Growing Green at the Base of the Pyramid
Growing Green at the Base of the Pyramid
The Great Recession hit the global economy hard, and shows no real signs of letting up in the United States and Europe. But in the developing world -- the so-called BRIC economies of Brazil, Russia, India and China, growth is far outpacing even the United States' boom years.
At the second panel discussion of the GreenBiz Innovation Forum, Marc Gunther laid out just how much those economies are growing: China at 10 percent per year, Brazil at 8.8 percent per year, India at 7.4 percent per year, compared to just 2 percent in the United States.
Asked for examples of what kinds of businesses are thriving by focusing on the "Base of the Pyramid" (BOP) market, Gunther's panelists -- Pawan Mehra, Aron Cramer and Hunter Lovins -- cited the mobile industry, the mobile industry and the mobile industry.
"In India, the mobile industry has 500 million users, adding the equivalent of a Sprint every six months," said Pawan Mehra, the managing director of cKinetics, a "venture accelerator" focused on sustainable growth. But because the average mobile phone customer in India spends just $3 a year, it has developed a whole host of innovation throughout the ecosystem.
Mehra cited as one of the greener examples the reuse of handsets -- he said that the average handset is reused on average seven times, and that companies have sprung up to meet the demand for cheaper, reused handsets.
Aron Cramer, the CEO of BSR, cited China's mobile phone industry as another example of sustainable innovation. The state-owned telecom China Mobile, he said, is accomplishing good things for its customers as well as accomplishing nation-building in the rural parts of the country.
While China Mobile is building cell towers out in rural China, it is equipping some of its towers with solar panels, and helping to bring new businesses to the region in the process. Cramer compared the initiative to the United States in the 1950s ("When the U.S. used to build things and invest in the future," he opined), and the development of the interstate highway system.
Although the third panelist, Hunter Lovins, first cited solar power companies in Afghanistan as booming businesses, she also touted the work of Roshan a mobile phone company that is also introducing solar power to the country.
"What Roshan is doing in Afghanistan ... they have the capacity to by bringing solar power cell towers, Roshan has the capacity to introduce villages to solar power and to begin to develop that [market]," Lovins said.
Although "western" companies have had some successes in bringing sustainable technology and products to the BOP -- Gunther asked Phil Geisler, director of innovation at Unilever, to stand up in the crowd and explain its "Pureit" water purification product -- there have also been plenty of failures.
Lovins said that companies seeking to do business at the BOP have more often than not tried to impose established solutions -- ones that work for developed economies -- on developing economies, where they are often doomed to fail.
"One of the definitions of the [global] South is 'No Spare Parts,'" Lovins said. "Anything that requires servicing just won't work, so [companies must] deploy technologies that don't require spare parts -- technologies that are requested by the people that live there."
Cramer echoed that point by saying, "Solutions don't come from corporate headquarters in London or Atlanta -- they come from looking at how people live their lives in rural India.... It's about talking to locals and finding out what works."
This kind of collaboration is key, whether it's between a foreign company working to enter a new market or a domestic company that's seeking to expand their presence in the BOP.
Collaborations like one cited my Mehra, of the company Fabindia, which connects 40,000 traditional artisans the much larger Indian marketplace, are also starting to blossom closer to the top of the pyramid. Cramer suggested that the growth of microfinance is one that has been imported into the United States.
In closing, Hunter Lovins laid out the sustainability challenge posed by the booming BOP markets. "Most of the world needs access to what we take for granted," she said. "Forty percent doesn't have clean water, energy, sanitation, housing, food. How do we use the world's best practices in sustainable ways of meeting human desires? That's going to come more from the global South than from us telling them how to do things."