” but more modestly Rio+20 Outcomes Document. Attendees did little more than reaffirm the original Rio Principles of twenty years ago (hence the “+20″ in the name) and the Universal Declaration of Human rights (adopted in 1948) while calling for new Sustainable Development Goals to complement the Millennium Development Goals.
But where heads of state and government and high-level representatives failed to reach any concrete commitments on pressing global sustainability issues, other Rio+20 participants demonstrated a parallel pathway towards the type of development the world needs. “The lack of political leadership,” writes former Irish President Mary Robinson, “was countered by the incredible vitality, determination and commitment of civil society – from young people, women, trade unions, grassroots communities, faith-based organizations and the private sector.”
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The CIPE Development Blog provides coverage of CIPE and its partner network at work -- highlighting successes, drawing out lessons from failure, and exploring the broader issues of political and economic development. For more information visit the CIPE homepage.
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