If the Pope can go to Cuba, why can’t companies embrace government? A mini manifesto for chang

The prevailing consensus in business used to be that government is the problem. What we need is lower taxes and less regulation, and we’ll create the jobs and money that you need to keep your voters happy. You can trust us – take a look at our corporate responsibility report where you can see all the good things we are doing. (But just in case, we will still maintain well-funded public affairs departments to lobby and fend off unwelcome interventions.)

I say “used to be” because we hear rather less of that rhetoric now, at least from corporate leaders, if not from certain politicians. Perhaps the billion dollar bail-outs for banks and motor companies gave some pause for thought.

But has the reality actually changed? Have companies developed an alternative view about the proper role for government? Are they welcoming, indeed lobbying for, the right sorts of intervention? Alas, the evidence is still sparse.

Of course the previous mind-set was a reaction against the era of ‘big government’ when a civil servant could credibly claim “the gentleman in Whitehall really does know best” (Douglas Jay, 1937). And no one in the mainstream is now arguing for a return to those days. With only five Communist countries left and one of them – Cuba – even embracing a visit from the Pope, it really is time for business to move on from cold war attitudes too.

If you doubt it, our round-up of news stories this month shows governments remain centre-stage: in India, an attack on patent rights but also subsidies for wind farms; in China, requirements for (unnecessary?) animal testing plus a vigorous defence of airlines against EU carbon taxes; meanwhile the UK-US Partnership for Global Development, promoted at the Obama-Cameron meeting in Washington, explicitly “builds on the power of the private sector to help change lives”. At the same time, three stories about pollution from off-shore drilling in the Atlantic, Gulf of Mexico and North Sea remind us that companies can’t be relied on even to get the basics right all the time.

So what should be the right approach? Here’s my mini-manifesto for a change to a productive and profitable relationship between the sectors.
1. Business should explicitly welcome an active role for the public sector. Governments have always set the ‘rules of the game’ and need now to create the space for socially-committed companies to do the right things. That means more regulations to prevent free-loading irresponsible firms that cut corners and compete unfairly.
2. Governments must enable business to act for the long term good of their shareholders and society as a whole, and counteract short-termism. When carbon emissions are damaging our future environment and essential resources like water are becoming scarce, current market mechanisms need regulation if the true costs of future damage are to be priced in now.
3. NGOs must help create the ‘public space’ for business and government to work together, through their influence with citizens and access to the media. The temptation to cry foul and fear the worst remains strong, given past behaviours, but helping build a trusting space to find solutions through partnership is vital.

Most of us roughly know what a long term sustainable and equitable future could look like; getting there sometimes seems impossibly hard. One thing is for sure – we won’t make it if we continue to regard any of our ‘partners’ as part of the problem.

This entry was posted in Business. Bookmark the permalink.