Can the private sector help safeguard democracy? The answer is yes

At Davos last week, sessions like “Is Democracy in Trouble?” signaled a shift in corporate perceptions of democratic erosion. The fragmentation of the liberal international order is fueling domestic polarization, threatening global information integrity, and, as the World Economic Forum’s latest Global Risks Report makes clear, creating risks that no company can ignore. The question is: Can the business community do anything about it? Growing cynicism surrounds the role of the business community in protecting democracy. “[T]hat’s the thing I got most wrong about Silicon Valley,” tech columnist Steven Levy wrote about tech leaders who once “seemed fearless.” With Big Tech now accused of succumbing to political pressure, pundits increasingly portray capitalism as a threat to democracy. I think they are missing the bigger picture. These self-defeating and pessimistic accounts fail to capture the extent to which business communities can and do contribute to fighting democratic erosion. Business has been democracy’s ally before Research shows that, historically, businesspeople have played pivotal roles in supporting pro-democracy movements using their economic leverage and organizational capacity. From Latin America to sub-Saharan Africa and post-Soviet Europe, third-wave democratization would not have been possible without entrepreneurs financing opposition parties, protests, and media outlets. Today, hundreds of business-led programs have emerged across democracies to protect electoral integrity and promote diversity, openness, and an inclusive economy. Even in autocratic countries, business coalitions have mobilized against foreign agent laws and internet shutdowns to protect the shrinking civic space. The rise of quiet corporate activism Businesses take action because they want to avoid reputational damage in the eyes of their stakeholders and consumer backlash. However, such corporate activism entails huge political risks. Even in established democracies, businesses face political retaliation when they counter government policies. Governments possess a wide range of regulatory tools to punish dissent, with some sectors being more vulnerable than others. That is why firms choose to apply strategic discretion. People skeptical of business’ role in protecting democracy tend to fixate on Big Tech and highly salient events. But the private sector is much more than Silicon Valley. As a German Marshall Fund Marshall Memorial fellow, last September, I traveled from Detroit to Austin in the United States, and conducted interviews with entrepreneurs and NGO representatives. My research shows that some companies choose to relabel their diversity, equity, and inclusion, or DEI, initiatives to avoid political targeting while still staying the course. Others discreetly support civil society organizations’ pro-immigration initiatives or create contingency plans against potential government raids to protect their workers, but do not necessarily broadcast them to prevent political retaliation. In other words, just because it’s under the radar doesn’t mean it’s not happening. Business engagement is needed to fight FIMI There is one key issue area where business engagement has become the most urgent for democracy protection: fighting “foreign information manipulation and interference” — FIMI. FIMI aims to weaken democracies by sowing division and eroding trust in institutions. Businesses, intentionally or not, may become vectors in FIMI through ad placements and compromised platforms. The European Commission recognizes this reality. The European Democracy Shield is planning to engage businesses in forming coalitions for democracy, encouraging private investment in independent media, and demonetizing disinformation campaigns. And companies have every reason to be on board. According to a recent study, fake news costs the global economy $78 billion annually. Why civil society needs business now Civil society needs business engagement for democracy protection, and for good reasons. First, despite mounting grievances, public trust in businesses as competent and ethical remains high. At a time when geostrategic interests are trumping other concerns, NGOs need businesses as informal allies for their lobbying power and political leverage. Second, with funding cuts in development cooperation, business investment is essential. The piloting era for civil society is over and scaling democratic innovations requires private sector support. Finally, workplaces offer easy access to people for outreach and training purposes — more so than traditional civic spaces, which have become polarized battlegrounds. But stakeholders in the democracy protection ecosystem must learn to engage businesses on their terms. That means talking their language: reframe democratic resilience as business risk management, and as a precondition for economic performance. Democratic erosion produces higher compliance costs and increased market volatility. These aren’t just abstract concerns, but also bottom-line issues for businesses. Therefore, a new engagement strategy requires business-centric democratic resilience metrics that executives can understand. Civil society leaders should be more intentional in engaging with corporate leaders in spaces such as Davos to facilitate such conversations. Civil society organizations and development cooperation groups should invest in learning how to activate potential corporate allies. Cynicism about corporate engagement is easy. But if we want democracies to survive, we need all hands on deck.