KARL MOORE: This is Karl Moore of the Desautels Faculty of Management at McGill University, Talking Management for the Globe & Mail. Today I am delighted to speak to a very senior professor at the Harvard Business School, Joseph Bower.
Good afternoon, Joe.
JOSEPH BOWER: Good afternoon, Karl.
KM: So business can help in terms of education, can you give us a couple of other examples of how business could proactively help improve capitalism?
JB: Ok, so one of the big problems is there is about, I don't know, two and a half billion unskilled workers in the developing countries. Recently, the leadership of China Mobile Limited decided that it was all very well and good to serve the 400 million on the east coast but in it's long term future it was going to have to find a way of serving the 700 million in rural China and they have gone about doing that! They have built an incredible distribution that reaches down below where the Chinese postal system is which stops where the county is. They are in the villages working at that level and essentially using a very basic smart phone that delivers information and that is helping essentially those farmers come into the system. They are moving to the extent that they are committed to moving into basic banking services, handling remittances, beginning to look at insurance, so they are helping to include 700 million into the market system.
KM: The traditional view is that business is to make money and return money to shareholders. You seem to be arguing for more of a stakeholder view, but part of this is if you want to do business and continue to do business, you are going to have to help people beyond just the shareholders. Is that the argument you are advancing?
JB: A little more than that – that is the corporate social responsibility argument. No, what we are saying is that business has to find a way of turning these problems into opportunities – that's what great innovators do all the time. Business has tended to say, "That's not my responsibility - government does that." Well, guess what? Government is not going to do it and if somebody doesn't do it then we are going to have very severe problems. If you think the migration issues we face now are hard, just wait. When the gaps get really big, and the weather gets really bad, and the water dries up in places – we are going to have big problems. And if companies wait, it's going to be bad.