Understanding Existing Enterprises and Institutions Internationally

Though I have some background in international development and know many of the key players and stakeholders, crossing over to the business realm of sustainable development level brings a new challenge.  Not unlike visiting a foreign country for the first time, there is a new language and culture to learn.  There are new laws and often there is not a clear road map for finding your way.

For the entrepreneur passionate about making a difference in the world, the encounter of these obstacles only add to the adventure.  Such is the case for Caroline Delaire, a PhD candidate at the University of California Berkeley who is working on a solution that could end the largest mass poisoning in history. 

“Nearly 60 million people in Bangladesh and West Bengal, India have to rely on arsenic-contaminated groundwater for their basic needs.” According to a bulletin of the World Health Organization.

Professor Shok Gadgil’s water group at Berkeley has invented ElectroChemical Arsenic Redemtion (ECAR), which is designed to provide locally affordable arsenic-safe water at the community level.  Caroline’s quest now is to study the new technology and better understand distribution strategies to maximize the impact of ECAR in the field.

According to an article in the Harvard Business Review on How to Design a Winning Business Model the task that lies ahead of Caroline includes understanding two main factors: the customer and their perceptions of this product and the way it is presented; and the sphere of competitors and institutions which surround the customers and this new innovation.

On the customer perception front, Caroline is working on marketing strategies for the social understanding and acceptance that is needed.  She is also looking further into the cultural ramifications that may arise due to the potential disruption of current prestige that is connected to communities and individuals that own wells and have access to water. 

In the sphere of institutions, partnerships with local schools are being established to teach children the importance of clean water to health — it seems Caroline is off to a good start.  But I’m interested in what other institutions might be of resource and support to her in her efforts.  This question led me to embark on researching players and stakeholders that are at work in the developing world.

Since I have not yet found one central location for information and resources, this blog is also dedicated to creating a platform for the ongoing collection of resources for further investigation as I dive deeper into values, value creation and business models. 

Though this list is not currently exhaustive, I will continue to add to it throughout the term.   I welcome your input by suggesting links that will further provide a broad base of understanding of who the existing enterprises and institutions are that have a significant role in the spear of sustainable international development particularly in Africa.

=====  RESOURCE LINKS  =====

BANKS

African Development Bank Group

Mission: to contribute to the sustainable economic development and social progress of African countries.

International Bank for Reconstruction and Development (IBRD)

Lends to governments of middle-income and creditworthy low-income countries.

Mission: to reduce poverty in middle-income and creditworthy poorer countries by promoting sustainable development through loans, guarantees, risk management products, and analytical and advisory services.  Structured like a cooperative owned and operated for the benefit of 188 [developing] countries, it is the original institution of the World Bank Group.

International Centre for Settlement of Investment Disputes (ICSID)

Provides international facilities for conciliation and arbitration of investment disputes and member of the World Bank Group.

International Development Association (IDA)

The World Bank’s Fund for the Poorest

Provides interest-free loans—called credits— and grants to governments of the poorest countries.  A member of the World Bank Group.

International Finance Corporation (IFC)

Provides loans, equity and technical assistance to stimulate private sector investment in developing countries.  A member of the World Bank Group.

Multilateral Investment Guarantee Agency (MIGA)

Provides guarantees against losses caused by non-commercial risks to investors in developing countries.

Mission: to promote foreign direct investment (FDI) into developing countries to help support economic growth, reduce poverty, and improve people's lives.

A member of the World Bank Group.

World Bank Group

Working for a World Free of Poverty

Five Agencies, One Group

BOTTOM OF THE PYRAMID

Aspen Network of Development Entrepreneur

The Aspen Institute is an educational and policy studies organization based in Washington, DC.

Mission: to foster leadership based on enduring values and to provide a nonpartisan venue for dealing with critical issues.

United Nations Development Program (UNDP)

Empowered lives. Resilient nations.

Helps developing countries attract and use aid effectively. They encourage the protection of human rights and help in the following areas: fighting poverty, building democratic societies, preventing crisis, enabling recovery, protecting the environment, halting and reversing HIV/AIDS, empowering women and growing national capacity (capacity development).

World Health Organization

WHO is the directing and coordinating authority for health within the United Nations system. It is responsible for providing leadership on global health matters, shaping the health research agenda, setting norms and standards, articulating evidence-based policy options, providing technical support to countries and monitoring and assessing health trends.

World Resource Institute

Working at the intersection of environment and human need

Mission: to move human society to live in ways that protect Earth’s environment and its capacity to provide for the needs and aspirations of current and future generations.

CONFERENCES

Growing SMEs

Is an international conference exploring the latest trends in developing, growing and financing Small and Medium Enterprises (SMEs) in emerging markets.

RIO+20

United Nations Conference on Sustainable Development

World Domination Summit
The World Domination Summit (WDS) is a gathering of creative, interesting people from all over the world. Every summer, thousands of people travel to Portland, Oregon for an immersive experience in life, work, and travel.

FUNDS

Acumen Fund

Mission: to create a world beyond poverty by investing in social enterprises, emerging leaders, and breakthrough ideas.

Aspen Network of Development Entrepreneurs: Capacity Development Fund

IMPORTANT & INTERSTING DOCUMENTS
$100 Start-Up
How to lead a life of adventure, meaning and purpose – and earn a good living.

Sustainable Development Report on Africa

The Next 4 Billion

Market Size and Business Strategy at the Base of the Pyramid.

Discussions of base of the economic pyramid (BOP) markets have, until now, relied principally on business case studies and rough estimates of market size. The Next 4 Billion uses previously unreleased data to measure market opportunity at the BOP.

Voices of the Entrepreneur  

This report highlights the experience of 32 New Ventures entrepreneurs and provides valuable insights into the challenges that hinder the growth of environmental enterprises in emerging markets. It also illustrates how business accelerators like New Ventures can help them scale their small businesses, with a recognition and call for more support to help move the environmental entrepreneurship industry forward.

NETWORKING

BNI

Local Business – Global Network

The mission of BNI is to help members increase their business through a structured, positive, and professional "word-of-mouth" program that enables them to develop long-term, meaningful relationships with quality business professionals.

International Business Leaders Forum

Redefining Growth for a Sustainable World

Is an independent, global members organization of over 150 leading multinational companies. We work across the sectors of business, governments and civil society, focusing on critical sustainability, growth and leadership issues.

International Chamber of Commerce

The worlds business organization

Next Billion

Development through enterprise

Mission: NextBillion.net is a website and blog bringing together the community of business leaders, social entrepreneurs, NGOs, policy makers and academics who want to explore the connection between development and enterprise. It is a discussion forum, networking space and knowledge base for individuals and organizations interested in the "next billion". Our goal is to highlight the development and implementation of business strategies that open opportunities and improve the lives of the world's approximately 4 billion low-income producers and consumers.

World Business and Development Awards

The first global business awards to recognize the crucial role of the private sector, large and small, in implementing the millennium goals.

NEWS & BLOGS

AllAfrica.com

A voice of, by and about Africa

Emerging Markets

News, analysis and opinion

Environmental Leader

Environmental & Energy Management News

Fast Company

Most Innovative Companies: Co.Design Co.Create Co.Exist Co.Lead

Forbes

Information for the World’s Business Leaders

Gifford Pichot's BlogThe Pinchot Perspective: In search of a future worth living

Green Biz

Defining and accelerating the business of sustainability

Huffington Post – Social Entrepreneurship

In Partnership with the Schwab Foundation for Social Entrepreneurship

Stanford Social Innovation Review

Informing and Inspiring Leaders of Social Change

Sustainable Brands

The Bride to Better Brands

The New York Times/Business

Enhancing society by creating, collecting and distributing high-quality news and information.

Triple Pundit

People, Planet, Profit

NGOs & NONPROFITS

Kick Start

Handouts will not solve poverty

Mission: to lift millions of people in Africa out of poverty, quickly, cost-effectively and sustainably.

Mercy Corps

Mission: Alleviate suffering, poverty and oppression by helping people build secure, productive and just communities.

New Ventures

Entrepreneurship. Environment. Emerging Markets.

The mission of New Ventures is to empower environmental entrepreneurs in emerging markets to develop market-based solutions that protect Earth’s environment and its capacity to provide for current and future generations.

Sustainable Development Africa

Sustainable Development Africa is a Private Organization set up to promote sustainable economic growth in Africa through, technology transfer, education, collaboration and partnership.

Techno Serve

Business Solutions to Poverty

Mission: to works with enterprising people in the developing world to build competitive farms, businesses and industries.

Mental Models = Sustainable Development

I really enjoyed our reading this week on Challenges for the 21^st Century.  It got me thinking about the connection of greenhouse gas emissions and developing nations.  Figure 15.4 in Macro Economics in Context shows the direct connection between GDP and CO2.

Expanding further on the overall environmental impact of each income class the authors then go on to suggest a course of action.

“Each group must approach environmental sustainability with different objectives.  For the lower-income group, the focus must be on improving material living standards and expanding options while taking advantage of environmentally friendly technologies.  The challenge for the middle-income group is to keep overall environmental impacts per capita relatively stable by pursuing a development path that avoids a reliance on fossil fuels, disposable products, and ever increasing levels of material consumption.  Finally, the high-income group must find a way to reduce environmental impacts per capita through technological improvements, intelligently designed policies and changes in lifestyle aspirations.”

Reading this I realize this is more of a “ . . . yes, and . . .” situation for the lower income groups (developing nations) meaning that really all of the above listed items in rank priority apply to them.  

The first objective of improving material living standards is directly tied to raising GDP in these countries.  In one of Norm’s posts titled “Week Demand in Europe and US is Slowing Growth in Developing Countries” he sites an article that links the declining economies of these developed countries to the GDP health of developing nations. 

Let me see if I understand this correctly:



Though there had been some thought that the current economic crisis might give way to the opportunity for emerging leaders to arise from the developing world – as of late this perspective has all but disappeared and become quite the opposite.  They are thought to be the “victims of the Western slowdown.”

The article goes on to say that, “The [GDP] results suggest trouble ahead for emerging economies, with banks in Asia and Latin America showing deeper caution, which can lead to weaker lending.”

Hum . . . so where might the leverage points be?  The thing that stand out to me is that Material and Financial Aspirations (though this is a mental model and mental models are the hardest to change) may actually be the best leverage point.  And possibly where all nations need to start.

What other variable might be injected into the system that would bring a greater state of wellbeing?  What if we where able to turn the GDP for Developing Nations apart from the impact Western economies are having on them?

This report announces a new initiative to boost sustainable business in developing countries with a 3.2 million Euro budget.  The Rio+20 report on "The Future We Want" outlines specific goals, measures and presents a plea for others to join in the effort.

 "We call on all countries to prioritize sustainable development in the allocation
of resources in accordance with national priorities and needs, and we recognize the
crucial importance of enhancing financial support from all sources for sustainable
development for all countries, in particular developing countries."

Though I would agree this report is encouraging to see the intent of collaborative effort to leverage change the thing that disturbs me a little is the intangible nature of what each of these countries on their own will be doing to effectually innovate sustainable systems with the resources they already have.

It is much easier to ask for a hand out than take full responsibility of the situation you find yourself in, to "be the board" if you will and consider why certain circumstances are presenting themselves and what adjustment might one make to leverage the power we each have to make decisions.  I'm not trying to be cold and heartless here but want to highlight the importance individual reasonability plays in the system.  How much, all the more, would nations and private investors from the North want to support sustainable development in a given nation if they see that nations going all out to "do for themselves."   And some countries are!

Overall however, to me this comes back to a international culture that has been created and that needs to be recreated with a new mindset -- yes, we are back to the mental model.  A culture that is growing but that needs to be further fostered by each of us.  A culture that closes the door on escapes such as blame, self pity and victimization,  and sits with the way things are . . . choosing to engage with the world, take responsibility, initiative and discover how we might redesign the systems we operate in, including our material and financial aspirations.

International Trade – Investigating a Potential Business Model

In my research on poverty I came across a poverty alleviation business model that is most commonly referred to as the BoP Perspective or BoP Ventures.  It was developed with the idea that new market entry strategies are needed, particularly in developing nations where there are large informal markets and implementing traditional formal business models create a host of socio-economic issues.

BoP stands for the Bottom of the Pyramid and refers to the 2/3 world or the impoverished population of the world that lives on the least amount of income.  Though there is varying thought as to where the income line is draw to say that you fit into this category it is clear that we are talking about the population of the world that is making $1-2 dollars a day or slightly more.  If that line is draw at $10 a day, as I mentioned in my last blog, that would account for 80% of the world’s population . . . so we are talking about a HUGE base.

The BoP model focuses on mutual value creation. It is a revenue generating enterprise that sells to, or produce goods for the poor.  It holds the following overarching measurement of success:

The greater the ability of the venture to meet the needs of the poor, the greater the economic return to the venture, the greater the venture.

This reminded me of a quote I heard from, I believe it was Henry Pinchot, Gifford’s father that said something to the effect of “Do the greatest good for the greatest amount of people for the greatest amount of time.”

BoP ventures have two main approaches as seen here:

The above is an excerpt from Ted London’s working paper on BoP Perspective on Poverty Alleviation.  It was a rich resource for understanding the fundamentals of this approach.

An article published call The Fortune at the Bottom of the Pyramid is thought to have provided inspiration to this BoP approach.  Since the publishing of the article a book with the same name has been released.

There are six BoP principles.  In more or less my own words, they are as follows:

DESIGN

1.    External Participation

Key Idea: Understand, leverage and build on existing social frameworks – partnership with “social embeddedness or “native capability”

Unique Approach: Non-local participation is involved which differs from Micro- and Small-Enterprise Development.

Measurement of Success:  A new non-locally owned or managed revenue-generation venture begins to serve BoP markets.

2.    Co-Creation

Key Idea: BoP active participation in designing the business model and conceptualizing any technological solutions.

Unique Approach: Each model is tailor made for the local BoP vs. a corporate or development sector strategy that relies on pre-existing “Western” business models and technologies that are brought into new market environments.

Measurement of Success:  The voices of the BoP are incorporated into the venture design.

IMPLEMENTATION

3.    Connecting Local with Non-Local

Key Idea: BoP products or consumers are connected to non-local markets that previously they were not able to access.

Unique Approach: Local intellect, perspectives and experience are engaged to create a new innovative venture with mutual benefits vs. being solely focused on creating jobs for those at the BoP.

Measurement of Success: Products/services from BoP reach non-local markets or non-local products/services reach BoP markets.

4.    Patient Innovation

Key Idea: The business model has a long-term orientation with the patience to scale only after demonstrating success.

Unique Approach: Starts small and scales based on success vs. immediate large-scale implementation with related economic returns or societal impacts.

Measurement of Success: Finances and resources are available to support the long-term objectives that are not strictly tied to short-term performance goals.

PERFORMANCE

5.    Self-Financed Growth

Key Idea: Profits from competitive advantage are the primary source of long-term growth of the business.

Unique Approach: The goal is to generate competitive advantage for a specific venture vs. dominating a particular industry.

Measurement of Success: Competitive advantage is achieved based on maintaining mutually beneficial partnerships with local entities.

6.    Focusing on What is “Right” at the BoP

Key Idea: The idea that there is intrinsic value and rationale to the informal economy and this undergirds the business strategy.

Unique Approach: The goal is not necessarily to formalize the informal market vs. approaching the venture with initiatives of creating an environment for formal economic growth.

Measurement of Success: Distinctive leverage points are identified by the BoP venture and it’s partners that enhance resources and capacities that currently exist at the BoP.

I would like to suggest that there is one more category and two more principles that need to be more directly stated to ensure the long-term mutual benefit of a BoP venture partnership.

EVALUATION

7.    Environmental Impact

Key Idea: Sustainable environmental practices are instituted to ensure the long-term benefit of the partnership.

Unique Approach: Zero impact practices are imbedded in the DNA of the business model vs. approaching resources with the idea that there is an unlimited supply and that waste has no residual effect on the environment.

Measurement of Success: Power, water and resources used or consumed are from renewable sources and result in zero waste.

8.    Social Justice

Key Idea: Human rights and principles of equality and dignity are engrained and promoted within the strategy of the venture.

Unique Approach: Local partners are deemed as equal collaborative partners with the focus on how we can help each other.

Measurement of Success: Fair trade principle are observed and the venture measurably narrows the gap of disparity within the local economy.

In Norms article Chocolate Versus Cocoa Will Reduce Poverty In Africa he shares a link to an article that argues that developing nations such that are in Africa must move up the value added chain by producing higher value commodities. 

While it may be true you can sell chocolate for more than coco and clothing for more than cotton, I’m not convinced that producing more processed goods for the sole motivation of profit is the best impetus.  The article sites a “successful” marketing campaign that persuaded 5 million Nigerians to consume an instant-noodle product, known as Indomie, instead of the popular more natural cassava product called Garri.  No consideration in the article was given to which was healthier for people or least damaging on the environment in it’s production . . . I’m noticing a trend that economists tend to all too quickly forget about the non-monetary factors such as quality of life, cultural heritage, health and happiness that inspire dignity and well-being.

The type of development the above article is describing, might lead one to believe, imposing Westernization on these countries with a formal market is the best and only way to bring them out of poverty. There are alternative possibilities however.  The BoP perspective focuses on a bottom up approach that respects the strengths and capabilities that already exist at the BoP vs. imposing a top-down more corporate design focus on overcoming weaknesses in the value added chain and “Westernizing” local business activities.

I’m very excited about what I have learned about this BoP business model however, if not just for marketing sake, I think it needs a better more catchy name.  Any ideas?