Secretary Clinton's vision of "Economic Statecraft" is putting economics at the center of our foreign policy: "Just as U.S. companies are ready to out-work, out-innovate, and out-compete their rivals, so we intend to be the most effective diplomatic champions for prosperity and growth."
Three key goals as we pursue our economic foreign policy:
At the same time, we are forming new partnerships with companies, universities, NGOs and civil society to put private sector ingenuity and best practices to work solving some of our most difficult global challenges and driving sustainable development.
Vital part of Economic Statecraft is Corporate Social Responsibility (CSR) – promoting exemplary corporate behavior to help strengthen our companies and project American values and U.S. influence.
Good corporate citizenship is a win-win. It also benefits the company’s bottom line: it can help manage risk, protect the company’s reputation, and attract good employees and loyal customers.
CSR at the State Department
New CSR team was set up at State to maximize our ability to be helpful to companies and civil society stakeholders on a range of CSR issues. Our team includes offices across the Department that deal with economic growth and development, human rights, labor issues, environment, trafficking in persons, diversity and disabilities, and good governance and anti-corruption.
The State Department takes a comprehensive approach to CSR. This includes:
The Corporate Social Responsibility Team in the State Department’s Bureau of Economic and Business Affairs leads the Department’s engagement with U.S. businesses in the promotion of responsible and ethical business practices. The CSR team, of which I am pleased to be Coordinator:
Clearly, corporate social responsibility is important because of the realities of globalization. The people of the world are becoming more interconnected due to advances of technology, communication and transportation. The global market economy is moving not only goods and services but ideas and values as well.
American companies are the face of the United States abroad, fulfilling an important diplomatic role and contributing to America’s overall foreign policy strategy. Wherever they go, American businesses carry the message of free enterprise, market-based economies and democracy. They are at the forefront of promoting education, environmental stewardship, sustainable economic development and humanitarian assistance.
American companies and all multinational enterprises have an opportunity to create a positive impact on the community in which they operate by contributing to the commercial, civic and cultural life of the people. This is corporate citizenship at its best. In other words, companies are a force for positive change, working every day to broaden and deepen economic development and international partnerships.
Over the past several decades, globalization has resulted in an increase in the power and influence of the private sector. The changing role of government has seen the private sector and NGOs become providers of many services previously offered by government. In developing and post-conflict countries, governments have historically faced serious and particular challenges and constraints, and private sector organizations have often provided services in areas such as health, education and welfare. As the capability of some developing-country governments expands, the roles of government and private sector organizations are undergoing change.
The joint Department of State and USAID Quadrennial Diplomacy and Development Review (QDDR) is a sweeping assessment of how the Department of State and the United States Agency for International Development (USAID) can become more efficient, accountable, and effective in a world in which rising powers, growing instability, and technological transformation create new threats, but also new opportunities.
It calls for more entrepreneurial and market-based approaches to the world’s development and diplomatic challenges, The State Department will build on the social entrepreneurship movement to increase the United States’ use of innovative strategies in our foreign policy agenda. This concept proposes that the State Department proactively engage with social entrepreneurs by creating a global network of ‘Mini Silicon Valleys’ ,housed in selected embassies, where social entrepreneurs can share ideas, inspiration and networks in order to accelerate their work and develop solutions that map to the US Government’s goals.
Social entrepreneurship is defined as a for-profit mission driven venture that delivers social benefits. It is also known as a double or triple bottom line business, where financial profit is not the only metric of success. These businesses are structured to make a profit while positively impacting a community, a Millennium Development Goal, or increasing social justice, among many other things.
In an increasingly interconnected world, technology and business cross borders faster than policy, and individuals and entrepreneurs are more nimble than governments. As such, the State Department is working to create easily accessible platforms for the development of business-oriented solutions.
We encourage the growth of triple bottom line businesses. This is accomplished at our U.S. Embassies through:
1) Local Outreach: relationships and community and resource-building tactics for Economic Officers. At the January conference of impact investors at the State Department, the successful social entrepreneur, Roy Sosa of MPOWER, argued that embassies can and should provide this critical role.
2) Digital and Peer to Peer Integration: expansion of Ementorcorps for connecting social entrepreneurs and resources for U.S. based mentors. Integration of the Virtual Student Foreign Service (VSFS) allows embassies to task out research and other remote tasks to American university students as they complete their “virtual tour of duty” and Corridor (Facebook for State Department) for better sourcing of knowledge through American universities and embassies.
3) Foreign University: State Department endorsed Social Entrepreneur Fellowship program for local entrepreneurs and university students.
4) Recognition: Touting best business practices of U.S. companies operating around the world.
The Secretary of State’s Award for Corporate Excellence (ACE)
At the State Department, one specific way we recognize and promote the good work of American business and encourage corporate social responsibility is through the annual Secretary of State’s Award for Corporate Excellence, also known as the ACE, which is handled by my office. The ACE criteria are based on the OECD Guidelines.
ACE nominations are submitted by our Ambassadors around the world for a U.S. company’s achievement based on the State Department’s comprehensive, holistic approach to CSR that I previously referenced.
ACE Winners and Innovative Communication Technologies
Since our focus today is on innovative communication technologies that are being used to advance CSR and promote both democracy and commercial diplomacy, let me offer a couple of ACE winners as examples of best practices.
Cisco, headquartered in San Jose, California, was a 2010 MNE ACE winner for the computer networking company’s efforts to reconnect the Israeli and Palestinian economies and people; build a sustainable model of job creation and economic development; and engage in several partnerships and initiatives to enhance technical capacity, connectivity, education, and opportunities for women and youths in Israel and Palestine. Cisco’s leadership has inspired other high-tech companies in Israel—U.S. and Israeli—to engage with Palestinian firms. Cisco CEO John Chambers’ personal visit to the West Bank in 2008, and his CSR commitment of $10 million to establish a sustainable model of job creation and economic development in the Palestinian Territories over a three-year period, including training, technology transfer, and partnerships, demonstrate how CSR makes good business sense. Cisco has led the way for other IT giants in developing business relationships with Palestinian companies, and equally important, Cisco has facilitated personal connections between Israelis and Palestinians. Cisco has made a qualitative difference in the lives of the people of Israel, and the joint nomination from U.S. Embassy Tel Aviv and Consulate General Jerusalem are testament to this.
In 2009, Trilogy International Partners of Bellevue, Washington, won the ACE for its steadfast example of good corporate citizenship through its subsidiary ComCEL in Haiti. In recent years, including the 2010 earthquake and recent trauma of Hurricane Isaac, the Haitian people have shown remarkable resilience in the face of adversity, and companies like ComCEL have seen the opportunity and potential of the Haitian people and the nation of Haiti. For over 10 years, ComCEL has offered affordable, high quality wireless cellular service in Haiti. But ComCEL does more than provide access to communications. It helps provide access to opportunity. In Haiti, as in every country, education is a key to helping families break the cycle of poverty. So ComCEL has funded over 7,000 primary school scholarships in Haiti, making it the largest corporate scholarship sponsor in the country. The company also provides college scholarships for students interested in engineering, law, and accounting, giving hope to many young people that a university degree is within reach.
Outside the classroom, ComCEL-funded new internet labs in rural areas to bridge the digital divide, giving coffee farmers access to market rates for their goods, public awareness campaigns highlighting the importance of environmental stewardship have sparked efforts to plant trees and led to the installation of new windmills, providing an additional source of renewable energy.
Trilogy strongly believes that wireless communications networks are vital pathways for economic development, particularly in emerging markets, and that economic development creates a solid foundation for freedom and democracy.
These companies support entrepreneurial initiatives both for the good that it does in the community and for the benefits that it brings directly to the business itself.
Technology is continuing its march across the globe, transforming the very nature of economies, becoming an essential tool for human and social development, and shifting the skill basis of jobs and professions. However, technology is not an end in itself, but rather a powerful tool for improving lives. When applied judiciously, it can reduce costs, accelerate, and expand delivery of services that improve health, education, business opportunities, and civic engagement. Opportunities also abound directly in the technology sector where job generation is expected to be among the fastest and most lucrative worldwide.
One note of concern, however, is the underrepresentation of women in the sector that fuels a digital divide. This gap must be addressed. Governments, corporations, and civil society all play important roles in bridging this divide.
Together, the public and private sectors can work in partnership to ensure that the over 6 billion mobile phone subscriptions worldwide and the more than 2 billion Internet users are working to promote openness in governments, economies, and build solutions for good.