In the face of climate change concerns and a once-in-a-century pandemic, there is a growing sense of urgency to accelerate solutions that address the seventeen Sustainable Development Goals (SDGs) in the 2020s, billed by the United Nations as the Decade of Action. For example, Sir David Attenborough, People’s Advocate for UN’s COP 26 climate change summit held in Glasgow, observes, “Businesses know the era of fossil fuels is ending and are innovating and changing direction”. Such imperatives call for companies to step up efforts to deliver shared value, encompassing both economic success and societal benefits, as part of their core strategy.
Building on the perspective that an effective way to do so is to leverage an “ecosystem of shared value” – partner networks involving business and non-business actors – my research has highlighted that a specific type of collaboration, partnering with startups, holds promise in enhancing the generation of shared value. However, the folks in companies who drive startup partnering (usually fashioned as a “corporation innovation” team) aren’t the same ones who deal with corporate social responsibility (CSR). As a result, there is all too often a missed opportunity for corporations to harness startup partnering for innovation and societal impact. My research in Africa and elsewhere (see “About the Research”) suggests three lessons for corporations to create share value through partnering with startups.
#1 Think win-win-win: for the corporation, startup – and society
In contrast to most efforts that corporations undertake which are win-win – in terms of corporate innovation (for its partner and itself) or CSR (for society and itself), a more effective way that promotes shared value is seeking a triple win, covering all three of these parties.
This could entail including some SDG-relevant startups in “mainstream” startup partnering programmes. For example, the German healthcare company Bayer selected the Ghana-based telemedicine startup that enables individuals to obtain inexpensive medical advice on their mobile phones, Bisa for its G4A accelerator programme in Berlin. This led to an expansion of Bisa’s operations – and its impact during the covid pandemic. Another covid-related illustration is Bangalore-based Cisco Launchpad’s support to Cloud Physician, which provided much-needed remote services to intensive care units in hospitals, particularly in under-served towns in India. Or, a corporation might direct some of its CSR activities at startup engagement. For instance, the global logistics firm DHL partners with South African startup Kusini as part of its CSR activity to support Black-owned businesses. This Johannesburg-based social enterprise uses nanotechnology to make water treatment systems built from macadamia nutshells. With DHL paying for the installations of Kusini’s water filters and tanks in areas near its depots, this partnership makes clean water available in some hard-to-reach parts of Africa. And ultimately, of course, initiatives with an exclusive focus on SDG-impacting startups – such as the Microsoft Global Social Entrepreneurship Programme launched in 2020 – are well placed to make a strong societal impact while yielding wins for the corporate and startup partners.
#2 Coopt development specialists to startup partnering initiatives
Social impact specialists – not the usual suspects when it comes to corporate innovation – can provide expertise and credibility to efforts to link startup partnering efforts with the SDGs. To be taken seriously by startups at the coalface of social impact, it can be useful to coopt actors – such as the United Nations or NGOs – as collaborators in startup partnering initiatives. For example, Alibaba partnered with the United Nations agency, UNCTAD, in launching its eFounders programme that supports entrepreneurs in developing countries.
Also, nonprofits specialising in entrepreneurship can act as a bridge with startups in nascent ecosystems. Swedish NGO Reach for Change has helped corporations like Millicom, a telecom company operating under the mobile telephony brand, Tigo, to launch a digital changemakers programme to partner with African startups developing solutions for children and youth.
In Asia, ABInBev, the company that makes Budweiser, has worked with Impact Hub Shanghai, part of a social innovation-focused network of co-working spaces and non-profits, resulting in a partnership with Mi Terro, a materials startup that traditional corporations might normally not easily cross paths with, to convert beer waste into home compostable packaging film.
#3 Demonstrate specific SDG impact via startup partnering
Finally, to ensure that shared value genuinely accrues through startup partnering efforts, it is important to cultivate and showcase examples vis-à-vis the specific SDG(s) that are impacted. For instance, the previously mentioned DHL-Kusini partnership contributes to clean water and sanitation (SDG 6) while the Budweiser-Mi Terro collaboration addresses responsible consumption (SDG 12) and climate change (SDG 13).
As another example, this time of a value chain partnership, Lindt & Sprüngli Chocolatiers are engaging with Koa, a social enterprise based in Switzerland and Ghana that helps cocoa farmers in Western Africa to boost their incomes by utilising cocoa pulp, which is normally discarded as a chocolate ingredient. Specifically, Lindt will source that startup’s “Excellence Cacao Pure” Koa Powder, thereby promoting decent work (SDG 8) and responsible consumption (SDG 12).
Of course, there is always a danger of companies paying only lip service to outcomes – but these can be evaluated vis-à-vis the detailed indicators identified for each of the SDGs. The point to note is that specificity facilitates greater mindfulness of what the societal impact is. In so doing, corporations can fine-tune their partnering practices for greater efficacy, persuade doubting Thomases that shared value creation via corporate-startup partnering is feasible, and attract suitable partners more readily.
By integrating their corporate innovation (specifically, startup partnering) and CSR activities that typically proceed in parallel, involving unrelated parts of the organisation and budget lines, corporations can enhance the shared value they generate. This can constitute a valuable, yet underutilised, manifestation of the last of the seventeen goals, SDG 17: partnerships for the goals. In the words of Paul Polman, former CEO of Unilever, “It is imperative for large organisations to partner with more nimble startups to help create a better world”.
About the author: Shameen Prashantham is Professor of International Business & Strategy, and Associate Dean (MBA), at China Europe International Business School, and author of Gorillas can Dance: Lessons from Microsoft and Other Corporations on Partnering with Startups (Wiley, 2021).
About the research: For over 15 years, I have been studying how large companies like BMW, Microsoft, Unilever and Walmart have been partnering with startups. Since the adoption of the SDGs in 2015, one strand of my research – entailing numerous interviews with managers, entrepreneurs, policy-makers and other experts – has taken place in Africa where I observed how startups naturally leaned into solving social problems as the basis of the opportunity they sought to pursue. Many corporate-startup partnerships seemed to readily incorporate, explicitly or implicitly, outcomes that were relevant to the SDGs. I also began to notice such efforts elsewhere too, including in China and India, as well as the West. The wider research programme of which this is a strand is discussed in the book, Gorillas can Dance: Lessons from Microsoft and other Corporations on Partnering with Startups.