The protesters marched on the highway, despondent about rapid inflation.  They shut down the thoroughfare for hours. 1000 miles away, protesters flocked the capital and drove the legislators to safe haven in neighboring territories.

These were fundamentalists in Tunisia or Libya; they were students in California and state workers in Wisconsin.

The impetus for civil unrest in the Middle East is that of the “lost generation” of unemployed misdirected youth.  In some regions of the world, unemployment is 40% or more.  In the U.S. , it is not just the young that face underemployment but generations of workers whose skills have become irrelevant.  The U.S. has the western world’s widest income distribution. The Top 10% make 6 times that of the bottom 10%, compared to 4.2 X for Great Britain and 2.8 X for Sweden[i].  The labor market has hollowed, as wages earned by shop floor workers have actually declined (when adjusted for inflation) over the last two decades.

The labor imbalance in the U.S. has far reaching implications, not only for the unemployed but for our economy as a whole.  The inability of low wage earners to consume is a strain on U.S. growth.

While there is plenty of banter about the need for jobs, there is no systematic solution in place for retraining American workers such as displaced auto and steel workers. President Obama has called on U.S. business leaders to: “generate ideas for creating jobs, sustaining the economic recovery and making America more competitive”[ii].

Of course the notion of “creating jobs” is a little too convenient. Jobs are created when there is a need for them, and Americans get the jobs when they offer the most value. The problem is not that there are not enough jobs; it is that the cost-benefit for the employer often tips towards off-shoring.  If our workers do not offer enough value in the form of specialized knowledge, ability to use technology, etc., jobs will continue to be shipped overseas.

This is not a protectionist rant, and my comments aren’t intended to incite a riot on free trade, or China manipulating currency, etc. I am focused on what we can control.  What our nation needs is a retraining effort. The money we are spending on unemployment and other services would be better spent invested in people so that they can acquire new skill sets that are relevant in an ever changing world.

The question is who will lead, and who will pick up the bill?  To prepare our workers for the future will require collaboration across business and government. Tax and other incentives need to be in place to encourage the retooling of America. So as GE Chairman Jeffery Immelt and the rest of the White House Council of Economic Affairs weighs in on jobs, I hope they emphasize that we need to create opportunities for workers, and provide them will the skill sets required to compete.

Otherwise, the marches may extend to Washington D.C. and a state capital near you.

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[i] The Price of Everything Eduardo Porter

[ii] Obama wants business world’s best ideas on jobs USA Today

Double and triple bottom line companies were all the rage a few years ago. As quickly as they peaked our interest and fed our social sensibilities, they faded into the depths of the great recession.

Many have long assumed that to serve the public good yields some type of opportunity cost. That is to seek any other outcome besides profit robs an organization’s ability to deliver the highest return on investment. Yet some of the world’s hardest charging enterprises such as GE and WalMart consistently lead global movement towards sustainability and similar pursuits. They do so not only because of the obvious public relations benefits but because they view such initiatives as driving some form of competitive advantage.

Thus there is a movement underfoot to understand how our businesses make our communities better, and how our communities (including government) can support economic development. One lesson of our economic malaise is that cities and small towns are drowning as a result of failed businesses; a reflection of an environment in which business and government can be in conflict with one another.

We have a number of clients such as People’s Care, Lincoln Training Centers and the L.A. Fireman’s Relief Association that blur the line between profit and non-profits. These are financially responsible organizations that also provide shared value; i.e. they contribute social benefit to our communities.

I once completed a project for Rio Tinto, one of the world’s largest mining concerns. They were extremely committed to reducing their consumption of water in North America, and invested heavily in seeking out solutions that reduced their impact on the environment, while reducing their cost and risk. My point is that these goals do not have to be in conflict, and can actually be synergistic.

Brands such as Starbucks combine their economic and social interests in a way that enhance their brand and positioning, and promote higher perceived value. Our penchant for spending $3 on a latte instead of a $1 coffee at McDonalds or Dunkin Donuts is due in part to our interest in being part of a social contract (precipitated by Starbucks).

Give some thought to how your enterprise can augment its thirst for profit with the ability to deliver shared value.

Inspired by “Creating Shared Value” by Michael Porter and Mark Kramer HBR January 2011