There’s no denying that the balance of power has shifted
The big picture
Whether you’re a libertarian who would like to see the privatization of most government functions or a progressive who believes that we need more government protection from corporate overreach (or somewhere in between), there will always be some kind of collaboration–at worst, collusion–between governments and the private sector.
There’s no denying that the balance of power has shifted in favor of business. Since the 1980s, corporations have gained greater power over governments and individuals around the globe, most notably in nominally communist and democratic socialist nations ranging from to China to Denmark. And the incredible power of private sector lobbyists in Washington to shape and mold legislation underscores the growing influence of big business in the U.S.
Of course, those owning and leading corporations around the globe often have highly divergent beliefs and agendas about which social problems are legitimate, to begin with (e.g., climate change and campaign financing reform). This is evidenced in the growing number of private sector leaders who now feel compelled to step in and address social and environmental problems that the U.S. government and international community have failed to address.
The tech industry is at the forefront of those pushing for change
While they were in charge, the first generation of tech leaders, including Steve Jobs of Apple and Bill Gates of Microsoft, paid little attention to social issues except for those that directly affected their business interests, e.g., immigration reform, Internet service regulation and copyright legislation. After all, why should they rock the boat by taking positions that might offend customers, stakeholders or employees?
In recent years, however, we’ve seen a growing list of billionaire philanthropist entrepreneurs, many of them from the Tech Industry, who have become activists, very willing to rock the boat to help remedy global social and economic problems because they are tired of Washington gridlock, etc.
One indicator of this shift in the U.S. is how Tech and other corporations have been supporting gay rights, most notably Apple CEO, Tim Cook, (who came out as gay last year). This is, of course, in sync with the cultural climate of the Bay area and a rapid evolution across most of the nation towards support of gay rights, especially among Millennials. One indicator of the strength of this new moral consensus is how Brendan Eich, former chief executive of Mozilla, was pressured into resigning after it was disclosed that he had made a donation in support of California’s 2008 measure banning same-sex marriage.
Regardless of your personal beliefs about this and other social issues, there is clearly growing support for advances in equal employment for women and other minorities. (While women aren’t numerically a minority, ‘minority status’ is more determined by power/advantage).
Next, I’ll look at how these and other business-led reforms may play out, including problems about which strongly entrenched opposing positions remain.
Problems like equal opportunity
Vexing Global Problems
No combination of private and public institutional forces will ever fully resolve the vexing global problems that define our era. That said, positive change is progressing rapidly on some issues while regressing on others…
–This is especially evident when comparing social-economic problems like equal opportunity with broader environmental/technical challenges. (I’ll cover the latter in Part III of this article).
Moving towards equal opportunity
Even in the tech industry, progress has been more evolutionary than revolutionary on most equal opportunity fronts. For example, in the U.S., female full-time workers make approximately 78 cents for every dollar earned by men. Though the difference is less in high tech, female representation in industry’s leadership positions still lags.
In addition, the current wealth gap between whites and blacks has increased to a factor of 13–while the white-to-Hispanic wealth ratio is the highest it’s been in 15 years. That said, when income/social class is factored in, differences decrease significantly for race/ethnicity. And, speaking more broadly, there is no clear solution to the global income inequality pandemic between the top-tiered ultra rich and everyone else.
Many tech leaders still maintain that theirs is a pure meritocracy, where talent and hard work are the only determiners of advancement. Critics, however, disagree… In a recent statement, spokespeople for the Kapor Center for Social Impact in California claimed that Silicon Valley has a ‘dismal representation’ of women and minorities in their workforce. In fact, until recent social pressure from civil rights leaders, tech industry employment statistics were not disclosed.
A few activist tech companies have been working to increase representation of women and minorities in the certificate and degree-related computer programming. Similar efforts, plus better training for hiring managers are promising developments.
Of course, even the best intentions can backfire as we all saw with Starbuck’s recent ‘Race Together’ effort to stimulate constructive dialogue.
I’ll provide an overview of Private Sector’s environmental initiatives and corporate efforts to help fund the repair of our crumbling infrastructure.
The private sector mixed record
Private sector support of green/environmental initiatives
The Private Sector has a mixed record of support for green/environmental initiatives, with dramatic variations from industry to industry… For example, carbon-based energy providers, especially those associated with eco-catastrophes, like British Petroleum, have invested heavily in media damage control campaigns. The same is true of chemical industry giants Monsanto and Dow. It’s not surprising that research reveals corporations like these, whose profits and stock prices may be adversely affected by ‘inappropriate’ clean environment policies, do not act upon their public promises. In fact, they actively work behind the scenes against reforms with armies of lobbyists who wield enormous influence on the U.S. political process.
Tech corporations
By comparison, Tech corporations are largely supportive of green initiatives, for the most part, because this strategy is consistent both with their business models and brand images. Here are some examples—
Starbucks has adopted green supply chain management that incorporates Fair Trade Certified organic coffee and LEED (Leadership in Energy and Environmental Design) Certification for their new outlets. This means, for example, that they keep store temperatures at 75F instead of the conventional 72F; that new cabinetry is ‘post industrial’ and all water valves are low-flow.
eBay Promotes the exchange and reuse of goods throughout the world. This includes the buying and selling of used household items, large and small, within local communities, which eliminates the need for shipping and packaging. In addition, the USPS has collaborated with eBay to create environmentally friendly Priority Mail packaging.
Marriott was the first major hotel chain to create a carbon footprint baseline against which to measure improvements in energy efficiency, water conservation and preservation of forestlands. This includes the implementation of Energy and Environmental Action (EEAP) plans and a best-practice energy and water use reduction-auditing tool. Marriott has partnered with the U.S. Green Building Council (USGBC) for Leadership in Energy and Environmental Design (LEED®) and the Green Building Certification Institute (GBCI), to build green hotels. The company’s leadership estimates that they will recover their initial investment on these programs within the next 2+ years.
Google initiatives have included green supply management practices, renewable energy power sources, even having goats trim the grass. I wish my neighborhood zoning permitted goats!
Lastly, I’ll look at the comparatively more promising global and U.S.-based private sector investment in infrastructure.
U.S. infrastructure investment would create jobs, improve the competitiveness of our goods, and protect public health and the environment
The profit motive plays out differently from one region of our globe to another. For example, in the U.S., corporations seem most concerned with short-term profits, driven by stockholder demand for high dividends.
By comparison, Japan and other East Asian economies are rooted in government-private sector collaboration with an overriding focus on long-term market share growth.
Consider how foresightful Chinese leadership was when they set out to capture the rare metals market over 20 years ago. By 2013, China controlled 95% of global mined production and processing. Why is this important? Rare metals are critical to a number of advanced weapons systems, wireless devices and emerging green technologies. Although the U.S. and other economically developed countries are now beginning to work towards closing the gap, estimates are that within the next few years the Chinese monopoly on this market could potentially undermine U.S. military defense capabilities.
Two extremes–Chinese vs. American infrastructure investment
No less impressive is China’s brilliant, rapid infrastructure development. International critics view some Chinese plans like linking Asia with North America by rail, as wildly unrealistic. Perhaps so… But how realistic is it for the U.S. to tolerate such sub-par investment in our crumbling infrastructure for over 35 years?
Global infrastructure initiatives
Last October, World Bank Group President, Jim Yong Kim, launched an initiative to encourage infrastructure investment in developing countries. He estimates that this Global Infrastructure Facility (GIF) will require up to a trillion dollars of additional investment each year every year this decade, twice what is now planned, primarily through public-private sector partnerships.
Without a higher level of investment, the bank won’t be able to implement its primary mandate of reducing global poverty. Critics doubt GIF’s commitment to improving the lives of the poor because in the past private sector-focused infrastructure plans have placed low priority on poor communities and overlooked environmental and social needs. Attempts to privatize water supply infrastructure, for example, have raised concerns about higher costs and inequitable service for consumers.
U.s. Infrastructure initiatives
Few question that U.S. infrastructure investment would create jobs, improve the competitiveness of our goods, and protect public health and the environment. One example–if we could muster the political will to repair our water supply system, we could radically reduce the loss of more than 46 billion gallons of water that leak out of pipes every day–at a time when chronic drought conditions besiege the West and other parts of the nation.
The Obama Administration launched its Build America Investment Initiative in the summer of 2014 to help local and state governments find ways to raise investment in water, transportation, energy and broadband. With Congressional approval of the Grow America Act so unlikely ($300B+ investment in infrastructure), the following public-private sector strategies offer the greatest immediate promise–
- The Rural Opportunity Investment (ROI) Initiative at USDA is poised to connect projects to investors, improve access to USDA credit programs and level the playing field for public private partnerships;
- A new Center at EPA will invest in drinking water and wastewater systems, working closely with local and state governments, utilities and private sector partners by leveraging federal grants to attract higher levels of private capital into projects.
- A new USDA Rural Opportunity Investment Initiative will encourage rural water, energy, and broadband investment in rural America.
- The Administration has proposed the creation of an innovative new municipal bond, Qualified Public Infrastructure Bonds (QPIB) to encourage financing for airports, mass transit, sewer, water and surface transportation projects with no expiration date, tax and other benefits.
