What Businesses Can Do—Beyond Corporate Philanthropy—to Support Global Education

The B-20, the private sector forum that feeds into to the G-20, has been quite active in developing thematic task forces and recommendations for government and business to contribute to global economic growth and social development. However, in the final set of top-line policy requests for the G-20, there is no serious inclusion of investments in education and learning to advance economic growth and social development. Given that quality education is a core component for sustained economic growth, I am surprised by the “light touch” attention it receives in the B-20’s recommendations.

Maybe businesses did not give these recommendations to the G-20 because they have a lot of work to do themselves. While evidence last year showed that corporate social investments and philanthropic contributions to education in developing countries are relatively small, short-term, uncoordinated and not directed to address the needs of the most marginalized, many companies are working to improve the effectiveness of these activities. In the past year alone, we have seen various efforts underway to improve business engagement in education, including a new Global Business Coalition for Education, incentives for corporate engagement in new bilateral donor agency initiatives, and a UNESCO task force on the issue.

At the same time, we cannot ignore the need to improve other corporate policies that have the potential for even greater systemic impact on global education. Inspired by the B-20 recommendations, I have five recommendations for what corporations can do beyond philanthropy to support education and therefore promote economic growth and social development.

1. Stop corporate tax evasion. Lost revenue in developing countries due to corporate tax evasion is estimated to be $160 billion per year. This excludes the hundreds of billions estimated to be lost through the offshore economy of high net worth individuals. In some Latin American countries, companies underreport by as much as 40 percent. While cracking down on tax evasion and instituting government anti-corruption and transparency measures must go hand in hand, directing just one-tenth of the estimated corporate tax evasion amount to education could fill the estimated financing gap and put every child in school.
2. Improve human resource policies to be pro-education and learning. With estimates showing that multinational corporations employ between 20-36 million employees in developing countries, pro-education human resource policies for employees and their families can have a huge impact. With adult illiteracy rates nearly at 775 million, companies could provide family literacy programs for employees and children. Early childhood centers for children of employees can also make a big impact on long-term learning in communities.
3. Be serious about combating child labor in supply chains. Child labor in supply chains in rampant, and the 2012 Child Labor Index indicated that 40 percent of countries are at extreme risk of including child laborers in supply chains, including fast-growing economies such as the Philippines, India, China, Vietnam, Indonesia and Brazil. Allowing children to engage in labor in the supply chain does not only have moral implications, but takes children away from learning foundational skills that can help promote social development and economic growth in the future.
4. Go beyond vocational training to support general education, starting early. Companies are quick to invest in vocational training to help bridge the talent gap and create a base of skilled labor. But firms actually project that soft skills — social skills such as communication, teamwork, problem solving and conflict management—will be in higher demand and harder to find than technical skills over the next three years. These skills are the basic values produced from a quality basic education system. If companies are serious about having these skills in a future workforce, the place to invest isn’t at age 18, but instead in early childhood and primary education when children acquire these non-cognitive abilities. 
5. Put pressure on governments to meet basic education goals. Last week it was reported that the number of out-of-school young people in Africa actually increased by two million between 2008 and 2010. This is unacceptable for the global community and the business community should be equally outraged since these are their potential innovators, employees and consumers who, without going to school, will not be integrated into the social and economic sectors. Business leaders must remind governments to keep their commitments and go the last mile to get all children in school and learning.