NextBillion.net - Development Through Enterprise - Miscellaneous

Taking BoP Strategies To Scale Pt 4: Building New Business DNA for the BoP

Al Hammond — Wed, 07 May 2008 14:49:52 -0500

This post is the fourth in a five part series on a radical new approach to scaling BoP business models, what we call a transformative sector strategy. In this segment, I discuss the common characteristics that make BoP business models in different sectors scalable solutions.

Searching for Transformational Models in New Sectors

If building the missing infrastructure could transform rural connectivity and health care, what about access to clean drinking water, especially for smaller rural and peri-urban communities? That's a proposition that WRI and Santa Clara University's Global Social Benefit Incubator are researching. There are some promising models in the field, such as Water Health International, that are beginning to scale. There are a number of additional enterprises, five of which will be mentored intensively in this year's incubator class. There are some promising new filtering technologies that use less energy than existing technologies, as well as other interesting approaches that have yet to be applied in emerging markets; we are undertaking a detailed comparison of both existing and newer technologies.

A number of community-initiated business models have produced good results, but they aren't easily replicable and don't scale. So we are analyzing both franchising and public-private partnership business models. Many of the elements that make rural connectivity and rural health care promising appear to be present in the water sector. It is too early to say what will emerge out of the research, but the scale of the unmet need is clear - a billion people without access to clean drinking water.

And after water, why not BoP energy? Our preliminary thinking is that there at least three sub-sectors of interest: Off-grid power and lighting, from mini-hydro to LED lighting; efficiency improvements in energy-using devices, such as cook stoves and motorbikes; and locally-grown, produced, and consumed biofuels that don't compete with food. We know of prototype enterprises and projects in each sub-sector, some of them already beginning to scale. We believe that the recent, rapid evolution of technology options will continue and can be adapted for the BoP. And we know that the unmet need is very large.

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Global Poverty: More Big Business is Not the Solution

Derek Newberry — Fri, 09 May 2008 10:36:22 -0500

By most accounts, UK Prime Minister Gordon Brown is genuinely passionate about reducing global poverty.

But he is not willing to challenge the structures of the global economy that generate poverty, or the corporations that build, benefit from and maintain those structures.

Nor, apparently, is he immune to gimmicky notions of corporate leadership to support development, or the lure of high-profile summits to shed light on new plans to do -- very little.

Thus, earlier this week the UK was treated to the spectacle of the Business Call to Action summit, which Brown's office co-sponsored with the UN Development Program. More than 80 CEOs of large companies gathered with Brown and other luminaries to discuss how they could help meet the Millennium Development Goals, which aspire to reduce global poverty by half by 2015. Roughly two dozen of these CEOs -- from Anglo American, Bechtel, Citigroup, Coca-Cola, De Beers, Diageo, FedEx, Goldman Sachs, GE, Merck, Microsoft, SAB Miller, Wal-Mart and others -- have signed the Business Call to Action, which states, "as leaders from the private sector, we declare our commitment to meet this development emergency."

GEM Report on Women and Entrepreneurship Released

Derek Newberry — Thu, 08 May 2008 10:40:56 -0500

WELLESLEY, Mass., May 2 /PRNewswire-USNewswire/ --

Women's entrepreneurship matters -- women are creating and running businesses around the world, contributing to economies that represent more than 70% of the world's population and 93% of global GDP (2007). Women's entrepreneurship is a key contributor to economic growth in low/middle income countries, particularly in Latin America and the Caribbean according to The Global Entrepreneurship Monitor (GEM) 2007 Report on Women and Entrepreneurship released today by The Center for Women's Leadership at Babson College.

View the report at: www.gemconsortium.org/about.aspx?page=special_topic_women

A gender gap persists -- both significant and systematic -- in new venture creation and business ownership. The gender difference is more obvious in high-income countries but exists throughout all regions, with Europe and Asia showing a greater gap than Latin America and the Caribbean.

GEM data suggests that women who are employed and have built a social network of entrepreneurs are more likely to become entrepreneurs. The social and economic benefits of working are driving women's entrepreneurship more than increased education or household income.

Women's level of optimism and self-confidence in starting a business is highly influenced by the culture and social norms of their native countries. Women entrepreneurs have less fear of failure than women who are not involved in entrepreneurial activity; yet they express a greater fear of business failure than men starting businesses.

"Women's entrepreneurship varies widely across the globe," says Babson Professor Elaine I. Allen, principal researcher of the study, "It's a surprise that developing countries in Eastern Europe have low rates of women's entrepreneurship, closely resembling their highly developed European neighbors, while the countries of Latin America and the Caribbean have rates of women's entrepreneurship two and three times higher."

The Global Entrepreneurship Monitor (GEM) 2007 Report on Women and Entrepreneurship, based on data collected through the Global Entrepreneurship Research Association (GERA), directed by Babson College, and is a comprehensive and up-to-date study of the role played by women in entrepreneurial activity across the world economy.

Announcement: New Ventures Call for SME Business Plans

Ella Delio — Wed, 07 May 2008 12:34:51 -0500

Do you run a small-to-medium size enterprise operating in India, Indonesia, China, Brazil or Mexico? Does your company have an innovative business model that delivers strong environmental and social benefits? Are you seeking debt or equity capital in order to grow your business?

If so, apply for the New Ventures program in these countries. The New Ventures program of the World Resources Institute supports the growth of businesses that deliver social and environmental benefits by providing business advisory services and access to capital. Enterprises that have been supported by New Ventures have raised $120M in capital. Moreover, 98% of New Ventures enterprises are still in operation.

The application deadlines for each country are:

India: May 15th
Indonesia: May 16th
Mexico: June 30th
China: TBD
Brazil: TBD

For more information and access to the application form, please visit the specific country websites. For an English language version of the Indonesia application form, please contact slall@wri.org.

Job: Senior Researcher, Institute for Financial Management and Research

Derek Newberry — Tue, 06 May 2008 16:03:55 -0500

Position: Senior Researcher, BoP Energy Sector Analysis, Institute for Financial Management and Research (IFMR)

Location: Chennai, India

Organization: The Centre for Development Finance of the IFMR is a development economics research and action centre. It was formally established in February 2006 with a mission to support development finance - the conversion of finance into development. We primarily focus on sustainable models for financing infrastructure and services, as these are essential inputs into any vision of equitable development.

Description: The senior researcher will be responsible for research and related activities analyzing the Base of the Pyramid energy sector in India. The senior researcher would be expected to undertake a comprehensive study to quantify BoP energy needs and existing uses, conduct stakeholder and expert interviews, conduct focus groups, and perform a competitive analysis of emerging and established off-grid and household energy technologies in order to develop a strategy and series of projects for improving access to clean, sustainable energy at the BoP.

For more information, see the full job description. To apply, send a cover letter, writing sample, and resume to shaanti.kapila@ifmr.ac.in.

“It’s Now the Era of Micro-Innovators”

Francisco Noguera — Mon, 05 May 2008 08:59:43 -0500

For more than a decade now, Coimbatore Krishnarao Prahalad, or C. K. Prahalad, has been the best-known management guru from India. Professor of Strategy at the Ross School of Business, University of Michigan, Prahalad shot to fame with his book Competing for the Future, which he co-authored with Gary Hamel. Since then, Prahalad, who studied and taught at IIM Ahmedabad before moving (back) to the US to join the University of Michigan as Assistant Professor, has written four more books, including the latest The New Age of Innovation, whose global release took place on April 17 in Delhi. In the book, co-authored with colleague M. S. Krishnan (he's Professor of Business Information and Technology), Prahalad, 57, argues that "we have finally reached the point where the confluence of connectivity, digitization, and the convergence of industry and technology boundaries are creating a new dynamic between consumers and the firm". "Traditionally," Prahalad and Krishnan write, "we have assumed that the firm creates value and exchanges it with its consumers. This firm- and product-centric view is being rapidly replaced by a personalised experience and a cocreation view of value." The authors use a shorthand ("it's not an equation," Krishnan clarifies) N=1 and R=G to drive home what they call the two pillars of the next generation of innovations, where N=1 stands for one consumer experience at a time, and R=G for all the resources that need to be tapped from multiple vendors and around the world to satisfy the experiences of one consumer at a time.

A day before the book was launched in Delhi, Prahalad spoke to BT's R. Sridharan on innovation and his own intellectual journey over the years.

Africa Investment Horizons

Rob Katz — Fri, 02 May 2008 12:03:33 -0500

As I turned the corner, it appeared almost out of nowhere - a monument to the successes (and failures) of capitalism - the New York Stock Exchange. I had ventured downtown to attend the premiere of Carol Pineau's new documentary, Africa Investment Horizons, which was being screened inside the Exchange. As first impressions go, you could do no better: it's impossible not to take Africa's investment potential seriously when you're talking about it inside the center of the financial universe.

Even the security line was interesting: long but vibrant, an impromptu salon of Africanists, investors, expatriates and activists, all of whom share a passion for the business of Africa. Not surprisingly, I saw a number of base of the pyramid and NextBillion allies: Liz Wald, of EDI Imports; Emeka Okafor, of TED and Timbuktu Chronicles fame; Joy Sun, COO of Market for Change. This was going to be a good event.

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Large Companies Take the Lead on Capacity Building for SMEs

Derek Newberry — Thu, 01 May 2008 09:27:01 -0500

Geneva, 28 April 2008 - Small and medium enterprises (SMEs) make up over 95% of private sector firms, making them the backbone of global economic activity. They have a key role to play in poverty alleviation by promoting economic growth that is inclusive and reaches the majority of people.

SMEs are also an important source of local supply and service provision for global companies. So how are some of the world's leading corporations building relationships with SMEs in the developing world? That's what a group of future leaders set out to explore.

Over the course of a year, the World Business Council for Sustainable Development's (WBCSD) engages high-potential future leaders in a long-term campaign to move sustainable development to the center of business thinking. The development workstream of the 2007 Future Leaders Team surveyed some 50 representatives from 12 WBCSD member companies and conducted informal interviews with SMEs in Brazil, China, Mexico and South Africa.

The team's informal study reveals a gap in perceptions about the relationship between companies and SMEs, as well as differing opinions about the success of the relationship.

MNC to BoP: How Entrepreneurs Make The Link

Derek Newberry — Wed, 30 Apr 2008 11:24:47 -0500

We blog frequently on this site about the importance of large multi-nationals finding ways to tap into BoP markets. This often comes in the form of discussions on reaching the BoP directly as consumers (ie projects like the OLPC or microcredit initiatives).

But what about small and medium enterprises as BoP intermediaries? Those of us who support these enterprises in our work are familiar with the list of benefits often attributed to SMEs - they raise employment, they are correlated with a reduction in income inequality, they reduce the size of the informal economy.... - but what about SMEs as middlemen for engagements between large corporations and the BoP?

The WBCSD explores exactly this topic in a recently published informal survey of some of its member companies and SMEs in their supply chains. According to WBCSD, SMEs "usually have extensive local knowledge of resources, supply patterns and purchasing trends."

Their competitive advantage is an ability to quickly and efficiently innovate new technologies and services that meet the specific needs of BoP markets in different regions. New Ventures enterprise Big Tree Farms is an example of this in reverse, where they are offering Whole Foods value as a partner by supplying exclusive access to authentic Indonesian foods. In other words, SMEs are a perfect channel for MNCs based in Europe and the US to intelligently connect with new markets and producers in emerging economies.

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Job: Gray Matters Capital Foundation, Program Officer

Francisco Noguera — Tue, 29 Apr 2008 15:17:19 -0500

Location: Atlanta, Georgia

Organization: Gray Matters Capital Foundation is a charitable arm of Gray Ghost Ventures, a social investment company that seeks to invest in visionary people, with an emphasis on microfinance and education. Since 1996, Gray Ghost Ventures has worked to foster strategic innovation by incubating and investing in enterprises and tools to provide market-based solutions to social issues.

Through the initiatives of its charitable foundations, The Rockdale Foundation and Gray Matters Capital Foundation and through its investment activities Gray Ghost Ventures has improved capacity of the microfinance industry in the Arab world, supported successful reform efforts in the Atlanta Public Schools, created the first privately-held global microfinance investment portfolio and social venture capital fund, offering both financial and social returns. Gray Ghost Ventures seeks to expand the mission of its charitable foundations and its social investing in the area of expanding the access and quality of primary and secondary education to the poor in developing countries.

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