The sleek blue-glass building of the Infosys corporation sits like an intruding spaceship amid the unpaved side streets and half-completed residential structures that surround it. Its giant porthole windows offer a peek into a Jetsons-esque world of workers gliding between floors on elevated moving sidewalks.

For now, 19-year-old Nishank Nachappaa toils in the shadows of Infosys and the other high-tech companies that, like him, call the Electronic City section of Bangalore home. The high school graduate helps out at two dormitories for tech workers – one for young men, the other for young women – that his parents manage. His father maintains the buildings and his mother prepares meals for the 120 male and 30 female residents.

Walk a block or two from the dorms and other corporate structures loom with multinational names such as Emerson and Yokogawa, Altametrics and Hewlett Packard.

Ann Hermes/Staff

Recent high school graduate Nishank Nachappaa stands near his family’s home, just outside the Infosys building in the Electronic City neighborhood of Bangalore.

The company logos offer a hint as to why Bangalore is known as India’s answer to Silicon Valley. Yet despite the high-tech cornucopia, it is still Infosys that Mr. Nachappaa aspires to work for in the future. Perhaps that’s because it is the building the entering college freshman, who will major in computer applications, sees every day as he completes his mundane summer chores cleaning and fetching water. Or maybe it’s those big round windows that offer a glimpse into another world.

“I dream of maybe working for Infosys someday,” says Mr. Nachappaa, shooing away the stray dogs that also call his street home. “It just seems like the future in there, from what I can see. It looks like a good future for me. I think it’s the kind of future many Indians want for our country.”

The dreams that Mr. Nachappaa lays out mirror in many ways the aspirations of a country that senses it is ready to vault forward in the world economy. Fueled in part by the global aspirations of the nation’s charismatic prime minister, Narendra Modi, and by an increasingly educated and middle-class population of youth, India stands on the threshold of a breakout.

The country has addressed much of the abject destitution that vast numbers of Indians lived in 25 years ago. As a result, it appears ready to join not just China but also South Korea, Indonesia, Vietnam, and other Asian neighbors that have either made the leap to middle-income prosperity or are well on their way. Along with its world-class space program, assertive foreign policy, and global cultural presence, India is trying to leverage its economic clout and privileged relationship with the United States into a more prominent role among world powers.

Ann Hermes/Staff

Sujata Mukhopadhyay, co-founder of an artificial intelligence company that helps match employees’ skills with new jobs, works at an incubator for new businesses in Bangalore.

And yet, the country that will soon be the planet’s most populous – India is on track to surpass China in 2027– and is perhaps the world’s most culturally and linguistically diverse, also faces a number of key challenges that could yet stifle its rise. Among them: a huge, underproductive rural population and economically inactive female population; a heavy state footprint in the economy that discourages private enterprise and foreign investment; rising political divides and religious tensions; and a lingering post-independence mindset of reliance on the state.

It’s a daunting list – one that echoes the period, more than a decade ago, when a first wave of “India’s time has come” declarations coursed through the country.

“Countries that have all kinds of potential and show great promise sometimes get stuck,” says Suyash Rai, a fellow at Carnegie India, a branch of the Carnegie Endowment for International Peace, in New Delhi. “India has a lot of advantages, but it also has some deep structural reforms and basic shifts in thinking to make.” 

Unless the challenges are addressed, analysts say, they could stymie the aspirations of one-seventh of the world’s population. “We face some crucial decisions that our leadership and Indians in general are going to have to make,” says Nitin Pai, director and co-founder of the Takshashila Institution, a Bangalore think tank. “We could continue on our current trajectory of about 6% annual growth and modest job gains, and that would allow us to continue moving some people out of poverty and would be a respectable performance. But it won’t be adequate for fulfilling India’s dreams of national prosperity and international prominence.”

India hopes to capitalize on tensions between other nations. Most notable is the continuing fallout from the U.S.-China trade war, which experts here see stretching over the coming decade, no matter who occupies the White House. They envision the repercussions of U.S.-China tensions resulting in a further shift of China’s low-wage and high-tech manufacturing jobs to other countries.

Ann Hermes/Staff

Workers sew men’s shirts at Jai Maruthi Fashions, a small clothing firm in an industrial district outside Bangalore.

The diesel engine-maker Cummins is just one example of a U.S. company that this year has shifted some manufacturing from China to India to avoid President Donald Trump’s tariffs on Chinese goods. In Bangalore, people also point to a new Apple plant assembling iPhones for the Indian market, reportedly replacing work previously done in China. India could benefit, too, from the desire of other Asian countries, such as Japan and South Korea, to diversify their trade and investment portfolios away from Beijing.

India largely missed out on the first wave of jobs that left China over the past decade. Countries such as Vietnam and Bangladesh captured most of those low-wage positions. Now, if the nation wants to create anything like a new Indian century, it will have to embrace fundamental economic reforms – and far-reaching cultural changes. 

Rural-to-urban shift

In many ways, Mr. Nachappaa and his family embody the kind of social and economic transitions the country will have to make to achieve global prosperity. 

Until a few years ago Ranama Mandanna, Mr. Nachappaa’s father, grew spices and peppers on the family’s three-acre farm in Coorg, a lush, tropical region of Karnataka state. Despite the appeal of rural life, however, Mr. Mandanna realized he could never get ahead working the small family plot, and he wanted a better future for his two sons. So he took a job managing the dormitories in Bangalore – a move that allowed his wife, Asha, to enter the workforce as his partner. 

“I miss the work in the fields; it’s a very nice place,” Mr. Mandanna says with a whiff of nostalgia for the family farm. “But we have a nice life here,” he says, gesturing around the tidy apartment his family occupies on the ground floor of the young women’s dormitory they manage. 

Ann Hermes/Staff

Help-wanted ads are posted throughout Peenya, an industrial district on the outskirts of Bangalore.

Over a lunch of aromatic rice and a masala omelet, Mr. Nachappaa reminds his father of the employment crisis gripping rural India and the difficulty of making money there. It brings a nod of acknowledgment. “It’s true our sons can now work for a better future than if we’d stayed on the farm,” says Mr. Mandanna, smiling proudly at his college-bound son.

The rural-to-urban shift the family has undertaken is something India will have to do on a massive scale. Of the country’s 1.3 billion people, more than 700 million are farmers or family members dependent on one farmer’s income. And with most of those farmers producing very little, rural incomes remain meager. 

Many farmers already have to leave home part of the year to survive and keep their children in school: Cities such as New Delhi, Mumbai, Chennai, and Bangalore are full of day laborers who come in from rural India to augment modest incomes. 

Experts note that China moved about 400 million people out of agriculture to urban jobs in its march to prosperity, and they say India will have to do something similar. That will mean difficult land-use reforms and changes to a system of agricultural subsidies that has allowed millions of farmers to cling to low-earning, low-productivity farms.

But even that won’t be enough. India will also have to build a modern agricultural sector. Currently it takes about 400 Indian farmers to produce the equivalent of what one American farmer does. 

“No country has grown its way from poverty to prosperity without growth and productivity in the agricultural sector first,” says Avinash Kishore, a research fellow at the International Food Policy Research Institute in New Delhi. Mr. Kishore points out that China followed the same pattern – “Deng [Xiaoping] de-collectivized China’s agriculture” beginning in 1978, “and the boom followed from there.”

Not far behind in importance is boosting female participation in India’s workforce. With fewer than one-fifth of working-age women in jobs, India stands near the bottom in rankings of female employment – with only Muslim countries faring worse. And despite growing awareness of the role women play in economic development, female participation in India’s economy has continued to decline in recent years.  

Ann Hermes/Staff

Shoppers throng Commercial Street, one of the main retail areas of Bangalore.

As Asha Mandanna, Mr. Nachappaa’s mother, chops big bowls of cabbage for her household’s dinner – enough for her family and her 150 tech-work boarders – the idea that she is in the vanguard of a leap in female workforce participation may not be uppermost in her mind. But her shift from a stay-at-home mother on a farm to full contributor to the family income is emblematic of the kind of transition millions of Indian women will have to undergo.

Surrounded as she is by high-tech workers, Ms. Mandanna is certainly well aware of the importance of technology to the future of India and her family. She is the one who nudged her son to study electronics in college. “It’s true, nowadays computers do everything,” Ms. Mandanna calls out from the kitchen. Moving closer to the doorway to the tile-floored dining area, she adds with a smile, “That’s why I chose it for him.” 

To make its leap, India will have to create 20 million jobs a year, Mr. Pai estimates. And to even approach that goal, it needs to embark on a series of reforms to modernize labor laws, privatize moribund state enterprises, and revamp a defective judicial system. “If you commit a crime at 40, chances are good you’ll die before your case is adjudicated,” says Carnegie’s Mr. Rai, lamenting India’s famously inefficient courts. The same goes for the legal system overseeing business transactions, which hinders investment and stunts job growth.

Then there are the lingering pieces of a postcolonial socialist economic system that have kept the government deeply involved in various industrial sectors and propping up inefficient state-run enterprises.

“The government makes soap. Soap!” notes Mr. Pai, rolling his eyes skyward and shaking his head. “We’re in a situation where many Indians live in the 21st, even the 22nd century, while the government is back in the Middle Ages. That has to change.” 

Mr. Modi, reconfirmed at the helm of the world’s most populous democracy in national elections in May, has talked of emulating the Asian Tigers. In 2014, he instituted a Make in India program – with a lion as its emblem – that had the goal of creating 100 million new manufacturing jobs by 2022. But the program has gone almost nowhere, experts say, hobbled by an unreformed state and a lack of boldness in execution.

Enter the entrepreneurs

Yet, for all its problems, India does have a rising entrepreneurial class. This is evident inside an incubator in a sleek multistory building in Bangalore’s Diamond District.

Part of a program called Nasscom 10,000 Startups, it is one of 10 state-funded incubators started across India in 2013 with the goal of creating 10,000 companies by 2023. The initiative here is a hive of activity focused on software innovation. 

Ann Hermes/Staff

“The government makes soap. Soap! We’re in a situation where many Indians live in the 21st, even the 22nd century, while the government is back in the Middle Ages. That has to change.” – Nitin Pai (center), director of the Takshashila Institution, a Bangalore think tank

At rows of desks stretching out over a large open floor, young people huddle in teams around computer screens. They’re fine-tuning business plans, adapting ideas to new clients, and perhaps dreaming of breaking out as India’s latest unicorn (a privately held company valued at more than $1 billion). India is currently third on the global list of unicorns, behind the U.S. and China. 

“Our aim is to give Indians more of a profile across the globe, so that India is no longer the back office” – that is, focused on call centers and other lower-level administrative services – “but moves up to the front,” says Saravanan Sundramurthy, who heads up the Nasscom incubator here in Karnataka state. “We’re very much about creating new companies, but at another level we want to help provide all the building blocks to get the country to the next level.”

That entails everything from creating educational curricula that respond to employer needs to easing obstacles to foreign investment. Driving many of the entrepreneurs on Nasscom’s vast floor is a sense that India’s time as a global player has come.

“India is where it’s happening,” says Rohit Sen, chief executive officer and co-founder of Nira, a digital lending startup. The company offers a mobile app that provides small cash loans – as little as $90 – for everything from emergency home repairs to school costs to the all-important Indian wedding. Nira is aimed at the 90% of urban Indians whose working-class wages leave them without access to conventional banking services.

“This is the Asian century,” Mr. Sen says, “and India is going to be part of that.”

Nearby, two women are also contributing to what they hope will be a “new India.” They’ve developed an artificial intelligence program, Headway.ai, that helps companies match employees’ skills with new or evolving jobs. It also helps workers who want to transition to new careers. “I might be a techie today, but maybe my talents match my dream of becoming a chef tomorrow,” says Sujata Mukhopadhyay, co-founder of the company, which has clients in India, Asia, the Middle East, and the U.S.

A few tables away sits the team behind Flutura, an artificial intelligence application that helps oil and gas firms automate operations. Another group has created Opentalk, a WhatsApp-modeled platform for live audio conversations among people around the world. A kind of techy ham radio, it had 1 million users in 100 countries last year. Many of those discussions were between people in India and rival Pakistan, which in recent months have been ominously feuding again over the disputed territory of Kashmir.

“Our idea is that if the world is open to talk between people from different countries and cultures, it will be a much better place to live in,” says Sumit Jain, the company’s co-founder and chief executive officer.

Still, despite the unbridled enthusiasm in the building here, India’s raft of innovative startups is not likely to contribute in a major way to transforming the economy over the next decade.

“Information technology looks like a big story and it tends to suck up all the attention. But IT is not what’s going to give good jobs and better lives to the tens of millions of not-so-well-educated Indians currently in the unorganized sectors of the rural economy,” says Carnegie India’s Mr. Rai. Noting that agriculture still employs almost half of the country’s workforce while producing only 14% of gross domestic product, he adds, “the [rural-to-urban] transition is very necessary – but it’s not going to be easy.”

“No national model to follow”

India could be called the Ginger Rogers of Asia. Just as Rogers was famously described as doing everything her dancing partner Fred Astaire did – only in high heels and backward – India is seeking to follow the lead of the Asian Tigers that have emerged from poverty to prosperity, only while being the world’s largest and arguably most linguistically, culturally, and religiously diverse democracy.

As Indians debate the steps their country must take to make the leap to success, the question often arises: Can the world’s most complex democracy do what other Asian countries did under authoritarian regimes?

“People often compare a democratic, diverse India to the United States, but it is really more like the European Union, when you look at the cultural and linguistic and religious diversity. So there really is no national model to follow,” says Milan Vaishnav, director of the South Asia program at the Carnegie Endowment for International Peace in Washington.

Coping with all that diversity means India’s transition to becoming a major economic power will probably be slower than some of its neighbors. It also means that India’s prosperity will likely have to be achieved with greater buy-in from its people.

“In a democracy like India, it’s difficult to do the big-bang reforms that are going to be necessary without the impetus of an economic crisis; it takes more time than under a system where a central authority can order things done,” says Dhruva Jaishankar, foreign policy fellow at the Brookings Institution’s India center in New Delhi. “The upside is that when big decisions are made it tends to be with broad consensus, and that means more stability over time. It’s a strength of democracy.”

Mr. Rai puts it a different way. “It would be very difficult to do a Three Gorges Dam in India,” he says, referring to China’s controversial hydroelectric dam completed on the Yangtze River in 2008 that displaced more than 1.2 million people. “In a democracy you need some level of consensus and you might have to take the slow path, but you also slow down stupidity.”

The Indian preference for economic growth under democracy does not mean people have glossed over the country’s glaring inequalities. If anything, some say, a democratic system encourages greater exposure of the challenges that need to be overcome. Indeed, some worry that India’s tilt toward one-party rule by Mr. Modi’s Hindu nationalist Bharatiya Janata Party will mean less attention to India’s post-independence values of pluralism and respect for minority rights.

Ann Hermes/Staff

Pedestrians walk past graffiti on Church Street, a trendy strip in the central business district of Bangalore.

Ultimately, while India’s path to prosperity may not be swift or perfect, many believe that it will reflect greater innovative thinking and will be more inclusive because of democracy. 

“Without democracy, we would be yet another China, maybe richer at this point but without the freedom to celebrate our diversity and to claim equal status in ways that make this India,” says Ms. Mukhopadhyay of Headway. “If you look around,” she adds, sweeping a hand over the buzzing incubator warehouse she shares with a hundred other entrepreneurs, “what you see is the result of the freedom of thought and inquiry that democracy inculcates.”  

Back on the construction-filled side streets of Bangalore’s Electronic City, Mr. Nachappaa is not prone to quite so lofty musings about India. But as he climbs a mound of dirt in a vacant lot to get a better look at his giant neighbor Infosys, the aspiring computer engineer nevertheless makes a case for his and his country’s advancement. 

“People used to do whatever they were born into, like working your family farm in a place like Coorg,” he says. “But young Indians are more ambitious; they want to make their own way.

“My goal is to one day start my own company. If I can build something new and create a lot of jobs,” he adds, “I think it would be fulfilling for me – and it would be a good thing for my country.”

Antonio Perez/Chicago Tribune/AP

Chicago Police Officer Joseph McElligott prepares to testify during the first-degree murder trial of former Officer Jason Van Dyke for the shooting death of Laquan McDonald Sept. 17, 2018, in Chicago. Mr. Van Dyke was found guilty of second-degree murder.

When Larry Krasner took over as Philadelphia’s district attorney in January last year, the office was full of filing cabinets from the previous administration. In them, his staff found a red folder with the words “damaged goods” written on the front.

Those "damaged goods" were Philadelphia police officers with histories of misconduct that could render them problematic as witnesses in court. Mr. Krasner, who took office after a 30-year career as a criminal defense and civil rights lawyer in the city, was not impressed.

“In my opinion that list was nothing more than window dressing,” he says. “In no way was it a sweeping attempt to get at the truth” of the breadth of police misconduct and untruthfulness in the city.

Since then his office has been compiling its own such database. Prosecutor offices around the country keep lists of this nature, often referred to as a do-not-call list or a Brady list – the latter in reference to the U.S. Supreme Court’s 1963 decision in Brady v. Maryland that prosecutors must turn over to the defense any evidence that might exonerate the defendant. These lists have shot into the public eye in recent months amid debate over when officers might be added and whether the lists should be made public. Critics, often police unions, have referred to them by a weightier name: blacklists.

Police officers often provide some of the most critical testimony in a trial, and receive a presumption of trustworthiness that many other witnesses – especially criminal defendants – do not, experts say. At a time when public faith in the U.S. justice system is wavering, some jurisdictions are considering expanding and publicizing Brady lists to restore that faith. But that has raised a crucial concern: balancing that push for greater accountability with due process and potential reputational harm to the officer.

“A police officer’s value in the criminal justice system is their ability to tell the truth,” says Ronal Serpas, a professor at Loyola University New Orleans and former chief of the New Orleans Police Department. “That’s what they should be, a presenter of truth and facts. If they can’t do that, then one of the fundamental building blocks of criminal and civil justice is lost.”

Vilified forever?

Most states, in a variety of ways, keep police disciplinary records from public view. Some states, including New York and, until recently, California, keep police disciplinary records completely private. This has led activists to pressure prosecutors to create these Brady lists, expand them, and make them public.

California has some of the toughest laws in the country protecting law enforcement privacy. The state supreme court softened one of those laws last week, ruling unanimously that law enforcement agencies can alert prosecutors if an officer who is a potential witness has a history of misconduct that might affect the outcome of the case.

The court said it tried to “harmonize” state laws with Brady requirements, noting that law enforcement is required to comply with Brady just as prosecutors are.

“Law enforcement personnel are required to share Brady material with the prosecution,” wrote Chief Justice Tani Cantil-Sakauye. “The harder it is for prosecutors to access that material, the greater the need for deputies to volunteer it.”

Matt Rourke/AP

Philadelphia District Attorney Larry Krasner speaks with members of the media during a news conference in Philadelphia, Feb. 6, 2019.

Mr. Krasner is one of several prosecutors elected in recent years on a platform of progressive policies to implement Brady lists, and this summer has brought demands from activists around the country for prosecutors to include officers who “exhibit racist or violent views.”

St. Louis Circuit Attorney Kimberly Gardner announced in June she was adding 22 officers to her “exclusion list” after the Plain View Project, a Philadelphia-based watchdog group, surfaced racist Facebook posts they had made.

Earlier this year, three candidates for district attorney in New York’s Queens borough said they would make its database of problem cops public. Melinda Katz, who won the election, said that while she would prosecute officers who lied on the stand, she would not make the database public, the Queens Daily Eagle reported.

Police unions have fought the maintenance of do-not-call lists. The California case stemmed from a lawsuit brought by the Los Angeles County Sheriff's deputies union arguing that allowing alerts to prosecutors would violate state law. In Philadelphia, the local chapter of the Fraternal Order of Police sued over Mr. Krasner’s database last November, saying that being on it could result in “lost wages, damages to reputation and professional harm to those police officers.”

“There’s going to be times when they’re not going to call an officer in certain cases,” the group's president, John McNesby, told the Philadelphia Inquirer, “but the bottom line is: Are they going to be vilified forever, are they going to be blackballed forever?”

A judge threw out the lawsuit last week. The union did not respond to a request for comment, but Mr. Krasner says the database both “changes almost every day” and allows officers to contest their inclusion on it.

“If they’re going to be added to the database they’re notified and given opportunity to, without an attorney, come in and state the reasons why they think they should not be,” he adds. “It’s simply not true they have no recourse, and it’s simply untrue that we’re unwilling to change things and don’t take people off.”

A “small” fix

Prosecutors are widely regarded as the most important actors in the criminal justice system, with the power to make charging decisions, negotiate plea deals, and dismiss cases altogether. Law enforcement, with the power to bring anyone it touches into the criminal justice system, is almost as powerful.

Brady lists can be an important tool in holding police and prosecutors accountable, but even if they become uniform and public, systemic issues will remain, says Kate Levine, an associate professor at Yeshiva University’s Cardozo School of Law.

“This is potentially emblematic of an extremely small problem in a world of just outlandish discretion and power on the part of both prosecutors and police,” she adds.

“If one person doesn’t end up getting in prison based on the lies of a police officer, that’s something,” she continues, “but what’s most important to stress for me is that the criminal legal system is fundamentally broken in ways that these small interventions will not fix.”

Some law enforcement experts believe that if agencies took a harder line against officers who lie or commit other serious misconduct, do-not-call lists wouldn’t be necessary. Mr. Serpas said that in seven years as chief of police in Nashville, Tennessee – a department of more than 1,200 officers, where you could be automatically fired for certain offenses – he only had 10 or 11 cases where an officer was dismissed.

“The idea that officers should be concerned that leadership is going to go off the farm and fire officers willy-nilly, that’s not what happens,” he says.

“My experience is other officers support that,” he adds. “My experience is they prefer to be in an organization with a reputation for truthfulness than not.”

Supporters of the lists say they can foster a culture of honesty and integrity. In many agencies, if an officer is barred from testifying in court they are often reassigned and replaced by an officer who could be a credible witness.

Not maintaining and enforcing a do-not-call list “has the strong tendency to keep down officers who are 100% honest and truthful and diligent in favor of officers willing to cut corners,” says Mr. Krasner. “We have 6,500 active police officers and we have a much, much smaller number in that database. The real effect of this is to elevate all the ones who aren’t a problem.”

“It’s important to recognize that there’s a heck of a lot of good, honest, decent, hardworking officers in the rank and file,” Mr. Krasner adds.

When Susan McPherson first came to New York in 2003, she never dreamed she’d be at the vanguard of a movement to reshape the core principles of American capitalism.

In her “nine lives” as a communications executive in various fields, she says, she’d always valued the importance of “giving back” to her community over the years. Her mother worked in public broadcasting and her father was a professor of history at a women’s college, and she says both had instilled in her the value of a career with a wider social purpose. 

“But when I moved to New York City, I didn’t know anyone, so as I was throwing myself into working full time, I also looked into nonprofits just to meet people,” says Ms. McPherson, now the CEO of her own communications consultancy in Manhattan, where she advises businesses how to be both sustainable and a “force for good.”

She wasn’t necessarily trying to rethink the powerful and elegant economic theories that for decades explained that the paramount purpose of a corporation was to maximize profits for shareholders, period. But in 2005, she volunteered for the Business Council for Peace, which took her to war-torn Afghanistan just a few years after 9/11. It reset the course of her life, she says.

“It was the first time I saw businesses actually being a force for good, and coming together as networks of professionals who could help women become business owners in that country,” she says. “The idea was, the more jobs that were created in that country, the more it could be less violent and stable.”

“And that really kind of supercharged me into doing a deep dive into the definition of capitalism, and to start to understand how this quote-unquote ‘social impact’ idea and the purpose of a business could dovetail together.”

The idea of capitalism has been buffeted from all sides over the past decade. On both the political left and populist right, supporters of President Donald Trump and those of Sen. Bernie Sanders (I-Vt.), Sen. Elizabeth Warren (D-Mass.), and others have decried the current state of global free markets, believing big corporations reap record profits while sending jobs overseas, even as wages remain in a perpetual state of stagnation. Even ideas wrapped in the name of socialism now have a widening following in mainstream American politics.

At the same time, too, millennials have generally brought a different ethos into the corporate workplace. Shaped by concerns about climate change and the economic crisis in 2008, many of the best and brightest have sought to work for companies that reflected their values, as they seek meaning and purpose in their jobs.

In many ways, Ms. McPherson was in the middle of this wide-ranging social movement as it began to evolve from below. Cadres of highly skilled and digitally connected employees, organizations of socially conscious shareholders, and even new-thinking CEOs like her began to challenge titans of global business and the long-held idea that maximized profits and shareholder returns are the be-all and end-all of a corporation.

“Right now it’s become a wave that is building into a tsunami,” says Andrew Behar, the CEO of As You Sow, a company that strives to build coalitions of investors who demand socially responsible business practices from the companies they invest in, rather than maximized returns alone.

Duties beyond earning profits

Instead of a singular duty to shareholders, this growing movement emphasizes a corporate duty to “stakeholders” – not only the well-being of a company’s employees and customers, but also those in global supply chains or any community affected by a company’s business practices.

Now, a group of nearly 200 of the nation’s top business executives, including those of Apple, JPMorgan Chase, and Walmart, has responded to these social pressures and announced a change in corporate orthodoxy, saying through the Business Roundtable last month that they were “modernizing” the principles on the role of a corporation. 

In years past, American executives had acknowledged the importance of a range of stakeholders in the decisions they made, but the “paramount duty” of a corporation, they said in 1997, is to the corporation’s stockholders. “The interests of other stakeholders are relevant as a derivative of the duty to stockholders.”

In their updated understanding of the purpose of a corporation issued in August, however, they acknowledged their many critics and appeared to elevate the importance of broad stakeholder well-being up to that of shareholder profits.

“It has become clear that this [prior] language on corporate purpose does not accurately describe the ways in which we and our fellow CEOs endeavor every day to create value for all our stakeholders, whose long-term interests are inseparable,” the executives said.

Mere ‘virtue signaling,’ or more?

Even so, as critics or cynics point out, this statement could simply be a public relations move in a politically and economically volatile era, since corporate boards and managers in most cases still have a legal “fiduciary duty” to operate on behalf of shareholders and their profits. 

Some say the Business Roundtable is simply “virtue signaling” to its many liberal critics, while in reality changing nothing about the calculus of business success. 

“Typically, a corporation’s sustained reputation for producing quality goods at competitive prices and for providing returns to those who risk their capital by investing in it tends to correlate with its acting in compliance with the laws and ethical standards of a given community or country,” says Juscelino Colares, professor of business law at Case Western Reserve University’s School of Law in Cleveland. 

“Because that is the case, the Business Roundtable statement rings hollow,” Professor Colares continues via email. “CEOs routinely decide between ‘investing in our workers’ or dealing ‘fairly with our suppliers’ and being competitive and profitable so they can remain in business, for instance,” he says. “Merely stating that other stakeholders matter – they obviously do – without openly acknowledging the core of their decisions, is an exercise in virtue signaling.”

Still, such pressures from below have been coming at corporate leadership from all sides, says Sarah Kaplan, professor of strategic management at the University of Toronto’s Rotman School of Management. Corporate executives have no choice but to respond, she says, and recalculate the best interests of their companies.  

“It’s very interesting, and I feel like we are at this kind of super turning point moment right now, where these conversations about stakeholders are now being taken seriously,” says Professor Kaplan, whose new book, “The 360 Corporation: From Stakeholder Trade-offs to Transformation,” traces the evolution of this social movement.

“That means that, increasingly, companies are feeling the pressure from all of these different stakeholders to be more responsive, or people are going to start walking away from the company as employees, they’re going to start walking away from the company as consumers, and they’re going to start walking away from the company as investors,” she says.

As it happened, in 2005, the same year that Ms. McPherson traveled to Afghanistan with the Business Council for Peace, investors coined the acronym “ESG” for the growing movement of socially conscious investors who were demanding information about a company’s environmental, social, and governance policies.

New voices shaped by a crisis

Then social media began changing the ways workers can communicate and organize. Shaped in part by observing corporate bailouts during the economic crisis of 2008 and investors who more or less were taking risks with “house money,” younger workers began to lose faith in the hierarchies of corporate leadership and the “invisible hand” of efficient markets. 

“Social media has greatly amplified the voices of workers, and not just workers in their companies themselves, but those throughout the supply chain,” says Professor Kaplan. “I think especially we attribute this to millennials, who don’t want to work for companies that don’t have good workplace policies, that don’t look out for their social impact, that ignore the increasing impact on the environment.”

And since then, a wave of ESG-based investment principles and other forms of stakeholder-centric investment strategies have indeed become a tsunami, scholars say. In 2010, there was about $3.07 trillion in socially responsible assets under management in the U.S., according to US SIF, a nonprofit forum in Washington D.C. This has rocketed to $12 trillion in the U.S. in 2018, the forum reported.

Worldwide, nearly $20 trillion is invested only in companies deemed socially responsible, economists estimate. 

“What we’re seeing is that people want to know what they’re investing in – and particularly the younger generation wants to know – and they’re saying, I do not want to profit from owning assault weapons, I do not want to profit from burning down the rainforest, I do not want to profit from companies that don’t emphasize gender equality,” says Mr. Behar at As You Sow.

One motive: building long-term value

But many economists say that political and moral values are not the only drivers of this social movement beginning to transform the idea of capitalism, even if this era’s zeitgeist is marked by a suspicion of global elites and institutions.

“This isn’t some far-left wing or collectivist movement, this is capitalism,” says C.B. Bhattacharya, director of The Center for Sustainable Business at the University of Pittsburgh’s Katz Graduate School of Business. “Maybe it’s a different brand of capitalism that’s in tune with our times, but this is very much enlightened self-interest, or whatever you want to call it.” 

“Ultimately, in the long run ... you’re bound to make more money if you are sustainable in your business practices,” continues Professor Bhattacharya, who traces the economic value of stakeholder-centric business practices in his new book “Small Actions, Big Difference: Leveraging Corporate Sustainability to Drive Firm and Societal Value.” 

He points to the business risks for corporations that fail to adapt. “Frankly the cost of inaction is higher than the cost of action today. So maybe the CEOs at the Business Roundtable thought at least that part through, saying that if we don’t do something now, then we really will perish in the years to come.”

Karen Norris/Staff

If you follow economics or technology in the news you’ve probably stumbled upon headlines with the word “blockchain.” And if you read those stories, you may have gotten the impression that blockchain is either (1) an earth-shattering technology that will completely transform finance, supply-chain management, and property records, and usher in a new era of online trust or (2) a currency-speculation scheme by amoral libertarians who don’t mind enabling drug deals and wasting electricity.

So which is it? As with nearly every human invention, blockchain can be used to achieve goals that are helpful, harmful, or some combination of the two. If you want to decide for yourself what the appropriate uses of blockchain are, you’ll first need to know what it is.

OK, so what is a blockchain?

A blockchain is a kind of database, a structured way of storing information, shared across a network of computers.  

Once a piece of information – a record, in blockchain parlance – is entered into this database, it is time-stamped and added to a “block” that is shared across the network. Each block contains digital fingerprints, known as hashes, that link it to the blocks that came before and after it. Changing a record on one block would require changing all the other blocks in the chain, making the system extremely resistant to tampering.

“Blockchain is a time-stamped recorder of what’s going on in an infrastructure,” says Bina Ramamurthy, a teaching professor in the University at Buffalo’s computer science and engineering department. “It’s simply an enabling technology that enables trust.”

What was it created for?

Researchers since the early 1990s have been working on creating distributed, tamper-proof records using chains of blocks, but the concept first rose to prominence in 2009, with the creation of the digital currency Bitcoin. 

In creating Bitcoin, Satoshi Nakamoto, a pseudonym for the unknown person or persons who drafted the original Bitcoin white paper and coded its initial blockchain database, solved a vexing problem in digital currency. If the money is nothing more than a file on a computer, how do you stop people from spending it more than once?

With traditional digital currency, like the kind you use when you make a credit-card purchase, a bank handles most of the transaction. The bank validates the credit card, checks the billing address, authorizes the payment, and puts a hold on your account. The merchant typically gets your payment within 24 to 48 hours. 

With Bitcoin and other so-called cryptocurrencies, you and the merchant create a record of the transaction, which gets uploaded to a block. The record is validated by the network. 

Having a bank validate and authorize digital payments costs money, which is why merchants often impose minimum spending limits on credit-card purchases. With cryptocurrencies, people can send micropayments, which can help change people’s lives in poorer countries. Professor Ramamurthy suggests, for instance, that cryptocurrencies could be used to pay schoolchildren to pick up plastic on the way to school.

With Bitcoin, the creation of new blocks is performed by computers. This process, known as mining, requires considerable computing resources, as well as vast amounts of electricity. Globally, Bitcoin mining consumes an estimated 66.9 terawatt-hours per year, according to University of Cambridge as of this writing. That’s roughly the power consumption of Colombia. 

So blockchain is a Bitcoin thing, then?

Not necessarily. While blockchain’s first widespread application was for Bitcoin, the technology can be used for lots of things. There are several other blockchain-enabled cryptocurrencies. 

Three years ago, Tavonia Evans, an entrepreneur and technologist in Atlanta, began working on developing $GUAP Coin, a currency aimed at keeping wealth within the black community. Unlike Bitcoin, $GUAP Coin doesn’t rely on mining, and thus uses far less energy. Instead $GUAP Coin uses a “proof of stake” model. In a proof-of-stake model, purchases are validated by those who already have the coins. Currently $GUAP Coin has about 2,000 users, says Ms. Evans.

“There’s a lot of money that flows out of African American communities and doesn’t flow back into the community,” she says. “I want black people to be able to get in and say, ‘This is our spending power.’”

Other applications for blockchain have nothing to do with cryptocurrencies. The London-based digital platform Provenance is using blockchain to attempt to improve transparency in the global fishing industry, which is notorious for slavery and overfishing. The United Nations World Food Program is currently using blockchain to distribute food vouchers to Syrian refugees, and others have proposed using the technology for everything from tracking carbon credits to providing a secure identity for stateless persons. 

In July, The New York Times announced the News Provenance Project, which uses blockchain to verify the authenticity of photos, and aims to expand into validating other journalistic content.

“One of the beautiful things about blockchain,” says Ms. Evans, “is that it’s very visible, it’s very transparent.”

“I see it giving the power back to the individual,” she says. “Giving real value to whatever it is that they offer to the world.”

Editor's note: This article has been updated to correct the month the News Provenance Project launched. It was July.

My buddy Doug Perry has a catchphrase about living on Georgia’s Tybee Island: “It’s a good life.”

Doug’s the kind of guy you’d expect to be living on an island paradise. He’s often clad in flip-flops and an unbuttoned Hawaiian shirt. My wife calls him “The Dude.” But like many of our neighbors, he is starting to have second thoughts about island life. The impending arrival of Hurricane Dorian this week is putting the staggering natural beauty of the barrier island into stark relief. 

After thrashing the Bahamas – stranding residents on roofs and killing at least five people – Dorian appears set to skirt up the Southeast coast of the United States. The hurricane’s strength has eased since the weekend, when it hit Category 5 status and became one of the strongest hurricanes ever recorded in the Atlantic. 

By Tuesday afternoon, it had been downgraded to a Category 2, though it still poses risks for Southeastern coastal communities, particularly from flooding due to storm surge or rainfall. It is also growing in size.

After years of chasing hurricanes for the Monitor, I have found myself – and my family – at the center of the story, weighing whether to retreat inland or make a stand at home. It’s a question more than a million residents under evacuation orders in Florida, Georgia, and South Carolina have been pondering over the past few days.

It can be easy in the wake of a devastating hurricane, like Katrina, to wonder why so many people ignored evacuation orders and stayed behind. But for those in the path of a hurricane – or rather, the hypothetical, potential path – opting whether to stay or go can be a complicated calculation.

Of our friends, some chose to stay out of a sense of defiance. Others, however, simply had nowhere else to go and lacked the means to hole up in an inland motel.

Leaving is expensive and can mean lost wages, shuttered businesses, and unexpected costs. Just on the Georgia coast, this is the third hurricane in four years to generate evacuation orders. Compounding the difficulty with Dorian: its extremely slow progress. We’ve been getting geared up for Dorian’s arrival since Thursday. Evacuation orders were issued Sunday. By Tuesday, the hurricane – at times moving at just 1 mph – was still stuck over the Bahamas off Florida’s Southeast coast.

It’s been devastating for the Bahamas, where Dorian has unleashed the bulk of its fury, dropping more than 30 inches of rain, along with 185 mph winds and a massive storm surge. The storm stalled over Grand Bahama Island, which is just 95 miles long, for more than 36 hours. But for those on the U.S. Southeast coast, the snail-like progress of the storm makes it even harder to time evacuations.

As a reporter who has spent two decades sliding in behind storms, I know full well the devastation and loss that hurricanes can leave behind. But I also have witnessed equally staggering levels of hope and resilience that emerge in such situations.

I have always been struck by the difference between evacuees and the outlaws who refuse evacuation orders.

This long weekend that dividing line hit home as I packed up my teenage son and daughter in the family van with our two cats. My wife, Alice, a “critical city employee,” would stay behind and likely evacuate later with other first responders to Hunter Army Airfield in Savannah. She had wanted us to leave sooner rather than later.

There are two kinds of evacuation. The orderly kind ahead of the storm with little traffic to deal with. Then there’s the more panicked version that happens when a storm suddenly turns your way. It is a game of weighing odds with each three-hour cycle of National Hurricane Center advisories. Kids, pets, grandparents, cars, boats, the potential for looting – they are all thrown into the equation. For those reasons, we went with the first kind of evacuation – leave early and beat the traffic.

Before we left, my son, Jacob, posted a snapshot on Instagram with his island buddies Clayton, Phoenix, Ryan, and William outside our house. Three would stay behind. Two, including Jake, would leave.

When finally the Chevy van was packed, my Gheenoe trot-liner boat in tow, my wife and I said goodbye. She smiled and said, “Thank you for listening to me.” 

That’s when it welled up. Why did we do this? Why live on a marsh that can rise and kill? Is the risk really worth it?

Everyone of course has their own reasons for wanting to live on the edge of the continent, or along a flood-prone river. For us, we had vacationed on Tybee for nearly 10 years until one year we realized we didn’t want to leave. I also grew up on a remote island in the Baltic and wanted my children to have a chance to experience that unique way of living.

Living in paradise has also been a lesson in privilege for my family. Unlike the gated coast just north on Hilton Head, South Carolina, it has never been exclusive. A post-World War II building boom allowed a quirky, blue-collar culture to develop that still exists, epitomized by raised Tybee cottages with wraparound porches. It’s a casual idyll that our family has settled into with ease. And we have been fortunate to find a warm welcome. At the same time, we are aware that newcomers like us are helping to marginalize this culture. Dorian’s approach, and our ease in finding somewhere to retreat to, has underscored that privilege. For many of my neighbors, escape can be a luxury outside their reach.

As I file this story from the Taproom Coffee Shop in Atlanta, I take comfort in knowing that the same sense of community that has made my family feel so welcome will carry the neighbors I left behind through the storm.

Amanda Paulson contributed reporting from Boulder, Colorado.

AP

Members of the peace movement in Afghanistan chat with a reporter in Kabul.

In the past two years, the people of Afghanistan have signaled in various ways – such as peace marches – their longing to end 18 years of terror and conflict. It is one reason why, as talks between the United States and Taliban have reached an agreement “in principle,” the prospects for peace have never been higher.

Among many Afghans, the crucial hope is that a U.S.-Taliban agreement will lead to direct talks between the Taliban and the elected government in Kabul. That step has many obstacles. It will, for example, require leaders from across the Afghan political spectrum to be consulted on key issues to achieve common ground. In addition, Afghanistan’s neighbors, especially Pakistan, must support peace rather than meddle in the country for their own interests.

Any peace must be built from the bottom up in a society that has evolved since a U.S.-led invasion ousted the Taliban in 2001 and diminished the Al Qaeda presence that led to the 9/11 attacks. Democracy in the country, though flawed, has become more representative, and millions have benefited from improvements in education and other opportunities.

Afghan society was suffering from internal strife long before the Taliban came to power in the 1990s. Yet since 2001, many reforms have prepared people to actively seek an end to the fighting. One example of Afghans working together is a rise in so-called peace clubs and related programs.

Two expected outcomes of a U.S.-Taliban deal are a gradual withdrawal of U.S. troops and an end to Taliban cooperation with international terrorist groups, such as Al Qaeda and a local branch of Islamic State. Both outcomes are essential to U.S. interests. Yet they must be initial steps leading to Afghan-to-Afghan negotiations.

Non-Taliban Afghans are very worried the U.S. is too eager to withdraw and may concede too much to the Taliban. They want a timetable for an American troop withdrawal tied to success in intra-Afghan negotiations. Otherwise, the Taliban would have a big advantage in negotiations, endangering the country’s democratic and social gains, notably the improved opportunities for women. Many older Afghans fear a return to the kind of Taliban rule they remember as brutal.

In anticipation of talking with the Taliban, the Afghan government has named a broad-based negotiating team. Neither side has worked out its position for a transitional or post-conflict government system. Though non-Taliban Afghans are fractious, they at least have experience in working with other political forces. The Taliban has no record of working with others in government. Many non-Taliban worry the Taliban may stall talks and continue fighting with hope of imposing a deal on their terms.

In the midst of all this, President Ashraf Ghani plans to hold a constitutionally mandated presidential election at the end of September. He hopes the result will give him added legitimacy in negotiations. The Taliban oppose the election and reportedly seek instead to negotiate an interim government in which they would participate. The insurgent group fears it would not fare well in any national election.

For the countries that have invested so much in Afghanistan, it is important to nurture the peace process and sustain a widely supported agreement. International partners can facilitate Afghan-to-Afghan talks while an array of foreign groups can promote reconciliation at the grassroots. Afghanistan’s friends should also help protect a peace agreement from extremists on all sides who would oppose it or try to degrade it.

In an Afghanistan with high levels of poverty, injustice, corruption, and drug trafficking, international assistance will be needed for years. The World Bank has already worked on plans to aid a post-conflict Afghanistan, but it will need funds.

Getting to a comprehensive and viable agreement will take consistent support from the U.S. and other international partners, as well as wise leadership from Afghans. Much of the hard work has already started with the Afghan people, who are demanding better from those who want to rule them.