The Private-Sector Role in Public Health

January 31, 2012

In recent decades, there has been a decided evolution in perspectives on the roles and responsibilities of business in society. The classic position was Milton Friedman’s 1970 pronouncement that the only responsibility a business has is to return a profit to its shareholders. That view has largely been replaced by a more nuanced understanding of the ways in which businesses can enhance their competitiveness and economic returns by addressing the needs and challenges of the communities in which they operate. Corporate responsibility is no longer an oxymoron, as skeptics claim, but rather an emerging approach designed to create shared value for businesses and their shareholders—having positive social impact while also generating the return on investment expected by shareholders. There is still wide variation in corporate responsibility practices, from firms that see such activities as little more than a public relations strategy to improve their brand image to others that find meaningful opportunities to drive social change through their core businesses. At the same time, there has been growing interest and acceptance of the private sector in the broader global development agenda. Private-sector engagement was among the main issues addressed at the recent 4th High Level Forum for Aid Effectiveness in Busan, Korea; as Lars Thunell, executive vice president and CEO of the International Finance Corporation (IFC), observed, “This could be the turning point where we recognize the mutually supportive roles of the private and public sectors in promoting development.”