Creating Shared Value Blog

In response to the recent Harvard Business Review article on Creating Shared Value I wrote with Michael Porter, I’ve received questions about the relationship between corporate social responsibility (CSR) and creating shared value (CSV).  Aren’t CSR and CSV the same thing – doing well by doing good?

“Currently, by age 25, less than half of American young people have the education, training, and skills needed to compete for (high-skilled) jobs in today’s workforce. As a result, the portion of young people employed in July 2010 was 49%, the lowest rate ever recorded.”

This alarming statement from the Bureau of Labor Statistics caught my eye while I was watching the webcast of the opening discussion from the White House Council for Community Solutions. The Council recently convened a group of corporate CEOs, national nonprofit executives, and other community leaders to identify promising “on ramps” for 16-24 year-old youth who are struggling to compete for 21st century jobs in knowledge-based fields such as financial services, health science, and engineering.

An article in last week’s Economist spotlights a recent survey conducted by global public relations firm, Edelman, that looks at differing attitudes to companies’ role in society by asking a sample of informed respondents whether they agree with Milton Friedman’s famous quote, “the social responsibility of business is to increase its profits.” The survey is a useful contribution to the field, to the extent that it illuminates cultural differences in attitudes to business; and as the Economist notes, the relative positions of Sweden and the U.S. do indeed warrant a raised eyebrow.

However, like many surveys of this type, the question is based on an assumption that explicitly pursuing social benefit must come at a cost to the company – a premise reinforced by the article itself, which summarises Friedman’s quote as exhorting companies to “forget CSR, make money.” At FSG, we would disagree with that assumption. Rather, companies have an opportunity to both engage in what the Economist calls “corporate do-gooding” and increase their competitiveness at the same time, by creating shared value.