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With my head spinning from the loftiness of an IDB infused week, I happily returned to reality in a conversation with Kiva, which--as many of you know--is leveraging micro-finance institutions (MFIs) to create virtual connections between investors and micro-entrepreneurs. This doesn't sound remarkable until you learn that this investor could be you, your Uncle Benny from Ohio, or anyone else, who with, as CNN Money so aptly wrote, "...$25, a PC and a PayPal account...now [has] the wherewithal to be an international financier." A sort of investment experience for the proletariat, Kiva has turned the traditional microfinance lending model on its head.

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Businesses interested in exploring base of the pyramid markets often ask for hard data: how many people? Where do they live? What do they spend money on? BOP pioneers CK Prahalad and Stuart Hart have done well for themselves and their ideas, as demonstrated by the success of their latest books. For the data-hungry manager, though, these books leave something to be desired – both are primarily anecdotal and make vague estimates about the size of the BOP. I have good news for managers – that’s all about to change.

The Economic Times of India, in conjunction with Indicus Analytics, today published a “first-ever” compilation of BOP markets in India - by district, complete with size rankings and market potential ratings. At least that’s what an article in the Economic Times of India reports this morning. I’ve spent the last hour looking for the study on the Indicus Analytics web site and on the Economic Times web site, without success. (If you can find it and let me know, I will be eternally grateful).

According to the article, Indicus Analytics’ study breaks down BOP markets geographically within India. In Medinipur, BOP household expenditure accounts for fully 60 percent of all household expenditure. Furthermore, most big BOP markets are either within a major city or in its vicinity. This supports big business’ push to go downmarket in urban areas. Unfortunately, these data make it hard to sell firms on the benefits of going rural, where many base of the pyramid communities live and work.

India is just one case. Latin America – another region where stats-based BOP analysis has been done – is quite different. There is an overriding message: the base of the pyramid is too big to ignore, and companies want to know exactly how best to engage it.

Writing in the latest issue of the New Republic, Christine Rosen takes on techno-utopians like Glen Reynolds and argues that blogging and WiFi will not save the world. As someone who ekes out an existence publishing online musings about new technologies and the developing world, I could not agree more. From my limited experience in the field, I have noticed that technological progress is all too often conflated with moral advancement. This is a mistake which must be recognized if new technologies are to be successfully integrated into the developing world.

In themselves, new technologies are neither good nor bad; it depends on how they are used. To illustrate this point, academics love to talk about Europe’s railroad system. Before World War II, railroads were seen as the engine of economic prosperity and political integration. But during World War II, they transformed into something grotesque--the engine of mechanized slaughter.

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I’ve decided to come clean and admit it. I hope Brazil wins its sixth World Cup. So for those of you cheering for the Ghanas and Ecuadors of the world, you will find little solace in this post, which extols the virtues of corporate superpower, Microsoft, and its latest business venture in Brazil. These days, being a Brazil fan and a corporate cheerleader is difficult, especially at an environmental organization where everyone fights for the little guy. But hey, look on the bright side, I could be praising Apple and its latest gismo to be unveiled in Cupertino.

So here’s the scoop: Working in conjunction with Magazine Luiza, one of Brazil’s largest retailers, Microsoft has launched a program called FlexGo, which is a pay-as-you-go plan for purchasing personal computers. The plan is modeled on the cell phone industry’s pay-as-you-go plan, which has brought even the most low income consumers into the cellular market. Here’s how the plan works: A consumer pays a portion of the computer’s upfront cost and is able to bring it home. By purchasing prepaid cards like those used for cell phones, she can pay off the remaining balance. The computers are outfitted with software that disables their use once the allotted time on the card expires. After she has purchased enough cards and the computer is completely paid off, it is hers to keep. The obvious benefit of FlexGo is that it lowers the initial price of buying a computer, allowing low income consumers to tap into the market.

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It's painful as an (admittedly fairweather) fan of the US team to acknowledge that even with all the gossip about how Brazil's World Cup team is performing below expectations they will still probably fly home with a sixth championship under their belts (I'll refrain from making a joke about Ronaldo's weight problems here).  Friendly rivalry not withstanding, I'm hoping the international media will start to turn their attention to the undiscovered talent Brazil has to offer.  No I'm not talking about the next Freddy Adu - I mean that the country doesn't just have the most successful soccer stars, it has the world's most successful hybrid system as well, produced by Eletra Industrial.

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Driving to Wolftrap this past Friday, a story on NPR’s Marketplace prompted me to turn up the volume – the national business media was covering WIZZIT, a South African cell phone banking firm that NextBillion has covered extensively in the past. For the uninitiated, WIZZIT is a 1-year-old start-up changing the face of South African banking. Their low-cost cell phone debit service, which comes with a funky Maestro debit card, has quickly developed what the Mail and Guardian calls a “cult status” in poor townships. Marketplace’s Gretchen Wilson describes how it works:

“[A customer] can make deposits at a bank or at any post office. They scan his debit card, take the cash, and then immediately credit his account. He gets a text message to prove it. Then he uses commands on his cell phone to check his balance, transfer money - even pay his electricity bill. He uses his debit card to buy things or to withdraw cash.”

According to WIZZIT CEO Brian Richardson, there are 16 million unbanked people in South Africa – a challenge to development, sure, but also a potentially huge untapped market. WIZZIT isn’t the only firm to recognize the latent potential of the BOP financial services market: banking majors Standard and FSB, as well as cell phone giant MTN, actively vie for BOP customers.

What seems to set WIZZIT apart from its competition is a combination of low fees (there are no minimum balances and per-transfer charges are cheap) and excellent customer service. Since we posted the WIZZIT activity capsule in January, customers have come to NextBillion to rave about their service:

“I phoned your service centre today [and] I was bowled over by the exceptional and friendly service; hope more companies will learn from you.” – Paddy

“[WIZZIT’s] service was unreal and so I gave the product a try. I can pay all my bills at extremely low costs! I can transfer money to anyone in the world! This product changed my perceptions of banking.” – Roger

The business model makes sense – Marketplace reports that 35 percent of the 16 million unbanked (5.6 million people) own their own cell phone. Critics might argue that poor people are ill-suited to use debit cards, and having credit might bury some in debt. Economists tell a different story: better access to phones spurs economic growth, while access to financial services unlocks “dead capital.”

There are, of course, issues. Adding customers is difficult in a highly-competitive environment, and there's no guarantee that each customer will complete enough transactions for WIZZIT to break-even. Furthermore, CGAP documents a myriad of barriers preventing BOP customers from getting cash into the electronic system.

Despite these challenges, hearing WIZZIT on the radio was music to my ears – it proves that entrepreneurs can succeed by targeting the BOP market. Marketplace has the full text as well as the audio online – check it out. As for the concert that evening, all I’ll say is that Motown is alive and kicking in Washington.

In the 1967 film The Graduate, Walter Brook gives a baby faced Dustin Hoffman advice he should never forget. “I want to say one word to you. Just one word.” After pausing for dramatic effect, he continues, “Plastics.” Now, almost forty years later, Dustin Hoffman has forty times the wrinkles. Yet Brook’s advice is still as relevant as ever; plastics are still the secret to success. But these aren’t any ordinary petroleum based plastics. Eco-friendly plastics, which can be used to make everything from bottle caps to plastic bags, promise to be the industry of the future.

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Silvio Donizetti Palvequeres, president of the farm workers’ union in Ribeirão Preto, told the New York Times in April that Brazil’s ethanol boom has only increased the burden placed on sugarcane farmhands.  “You used to have to cut 4 tons a day, but now they want 8 or 10, and if you can't make the quota, you'll be fired," he said. "We have to work a lot harder than we did 10 years ago, and the working conditions continue to be tough."  Through rose colored lenses, Brazil’s experiment with alternative fuels like ethanol may seem like the perfect green fix to this country’s development challenges.  But ethanol has many potential pitfalls, which, if left unaddressed, threaten to overshadow its economic and environmental contributions in the region.

The state of São Paulo, where Palvequeres works, produces 60% of the sugarcane grown in Brazil and is looking to increase production capacity to match the growing need.  Yet the growth of this industry in southern Brazil may have repercussions felt as far away as the Amazon.  “The expansion of sugar production,” Larry Rohter writes in the New York Times, “has come largely at the expense of pasture land, leading to worries that the grazing of cattle, another booming export product, could be shifted to the Amazon, encouraging greater deforestation.”  

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Since it was announced in April of last year, MIT's One Laptop per Child initiative has received a great deal of media attention, as well as some healthy skepticism. Questions were raised about the $100 laptop on NextBillion here and here. I hadn't heard much recently about the project until last week when WorldChanging's Ethan Zuckerman posted an excellent first-hand account of his use of the latest prototype.

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The second day of “Building Opportunity for the Majority” had an inauspicious beginning: I was told no coffee would be allowed into the auditorium, a change from the previous day’s policy and a potential threat to my productivity. The threat was averted by something much more powerful than caffeine: Bill Clinton. The former president addressed a packed auditorium for over an hour, touching on subjects from fiscal policy and remittances to AIDS and clean energy. The electricity in the room was palpable, and Clinton lived up to the hype – he’s an amazingly intelligent person who can speak credibly on just about any topic. I never realized how articulate he is until the current President took office – quite a change. But I digress...

So, what did Clinton say? The IDB’s press office does a good job summarizing here, so I won’t replicate their efforts. I was struck by how well Clinton understands the tension between social and economic policy as he pushed the Bank to empower more entrepreneurs. He understands the importance of business environments – a subtle nod to the Doing Business series – and legal systems. His Clinton-esque “friends with everyone” anecdote about Hernando de Soto’s dead capital work was engaging and funny, but also serious – noting that de Soto would be able to achieve much more “good” if he didn’t have to constantly raise money.

Another question centered on AIDS work, which really energized Clinton. He’s done a lot of work on developing better market mechanisms for AIDS drugs through his foundation, and it’s right up the BOP alley: “We went to the major drug producers and got them to change their model from one with high margins and low volumes to one with low margins and high volumes by guaranteeing payments for the drugs.” Substitute telecommunications, financial services, water, energy, etc for drugs and you’ve got the basic BOP hypothesis down. Clinton continued, “If you get entrepreneurial partners and apply entrepreneurial practices to a social problem to move to a high-volume, low-margin model, it will change the entire system...I’m convinced we could do exactly what we did with AIDS and apply it to ten other problems.”

Bingo.

The presentation was generally engaging – the product of watching an incredibly intelligent, articulate man at his best. What bothered me was the end of Clinton’s speech – once he was done, the IDB auditorium emptied out faster than a Washington Nationals game in the 8th inning. The power of celebrity trumps the power of content, I suppose, which left WRI president Jonathan Lash a smaller-than-deserved audience for his on-point remarks about the Market of the Majority. I’m biased – the presentation is based on my team’s research – but Lash did a great job connecting the power of markets to the empowerment of the majority. His presentation, along with Hernando de Soto’s, were my two favorite content-related speeches of the conference.

The afternoon session began with Bjorn Lomborg, author of the Copenhagen Consensus. Lomborg’s cause celebre is prioritization of development projects – he’s a self-described realist who wants to get the most bang for our development buck. It was an interesting perspective, especially considering the six-part approach being announced at the conference. Lomborg stood in front of some banners touting the six elements of Moreno’s initiative and basically said, “Choose only three, if that.” Ironic, but interesting. His methodology calls for economists’ evaluations of various development options. Those options are ranked by evaluating how much social good will come from each dollar of aid money. The projects with the highest ratios of good to spending come first. It’s a pipe dream to ask development banks to prioritize malaria projects over basic health clinics, since there are so many entrenched interests within the staff and the stakeholders. But Lomborg’s approach, as well as his engaging presentation style, won me over. I wish him well in his Quixotic adventure, and hope he’ll continue to buck the establishment (I smiled when he walked onstage in jeans and a polo shirt to address the buttoned-up audience).

All in all, it was a great conference. Most impressive are the concrete steps that IADB is taking to change its course from a top-of-the-pyramid financing institution to one that focuses directly on projects impacting the majority. That may sound simple or overdue, but it’s neither. Hernando de Soto observed on Monday that it is relatively easy to shift 30 percent of a country’s population into the middle class. What of the remaining 70 percent? That’s where the hard work lies – and that’s what Luis Alberto Moreno wants his legacy to be.