Esteemed Representatives of Governments, Private Sector and Civil Society,
Distinguished Speakers, Ladies and Gentlemen,
It is an honour to be joining the inaugural session of the 8th Bosphorus Summit, which has become a recognised platform of cooperation to discuss topics of global importance, ranging from sustainable development, trade and finance to urban transformation and humanitarian crises.
I would like to begin by highlighting the progress we have achieved in global development between 2000 and 2015. The number of people living below the extreme poverty line decreased by more than half. The number of undernourished people across the globe decreased from 930 million to around 793 million, absorbing poor families’ population growth. Similarly, the number of children out of school has decreased by nearly half.
Yet, the global development challenges are persisting. Climate change, income and gender inequalities, biodegradation and other problems pose a significant threat to our livelihoods, to our planet and to our future. To tackle these challenges, the international community agreed on the Sustainable Development Goals (SDGs) two years ago, which marked the most ambitious development agenda to date. Successful implementation of the SDGs requires harmonizing and combining the capacities and resources of all sectors - public, private and civil society alike.
Considering the development opportunities and challenges we are facing, private sector is widely recognized as a highly valuable and innovative partner. It drives the majority of employment and economic activities around the world, produces goods and services, and supports public finance through taxes and leveraging innovation. Realizing the innovative capacity of businesses, UNDP collaborated with the Government of Turkey to set up the International Center for Private Sector in Development (IICPSD) 4 years ago to strengthen the role of the private sector in global development. I want to recognize and thank the Government of Turkey for this excellent partnership.
First and foremost, it is important to recognize that businesses have a vested interest in the achievement of Global Goals, because of the associated economic value. The SDGs could unlock up to US$20 trillion worth of market opportunities in different sectors. This would be accompanied by the creation of 10% of jobs for the forecasted global workforce in 2030.
The private sector, though, will not be able to tap into these vast economic opportunities without the necessary skills and competencies. Companies need a skilled workforce to maintain and increase their productivity and competitiveness. This is particularly essential with the changing workforce requirements as a result of the Fourth Industrial Revolution. Skills mismatches are wasting human potential; and only equipping people with the right skills at the right time will expand their choices and improve their livelihoods.
UNDP’s Istanbul Center has been working on market-driven skills delivery for the last five years for stronger business engagement in skills training. It has offered good practice examples from Turkey and India; developed toolkits to guide practitioners; provided project support to various countries; and partnered with global corporations on developing skills for disadvantaged groups. We recently partnered with IBM to provide a cloud-based learning platform to offer ICT skills for up to 25 million African youth in the next five years.
Companies of course are aware of the economic opportunities lying within the SDGs. They are actively searching for ways to align their operations with the Global Goals and to play a more transformative role. In a UN Global Compact Survey in 2016, 87% of CEOs in more than 25 industries across over 100 countries highlighted that the SDGs are an opportunity to reformulate approaches to create value more sustainably.
This momentum creates a timely opportunity to synergize core business strategies and operations with the Global Goals. But corporate governance and Corporate and Social Responsibility-based solutions are not sufficient for the private sector to respond to the complex development challenges of the day. Only innovations in core business models can maximize the positive development impact of enterprises.
At the same time, we are facing a lack of adequate financing for the SDGs. Currently, the estimated annual funding gap for achieving Agenda 2030 is between US$1.9 trillion to $3.1 trillion. The private sector, through innovative investment approaches like sustainable and responsible investing, can help bridge this financing gap. For instance, $18.2 trillion worth of responsible investments were made in 2016, marking an almost $4 trillion increase from 2014. Corporate venture capital, which amounted to $25.8 billion last year, is increasingly seeking “beyond-financial” returns. In this context, blended finance aims to leverage public and grant funding to increase private sector investment towards sustainable development.
We are often too complacent and sometimes sound as if private sector investments were all good and the panacea for development – they can be, but there are conditions. These investments should be channelled to the least developed countries and economies in need, with know-how and technology spill-overs. However, these conditions are often not fulfilled. Foreign direct investments to least developed countries, for instance, remain low, falling a further 13% in 2016 to $38 billion.Transfer of technology and know-how often fails to drive local innovation and jobs. And there are reasons behind this. Private capital is still largely speculative, focused on short-term gains. Lack of intellectual property rights in least developed countries, absence of locally skilled workforce and missing links of international companies with local supply chains prevent effective technology transfer. There is much to be done to align private capital with sustainable development needs.
The Sustainable Development Goals are our joint responsibility, as leaders and representatives of governments, multinational corporations, NGOs, international organizations and academia alike. Innovation and partnerships will be the differentiating factors for the successful implementation of the Global Goals. And for effective multi-stakeholder partnerships and innovative solutions to development challenges, the world undeniably needs the transformative power of businesses, provided it is done under the right conditions and reaching all places and not just a few countries.
I would like to conclude by thanking Mr. Cengiz Ozgencil, the Founder of the International Cooperation Platform, for convening this annual Summit to advance the global development agenda.