Inclusive Business competition: winners were announced

By Xavier Forneris

Last December, I mentioned a competition launched by the Group of 20 (G20) and IFC -full disclosure: IFC is my employer- to find the best examples of “Inclusive Businesses”, i.e., businesses that provide goods, services and livelihood opportunities to the poorest of the poor, those who live at the “base of the pyramid” (BOP).

The results have been announced a few days ago in Los Cabos, Mexico (June 18) and the winners are:

Agrofinanzas (Mexico)
Apollo Hospitals Group (India)
Bakhresa Grain Milling (Malawi)
Brilla, a program launched by Promigas (Colombia)
Corporación Universitaria Minuto de Dios (Colombia)
Ecofiltro (Guatemala)
Engro Foods Limited (Pakistan)
Jain Irrigation Systems Ltd. (India)
Manila Water Company (Philippines)
Millicom (Luxembourg)
Reybanpac Unidad de Lácteos (Ecuador)
Sustainable Harvest Coffee Importers (United States)
Tenda Atacado Ltda (Brazil)
VINTE Viviendas Integrales (Mexico)
Waterlife India Private Limited (India)

 

For more information on the competition go to: http://www.g20challenge.com/

To read about the winners, go to: http://www.g20challenge.com/winners/

And to learn about IFC’s Inclusive Business Models program and activities go to: http://www1.ifc.org/wps/wcm/connect/AS_EXT_Content/What%20We%20Do/Advisory%20Services/Inclusive%20Business

 

Base of the Pyramid (BoP): the “must-reads”

In 2008, Stanford University’s Social Innovation Opinion Blog published a post by a Grace Augustine titled BoP 101: Essential Reading for Those Interested in the Base of the Pyramid” (Oct 07, 2008). I encourage everyone interested in this space to read this post, which can be retrieved at: http://csi.gsb.stanford.edu/bop-101-essential-reading-those-interested-base-pyramid

I’ll first summarize Augustine’s post and then complement it with some papers and books published both before and after her post. In the interest of brevity, the names of the publishers or journals where these papers appeared are omitted, but an internet search on the title and author will generally lead you to the relevant publication.

In her post Augustine does not just provide a list of “must-reads”; she offers a useful and short genesis of the BoP theory, summarizes what each of the papers added to the conversation, and also mentions key developments around the theory (e.g., UN Global Compact, Millenium Development Goals, the MNC’s quest for new markets in a slowing global economy, etc.), which provides useful context to understand why the theory emerged and gained traction.

Augustine starts, logically, with what is widely seen as the seminal piece, the first article on the BoP: ”Strategies for the Bottom of the Pyramid: Creating Sustainable Development” published in 1999 by two academics: C.K Prahalad (University of Michigan Business School) and Stuart Hart (then at the University of North Carolina’s Kenan-Flagler Business School). Prahalad and Hart are often considered the “fathers” of the BoP theory, which they viewed both as a business strategy for transnational companies and as a potential tool for poverty alleviation.

This serves as a useful reminder that the BoP theory is rooted in the premise that traditional aid has had limited impact on poverty alleviation and that the time has come for a new strategy. This argument was not totally new. The same year as Prahalad and Stuart wrote their first article on the BoP, Amartya Sen published Development as Freedom (1999). The aid indictment was subsequently reinforced by influential development scholars who challenged the traditional model of development aid (Hernando de Soto’s The Mystery of Capital, 2000; Sachs’s The End of Poverty, 2005; William Easterly’s The White Man’s Burden, 2006). So Prahalad and Hart were not the first nor the last scholars to write about the shortcomings of aid as a way to alleviate poverty but they saw the BoP theory as a new avenue for tackling the poverty challenge.

The concept was refined in a second piece, published in 2002 by A. Hammond of the World Resource Institute (WRI) and the same C.K. Prahalad in the Harvard Business Review (HBR), titled Serving the World’s Poor, Profitably.

The “co-fathers” of BOP, Prahalad and Hart then separately published two books on the BoP theory:

  • The Fortune at the Bottom of the Pyramid: Eradicating Poverty through Profits, C.K. Prahalad (2004)
  • Capitalism at the Crossroads: The Unlimited Business Opportunities in Serving the World’s Most Difficult Problems, S. Hart (2005)

Augustine described both books as must-reads while summarizing their respective themes. She then mentioned a 2006 critique of the BoP theory posted by University of Michigan professor Aneel Karnani on NextBillion.net: Fortune at the Bottom of the Pyramid: A Mirage.

Finally, Augustine mentioned a few publications on sub-topics of the BoP theory:

BoP and Innovation:

  • The Great Leap: Driving Innovation from the BoP, S. Hart & C. Christensen (2002)
  • BoP Protocol, S. Hart (second version)

BoP and Economic Development:

  • Reinventing Strategies for Emerging Markets: Beyond the Transnational Model, T. London &  S. Hart (2004)
  • A Base-of-the-pyramid Perspective on Poverty Alleviation, T. London (2007)
  • The Next 4 Billion Report, WRI/IFC (2007) [which Augustine describes as the most comprehensive document for defining and understanding the BoP market].

BoP and Finance / Impact investing:

  • Meeting Urgent Needs with Patient Capital: an article by Jacqueline Novogratz, founder and CEO of Acumen Fund, one of the pioneering organizations in this field, published in MIT’s Innovations journal.

Unfortunately, Augustine’s overview ends in 2008, at the time of her post. I hope she has done or can do an update, for it was extremely clear and useful contribution. Here are some of the post-2008 reports and publications I would like to recommend, as well as some pre-2008 ones which were not on Augustine’s list:

  • Accelerating Inclusive Business Opportunities: Business Models that Make a Difference, B. Jenkins, E. Ishikawa, A. Geaneotes, P. Baptista, amd T. Masuoka. IFC (2011)
  • Creating Shared Value, M. Porter (2011)
  • Scaling Up Inclusive Business: Advancing the Knowledge and Action Agenda, B. Jenkins & E. Ishikawa. IFC and the CSR initiative at Harvard Kennedy School (2010)
  • The Next Billions: Unleashing Business Potential in Untapped Markets. World Economic Forum (2009)
  • Creating Value for All: Strategies for Doing Business with the Poor. UNDP (2008)
  • Make Poverty Business: Increase Profits and Reduce Risk by Engaging with the Poor, C. Wilson & P. Wilson (2006)
  • Developing Native Capability: What multinational corporations can learn from the base of the pyramid, S. Hart & T. London (2005)
  • Banker to the Poor: Micro-Lending and the Battle Against World Poverty, M. Yunus (1999)
  • Unleashing Entrepreneurship: Making Business Work for the Poor, UNDP, Commission on the Private Sector and Development (2004).

BOP News: G20 and IFC launch competition

By Xavier Forneris

The purpose of my blog is not to promote the activities of the organization where I work – IFC ( a member of the World Bank Group)- but I’m starting a new series of posts on doing business at the “Base of the Pyramid” (BOP) and IFC happens to be the co-sponsor of an interesting competition launched in that field, last month, by the Group of 20 (G20). It is an online competition to find the best examples of ventures in developing countries that provide critical goods, services, and livelihood opportunities in financially, environmentally, and socially sustainable ways to those living at the base of the pyramid, what I will refer to in the forthcoming BOP posts as ‘Inclusive Businesses’. Launched as part of the G20 Leaders Summit in Cannes, France on November 3-4, 2011, the G20 Challenge on Inclusive Business Innovation seeks to recognize businesses with innovative, scalable, and commercially viable ways of working with low-income people in developing countries. Winners of the competition will be announced in Mexico (country hosting the G20 meeting) in June 2012. Stay tuned.