The Challenge of Future Entrepreneurship: Making Peace Profitable
The business of war is profitable. In 2011, for example, the top 100 war-supporting companies made in excess of $410 billion in arms and military services. According to a report by the Stockholm International Peace Research Institute (SIPRI), the top 10 of those companies made grossed $208 billion in that period.
While war is profitable, our aim should be world peace. The question then becomes, can peace be as profitable if we have companies and organizations supporting peace initiatives and turning profits?
According to many experts, this is possible but just not fully operational at this time. In fact, some studies show that peace can be more profitable than war. According to findings from the Australian Institute for Economics and Peace released in 2011, reducing violence by as little as 25%—an attainable goal for most countries—would reap the world at least $2 trillion in peace savings yearly.
So, how do we build profitable, peace-focused enterprises?
This is easier said than done given that war already dominates the economy with governments spending up to 20%+ of their budgets on military projects. However, it is possible.
The United States Institute of Peace Special Report on How Business Can Foster Peace provides a sneak peek of what is needed. According to the report, a peace-promoting business should be founded on five key principles;
Promoting economic activity
Studies by both the World Bank and the United Nations show that poverty begets violence. Thus, by providing jobs and diversifying economic opportunity, entrepreneurs can alleviate a region’s poverty. A good example is when Cisco invested $10 million in Palestinian programmers and included both Palestinians and Israelis on the same programming teams. Such little efforts can go a long way in reconnecting conflicting groups.
Respect for the rule of law
Instead of exploiting asymmetrical power relationships, entrepreneurs can contribute to peace by respecting the rule of law and abiding by international labor and environmental standards. As corruption can trigger instability and violent conflict, companies with zero-tolerance policies and strong ethical principles move the needle toward peace and stability.
Support for truck-two diplomacy
Truck-two diplomacy is all about businesses and entrepreneurs standing up for the rest of the society when the going gets tough. To this end, if they are to profit from a peace economy, future businesses and entrepreneurs must be ready to broker peace in the face of conflict and defend the rights of the common man.
Implementing corporate citizenship
Businesses can also promote peace and later benefit from it by encouraging corporate citizenship. Corporate citizenship essentially means making the citizenship feel that they are part of the corporation. Coca-Cola has done that well in Vietnam where it provides pushcarts to disadvantaged female entrepreneurs—a practice that benefits both parties. Corporate citizenship enhances social, environmental, and economic well-being of societies.
Leveraging unique practices and risk assessment
For businesses that work in war-prone zones, practices and risk assessments unique to the specific environment may be needed to prevent conflict. These practices usually include paying careful attention to the needs of suppliers, customers, employees, and other stakeholders immediately involved in the conflict-sensitive environment.
With peace comes increased business profitability
If the future entrepreneur can embrace these five principles, then we are certainly on the way to greater peace—peace that would go a long way in improving the business environment, leading to faster economic growth. Even better, increasing peace would help lower the $14.3 trillion that businesses lose to violence yearly, all while boosting business profits.