Speeches

DEBRA DUNN
ISC-Symposium
University of St. Gallen
St. Gallen, Switzerland
May 14-15, 2004

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I am delighted to be here with you this morning. The students pointed out to me that I am a little short and I really should stand on a platform so that you could see me but I was quite convinced that I would fall off the platform, so excuse me if I sometimes drift over here and block your view of me.

What I want to talk about today is how multinationals can drive growth and prosperity; and I want to clarify that when I talk about prosperity I am not just talking about increasing income levels among the citizens of developing countries, but increasing the quality of life in general. Specifically, I would like to cover how HP contributes to growth and prosperity through global citizenship, through our e-inclusion efforts broadly and I want to talk briefly about a specific e-inclusion project, our i-community in Mogalakwena, South Africa.

So, to frame the discussion of how multinationals can contribute to growth and prosperity in developing countries, there are three heavily overlapping areas in my view in which we can contribute.

The first is through our mainstream business. Foreign direct investment has long been viewed as a critical vehicle for contributing to development and will continue to be going forward. We do a lot of our manufacturing work and other work in developing countries – that is getting a lot of public air lately – and through those activities create jobs, invest in communities, often invest in infrastructure associated with the investments that we are making. Related to that, I think there is a critical area of standard-setting that multinationals can contribute to. By standard-setting I am talking about areas like environment, minimum wages and work hours where we have an opportunity both individually and collectively when we go into a country – such as China as an example – to really raise the bar locally around what suppliers are required to do if they want an association with our individual companies and with our industry. Finally, and perhaps most intriguing to me, I think there is a huge opportunity to contribute to growth and prosperity through citizenship efforts, leveraging the core assets of the company to promote private sector growth.

Global citizenship in the corporate environment is probably not a uniformly understood term. We don’t all have the same definition. Let me take just a few minutes to explain how we define citizenship at HP because I think that is critical to the other points that I will make. We use this model, which is relatively simple, but very specific to HP based on the business we are in. This is not a generic model that I would apply to all companies. In the center of this triangle, you will see ethics and governance. It is not in the center by accident. We strongly believe that at the heart of global citizenship is the way that you run the company, the way people behave, the integrity that the company demonstrates in all of its business dealings. I think that is important to mention because particularly in the U.S. over the past several years, I think many confused citizenship with philanthropy. There were examples, Enron being a very vivid example in the U.S., of companies that were incredible philanthropists, doing really great work in the community philanthropically, but at the end of the day they clearly weren’t good citizens because they did not run the company with sound ethics and good governance. As a result, they disappointed almost all of their stakeholders.

Community engagement is also in the center of our model and we have two definitions for community engagement. One is quite simply being positively engaged in the communities where we do business, contributing to things like the education systems and the community organizations through our direct participation and through some of our community programs that are driven through our Public Affairs organization. In addition, we have increasingly become engaged with communities of interest. Special interest groups in the environmental area, in the human rights area, groups that had historically viewed themselves at odds with us, but who increasingly we need to partner with in various ways to gain mutual understanding and to make progress in the fairly challenging areas that we are trying to tackle on our own, but in some cases together.

Around the outside of the triangle are the three citizenship priorities that HP has been focused on for the past two years. And we have selected these priorities again - privacy, environment, and e-inclusion and education - because of the business that we are in. E-inclusion is one of the greatest opportunities for us to contribute to economic development because e-inclusion is about figuring out how the technology that we develop and sell can be used to accelerate economic development in all kinds of environments – the developed world environment as well as the developing world environment, not just at the top of the pyramid but moving down as well. Around the outside of the triangle are tools or enablers that we use to tackle these priorities, and you will see that philanthropy is listed as a tool not as an end in itself. We do quite a bit of philanthropy at HP, have done so since the company was founded about 65 years ago, but philanthropy is strategically targeted to particularly e-inclusion and education initiatives to maximize the impact that we can have.

So, let me turn to the area of e-inclusion because I think it is one of the exciting areas where HP is actively contributing to growth and prosperity in developing countries. There are a couple of key aspects of our work here. It is fundamentally about applying the power of technology to unlock the potential of individuals and communities while simultaneously growing our business. The last part of that statement is important, because when we look at this not just as a philanthropic opportunity but as a business development opportunity as well, we are able to tap into the broader assets of the company. We are not just writing checks. We are bringing our technical talents, our development talent into communities that historically have not been served by technology and trying to figure out what solutions would be meaningful, relevant, add value in these environments. In a moment, I will talk a bit more about one exciting project where we are doing this.

We are also engaging in global multi-sector initiatives, working with groups like the United Nations and the U.S. Agency for International Development. We have found this to be an important engagement in beginning to tackle the very complex challenge of working across sectors to try to really make traction on poverty alleviation and economic development. It is not natural thing for a company like HP to work with an organization like the UN. We operate in very different ways, we have very different norms, we have different languages. The differences are quite fundamental. However, when we are looking at an issue like poverty alleviation, which is certainly not our strong suit at HP – there is tremendous skill, knowledge and capability in the development organisations like the UN. But we do find that we bring a lot of really useful perspective and skill to the table as well, and it is combining those capabilities that really have the power to unleash new potential in the community. Along those lines, part of our work here is piloting new and very deep models of public-private partnership and working with governments at the local and national level as well as multi-lateral organizations to try to create new models for transformation at the community level.

So, I will briefly mention this framework. We have a number of different e-inclusion initiatives. I am going to talk about one, which is one of the six projects that we are doing, which involves very deep engagement with specific communities to create test-beds if you will. A place where we can deeply understand these potential customers and develop appropriate solutions that would have a viable business model, as well as deliver real value to the community. We have several in the U.S. – those were our initial projects – and we now have two in developing countries, one in India and one in South Africa.

Let me talk briefly about the South Africa project. This project, as I mentioned, is a project that involves partnership with the government in South Africa. In this case we are partnering both at the national level and at the provincial level and, as you will see based on the timeline at the bottom, our commitment here is three years. We have a large team of HP employees on the ground in Mogalakwena, the community that we are collaborating with day-by-day. They work with government employees and with non-profit and community members in Mogalakwena to figure out what technology solutions can really help to catalyse economic development in the community. So, we are now well into year two of the project. We have quite a bit of experience under our belts, and we have focused on a set of solutions that are really at the heart of the project. We have developed a municipality web site in three local languages and simply delivering information in local languages has been a real breakthrough for this community. They have never been able to get on the web and access information in local language. So that has really opened eyes about what is possible.

We have a business resource center to support entrepreneurs, small business members, in the application of technology and business practices to make their businesses more successful. I think we have created some building blocks if you will, that are leverageable and replicable in other communities, such as the support call center. Mogalakwena is in the far north of South Africa, they do not have a lot of technology resources and so efforts to this point to do things like put computers in the schools have been limited in their success because there are no support resources available to keep the computers running. They have to get resources to come from Johannesburg. This is too expensive and it really just isn’t a workable model. So we have created a support business, if you will, in the community. It includes a call center as well as support technicians who can go out and repair equipment. They are all from the community. They have all been trained and this is now a sustainable business. They can sell their services and after this project is over this business will continue to be viable in the community.

Similarly, we have set up a PC refurbishing business, because again to effectively wire the schools they have decided in some cases they can use refurbished PCs. So it is a similar modular building block, if you will that can be scaled and replicated in other communities. We have a digital-cultural audio-visual center. There is an Internet radio station which is part of that, for example, and the last time I visited, there were local musical groups there recording their works to be played to the community on the Internet radio station. This is a wonderful vehicle to let the community share some of its rich cultural resources. And there are 23 access centers scattered around – this is a large community of about 300,000 people, there are very remote villages as well as fairly developed towns that are part of it – there are 23 access centers at this point where citizens can go and tap into a range of information services that are provided.

So, there are several things about this initiative and partner initiatives like it that we are very excited and encouraged about. One is the approach of addressing social needs with business solutions. By business solutions I mean solutions that are conceived, not just in terms of their content and their technical viability if you will, but also in terms of their financial sustainability. The experience in many countries today has been great projects in education and other areas leveraging technology, have fallen by the wayside because the sustainability aspects have not been considered. We are also enthused about the approach of using these projects to pilot new solutions that are specifically appropriate to the communities that we are working in. Most of the technology that we use like this laptop certainly was not developed with the needs of the developing world in mind. So as we are deeply engaged with these customers living day by day in the community, we can identify solutions that are more appropriate and have begun bringing some of those solutions to market.

We also are discovering the power and in some ways the challenges of partnering with national and provincial leaders in tackling challenging transformation in their countries and their provinces. These relationships can be incredibly fruitful as both sides bring a lot of unique assets to bear on solving the problems. Frankly, they can also be very frustrating. We are accustomed to a different pace, we are accustomed to different ways of thinking. Getting this team actually to gel and to view itself as a team across the sectors – so that it is not the HP people and the government people- but that it is the Mogalakwena i-community project team is the difficult part. Creating a team that identifies itself primarily this way and works seamlessly regardless of where people have come from has been a challenging process, but one that bears incredible fruit when you can achieve it.

To summarize, we are quite encouraged by the prospects of working collaboratively in the developing world environment with key stakeholders to tap into the unique assets that HP brings and to help not only build our business over the long term, but really to help contribute to sustainable economic growth moving down the economic pyramid, ultimately to some of the poorest villages that have not had any support or systems in the past.

In addition to technology companies there are opportunities for other large companies to bring their unique assets to bear. There are many areas that I am sure you can think of. Health care is a huge requirement, medical and pharmaceutical companies have many assets to bring. So we think this model and this approach is one that is broadly applicable and holds great promise.