Defining the Decade of Inclusive Growth

As we enter a new decade, it is evident that stakeholder capitalism is here to stay. This new era means that businesses can only be assured of success by adopting values that mean that everyone, everywhere can participate in the cycle of inclusive growth.

Brand Provided | By Shamina Singh | Published 4 years ago | About a 4 minute read

Image: rice farmers in Kerala, India | weareaway/Pixabay

There is a new consensus. From the 2008 financial crisis and changing geopolitical relationships, to increasingly urgent environmental concerns, we have been living in a period marked by uncertainty and a questioning of our global economic model. The principle that economic growth should be the driving force behind all business objectives and government campaigns has been severely tested.

Cue the rise of stakeholder capitalism, greater business realisation of their place in society and their impact on the world around them. Together, we must define what inclusive growth really is. This means moving beyond looking at it purely through the lens of market share and the bottom line. It’s about incorporating social and sustainability goals, while ensuring that growth unlocks the potential of people and communities.

Creating a virtuous circle of growth

It’s evident that the world is falling behind on the UN 2030 Agenda for Sustainable Development. Extreme rural poverty is three times higher than in urban areas, yet one in four urban residents still live in slum-like conditions. There are 750 million adults in the world who are illiterate, while 785 million people cannot access drinking water.

Such wide-reaching challenges are incredibly complex and diverse. To ensure that inclusive growth works for everyone and reaches every corner of the world, an equally comprehensive response is required. We need to approach this with an understanding that the global economy is powered by three networks:

physical networks (electricity, transportation and water),
virtual networks (digital platforms, markets & supply chains, and financial services), and
social networks (local communities, family & friends, and investors & mentors) [Figure 1].

Figure 1

In the same way that poverty is a cyclical trap, sustaining inclusive growth is conversely cyclical. In order to unlock people’s full economic potential, you need to connect them to all three of the networks that drive the global economy. By bringing people into these crucial ecosystems, you propel them into a virtuous cycle of inclusive growth [Figure 2]. This is called democratising productivity — improving the quality of life, job opportunities, income levels and financial security for everyone, everywhere.

Figure 2

Spreading the wealth

One of the key challenges of achieving a cycle of inclusive growth is ensuring that no place or person is left behind. This requires collaboration at scale in order to connect with people and communities that may have never experienced financial inclusion before. Therefore, it necessitates a shared global vision and an interconnected web of partnerships.

Here is a four-part model designed to drive cross-sector collaboration and help advance global aims:

1. Understanding

Leading economists and scholars have an essential role to play. It’s why Mastercard launched a Data Fellows programme in 2018 to bring together the very best data scientists from academic and government institutions with our own.

Together, they work to unlock insights that can be used to help improve economic stability for vulnerable communities. For example, in New Orleans, they identified how tax incentives stimulate spending in specific neighbourhoods and how low-income areas of the city can benefit from money generated through tourism and popular events.

This partnership model can be rolled out to the benefit of policymakers in other cities around the world.

2. Programmes

Inclusive growth is about supporting the overall economic growth of local communities, so entrepreneurs and workers can grow, thrive and succeed.

Programmes such as the Mastercard Farmer Network — developed in partnership with the International Centre for Tropical Agriculture in Uganda, the Government of Andhra Pradesh in India and the National Microfinance Bank in Tanzania — have helped more than 275,000 farmers leverage digital tools.

3. Unlocking the power of data

Data is a powerful tool used by businesses around the world to influence decision-making. Yet many actors — including non-profit, civic and government organisations — do not have access to this level of insight.

By partnering with the Rockefeller Foundation to create the Data for Good programme, we have developed a $50 million fund to support those on the front line of social good. This fund allows them to unlock the power of data and discover insights that help form the foundations of impactful community projects.

4. Collaboration

A strong leadership community is required to ensure the promotion and adoption of evidence-based solutions.

Facilitating dialogue with stakeholders is a powerful knowledge-sharing tool that improves understanding; and when coupled with participation in sustainability membership organisations and peer networks, information and learnings can be communicated effectively. These approaches can be adopted worldwide to enable and inform inclusive growth.

Achieving inclusive growth

We have put inclusive growth at the heart of business models, ensuring that success is in part measured by the positive impact we are having on the communities and countries around the world that use our services and connect with our partner networks.

Shamina Singh

President. Center for Inclusive Growth & Executive Vice President, Sustainability
Mastercard

For more than 20 years, Shamina Singh has been on the front lines of developing and implementing solutions to make the global economy work for everyone, everywhere. Shamina is the Founder & President of the Center for Inclusive Growth, the philanthropic hub of Mastercard. She also serves as Executive Vice President of Corporate Sustainability.

Tags:

Mastercard