Guest blogger Ryan Gunderson writes about sustainable, scalable solutions to end global poverty on his Riches For Good blog. A finance professional with an MBA from the University of Michigan's Ross School of Business and seven years of Fortune 500 experience, Ryan is transitioning to part-time work to allow him to pursue his goal of helping 1 million people out of $1-a-day poverty. He welcomes help in reaching his goal and can be reached at richesforgood@yahoo.com.

In this post, Gunderson responds to Allen Hammond's series on taking Base of the Pyramid models to scale. This week, NextBillion.net will publish responses from a number of BoP experts and practitioners, followed by a concluding post from Hammond.

By Ryan Gunderson

"The biggest reason most poor people are poor is because they don't have enough money." Why did Paul Polak find the need to write that embarrassingly obvious statement in a book? Because the development community has a long history of overlooking the concept. My initial reaction to Allen Hammond's series on transformative sector strategies is that he is perpetuating the common mistake of ignoring income generation. One of his sentences particularly strikes a wrong chord with me: "How do you meet the unmet needs of four billion people?" To me, the appropriate question is "How do you help people raise their incomes so they can afford to meet their unmet needs?"

Consider his phone example for a minute. Hammond shares a reasonable level of detail about how WiFi networks can be built relatively affordably in rural areas, theoretically at a profit to companies. (I will ignore for a moment that in his example he implies a regional government may be more interested than its for-profit partners in expanding its WiFi network). But Hammond does not talk convincingly, in my opinion, about how phone and Internet access will help raise individuals' incomes. He mentions that a phone user could solicit information about how to raise pigs, and he mentions that quality of life would improve from less walking.

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We live in a world obsessed with growth. According to the National Bureau of Economic of Research (NBER), there have been only four recessions in the US since 1980. Between March 1991 and March 2001, the US experienced the longest economic expansion in its history. It comes, therefore, as no surprise that BoP experts seem to be concerned only with applying BoP lessons toward stimulating growth. In this post, I would like to suggest the possibility of using BoP knowledge as a palliative action in places that are experiencing extreme hardship and as a first step towards returning to normalcy.

One of the defining characteristics of BoP markets is the lack of connections with global markets. This lack of connections results in smaller markets with fewer competitors and higher prices. Furthermore, BoP markets suffer from a lack of infrastructure, efficient bureaucracy and the legal, political and economic certainties that are normally provided by public actors. Now, what happens in an area afflicted by disaster or violence where some or all of these variables are totally non-existent? Would BoP lessons be applicable in these cases?

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