Why we need to push harder for inclusive business

Why we need to push harder for inclusive business

Great progress has been achieved since the base of the pyramid (BoP) concept appeared, aiming to realize the entrepreneurial potential of the previously ignored markets of the economically disadvantaged.

Today, it is of great satisfaction to see how governments, international organizations and civil society — along with companies and new ventures from all over the world — have adopted the concept. Some actually are endeavouring to develop strategies and management systems that bring them closer to the real needs of the underserved so they can work together to create sustainable value.

The commercialization of disruptive innovations and the creation of more inclusive business models can generate new, innovative commercial opportunities with tremendous potential to both scale laterally and “trickle up” to the top.

In fact, by developing inclusive businesses, low-income communities potentially can gain greater access to goods and services, a wider range of choices and better opportunities to improve their present and future. Companies, in turn, are exposed to new growth markets that can boost their competitiveness and capacity for innovation.

Nonetheless, despite the interesting potential of BoP business models, ensuring success in implementation has proven challenging.

Many methodological and management deficiencies still need to be addressed, such as: developing proper co-innovation processes with BoP communities; understanding and enhancing the full potential of generating social and economic value throughout the full life cycle of product and service processes; and the scaling and replication of successful pilot cases.

Pyramid 3.0

With these objectives in mind, we decided to bring together the practitioners and thought leaders of the BoP Global Network to write the book "Base of the Pyramid 3.0: Sustainable Development through Innovation and Entrepreneurship."

The new book seeks to ignite a debate on the role innovation plays in generating value at levels of the BoP. It aims to move the inclusive business agenda forward by sharing such experiences with practitioners engaged in the global commitment to improving lives at the BoP by putting forward more innovative and inclusive business models.

If the BoP 1.0 model can be summarized as “finding a fortune at the BoP," then the BoP 2.0 approach stresses the importance of co-creating products and compelling value propositions with underserved communities, innovating from the bottom-up, leapfrogging to environmentally sustainable technology and creating a dedicated set of metrics and timelines suited to the unique features of the underserved space.

Although we are still in the midst of developing the new skills, capabilities and organizational routines necessary to execute BoP 2.0, new challenges have been revealed that make it important to press forward toward a BoP 3.0.

This book aims to stretch our thinking in this direction — a path that implies proposing a transition from co-creation to open innovation, drawing on the “wisdom of the crowd” to spawn previously unimagined solutions. Indeed, participatory, grassroots innovations may take BoP business to a whole new level in the years ahead.

BoP 3.0 requires a conceptual shift, passing from standalone initiatives to innovation ecosystems, from extended distribution approaches to innovation for the last mile, from NGO engagement to cross-sector partnership networks and from poverty alleviation to sustainable development frameworks.

Amidst these evolutions, we also must emphasize the importance of integrating both environmental sustainability and a true triple-bottom-line perspective into the BoP space. Global potential also exists to use BoP business logic to incubate new models to better serve and include the underserved populations in the developed world.

The ultimate goal of this book is to move the inclusive business agenda forward and transform the entire socio-economic system in which the poor find themselves. Thus, the emphasis rests on the urgent need for scalable solutions, rather than specific pilot projects that have achieved only a certain level of impact through local implementation.

More generally, the book is an invitation to create an open debate with the practitioner community to consider what might generate a profound social transformation of the whole ecosystem, rather than just new business models or individual products that are green or socially responsible.

We hope you join us in this debate and look forward to moving the inclusive business agenda forward.