The impact of creating shared value
I find it upsetting that businesses are often viewed as merely profit-maximisers. While it isn’t completely wrong to assume that many firms practice Corporate Social Responsibility to improve brand image and gain profit, there are some that aim to create shared value. Shared value is a very interesting concept as it makes solving social problems an integral part to the way a business operates (in CSR, these two aspects are separated). A perfect example of this is Gap Inc.’s P.A.C.E (Personal Advancement and Career Enhancement) program.
How does P.A.C.E create shared value?
P.A.C.E involves providing women from third-world countries with training programs that are not limited only limited to technical skills training, but also other important life skills such as communication, problem-solving, decision-making, and financial literacy. This socially benefits women as they become more skilled, confident in themselves, hence more open to new opportunities that arise in their lives. Gap will also be rewarded with a more efficient and productive human capital in the manufacturing bottom line. However, the positive externalities do not just end there. By improving the skill set of women, they can improve the lives of their children, family and even their community.
By combining social programs and business together, Gap is un-locking the huge untapped potential within these women and creating a ripple-effect that benefits a wide range of stakeholders.