SMEs
The business of global poverty
Making business benefit the poor
Authors:
J. Emmons
Publisher:
Harvard Business School , 2007
This document discusses work from members of Harvard’s business school global poverty project (GPP). It specifically details the GPP’s claim that business could play a crucial role in reducing poverty in the twenty first century.
It argues that, by pursuing their own self-interests in opening and expanding the bottom of the pyramid (BOP) market, businesses can make a profit while serving the poorest of consumers and contributing to development. The argument follows that for business, the bulk of emerging markets worldwide is at the bottom of the pyramid so it makes good business sense, not a sense of do-gooding to go after it. Today, market forces, private-sector know-how, and grassroots initiatives such as microfinance are all being looked to as tools to alleviate poverty. Business, once viewed by many critics as part of the problem, is increasingly being called on to be part of the solution, the paper argues.
While the authors note that it is too early to declare any models runaway successes, they point to some unique ways in which multinational corporations (MNCs) and local businesses are serving the previously invisible BOP market: These include:
• Nestlé, with its "milk-district model" that encourages supporting businesses to spring up around its dairies in rural India
• CEMEX's program of affordable payments and materials that enables impoverished Mexican families to build their own housing
• Brazil, with Kodak's no-frills camera/film packages
• department store Magazine Luiza's merchandise, payment plans, and customer service, all designed to make consumers out of those outside the formal economy
