Conventional wisdom says there is a trade-off between business and social benefits. Many believe that business success comes at the cost of social well-being and that social benefits harm profits. On the contrary, the concept of shared value suggests that social and economic values can be created together by addressing social issues with a business proposition.

In this keynote address, Professor Porter explained that the role of business is changing. Business needs to think strategically about its social impact and the value it generates. Value does not come from money alone, but from the economic and social benefits you achieve. Government funding and philanthropy alone are not sufficient to tackling and scaling solutions to social issues. Rather, the real resources to scale solutions are in business. However, this activity cannot be outsourced to a Corporate Social Responsibility department. Business needs to take it a step further via creating shared value as core to business strategy.

Creating shared value is where business tackles a societal problem through business with a business model. Business is no longer about meeting conventional needs with conventional products or services. Solving social problems are opportunities for business.

To apply these principles to philanthropy: 1) there is a need to focus; 2) can’t just donate money but need right people who will get results; 3) foster collaboration with other players working in the same space; 4) find leverage points that can move the whole system forward; 5) keep learning to understand and address root causes of social problems’ and 6) make trade-offs on knowing what to do and what not to do as part of strategy.

How business can set its agenda is fundamentally about measurement. We know a lot about economic performance, but we are still primitive in measuring social performance. There is a need to create a social progress index in Hong Kong to facilitate this social performance mindset going forward.

At the session, Matthew Cheung also stressed the importance of fostering cross-sector collaboration and providing a “right atmosphere” to facilitate the exchange across sectors. He also expressed comfort that creating shared value doesn’t mean that the NGOs have no role to play. He also welcomed the forum“extravaganza” as occurring at an opportune time when the government is undergoing a quiet shift into a caring culture, much in line with some of the principles in creating shared value.