Business

Harmonizing the ICT sector

Photo credit: rodrigo senna via Flickr.

Keeping in line with President Hu Jintao’s goal of “building a harmonious society,” the Chinese government has made a stronger commitment to sustainable growth and corporate social responsibility in recent years, as integrated into the country’s 11th “five-year plan.” Now let’s get down to the nitty-gritty…exactly how is this possible?

The Foreign Investment Advisory Service (FIAS), a joint IFC-World Bank department, and Business for Social Responsibility (BSR), a San Francisco-based nonprofit business association, recently released a report, “Corporate Social Responsibility in China’s Information and Communications Technology (ICT) Sector,” to address corporate social responsibility (CSR) practices in China’s information and communication technology (ICT) sector, which is currently the largest ICT exporter in the world, totaling $232 billion in goods and employing 7.7 million people, according to the World Bank, the report says.

Assuming that there is a connection between CSR and a company’s ability to attract international business, the report makes the following recommendations:

The Chinese ICT sector must therefore improve working conditions and environmental standards in order meet CSR expectations and maintain overall competitiveness. Improved CSR standards among Chinese companies will also help the country achieve the government’s goal of a harmonious society and the objectives of the 11th five-year plan. The economic benefits of such an achievement include increased business opportunities, reduced worker turnover and improved reputation of the region and sector. Elements that can help improve the overall soft competitiveness of the industry.

While the ICT sector in China has made much progress, the public and private sectors must now collaborate and focus on long-term capability building in order to achieve sustainable, systemic change.

Read the rest of the report to learn how international stakeholders propose to develop a “capacity-building strategy that can improve labor and environmental conditions in the ICT industry.” From what I read, capacity-building means developing the institutional infrastructure, programs, and human resources to help an industry become more effective, sustainable and competitive.

The pilot project focuses specifically on the ICT industry in Shenzhen, in southeast China’s Guangdong Province, because of its limited geographic area and high concentration of ICT companies. According to the report, the coastal city has established the largest special economic zone in China, with exports totaling more than $100 billion in 2005.

The research and workshops conducted in Shenzhen show that there are several challenges to the current ICT sector, including excessive overtime and the lack of management systems to handle labor, ethics, health and safety issues. The report makes recommendations on how to overcome obstacles to CSR performance, addressing different stakeholders in the supply chain separately–customers, suppliers, government, NGOs, association. There is a heavy emphasis on the responsibility of workers and management at the factory level to maintain healthy workplace conditions and institutionalize good performance.

You can find a link to the full .pdf of the report under my “Reports” section.

Enjoy!

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