"Who are they?" Melanie Edwards asks us. Frankly, we don't know – and neither does the government. These are the people of Morro de Macacoes – Portuguese for "Hill of the Monkeys" – and they are among the 1 billion people worldwide whose existence has no official record. Imperfect or non-existent information characterizes base of the pyramid markets worldwide. When Edwards began working in Morro de Macacoes (a slum near Rio), she asked government officials how many people lived there. The answer ranged from 5,000 to 60,000. She saw this disparity as a business opportunity; after all, how can businesses, banks, governments and NGOs serve people's basic needs if they don't know who they are? Edwards' company, Mobile Metrix, is...
You're sick, so you go to the doctor. He prescribes you drugs. The medicine makes you better, right? Unfortunately, that's not always the case – especially for the billions of people living at the base of the economic pyramid. Taylor Thompson and Nathan Sigworth are on a mission to make sure medicine makes patients better, every time. They are the co-founders of PharmaSecure, a for-profit startup targeting the problem of global pharmaceutical counterfeiting – which kills millions each year. PharmaSecure will soon launch a cell phone-based system that allows healthcare professionals and consumers to easily confirm the validity of purchased drugs, bridging the information gap that allows counterfeiters to sell more than $50 billion worth of fake drugs every year....
Guest blogger Champa Gujjanudu is an 1st-year MBA student at the Haas School of Business at UC Berkeley with an emphasis in social impact consulting and community development. Prior to Haas, Champa was a Strategy Consultant with BearingPoint in the Bay Area and in New Zealand. She has held consulting positions in various industries such as Financial Services, Healthcare and Technology. She graduated with a degree from the University of Auckland with degrees in Computer Science, Mathematics and Business Information Systems. By Champa Gujjanudu Today, I was privileged enough to attend not one but two great panel discussions on a topic close to my heart, Fair Trade. While being familiar with some of the local and regional fair trade associations and retailers, I was blown away by the...
Jocelyn Wyatt leads the Design for Social Impact initiative at IDEO (a global design consultancy). Prior to IDEO, Jocelyn worked as an Acumen Fund fellow in Kenya and served as Interim Country Director for VisionSpring in India. Jocelyn has an MBA from Thunderbird and a BA in Anthropology from Grinnell College. She blogs (periodically) on www.jocelynwyatt.com. By Jocelyn Wyatt Fully admitting my bias here, I did think the Design in the Developing World panel was an especially interesting conversation between a top-notch set of designers and practitioners. Caroline Balerin launched the panel with the question "What would it look like to design for the other 90%?" I fully expected the panelists, who have traditionally designed products, to respond with something about...
...you can have the very best technology in the world, and if you don't get it out there and market it, if you don't have a distribution network, then it doesn't have any impact.Martin Fisher, Co-Founder and CEO, KickStartCreating markets at the base of the pyramid is hard work. This theme that has resurfaced again and again in my recent work, whether at a gathering of budding BoP-focused entrepreneurs or during a conversation with established social innovators.What do we mean by 'market creation'? What role does it play in BoP venture creation? And why is it so often overlooked by entrepreneurs, investors, policymakers and pundits? In this post, I'll touch on these issues by citing examples that have surfaced recently in my work, including insights from...
Last week, I had the opportunity to sit down with Jordan Kassalow, Graham Macmillan and Miriam Stone – three staff members at VisionSpring – to conduct a long-form interview. Formerly known as Scojo Foundation, VisionSpring is the pioneering base of the pyramid-focused enterprise working to provide access to eyeglasses in low-income communities around the world. NextBillion.net readers will be familiar with VisionSpring's basic story; after all, our team published a What Works case study on the company back in 2007. We've followed their progress for a long time, up to and including their recent name change and announcement of a 5-year fundraising prospectus. (Full disclosure: I work at Acumen Fund, which is an investor in VisionSpring.) Rob Katz, NextBillion.net: How,...
This post is the second in a two part series exploring China’s role in Africa’s development. Part 1 focused on the breakdown and impact of African exports to China, and Part 2 focuses on the role of China’s investment and imports into Africa.Investment It is no surprise that most Africans are welcoming Chinese investment and products. The history of traditional Western aid and investment in Africa is one of a nagging "I correct you because I want what's best for you" parental-like stronghold over the continent. Tired of "the politically motivated, finger-wagging approach of western governments," Africans have welcomed China’s emphasis on pure business. Numerous sources quote the lack of political motivation, as well as societal or environmental demands, as...
A key issue that the BoP development world currently faces is generating a tangible connection between markets, enterprise and the poor. After all, if we are going to alleviate poverty through enterprise, we require effective strategies that enable the BoP to participate in profitable business endeavors as well as markets that serve the BoP's needs sufficiently. In light of this difficult obstacle, WBI has taken steps to provide insight into how BoP development can be engaged successfully though its release of the special report "Business and Poverty: Opening Markets to the Poor." The report's 18 chapters-each about eight pages long-analyzes various effective strategies, obstacles and prospects for NGOs, non-profit organizations, corporations, banks, MFIs, and local...
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Position: VP of Sales and Operations Location: New York - with 30% international travel Organization: VisionSpring (formerly Scojo Foundation) is a global social enterprise, currently operating in 13 countries, which creates jobs and sustains livelihoods through the sale of affordable reading glasses to the 700 million people who require clear, up-close vision to read and work. VisionSpring trains low-income men and women as "Vision Entrepreneurs" to start microfranchises that conduct vision screenings within local communities, sell affordable reading glasses, and refer those who require advanced eye care to reputable clinics. Description: The VP of Sales and Operations is responsible for the leadership and management of VisionSpring's global operations team and the...
As Robert Katz posted last week, a BoP Conference entitled “How to do Business at the BoP” was held on February the 27th in Madrid. The conference had pretty impressive speakers and visitors, since it was mainly directed at the corporate world. Robert was the first speaker of the day. He kicked off by explaining the reasons for BoP studies and briefly went through the three main penalties suffered by BoP customers: price, quality and access. After giving an overview of business strategies at the BoP, he presented “The Next 4 Billion” study and explained some of the most important conclusions that the study sheds light upon, such as the significant unmet needs in the ICT and Transport industries. The second part of the conference introduced several BoP case studies from different...
Position: Director of Sales and Product Management – Clean Cook Stoves India Location: Based in Fort Collins, Colorado (approximately 40% of job will be international travel) Organization: Envirofit International was established to develop well-engineered technology solutions to improve the human condition on a global scale, with a primary emphasis on applications in the developing world. Envirofit's goal is to develop and distribute well-engineered energy products for low-income markets that traditionally have been overlooked. Position Description: Envirofit is seeking a full time Director of Sales and Product Management to help design, develop, and distribute products that address major environmental problems in the developing world. Based in Fort Collins, Colorado, Envirofit...
Today, Bill Gates' speech at Davos has thrown the spotlight on "creative capitalism" and an emerging groundswell of interest in market-based solutions and business models that can drive positive social and environmental change. The excitement around these ideas to create self-sustaining, scalable options for development at the bottom of the economic pyramid (BoP) is encouraging, and the potential for a snowball effect of increased action is huge. Yet all of the grand words and fanfare remind me that what is most riveting - what really seems to capture attention and combat ingrained suspicions (about "development aid" and about "capitalism") - are the actual stories of the models themselves. So, today I'd like to provide a brief vignette of pieces...
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The January 10th edition of the Economist takes note, in two separate pieces, of the huge successes of a handful of large MNCs. It highlights how these firms have successfully shaken up their industries and acquired well-known brands in their efforts to capture large swaths of global market share. Usually this wouldn't mean much for the BoP. In fact, what does the potential acquisition of a luxury brand like Jaguar, or a deal for a steel giant, "cooked up... [by father and son] during their annual skiing holiday in St Moritz," have to do with the BoP? Maybe not much, but maybe the Economist is on to something. What the magazine was so interested in reporting was not the private sector's search for growth, but rather that all of these MNCs are from "poorer...
Two new papers exploring the 'base of the pyramid' concept crossed my desk recently. We posted both of them to the Newsroom, but they also merit a slightly longer discussion. First, Jean-Louis Warnholz of the University of Oxford's Queen Elizabeth House has a new working paper out entitled "Poverty Reduction for Profit? A critical examination of business opportunities at the Bottom of the Pyramid." In his paper, Warnholz studies overarching BoP strategy and applies a new dataset - based on price survey data - to look deeply at the extent of a 'poverty penalty' at the BoP. Warnholz's paper merits a close read, especially for academic members of the BoP community. I will hold off on giving my impression of his paper - other than to say that it's...
Guest blogger Bill Kramer is principal of The Global Challenge Network, LLC, an executive education and training company. From 2001 through mid-2007, he worked on pro-poor business strategies with WRI. Previously, Bill founded a non-profit focusing on the relationship of knowledge to economic development and enjoyed a long career in the private sector, founding a dozen companies, most of which were in the book business.By Bill KramerLast week’s Wall Street Journal story about ICICI Bank's micro-finance loan collection tactics and the Business Week article last month about Mexico's Banco Azteca (and the interesting follow-on posts) raise a series of complex issues around doing business at the BoP. These questions have been present from the movement's early days, but are...
In recent months, Boston Consulting Group's publications have tackled various aspects of BoP strategy, which Manuel and Julia have covered in detail. From a high-level point of view, this is a positive trend, reflecting growing interest among BCG's clients – large private sector corporations – in better understanding and exploring BoP markets. And from a branding perspective, I couldn’t be happier that BCG has chosen "Next Billion" as the catchphrase tying these publications together. BCG's most recent publication, Decoding the Next Billion Customers (PDF), briefly but jauntily describes six ways that BoP consumers are different from other consumer segments, and provides a few hints about what this means for those interested in developing products for and...
Today I'd like to highlight what I see as a frequently occurring theme in BoP business models, and an element that could make it or break it for companies that look to target BoP markets. Entrepreneurship is often cited as the critical component for small and medium-scale enterprises, especially ones that employ a franchise model. Enterprises such as Scojo, Medicine Shoppe, Drishtee, HMX Sumaya, Florestas and Berni Labs are among many examples of business plans that rely on entrepreneurial individuals to take a model and make it work in their own communities.Despite this impressive list, I think what underlies some of these entrepreneurs' success is not based on ‘entrepreneurship' per se. Rather, there is another, crucial element that explains why smaller enterprises often...
Last fall, Business Strategy Review published an interesting piece by Juan Luis Martinez and Maria Carbonell called "Value at the Bottom of the Pyramid." The article, available on the journal’s web site, warrants some serious discussion, especially in light of the recent profit versus social motives debates for businesses targeting the BoP. I’m specifically thinking about microfinance institutions, where this has received a lot of media attention and heated discussion (Forbes and BusinessWeek both recently published a series of articles, available in the NextBillion Newsroom).Martinez and Carbonell’s piece, however, is not part of the polemical debate at all. They set out to refute common misconceptions about doing business with the BoP. They also propose that, by...
Codensa is a very successful utility company that serves 2.2 million customers in Colombia. It is controlled by Endesa, the largest electric utility company in Spain, which in 1997 took control of Codensa and Emgesa (this second company accounts for 21% of the generated electric capacity in Colombia).Its return over equity (that is, the rate of return over shareholders’ investments) has grown from 4% in 2003 to nearly 12% in 2006. This is a measure of the current company's profitability.Furthermore, last July, Codensa’s debt offer was oversubscribed three times, despite being in Colombian pesos rather than a more stable international currency and despite the jittery markets at the time (they still are). This was a bet the market made in favor of Codensa’s future stability and...
Acumen Fund is currently seeking highly qualified applicants for the position of India Portfolio Associate.Location: Hyderabad, IndiaAcumen Fund is a global non-profit venture capital fund serving the four billion people living on less than $4 a day. Its objective is to create a blueprint for building financially sustainable and scalable organizations that deliver affordable, critical goods and services that elevate the lives of the poor. Acumen Fund invests debt and equity in enterprises delivering critical goods and services to the poor in South Asia and East Africa. read more...
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By Ethan Arpi and Rob KatzWhile discussions of Ratan Tata's 1 lakh car - and other entrants to the ultra-cheap car market - are nothing new to NextBillion.net and many other blogs, the concept received another burst of publicity over the weekend when New York Times columnist Thomas Friedman featured it in a piece entitled No, No, No, Don't Follow Us. Friedman - whose column is syndicated in newspapers throughout the world - argues that while Americans don't occupy the moral high ground when it comes to driving, following the American model of motorization would be catastrophic for India's economy and its environment.Friedman's point is well taken: if India doesn’t leapfrog the American model, it risks choking its economy on smog and traffic. (See China; Beijing for a...
Acumen Fund is currently seeking highly qualified applicants for the position of Portfolio Associate.Location: New York, NYAcumen Fund is a global non-profit venture capital fund serving the four billion people living on less than $4 a day. Its objective is to create a blueprint for building financially sustainable and scalable organizations that deliver affordable, critical goods and services that elevate the lives of the poor. Acumen Fund invests debt and equity in enterprises delivering critical goods and services to the poor in South Asia and East Africa. read more...
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A WalMart-type logistics system, tracking every sale of every item at every outlet? Surely that's overkill for a base of the pyramid (BOP) business--or is it? Last week Julia Tran--WRI's BOP health sector specialist--and I visited Mi Farmacita, a franchise pharmacy that provides low cost, certified generic drugs and other essential services to many low income communities in Mexico. We've written previously about Mi Farmacita, which is also supported by WRI's New Ventures/Mexico enterprise development activity. The visit was intended as part of a more in-depth investigation of the need and the business opportunity in serving BOP pharmaceutical markets in Latin America, an activity we are undertaking jointly with the Inter-American Development Bank and our partners in the...
Guest blogger Dr. Anand Kumar Jaiswal is a faculty in marketing area at the Indian Institute of Management Ahmedabad, India. He received his Ph.D. from XLRI Jamshedpur. His research interests include business strategies for low-income markets, sustainable development, services management and business-to-consumer e-commerce. He has published articles in refereed journals, besides several presentations at research conferences. His latest paper, Fortune at the Bottom of the Pyramid: An Alternate Perspective, was featured on NextBillion.net here. By Professor Anand Kumar Jaiswal Prahalad’s argument is that MNCs should play a proactive and important role in tapping "base of the pyramid" (BOP) markets. However, most initiatives catering to the needs of BOP customers have come from...
Noted economist and consulting editor for The Economic Times, Swaminathan Aiyar has written an interesting article on strategy in retail markets.Aiyar argues that as Mukesh Ambani (one of the wealthiest people in the world), who is driving Reliance Industries’ foray into retail, could learn lessons from the much talked e-Choupal project of ITC. Reliance aims to invest USD 6 billion by 2011 in retail, with sales of possibly USD 25 billion, generating over 500,000 jobs directly and one million jobs indirectly. However, the launch of Reliance Fresh outlets has faced agitation from small players and is being branded in the same space as Wal-Mart.Aiyar writes:(This post continues past the break; click "Read More" to continue)read more...
Guest blogger Bill Kramer was, until recently, WRI’s Director of Education and Training for the Markets & Enterprise Program, and Deputy Director of Development Through Enterprise. He now runs Global Challenge Network, an executive education and training company. His email is wkramer@globalchallengenetwork.com. By Bill Kramer It should be a source of considerable satisfaction to WRI's Markets and Enterprise team and to the NextBillion community in general that the ideas we have all been exploring these last several years are being used as a frame of reference by senior business executives. I write this blog entry from Fontainebleau, France, at the conclusion of a one-day conference called "Understanding and Responding to Societal Expectations on Corporate...
Each year, the Acumen Fund Fellows Program provides extraordinary young professionals with a unique opportunity to use their skills to effect real social change with our portfolio organizations in Kenya, Tanzania, South Africa, India and Pakistan, and to build lasting relationships with other like-minded individuals. Joining us in September 2008, Fellows will spend one year working with our team and with local entrepreneurs, gaining intensive experience in price performance, logistics, distribution systems, scaling and innovative technology. Fellows will learn and apply these skills while enjoying an unusual level of responsibility both at Acumen Fund and within our portfolio Applications accepted online from September 17 until noon on October 24, 2007.(Click below to read more)...
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While browsing online this morning, I found a couple of new interesting ideas on the blogosphere worth mentioning on NextBillion today: The PSDBlog of the World Bank has touched the subject of biofuels (which I blogged on last week). They quote a very interesting article regarding world poverty and the increase in food prices in the world. "What do Kellogg's, Fidel Castro and Hugo Chávez all have in common? All three blame biofuels for pushing up food prices. The new issue of Newsweek breaks down components of the recent price hike." Ethan Zuckerman, author of My Heart's in Accra, also has an interesting view on the increase of food prices, specifically the cost of maize. It isn't really related to the biofuel debate, but plays more as an economic - free market...
After reading the blogpost on Construmex and productizing remittances, Roy Serventi, the President/CEO and founder of Infinity Systems International (ISI), contacted the NextBillion team. Roy, Rob Katz and I had a long talk on how ISI is also taking steps toward productizing remittances, the vast sums of money sent by immigrants to their home countries ISI has identified a unique niche market that it believes will translate into a promising business opportunity. In both the U.S. and in Mexico ISI is formalizing agreements with organizations that currently cater to or want to offer products and services to the Latino market. These include hometown community organizations, local and national money transfer, check-cashing and pay-day loan organizations, and local and national convenience...
"India may be better-known for its high-flying entrepreneurs who have turned the nation into a high-tech center and outsourcing mecca. But the still largely rural country also is gaining a name as a center for smaller-scale innovation."This came from a recent Chicago Tribune article on entrepreneurship in India. The piece continues:"In farm sheds and machine shops and on small rural plots, India's back-yard inventors are coming up with creations that their backers hope will make it big, solve a few of the world's problems, boost India's exports and continue cutting the country's dismal poverty rate." Meet some of these back-yard inventors, the founders of Indian enterprise, Conserve HRP. Conserve is a fascinating fusion of sustainable business values...