1st Edition

Sustainability Challenges and Solutions at the Base of the Pyramid Business, Technology and the Poor

Edited By Prabhu Kandachar, Minna Halme Copyright 2008

    Around the turn of the millennium it had become painfully evident that development aid, charity or "global business-as-usual" were not going to be the mechanisms to alleviate global poverty. Today, there is little dispute that poverty remains the most pressing global problem calling for innovative solutions. One recent strategy is the Base of the Pyramid (BoP) concept developed by Prahalad and Hart, which relies on entrepreneurial activity tapping into the previously ignored markets of the economically most disadvantaged. It is a process requiring innovations in several disciplines: technological, social and business.This book covers a number of areas. First, much of the current BoP discussion emphasises targeting products to the needs of the poor. But do we actually know what the real needs of the poor are?

     This book takes a bottom-up human-centred approach and examines examples that truly engage the poor in BoP product and service development. What types of needs assessment methodologies are indicated considering the cultural differences in BoP countries? Are the existing methodologies adequate? Do they need to be redefined and redeveloped?

    Second, the book considers how we can balance poverty alleviation and stimulate economic growth without stressing the ecosystem. Tragically, the poor are hardest hit by the adverse effects of environmental deterioration such as water shortages, climate change or the destruction of habitats. While the economic welfare of the poor is critical, the BoP approach must balance its inherent paradox of encouraging greater consumption while avoiding further pressures on environmental sustainability. The link between the BoP approach and sustainable development is a key feature of this book.

    Third, it looks at innovation and asks what kinds of"bottom-up" innovation (open source, technological, social and business) support BoP initiatives (and sustainable development)?Fourth, the book deals with the relationship between development assistance and BoP. Is a BoP strategy the antithesis to development aid or can these two co-exist or even complement each other?Finally, the book raises questions about the relationship between corporate responsibility and BoP. Is BoP a new form of corporate neo-colonialism or a new form of corporate responsibility?

    Although the BoP concept has unleashed an extensive and generally enthusiastic response from academics, businesses, NGOs and governments, the knowledge domain around this concept is still in the early stages of development. This book addresses that need with a focus on the needs of the end-users – the poor – as a starting point for BoP products and innovations. With contributions from both supporters and critics, it provides a treasure trove of global knowledge on how the concept has developed, what its successes and failures have been and what promise it holds as a long-term strategy for alleviating poverty and tackling global sustainability.

    Foreword Stuart L. Hart  Introduction. Farewell to pyramids: how can business and technology help to eradicate poverty? Prabhu Kandachar, Delft University of Technology, The Netherlands, and Minna Halme, Helsinki School of Economics, Finland  Part I. Inclusive markets and BoP strategies1. Understanding the markets of the poor: a market system approach to inclusive business modelsChristina Gradl, Emergia Institute/Martin-Luther-Universität Halle-Wittenberg, Germany, and Sahba Sobhani, Afke Bootsman and Austine Gasnier, United Nations Development Programme2. Lights on or trade off? Can base-of-the-pyramid approaches deliver solutions to energy poverty?Emma Wilson, Business and Sustainable Development Programme, International Institute for Environment and Development (IIED), Lyuba Zarsky, Monterey Institute for International Studies, Brian Shaad, Partnerships in Development, Ltd, and Ben Bundock, freelaPart II. Local enterprises at the BoP: cooperative efforts3. WIZZIT: mobile banking for the poor in South AfricaBrian Richardson and Nicolas Callegari, WIZZIT South Africa4. The GP Community Information Centre: helping the poor through technologyA.H.M. Sultanur Reza, Head of Community Information Centre, Grameenphone, Bangladesh5. Edenor SA: energy and development for the base of the pyramidMiguel Angel Gardetti, Centre for Study of Corporate Sustainability, Argentina; Argentina Base of the Pyramid Learning Lab, and Ma Griselda Lassaga, Centre for Study of Corporate Sustainability, Argentina6. Pro-poor enterprises and the base of the pyramid concept: learning from natural plant product ventures in South AfricaCori Ham and Wolfgang Thomas, Stellenbosch University, South Africa7. Integrating poverty reduction and environmental protection among BoP producers: Van Chang craft village in VietnamNonita T. Yap, University of Guelph, Canada8. The challenges and opportunities of creating sustainable shared values at the base of the pyramid: cases from sub-Saharan AfricaSamuel Petros Sebhatu, CTF; Service Research Centre, Karlstad University9. SEWA members: wheels of the pyramid. A case studyReema Nanavaty, Self Employed Women's Association, India10. Reutilisation of glass residues and social and environmental sustainability in BrasíliaAdriana Villela, Leila Chalub Martins, Maria de Fatima Makiuchi and Donald Sawyer, University of Brasilia, Brazil11. Sustainable solid waste management using a base-of-the-pyramid approachJohn Stutz, Tellus Institute, USA12. Small is beautiful: solar product and market development should be scaled to the actual needs of end-users in the developing worldK.M. Arkesteijn and A.E. Maaskant, Free Energy Europe, The Netherlands, and P. Steemers, Umeme Jua LtdPart III. Are BoP consumers and citizens included?13. Consumer integration into innovation processes: a new approach for creating and enhancing innovations for the base of the pyramid (BoP)?Aline Krämer and Frank-Martin Belz, Technische Universität München, Germany14. Research methods for subsistence marketplacesMadhu Viswanathan, Roland Gau and Avinish Chaturvedi, University of Illinois at Urbana-Champaign, USA15. Investments at the base of the pyramid: reducing poverty through sustainable asset developmentJanet Boguslaw, Heller School for Social Policy and Management, Brandeis University, USA, and Mary Ellen Boyle, Clark University Graduate School of Management, USAPart IV. Capabilities, opportunities and challenges for developing BoP business by MNCs16. Empowering creativity: a design-led innovation experience based on value co-creation and user insightsSimona Rocchi and Yasushi Kusume, Philips Design, The Netherlands17. Affordable communication for rural communitiesMika Skarp and Raj Bansal, Nokia Siemens Networks, and Raimo Lovio and Minna Halme, Helsinki School of Economics, Finland18. Understanding business models at the BOP: lessons learned from two South American utility companiesJuliana Mutis, Universitat Politècnica de Catalunya (UPC), and Joan Enric Ricart, IESE Business School, University of Navarra, Spain19. Finding value and sustainability at the base of the pyramidNaomi Wynburne and Rosalind Wilson, Emerging Markets Group (EMG) Ltd20. Fortifying the business model: the case of Tetra Pak and the Nasarawa State school feeding programme in NigeriaAileen Ionescu-Somers and Ulrich Steger, Forum for Corporate Sustainability Management, IMD21. Building dynamic capabilities for the base of the pyramid: a closer look at firm practicesPatrick Vermeulen, Judith Bertisen and Jac Geurts, Tilburg University, The Netherlands22. Opportunities and challenges for multinational corporations at the base of the pyramidChristine Keating and Tara Schmidt, London Business School, UKPart V. Sustainability challenges and solutions23. Transforming innovation and development practice in the Global South? Myths, realities, and the prospects for base-of-the-pyramid approachesJames T. Murphy, Clark University, USA24. The environmental (un)sustainability of the base-of-the-pyramid (BoP) philosophy: a governance perspectiveFrank Wijen, Rotterdam School of Management, Erasmus University, The Netherlands25. Sustainable development at the BOP: on integrated approaches beyond trade-off thinkingRüdiger Hahn, Heinrich-Heine-Universität Düsseldorf, Germany26. When CSR Met BoP: ethical concerns at the base of the pyramidD. Kirk Davidson, Mount St Mary's University, USA27. Towards "Human Development through the Market": a comparative review of business approaches benefiting low-income markets from a sustainable consumption and production perspectiveBurcu Tunçer, Fisseha Tessema, Martin Herrndorf and Nadine Pratt, UNEP/Wuppertal Institute Collaborating Centre on Sustainable Consumption and Production (CSCP), Germany, and Martin Herrndorf, University of St Gallen, Switzerland


    Minna Halme, Prabhu Kandachar

    Tackling the issue of poverty on a global scale, this title provides an in depth look at the requirement to consider the needs of the poor in developing products and services. The base of the pyramid (BoP) approach adopted by the authors has allowed them to investigate the markets previously ignored – those of the most disadvantaged economically. Presenting an objective review of the subject, this title contains detailed contributions from both supporters and critics of the BoP approach, suggesting not just answers to the problems, but raising vital questions regarding this new approach to sustainable development. - The Environmentalist 89 (7 December 2009)