In his view, private, public and civil society organizations need to become increasingly aligned towards the common goal of addressing the complex challenges of the 21^st century, leveraging the unique access and capabilities that each sector offers. Achieving this will become even more challenging in the current context of tighter financial constraints for all parties due to the global economic uncertainty.

Bulloch also believes that in order to operate effectively with, influence and engage the private sector in a new breed of development coalitions, international NGOs will have to go through a fairly transformative change process. He identifies the emergence of three broad waves of evolution in the NGO sector:

- Wave I - “Foundation”: Early efforts to invest in raising performance levels are done on a piecemeal basis but progress is being made, the starting point of which is the recognition that money invested in building organizational competencies is an enabler and not a waste of resources.

- Wave II - “Transformation”: Change is driven by more strategic imperatives and spans the entire organization, as demonstrated by an increasing willingness to collaborate within the sector to reduce costs and improve efficiency.

- Wave III - “Collaboration”: Change is more systemic, as evidenced by a growing number of international NGOs playing a crucial role as seamless partners in a new breed of complex coalitions and hybrid business models.

The leadership of NGOs, global businesses and government will play a crucial role in navigating this complex transformation process. This paper argues that they all have a vested interest in doing so. NGOs in particular have a real opportunity to play a very important role in positively engaging with and harnessing the latent power of a private sector which is increasingly receptive to a more collaborative approach. However, to fulfill this important role they must firstly transform themselves to partner effectively as peers with their counterparts in other sectors.

Furthermore, Bulloch argues that global business needs to engage with NGOs as key stakeholders in their business whilst strengthening the development sector. The private sector must look beyond short-term shareholder value and embrace a far  broader agenda with a focus on longterm returns. Emerging markets hold the key to future growth for many multi-nationals. However, in order to achieve the required levels of stability in these markets, strong civil society and government will be key. Business has therefore a vested interest in helping to strengthen these sectors. National governments and international development agencies, which have traditionally supported discrete programs, need to play a more holistic role — investing in and supporting NGO transformation. They are also well placed to help broker new partnerships and collaborative arrangements.

For a synthesis of Accenture’s paper, see Gib Bulloch’s op-ed piece in The Times of 27 February 2009, titled Companies and NGOs have a lot to learn from each other, in which he argues: "NGO leaders need to change culture and attitudes to work closer with businesses. They need to persuade their boards, funders and supporters of the need for change. And they need to learn from the best business thinking, skills and capabilities. But it’s a two-way street. Business and the private sector have a lot to learn from NGOs."

In view of facilitating the work of business managers interested in working with development organizations, but unsure where to begin in their search for effective partners, the World Business Council for Sustainable Development (WBCSD) and the International Business Leaders Forum (IBLF) have set up an online guide, which currently profiles some 70 development actors, from bilateral donors to multilateral organizations and NGOs. Each profile includes a section entitled "Overview of the work with the private sector", which suggests avenues for collaboration, many of which look beyond philanthropy to involving companies through core business operations.

We have finished the day today with a lovely taste in our mouth. We are not just talking about the delicious meal we had for dinner but also the last panel which was amazing and kept us captivated for the better part of the evening.

Neelam Chibber, Founder Director of Industree and Raj Menon, Country Manager of InterfaceFLOR spoke at length about their businesses and how they are tackling sustainability issues in India and beyond.

This is what we call inclusive business.

Industree is a social entrepreneurship based in Bangalore supporting livelihoods of rural artisans by providing them with market access. These artisans produce contemporary products using traditional crafts and natural raw materials. Industree connects the two ends of the spectrum – the artisan and the market. Industree was founded in 1986 and currently works with more than 3000 artisans and has business relations with global entities like IKEA and InterfaceFLOR.

Industree also runs a retail store in India called Mother Earth, which offers sustainable products manufactured locally. Industree’s mission is to create a sustainable business for women in rural India by using traditional practices and local knowledge which in turn, helps the women earn a fair wage to sustain their families. Industree also arranges capacity building workshops and teaches them how to access micro-finance, enabling them to access credit at a reasonable interest rate. You may be surprised to hear that for over 40 years following India’s independence, arts and crafts were seen as cultural activities and not as a profession or livelihood by the government.

Disclaimer: The opinions shared in this blog entry are personal perspectives from the Future Leaders Team and do not express the opinions of the WBCSD or its member companies.

Background on the WBCSD Future Leaders Team

The WBCSD’s Future Leaders Team (FLT) is designed to enable future business leaders to become effective ambassadors for sustainable development through experiential learning, knowledge creation and the building of networks and skills. 

The FLT 2009, launched in March 2009, is working closely with the WBCSD Development Focus Area to explore ways to drive positive change and influence development outcomes by looking for more inclusive business models that create new revenue streams while serving the needs of low-income communities.  The first four months (March-June) were spent doing an individual project to measure and understand the way business contributes to development using the WBCSD Measuring Impact Framework. The second four months (July-October) will be spent preparing to advocate a future leaders’ business perspective on the role of business in development at the WBCSD’s Council Meeting in Washington DC in October.

The FLT is spending this week on Infosys’ campus in Bangalore, India, for their second of three meetings to reflect on the individual Measuring Impact projects, participate in a one day training workshop on stakeholder dialogue, run a future leaders dialogue, visit an inclusive business project and plan the second phase of the project. Throughout the week, the FLTs will be joined by experts from business and non-business who will share their perspectives on the role of business in development and the leadership skills needed to build a sustainable future in India and around the globe. 

Business Action for Africa (BAA) has invited a wide range of leading thinkers from business, government and the NGO community – both international and from Africa – to share their views on how to ensure the private sector continues to act as the engine room of growth and development, and the type of policies required to help businesses to manage and innovate through the crisis. Those views are compiled in the report titled From Crisis to Opportunity: Harnessing the Power of Business to Sustain Progress towards the Millennium Development Goals (pdf, 28 pages).

Business leaders featured in the report include (click here to directly access their contributions):

• Sir Mark Moody-Stuart, Chairman, Anglo American
• Miguel Veiga-Pestana, Vice-President Global External Affairs, Unilever
• Nicky Oppenheimer, Chairman, De Beers Group
• Razia Khan, Regional Head of Research, Africa, Standard Chartered Bank
• Dr. Nick Blazquez, Managing Director, Diageo Africa
• Brenda D. Colatrella, Executive Director, Corporate Responsibility & Global Policy Support, Merck & Co., Inc.
• Mark Bowman, Managing Director, SABMiller Africa

BAA is an international network of businesses and business organizations from Africa and elsewhere united by their objectives to (1) positively influence policies needed for growth and poverty reduction (2) promote a more balanced view of Africa, and (3) develop and showcase good business practice.

BAA invites the public to join the debate online. 

"God forbid that India should ever take to industrialization after the manner of the West. If an entire nation of 300 million took to similar economic exploitation, it would strip the world bare like locusts."  (Mahatma Gandhi, 1928)

The objective of this week is to understand more deeply the topic of inclusive business, by evaluating the work that we have been doing individually since we first met as Future Leaders in March at the WBCSD Liaison Delegates Meeting in Montreux. Everyone has put a lot of effort into their projects and over the next few days, we believe that there will be significant input on how to improve the WBCSD Measuring Impact Framework (MIF) and how to incorporate it into our businesses to make them more inclusive. But, what is inclusive business in any case? We understand inclusive business as a corporate that understands its impact (direct and indirect) on the environment, society and economy and adapts their business models to improve their impact not just on the bottom-line but also on society. A company that has a holistic view of itself can manage risks better and be more successful in the future.

As members of the WBCSD’s Future Leaders Team 2009, we have gathered at the Infosys campus in Bangalore (India) this week as our mid-program touch point. The campus is a visual stunner and we were told that this is now a favorite landmark among visitors to India just like the Taj Mahal. However, the Infosys campus contradicts the absolute poor infrastructure we saw on Bangalore roads. It is contradictions that we have encountered in India ever since we landed here. It is another matter that these contradictions in India seem to happily co-exist. Some of them are poor roads accommodating world class cars alongside handpulled carts, technical whizkids alongside semi-literate citizens, malls and supermarkets teeming with the new upward middle class and many people begging on the streets.

From what we have seen since we arrived Saturday night, we recognize that the magnitude of the challenge for India is tremendous. The sustainability challenge is quite complex being the largest democracy in the world and having to accommodate a diverse group of stakeholders that includes central and state government agencies, NGOs, communities, media, the poor, the middle class and the rich. India’s urbanization growth rate is neck-breaking – in 10 years over 500 million people will be living in cities, and according to the Boston Consulting Group, over 30 new cities will be added to the existing list.  Health care, education and poor infrastructure along with rampant poverty are the major challenges.

At the same time, India’s GDP has grown at an average of 8% over the last few years, it has lifted millions of people out of poverty, and it is currently home to 13 out of 58 Fortune 500 companies in BRIC countries. 90% of Indian businesses are small and medium enterprises employing over 340 million people, demonstrating the tremendous entrepreneurship and creativity in this country. Today’s newspaper headlines screamed of the budget, which is annual policy guidance by the central government. It seems all the corporate honchos are going to be in television studios debating the fiscal policies proposed. The enthusiasm it generates is on same lines as that of a soccer game in Europe or when the Red Sox play the Yankees.

Leap frog has acquired a new meaning for us as we see Indians adopting mobile phones, villagers being part of an electronic market place and Unilever transferring Indian business models to other markets.  However one could ask if these examples are that of sustainable development or simply isolated cases of innovation. The 8% GDP growth has brought in urban congestion and the poverty one sees can be disheartening but not to the many poor people we saw who seemed pretty happy with a smile permanently fixed. Traffic is unmanageable in many of the cities, and low-priced cars can lead to the congestion and thereby more GHG emissions on absolute terms. India’s share of historic blame for global warming and many other environmental problems of our world is not big, but unfortunately, we do not have the luxury of time any more. We believe that India can be a great model of sustainable development.  If we get the recipe right here it can be developed and exported to many other countries worldwide, including China.

Discussions and meetings with guest speakers lined up by our WBCSD “sustainable leaders” on day one of the agenda has brought up very interesting and diverse topics that we will drill down in detail over the next few days. First, one of the presentations gave us an overview of the study that the Indian Council for Research on International Economic Relations (ICRIER) has done on the impact of mobile phone penetration on the GDP growth in India. Mobile phone penetration has helped reduce transaction cost, decreased asymmetric information and increased economic development. However large parts of rural India still do not have access to mobile phones and coverage is limited making this a big opportunity for the future. Our speaker also saw huge potential for the mobile phone to become an electronic wallet especially for people without a bank account.

Subsequently with the case of Rojamma a village woman in Andhra Pradesh, Hindustan Unilever (HUL) explained how it is promoting health and sanitary education in remote villages and at the same time helping women to start a small business for sustainable livelihood. HUL also explained how contribution to sustainable development is now a target for top managers within the group. The session also included a representative from General Electric (GE) and he explained to us how “ecomagination” was integrated in to the GE way of doing business. However, it was evident that sustainable business was backed by a strong business case in both these organizations and while at HUL it was a bottom-up approach it was a top-down decision at GE. We wonder if going forward inclusive business will need additional measures of success, beyond traditional economically-backed business cases. According to GE it is true that technology is not the challenge to deliver a solution but the challenge was in getting the economics right.

Meanwhile we also discussed the partnership between GE and Google for developing tools to inform consumers of their energy consumption. HUL also shared an interesting example, where they found out that better access to sanitation in villages or slums improved attendance of children at the local school.  It was pointed out to us that many projects in India had been stopped / stalled over land disputes and political activism and any renewable energy policy development requires difficult discussions with landowners. It is interesting that the central government has now constituted a ministry for renewable energy.

The diverse nature of the group and the many complexities and contradictions in India make the setting absolutely engaging. Arguments and strong positions make the discussions lively and we have been always running short of time. And often we go back to the basics on questions on sustainability, inclusive business, shareholder value, politics of governments and climate change. If the first day is any indication we are all set for some serious debate for the rest of the week. 

We will keep the site updated…more tomorrow!

Disclaimer: The opinions shared in this blog entry are personal perspectives from the Future Leaders Team and do not express the opinions of the WBCSD or its member companies.

Background on the WBCSD Future Leaders Team

The WBCSD’s Future Leaders Team (FLT) is designed to enable future business leaders to become effective ambassadors for sustainable development through experiential learning, knowledge creation and the building of networks and skills. 

The FLT 2009, launched in March 2009, is working closely with the WBCSD Development Focus Area to explore ways to drive positive change and influence development outcomes by looking for more inclusive business models that create new revenue streams while serving the needs of low-income communities.  The first four months (March-June) were spent doing an individual project to measure and understand the way business contributes to development using the WBCSD Measuring Impact Framework. The second four months (July-October) will be spent preparing to advocate a future leaders’ business perspective on the role of business in development at the WBCSD’s Council Meeting in Washington DC in October.

The FLT is spending this week on Infosys’ campus in Bangalore, India, for their second of three meetings to reflect on the individual Measuring Impact projects, participate in a one day training workshop on stakeholder dialogue, run a future leaders dialogue, visit an inclusive business project and plan the second phase of the project. Throughout the week, the FLTs will be joined by experts from business and non-business who will share their perspectives on the role of business in development and the leadership skills needed to build a sustainable future in India and around the globe. 

This special issue seeks to explore as many different dimensions of the topic as possible (while focusing specifically on Latin America), broadly grouped into the following themes:

BoP and entrepreneurship (corporate and local)
- To what extent can entrepreneurship (corporate and local) support or drive BoP?
- What is the link between social entrepreneurship and BoP?

BoP and innovation
- What kind of "bottom-up" innovation might support BoP initiatives (and sustainable development)?
- What is the relationship between technological entrepreneurship and BoP?

BoP and the role of the state
- What should the role of the state be in the BoP?
- What is the message to and from policy-makers, governments, local and international funding agencies?
- What is the contribution of structural, policy-based or economic subsidies?

Local companies vs multinationals (or large companies vs SMEs)
- Some studies show that domestic (local) companies are the main BoP drivers. Is there a particular reason for that? And, along the same line, why do SMEs sometimes become the drivers of the BoP strategies? What are the institutional, strategic or managerial barriers for large companies?

Impacts of BoP strategies
- What are the (social) individual and collective impacts of BoP strategies? What could be the most suitable measuring structures?

Successes and failures of BoP initiatives
- Case studies are welcomed. Examples of both successful and unsuccessful entrepreneurial ventures are sought, preferably drawn from a variety of industries and geographical regions, and covering both small and large firms. What are the lessons learned? How do failure rates of BoP projects compare with those of other business start-ups?

Sustainability
- How can we balance poverty alleviation and stimulation of economic growth without stressing the ecosystem? What is the policy support, and how effective is it?

Contributions on other relevant topics will also be considered. Given the intended practical nature of these publications, contributions from practitioners in businesses, NGOs and government are very welcome. Theoretical papers should be between 4,000 and 6,000 words and case studies between 2,500 and 4,000 words in length. The paper submissions should follow editorial guidelines, and the submission deadline for initial expressions of interest in the form of abstracts of approximately 300 words is 16 October 2009.

More information:

Miguel Angel Gardetti
Head of the Center for Study of Corporate Sustainability & Founder and Coordinator of the Argentina Base of the Pyramid Learning Lab
Av. Córdoba 6502, 1er piso "B"
C1427BZS Buenos Aires, Argentina
Tel and Fax: +54 11 4554 9482

Microinsurance in emerging economies represents a market of great potential growth and profitability. As insurance markets in many rich countries become saturated and growth prospects limited, insurance companies are looking to new opportunities in emerging markets. In India alone, more than 250 million people are in need of microinsurance. And worldwide, the Allianz Group (Allianz), a leading global provider of insurance, banking and asset management, predicts that by 2011 the microinsurance market will double the size it was in 2008.

The Allianz Group's work on microinsurance began in early 2005, as the Management Board of Allianz in Munich , Germany, realized that the South-East Asian Tsunami of December 2004 did not leave much of an impact on the balance sheet of the company, despite being one of the worst natural catastrophes in the last 100 years. As Heinz Dollberg, head of the Asia-Pacific division of Allianz, explains, "the risks faced by the poor are much the same as those for most individuals, but research has shown that they experience those risks with greater frequency and with a relatively greater financial impact."

On a global scale, Allianz aims to reach 3 million clients with microinsurance products by the end of 2009. As Mr. Dollberg argues, while in the short-term, the scale of microinsurance will not translate directly into profits, adapting product and service offerings to the needs of the poor will help unlock the potential of this market for the future and solidify the company's presence in new markets in the medium to long term. Moreover, offering microinsurance in new markets also provides critical learnings about emerging markets and builds relationships with customers whose wealth may grow in the coming decades.

Read the full text of how Allianz is reaching out to clusters of villages across southern India, Indonesia, Egypt and soon West Africa. You can also watch a brief video of Allianz’s work in Indonesia.