Contributing to an Impact Economy

April 26, 2012
Replay: Secretary Clinton Delivers Remarks at Global Impact Economy Forum

Today at the State Department in Washington, D.C., we are convening leaders across sectors and continents to discuss how we can work together to contribute to an impact economy by developing and deploying cutting-edge business and financial models that generate financial returns and positive social and environmental change. During our travels around the world, we have seen different institutions trying to address the same issue through disconnected programs -- be it lack of skilled workers, sustainable supply chains, infrastructure, or the rising cost of natural resources. We know that government alone cannot solve these challenges -- not in the best of times and certainly not in austere times; nor can business or civil society. We need to leverage and align the assets of multiple partners to achieve our common goals.

From our perspective, it is also increasingly evident that we need to engage in a different type of economic statecraft to position ourselves in the global marketplace and to adapt to global trends. Today 95 percent of the world's consumers live outside the United States. Increasing exports and creating long-term economic relationships with countries around the world is an effective way to spur growth, encourage investment, and create jobs at home.

We see the State Department's ability to catalyze and scale the impact economy as a tremendous opportunity to address investment in a way that enables the United States' greater foreign policy goals and creates sustainable value for business. Markets that focus solely on short-term results are not in our collective interest. Short-term incentives distort behavior, creating public consequences that can undermine the long-term health of our markets, our economy, and our way of life, as we recently have seen. The good news is that people are waking up to this problem, and behavior is beginning to change. This transformation has the potential to be as significant as the green revolution and the industrial revolution -- where we take a longer-term view and enable a new era of sustainable economic opportunities.

When companies proactively integrate environmental and social impact into their business models, they are well positioned to provide investment performance over the long term as well as to affect corporate and ultimately market behavior for the greater social good. That's why the State Department is focused on the impact economy -- because we believe that the more the market moves toward incorporating the externalities of doing business and advancing the impact economy, the more our foreign policy goals of good governance, stability, and inclusive economic growth are accomplished.

The challenge now is to understand how the government can facilitate the impact economy ecosystem and scale the innovations and partnerships needed to achieve sustainable, long-term growth. Governments have several tools at their disposal, such as credit guarantees, investment services, tax incentives, and regulations, to encourage the private sector to deploy sustainable business models. How can we better utilize these tools to incentivize firms to put into place long-term sustainability measures and to create new products and practices?

How can governments help facilitate a better understanding of real versus perceived risks in emerging and frontier markets? Aid organizations, development finance institutions, and civil society organizations have long-standing experience in and knowledge of these markets that can and should be leveraged. How can this be done more efficiently?

How can the government provide risk-taking capital and facilitate the work of intermediaries that are needed to create and scale financial and business innovations that yield simultaneous value for business and society?

A key barrier of entry into emerging markets is often the lack of on-the-ground knowledge and networks. The State Department has local expertise and strategic position through U.S. embassies to serve as a connector and to help the private sector and civil society make a difference. This isn't a new role for government. The Defense Advanced Research Project Agency (DARPA) project, which developed the seeds of the Internet, engaged researchers from many universities and companies to work together. Their collaboration spun off countless other innovations and new companies. The Human Genome Project, the Apollo Program, the Manhattan Project -- none of these would have been possible without government convening experts who might otherwise be competitors to work together on a single project. Now we have to determine how we can do this again and more often.

Today's forum is the beginning of a process and signifies a change in how we are doing business. The State Department has been translating languages for over 200 years. Now we have to serve as a translator among government, business, and civil society and to create uncommon alliances to solve common problems. We don't claim to have all of the answers, but we are asking for your help as we move forward in our efforts to expand and scale the impact economy.

The U.S. State Department is working to accelerate practices and thinking around the impact economy -- an economy in which government works with civil society and the private sector to create positive social and environmental impact while generating economic value. The following article is part of a series written by participants in Secretary of State Hillary Rodham Clinton's Global Impact Economy Forum in Washington, D.C., April 26-27.

Comments

Comments

zipper83
April 26, 2012

W.W. writes:

Only way out :

Suspend global financial system and global economy till further notice

tear down lobby temple and rebuild it in 3 days ;)

finance and economy : dangerous tools in kids hands used as toys

husband37
April 26, 2012

W.W. writes:

Timothy Franz Geithner is mathematically incorrect : his solution will collapse soon as an house of cards - he just toke time but this time will fall forever

police13
April 27, 2012

W.W. writes:

groundhog tyranny

The Federal Reserve says that everything is going to be okay. The Fed says that unemployment is going to go down, inflation is going to remain low and economic growth is going to steadily increase. Do you believe them this time? As you will see later in this article, Federal Reserve Chairman Ben Bernanke has been dead wrong about the economy over and over again. But the mainstream media and many Americans still seem to have a lot of faith in the Federal Reserve. It doesn’t seem to matter that Bernanke and other Fed officials have been telling the American people lies for years. As I always say, most people believe what they want to believe, and many people seem to want to have blind faith in the Federal Reserve even when logic and reason would dictate otherwise. The truth is that things are not going to be getting much better than they are right now. When the next wave of the financial crisis hits, the U.S. economy is going to fall back into recession, financial markets are going to crash and unemployment is going to absolutely skyrocket. But you will never hear any of that from the Federal Reserve.

The following are 5 new lies that the Federal Reserve is telling the American people. After each lie I have posted what The Economic Collapse Blog thinks is actually going to happen….

#1 The Federal Reserve says that the labor market has improved and that unemployment is going to decline significantly over the next few years.

The following is a quote from the FOMC press release that was released on Wednesday….

Labor market conditions have improved in recent months; the unemployment rate has declined but remains elevated.

The Federal Reserve is projecting that the unemployment rate will fall within the range of 7.8 percent and 8.0 percent by the end of 2012.

The Federal Reserve is also projecting that the unemployment rate will fall within the range of 6.7 percent and 7.4 percent by the end of 2014.

The Economic Collapse Blog says that the labor market has not improved. In March 2010, 58.5 percent of all working age Americans had a job. Exactly two years later in March 2012, 58.5 percent of all working age
Americans had a job. If the labor market was improving, the percentage of working age Americans with a job should have gone up.

The Economic Collapse Blog also says that while there is a chance the official unemployment rate may go down slightly in the short-term, the truth is that it is going to go up into double digits once the next wave of the financial crisis hits us.

#2 The Federal Reserve says that that U.S. economy is going to experience solid GDP growth over the next couple of years.

In fact, the Federal Reserve is projecting that U.S. GDP will be rising at an annual rate that falls between 3.1 percent and 3.6 percent by the end of 2014.

The Economic Collapse Blog says that a great economic cataclysm is coming….

“When the European banking system crashes (and it will) it is going to reverberate around the globe. The epicenter of the next great financial crisis is going to be in Europe, and it is getting closer with each passing day.”

#3 The Federal Reserve says that we can expect low inflation for an extended period of time.

The Federal Reserve is officially projecting that the annual rate of inflation will not be higher than 2.0 percent by the end of 2012. Federal Reserve Chairman Ben Bernanke reinforced this projection during his press conference on Wednesday….

“But we expect that to pass through the system, and assuming no new shocks in the oil sector, inflation ought to moderate to about 2 percent later this year.”

The Economic Collapse Blog says that the Fed is being tremendously dishonest and that if inflation was measured the exact same way that it was measured back in 1980, the annual rate of inflation would be more than 10 percent right now.

The truth is that most middle class families know that we do not have low inflation right now. This is hammered home millions of times a day when average Americans visit the gas station or the grocery store.

At the beginning of the next recession inflation will likely subside, but that will only be because economic activity will be slowing down dramatically.

#4 The Federal Reserve says that it has built up a 30 year reputation for keeping inflation low.

Ben Bernanke actually had the gall to make the following claim during his press conference on Wednesday….

“We, the Federal Reserve, have spent 30 years building up credibility for low and stable inflation, which has proved extremely valuable in that we’ve been able to take strong accommodative actions in the last four, five years to support the economy.”

Oh really?

The Economic Collapse Blog says that the Federal Reserve has nearly a 100 year reputation for destroying the value of the U.S. dollar. Even using the Fed’s doctored numbers, the value of the U.S. dollar has declined by more than 95 percent since 1913.

.

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