India's growth depends on its ability to significantly revamp its dismal education sector, which suffers from problems of outreach and quality. A recent study shows that the public education sector may be beyond saving.

A possible solution comes in the form of sustainable investments in a vast network of private schools delivering standardized, high quality education at an affordable price to the low income mass market (base of the pyramid) customer.

The investments in schools would take the form of financial resources, organizational support and value-added services to help these schools become efficient and effective educational institutions.

Harnessing India's Human Capital Through Educational Opportunities, published in the MIT International Review, presents one possible solution. (Full disclosure - I am one of the paper's co-authors.)

Read the paper at http://web.mit.edu/mitir/2008/spring/harnessing.pdf

(Photo by McKay Savage, used under Creative Commons License.)

In recent years, the capital markets have infused millions of dollars into the 'development sector.' While we applaud the growing interest in development through enterprise, the question arises: are there enough quality investees? Or, more simply, is too much money chasing too few investments? Let's take a closer look:

Capital:
The novelty of the venture philanthropy model and the (debatable) success of microfinance in particular have helped attract large tracts of new capital to the development sector.

(This post continues past the break; click "Read More" to continue)

Via NextBillion ally Reuben Abraham, I was pointed to James Surowiecki's recent article, What Microloans Miss in The New Yorker.

Surowiecki points out that while microfinance does a tremendous amount of good, there are also real limits to what it can accomplish. With over $25 billions of loans and websites to lend to the poor, microloans are increasingly being viewed as a panacea for all issues of poverty.

An excerpt:

The idealized view of microfinance is that budding entrepreneurs use the loans to start and grow businesses—expanding operations, boosting inventory, and so on. The reality is more complicated. Microloans are often used to “smooth consumption”—tiding a borrower over in times of crisis. They’re also, as Karol Boudreaux and Tyler Cowen point out in a recent paper, often used for non-business expenses, such as a child’s education. It’s less common to find them used to fund major business expansions or to hire new employees. In part, this is because the loans can be very small—frequently as little as fifty or a hundred dollars—and generally come with very high interest rates, often above thirty or forty per cent. But it’s also because most microbusinesses aren’t looking to take on more workers. The vast majority have only one paid employee: the owner.

(This post continues past the break; click "Read More" to continue)

Soon after we explored the role of Technology in BoP success, Derek pointed me to an interesting article in The Economist: Technology in emerging economies. The article makes a distinction between technology adoption and technology diffusion -- and argues that emerging economies are better at adopting new technologies than at putting them into widespread use.

The Tata Nano at USD 2500 is a favorite example to show that competence in design and technology exist, and that challenges could well lie in reaching out to a large audience.

Even as technology is spreading to emerging markets faster than ever, I found one very interesting data point.

(This post continues past the break; click "Read More" to continue)

What do Aravind Eye Care, d.light design, Ekgaon Technologies, ITC's e-Choupal, and the much awaited Tata Nano have in common?

New market segments?
Radically new paradigms?
Technology?

As the BoP discussion moves from whether-to-invest to where-to-invest, there is an increasing need to measure the impact of new ventures. I see a strong correlation between Successful Models and Technology.

(This post continues past the break. Click 'Read more to continue.)

Position: Vice-President, Sales

Location: India

Organization: The goal of d.light design is simple – to eradicate kerosene lanterns from the face of the earth. To do this it will become the market leader in delivering safe and affordable lighting solutions to over 1.6 billion people who currently do not have access to electricity. d.light's initial focus is India, where it will provide modern lighting to the 78 million families still using kerosene lanterns.

Position Description: d.light design is hiring a VP Sales Executive who will report directly to the CEO and build sales and distribution in India. This position is based in Delhi and is an incredible opportunity to work with a high growth Silicon Valley social enterprise funded by both US and Indian investors including Mahindra & Mahindra, Draper Fisher Jurvetson, Acumen Fund, Nexus India Capital, Gray Matters Capital and Garage Technology Ventures.

For more details, visit http://www.dlightdesign.com/jobs/dlight-jd-vpsales.pdf

To apply, contact india@dlightdesign.com and include your CV and a statement of interest. Following successful phone interviews, the CEO, Sam Goldman, will conduct personal interviews in Delhi.

This year's topic for the St. Gallen's Symposium set me thinking...

Global Capitalism, Local Values
There has been much discussion about Bill Gates' keynote address at the World Economic Forum in Davos, where he pushed for "a creative capitalism" that uses market forces to address the needs of the world's poorest countries. In his keynote, Gates told the audience that, "We have to find a way to make the aspects of capitalism that serve wealthier people serve poorer people as well."

Even as academics such as Prof. C. K. Prahalad at the University of Michigan and Prof. Kasturi Rangan at Harvard Business School write and research extensively on the opportunities at the base of the economic pyramid, does development through enterprise (DTE) remain by and large a Western concept? Is global capitalism a wave that originates from the West and trickles to the developed countries?

Clash in Values
Based largely upon my experiences in the development sector in India, I believe the success of global concepts (spawned in the West) ultimately lies in their implementation at a local level.

(This post continues past the break; click "Read More" to continue)

Intellecap recently e-mailed us about a couple of interesting job opportunities.

About Intellecap:
Intellecap is a leading consulting firm focused on capital advisory and innovations for the inclusive finance space, endeavoring to create
and deliver mainstream, profitable solutions to address the problems of poverty and expedite sustainable development.

Career Opportunities:

Editor – Microfinance Insights, Mumbai
Profile: Work as a full-time editor and manager of the magazine; Coordinate, plan issues, content; Coordinate with authors,subscribers and various industry stakeholders; Raise sponsorship and advertising revenues; Establish brand identity of the print and online magazine.

Senior Associates/ Associates – Publications and Knowledge Advisory, Mumbai
Profile: Work closely with Intellecap’s Knowledge and Communications Advisory team, responsible for developing innovative knowledge solutions; Support a team of content managers primarily on portals and publications; Promote the company's objectives and strategies for growing the knowledge
management portfolio.

(This post continues past the break; click "Read More" to continue)

As Moses pointed out last week, a good talent strategy is key to the success of "base of the pyramid"  enterprises.

A few months back, I had blogged about my idea to bring top talent into the development sector. We are excited to announce the launch of Engineers for Social Impact - a student-driven initiative in India.

Intellecap in partnership with Aavishkaar Goodwell and The Financial Express has announced the launch of the Srijan Microfinance Business Plan Competition 2008.

Deadline: March 15, 2008

Srijan (meaning creation in English) is a search for entrepreneurs, groups, individuals and microfinance institutions with innovative ideas and viable business models that aim at improving the sector and promoting financial inclusion of the poor. This annual business plan competition provides both start ups and established businesses an excellent opportunity to:

(This post continues past the break; click "Read More" to continue)

I recently had the opportunity to read an IESE occasional Paper, “Profitable Business Models and Market Creation in the Context of Deep Poverty: A Strategic View” by Christina Seelos and Johanna Mair of the IESE Business School – University of Navarra.

What makes the paper refreshingly different is that it moves beyond the “why” BoP debates to focusing on “How to do it” from the perspective of corporate and competitive strategy. The paper aims at providing insights into how business models can be structured to generate profits to justify investments, while integrating and serving the needs of the poorest citizens.

According to the authors, corporates looking beyond their existing markets, keen to gain a foothold into underdeveloped markets would do well to work in tandem with local entrepreneurial organizations to achieve multiple strategic objectives. The paper uses 3 cases of successful partnerships (2 from Bangladesh, 1 from India) to show how local entrepreneurs provide important resources and capabilities, both of which take time to create.

(This post continues past the break; click "Read More" to continue)

Organised by: Center for International Development at Harvard University

Sponsored by: The Anwarul Quadir Foundation

Key Dates:
Submission Deadline: June 30, 2008
Results: October 15, 2008

Propose an innovative and practical idea that would improve the lives of low- and middle- income people of Bangladesh (everyone except the top-third of the population in terms of annual income). Proposals will be judged by four Harvard University faculty members, in consultation with scholars familiar with Bangladesh.

This global contest is open to any individual in the world. Any compelling essay that establishes a way to improve the lives of low- and middle-income people in Bangladesh is acceptable for submission. The essays will be rated giving equal weights to a) innovative nature of the idea; b) clarity and cogency of argument and writing; c) ease and practicality of implementation; and d) the size of impact.

The author of the winning essay will be awarded the Anwarul Quadir Prize, USD $25,000.

Find competition details at:
http://www.cid.harvard.edu/quadir_prize/

 

When I first read the seminal article "Serving the World's Poor, Profitably" in HBR, I found the direction it pointed to elusive. Instead of tugging at sympathy, the paper pointed to an exciting and fast growing market - the immense collective entrepreneurial capabilities and buying power of the world's poor. Looking back, made easy by NextBillion, I wonder how organizations are using different approaches (read - for profit and non-profit) to social innovation.

According to Prof. Reuben Abraham at the Indian School of Business, Hyderabad, the first step to understanding BOP Markets is to "Forget the Moral Imperative."

Point number one is forget the moral imperative. Let’s look at the economic imperative of why this market is important. Everybody tends to emphasize the moral imperative of why economic growth needs to spread, but I think there is a strong economic imperative why growth needs to expand beyond the 15 per cent, say, in India that actually enjoy the fruits of the current economic growth. Because ultimately, if there are a billion people and only 150 million people are participating, that is not sustainable. That is not sustainable for a bunch of reasons because there will ultimately be saturation, and there will also be all sorts of political ramifications to this as there is a disconnect between aspirations of people who live in these markets and the elite in these countries. So, there is definitely an economic reason for why we should look at these markets.

The questions are: Are we doing this? And indeed, should we? After all, some organizations might pride themselves on their non-profit approach - right?

(This post continues past the break; click "Read More" to continue)

The results are out for first annual BoP e-Journal competition organised by the Center for Sustainable Global Enterprise at Cornell University’s Johnson School. We have recently blogged about how Cornell's BoP Learning Labs are moving the discussion to developing markets, and gaining live insights from BoP experiences gleaned from around the world.

The competition was developed to highlight the challenges of doing business in underserved markets and identify innovative business experiments or solutions to those challenges.

The winning submissions were able to clearly articulate a business challenge that an organization, either a non-profit or for-profit enterprise, working in low-income communities is striving to overcome. These are prominently included in the BoP e-Journal here.

(This post continues past the break; click "Read More" to continue)