Michael Porter and Mark Kramer’s Creating Shared Value convincingly articulates how shared value can transform “business as usual” – in private, public and non-profit sectors. The authors likely understood the danger of introducing yet another acronym into an already saturated market of purportedly transformative business strategies. Undoubtedly the limited use of CSV in the article was intentional, to sidestep an association – and resulting disregard of the concept – with related terms such Corporate Responsibility (CR) and Corporate Social Responsibility (CSR). (Epstein-Reeves’ Forbes CSR blog provides a helpful visual to show the peripheral, as opposed to endogenous, nature of CSR compared to CSV). Porter and Kramer were likely also aware of the threat of ambiguity, which has plagued and discredited the concept of sustainability. Porter and Kramer’s presentation of shared value creation is both understandable in economic, social, and environmental terms and is broadly applicable across sectors.
Although Porter and Kramer admittedly focus on the private sector, they briefly discuss how public and non-profit sectors can benefit from creating shared value. As an urban planning student, my interest lies in the potential of shared value creation to generate innovation in urban development, particularly in light of shrinking public sector budgets and rising expenditures. The authors encourage businesses, government, and civil society organizations to reimagine their traditional responsibilities and instead focus on how to achieve the most impact for the lowest cost. This could mean private sector involvement in a historically public issue or collaborative public-private partnerships.
It is an opportune time to innovate our concept of value and expand cross-sector partnerships, particularly in urban planning. Complex issues such as climate change and increasing socio-economic inequities demand reconceptualization of “business as usual,” particularly what constitutes growth. The principles of shared value creation may uncover potential areas of operational or procedural innovation and mutually beneficial alliances. Increased collaboration – within industries and across sectors – could be tremendous for addressing current social, economic, environmental problems. (For a description of how shared value can catalyze meaningful change in regulatory processes, refer to Porter and Kramer’s section on “Government Regulation and Shared Value”).
Creating shared value sounds like a silver bullet – it’s almost too good to be true. So what does it look like in practice? What cities have pursued creating shared value? Many examples are underway and provide inspiration for alternative approaches to planning and development. Bruce Katz and Jennifer Bradley of the Brookings Institution highlight noteworthy transformations in what they term “innovation districts” in The Metropolitan Revolution: How Cities and Metros Are Fixing Our Broken Politics and Fragile Economy. Harvard University’s Innovations in American Government Award recognizes 25 programs across the country that address marginalized societies, workforce training, and operational optimization.
(Photo: Planetizen, Innovation Districts: The New Big Urban Idea)
The Rockefeller Foundation, The Economist Intelligence Unit, and the University of Pennsylvania recently released a report on Transforming Cities that illustrates how cities can innovate to accommodate expected increases in population growth and promote resiliency – in essence, how cities develop to sustainable over time. Such examples and initiatives illustrate the potential for transformation of business as usual.