Private Sector Reevaluates Development Business Partnerships in Emerging Markets

Multinational corporations are warming up to public-private partnerships to supplement charitable work and build their brand in emerging markets.

Devry Boughner, Cargill Inc.'s director of international business relations, is an outspoken supporter of such partnerships. During a recent event in Washington on the challenges facing emerging markets in Africa, Boughner discussed how to form successful partnerships.

Some large multinational corporations may stay away from certain emerging markets because they fear damaging the reputation of their brand, Boughner noted at the U.S. Chamber of Commerce Business Civic Leadership Center's 2009 Global Corporate Citizenship Conference on Oct. 1. But, she added, most companies these days will work to address major hurdles to business development, including an underdeveloped supply chain, scarce human capital, government or trade barriers, and a lack of infrastructure.

If it makes marketable sense, the company will identify nonprofits and other partners who know the issues, and bring in experts to solve the problems, she said.

How does an interested partner strike up a relationship with companies like Cargill to form a potential partnership? Boughner was quick to point out that partnerships have to be country-driven. Partners on the ground and in the field have a much better sense of what's needed and what works than anyone masterminding collaborations from an office thousands of miles away, she said.

The Chamber of Commerce conference brought together leaders from the government, nonprofit, and for-profit sectors for a candid discussion on doing business in emerging markets. One question was central to the debate: How should a partnership's impact on business and development be measured?

Businesses can always look at profits and losses and whether a project maintained capacity as an indicator of success, Boughner noted, but proving a development impact is much tougher.

The popularity of public-private partnerships has catapulted a number of large multinational companies into the business of developing emerging markets. Estimates show that these partnerships will only continue to grow in number - and, hopefully, in effectiveness. Defining and monitoring success will be key to such efforts.

One issue the conference touched on briefly was the emergence of private-sector partnerships in emerging markets. Would competing companies indeed join forces to eradicate poverty and open markets for their products? Some of the companies represented at the Chamber of Commerce event indicated they are considering it.

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