by Steven A. Zyck and Randolph Kent
Businesses have increasingly integrated themselves within humanitarian operations. Formerly seen solely as suppliers of goods and services to aid agencies and governments – and perhaps as small-scale donors – they are now being viewed as drivers of innovation and strategic partners (Khiyara, 2013). This section addresses that shift in perception, highlighting the origins and development of private sector engagement in emergency response and preparedness.
The decade following the tsunami has seen the expansion of business partnerships with humanitarian organisations and governments as well as autonomous business initiatives, including ones led by corporate foundations. These have been driven by a range of factors, including the emergence of crises (e.g. those related to climate change and pandemics) that are so broad that they require the involvement of businesses alongside a wide range of other actors. In addition, emergencies will increasingly take place in middle-income countries with strong local business communities and an aversion to massive international aid operations. The rapid pace of urbanisation and the increasingly urban face of humanitarian crises have opened up opportunities for businesses, which tend to be concentrated in cities. Many future crises will require responses that go beyond conventional aid agency approaches, and will require growing levels of technical expertise. The private sector is seen as the best possible solution to the humanitarian capacities challenge as aid agencies strive to adapt to new types of crises.
Why does the private sector engage with humanitarian emergencies?
Private sector engagement in emergency response (aside from the routine selling of goods and services to aid agencies) has been driven by a primary concern for the wellbeing of affected people and a desire to use resources to help alleviate suffering.This is particularly true among national and local enterprises, where humanitarian work is often viewed as a moral, religious or national obligation. The global media, information and communications technology and the globalisation of commerce mean that business leaders increasingly know people, including clients, customers, suppliers and colleagues, who have been affected. Hence, businesses are drawn more into crises than they may have been in previous decades.
There can also be tangible benefits for businesses engaging in humanitarian efforts. A company’s brand reputation may be enhanced by becoming involved in responses to disasters (Wassenhove et al., 2007). Some research has also linked – though evidence is relatively limited – corporate humanitarian activities with human resources. By engaging in humanitarian efforts, businesses reportedly increase staff morale and retention and job satisfaction (Binder and Witte, 2007). Likewise, companies which engage in humanitarian efforts are believed to have stronger reputations, which may help them recruit more qualified personnel in highly competitive fields.
Lastly, many businesses see humanitarian work as an opportunity for the company or key personnel to learn or innovate in response to daunting situations (Wassenhove et al., 2007); that is, disasters press staff to develop new approaches and solutions which apply even in daunting contexts (e.g. means of repairing damaged communications systems).
However, noting that ancillary benefits such as staff morale and recruitment are relatively modest and far from guaranteed, academics, businesses and aid agencies have sought out a new more convincing business case. The most prominent alternative business case, often referred to as Creating Shared Value (CSV), is rooted in the notion that businesses are more successful when the people and communities around them thrive (Porter and Kramer, 2006). This theory has generally been applied to longer-term development processes rather than humanitarian relief. It is thus worth asking whether a specific business case or rationale exists for businesses considering involvement in humanitarian action. Based on this study, such a business case could be described as follows: crises and the humanitarian responses to crises offer considerable opportunities for firms to gain new customers, introduce new products to customers, grow relationships with existing customers and enhance brand loyalty. Mobile network operators often give away free air time during crises to ensure that people switch to their network or do not leave their network when their pay-as-you-go phone (common in most of the world) runs out of credit. Customers will be much more loyal to that operator given that it helped them –enabling them to stay in touch with family, friends and assistance providers – during a crisis. Likewise, in the consumer goods sector, firms have routinely used crises as opportunities to introduce new food and hygiene products in hopes that people will purchase them once the crisis has ended. Banking firms use mobile money and other cash transfer programmes during crises to attract new clients.
There is nothing inappropriate about these underlying motives or interests, and these commercial considerations do not diminish business figures’ primary concern – when engaging in humanitarian activities – for the wellbeing of affected people. Businesses which develop innovations or contribute goods to humanitarian efforts may ultimately see a return on this investment, but this does not undermine the positive impact of their contribution. A company which supports hygiene projects in a refugee camp is not requiring that beneficiaries purchase their product in the future, nor is it preventing them from ultimately choosing a different brand or foregoing the product altogether. The same applies to banks which gain customers via humanitarian cash transfers; these new clients are only temporary, and the bank in question will need to prove its value once the cash transfer programme ends. Furthermore, the bank will only benefit from these new clients if they ultimately have enough money to deposit or enough assets to take out loans in the future, making the bank, to some extent, a partner with its new-found clients. This same logic applies to insurance companies, which have increasingly gained clients in developing countries through micro-insurance initiatives. In doing so they have gained a financial stake in ensuring that their new and relatively low-income clients are prepared for future disasters.
The nexus of business interests and the wellbeing of people in developing and disaster-prone countries is a powerful one. It will increasingly make businesses partners in emergency preparedness, resilience and disaster relief not just in theory but also in practice.