The bottom-up development perspective in Base-of-the-Pyramid Ventures
Doing business with the four billion plus poor people in the world requires a strategy which considers slum inhabitants in Colombia and small-scale farmers in Costa Rica a source of innovation, and integrates them into different business processes – from idea generation and product and service development – to production and the distribution and marketing of products and services. They are then included in the business of companies, so that “Business with four billion”, as Stuart L. Hart and Ted London call it, can take place.
But what if inclusive business means more than integration?
Does inclusive business mean that the poor are only included in “our” businesses, or should it also mean that they have their own flourishing enterprises and we become integrated in their activities? What if the poor want to play a bigger role than instruments, “included” in a process that was defined by outsiders? What if they want to define their own development and proceed with it?
Aren’t we all dreaming of a world where the poor can lift themselves out of poverty? A world where everybody can be economically active and earn enough for a dignified livelihood? We all say that we are, at least. Development actors have believed for over 30 years (some for even longer) in a situation in which poor people are no longer viewed as the target of poverty reduction efforts, but as partners in, and an asset to, the development process.
Bottom-up development approaches such as Participation, Community Driven Development, Empowerment, Asset Based Community Development, or Local Knowledge emphasise the role of the poor and see them as central to the design and implementation of the development process.
Aren’t we all dreaming of a world where the poor can lift themselves out of poverty?
Companies can learn from their experiences with the poor and apply certain strategies accordingly in their Base of the Pyramid (BoP) ventures, which my new book Putting the Poor First – based on my PhD research – analyses and demonstrates. The elements of a bottom-up development perspective applied in Base of the Pyramid Ventures can be grouped into three clear categories:
• Drivers to choose a bottom-up development perspective in BoP ventures (e.g. that products and services are more readily accepted);
• Circumstances that help or hinder the application of a bottom-up development perspective in BoP ventures (e.g. the acceptance of the company in the communities or previous experiences with poverty alleviation projects); and
• Success factors when choosing a bottom-up development perspective in BoP ventures (e.g. the importance of power structures, pluralism, and self- esteem).
For these innovation processes to be successful, companies need to put the poor first, step back and hand over at least a part of their responsibility to local partners, and finally, the target group themselves. A certain level of control may still be necessary at the beginning. But arms-length project management with intermediaries and engaging the poor comprehensively is a valid alternative, as case studies show. The more the poor are able to control their own destinies, the more efficient and effective a Base of the Pyramid Venture becomes.
However, some questions remain: Do companies need to internalise knowledge provided by bottom-up development literature or can they just engage local partners (such as NGOs) who already possess it? When engaged local partners consistently apply a bottom-up development approach and shift far greater responsibility to the poor, what sort of development will we face?
Will we see more TVs and mobile phones, or will we see improved sanitation and environmentally-friendly consumer products?
By Piera Waibel
Piera Waibel is the Global Manager for Agriculture at the Fair Labor Association. Piera’s new book Putting the Poor First offers an important insight into the bottom-up development approach for organisations looking to optimise their business model innovation processes in view of enabling “win-win” solutions at scale. Putting the Poor First comes out this month. For more information please visit the Greenleaf website, where you can pre-order your copy now and benefit from an exclusive 30% discount.