Shared Value

* Shared Value is a new form of capitalism.

* “Capitalism is under siege. In recent years business increasingly has been viewed as a major cause of social, environmental, and economic problems. Companies are widely perceived to be prospering at the expense of the broader community… companies must take the lead in bringing business and society back together”

* “The solution lies in the principle of shared value, which involves creating economic value in a way that also creates value for society by addressing its needs and challenges”

* “Shared value is not social responsibility, philanthropy, or even sustainability, but a new way to achieve economic success”

* Porter & Kramer criticize neoclassical thinking on the trade-off between societal needs and economic success, and the way the concept of ‘externalities’ have shaped corporate and policy strategy.

* Uses Fairtrade as an example of what shared value isn’t: “Fair trade aims to increase the proportion of revenue that goes to poor farmers by paying them higher prices for the same crops. Though this may be a noble sentiment, fair trade is mostly about redistribution rather than expanding the overall amount of value created. A shared value perspective, instead, focuses on improving growing techniques and strengthening the local cluster of supporting suppliers and other institutions in order to increase farmers’ efficiency, yields, product quality, and sustainability. This leads to a bigger pie of revenue and profits that benefits both farmers and the companies that buy from them.”

* Throughout the article, there are countless examples of where creating shared value is happening and proving to be successful.

Initial Concept

* There are three main ways companies can create value opportunities

* By reconceiving products and markets

* By redefining productivity in the value chain

* By enabling local cluster development

* Business and...