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Most people steeped in the development field see the term developing countries as negative and passé; we call the up and coming global presence of countries like China, Brazil and Indonesia “emerging economies.” This term is not about being PC, it’s about accuracy and according to the Economist (subscription), these countries have really been living up to that title of late.

The magazine reports on the record growth and mainstream investment flowing into countries once unfairly stereotyped as having backward economies with poor management. Take the example of India, which has recently gotten a significant amount of attention over the vast sums of money being moved into the country.

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The Business in Development Challenge, the world’s first international business plan competition for poverty reduction and profit, is taking place this week in Amsterdam. Hundreds of entrepreneurs, investors, NGOs, and government representatives have gathered on the eve of tomorrow’s award ceremony, when a 150,000 Euro prize pool will be divided among 15 or so winners.

The BiD Challenge is the product of a partnership between the Dutch bi-lateral development agency, NCDO, and a local NGO named Fair Ventures. Their goal is simple: generate jobs and incomes by boosting small enterprises in developing countries. What’s unique about the BiD Challenge is that it combines a business plan competition with a charitable award – a hybrid financing scheme that attracts both corporate and NGO interest.

Of 903 initial applicants, the pool has been whittled down to 25 finalists; about fifteen of them will split the 150,000 Euro prize pool. Winners will be announced tomorrow; prior to the awards ceremony, finalists will have the chance to pitch their business plans to investors during a large venture fair.

The BiD Challenge is the ultimate partnership – it bridges the government, NGO, and corporate worlds relatively seamlessly. Each participant has a clearly defined role, and acts in its own best interests: government funds projects that have been vetted by experts; NGOs highlight the importance of small-scale enterprise; corporations and investors see the next wave of BOP innovations and invest in the best models. Everyone wins, right?

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It has been a couple of weeks since Professor Aneel Karnani and Professor C.K. Prahalad debated the best (and worst) ways to serve bottom of the pyramid markets here at NextBillion.net. You may recall that it started when Karnani posted his criticism of Prahalad’s best-selling book; Prahalad responded in-kind. Now the Acumen Fund weighs in on the debate:

The paper argues that the only way to alleviate poverty is to focus on the poor as producers – not as consumers – to raise their income. We, like Prahalad, believe that these are not mutually exclusive. Given the right access to choices, the poor can make consumer decisions that increase their ability to generate income and improve their overall quality of life. The fact that there is ongoing debate around this idea reinforces the need for Acumen Fund, and others in this space, to continue to find and support examples of enterprises that are successfully serving the poor.

Waste is an issue that tends to fly under the radar these days, but should receive more attention- in Sao Paulo alone, 10 tons of garbage is dumped in surrounding landfills every day. In 1999 two entrepreneurs saw a new challenge amidst the piles of used materials in their hometown, and founded Oxil Reciclagem de Plasticos to take advantage of the opportunity this unique environmental threat created.

In her profile of the company, Kelly Desy finds that there is a surprisingly high demand for recycled plastics, totaling 17.5% of the total plastics market. The founders of Oxil turned the waste issue around to begin recycling and repurposing used plastics, producing 140 tons of resins per month and selling the entire stock.

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Ethan Zuckerman, a fellow at the Berkman Center for Internet and Society, reports on the state of African connectivity development, which remains hampered by very high costs. In West Africa, for example, connectivity costs more than 66 times as much as it does in the United States--$8 per kbps versus a typical cost for US universities of $0.12 per kbps.

But Zuckerman also suggests 4 areas where Africans are leading the rest of the world:

- Narrowband - innovative connectivity solutions that use very little bandwidth, like the Ghana “Javelin” project

- Localization - Translation of open source software into a wide variety of languages, especially through the help of organizations like Translate.org.za.

- Radio - Use of community radio for information dissemination, integration of data and radio in projects like Geekcorps Mali.

- Urban wifi - with huge wifi networks in Accra, Bamako and other African cities.

I would add one more to the list—financial services over mobile phone networks. Celtel was an early pioneer with Celpay, and Wizzit in South Africa has been among the most innovative in this space, along with Smart and Globe in the Philippines.

It is remarkable, as Zuckerman points out, that Africans are able to innovate around myriad regulatory and price barriers to lead in these areas. That suggests the question: what is the comparable list for other developing regions?

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Just as a report comes out confirming the obvious- that SMEs in India have a hard time performing because they don’t have the funding they need- Business Today declares (subscription required) that the private sector is picking up the slack, with record venture capital flooding the country.

The article is a bit lengthy, but well worth the read as it explores one of the most important current trends for Indian business. In this climate, 44 American VCs are looking to invest around $4.4 billion in companies- money that will almost certainly be forced to move outside of the traditional IT sector to develop budding industries including green technology and education.

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The thing to do in development right now (the right thing in my opinion) is to have as much initiative and control as possible given to the beneficiary. That is one of the main tenets behind the BOP market theory, grassroots development and other approaches. Poverty alleviation and economic growth should be accompanied by a diversity of voices and a range of input.

Of course as much as we say that, a lot of the folks still designing development projects and writing about them in blogs like this one do not represent the beneficiary nor a very wide array of voices. In the spirit of hearing these other perspectives, I would encourage readers to check out a few blogs I have run across recently.

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Cory’s post about the Tech Museum Awards reminded me to look through the list of this year’s Laureates. Nominees outside the Economic Development category may not necessarily be base of the pyramid focused, but they tend to be really innovative and under-the-radar. As I browsed down through the categories, I was pleasantly surprised: Catalytic Communities, a NextBillion ally and base of the pyramid innovator, is listed as a Laureate in the Equality category.

We’ve previously mentioned Catalytic Communities (CatComm) on NextBillion.net in the context of their community work in Brazil. A quick reminder - CatComm serves as a clearinghouse for low-income communities’ collective wisdom. CatComm’s Community Solutions Database tracks hundreds of bottom-up solutions to local problems, and they have built powerful peer networks of community leaders worldwide to grow and field-test those solutions.

I’m thrilled to see this project recognized by the Tech Museum. Sure, the Community Solutions Database uses cutting edge IT in its work, but the real innovation is their model. Here at NextBillion, we often talk about what works for the base of the pyramid, returning again and again to the importance of partnerships and understanding local markets. CatComm doesn’t talk – it builds partnerships and disseminates local knowledge, helping successful models scale up. They don’t have to worry about local buy-in – they ARE local. This is one of the best examples of bottom-up, base of the pyramid development out there.

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The Laureates for the 2006 Tech Museum Awards were recently announced.

The Tech Museum Awards is an international awards program that honors innovators from around the world who are applying technology to benefit humanity.

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The Financial Times exposes the hype over trade and poverty in the context of all the rhetoric we’ve heard regarding the failure of the Doha round.  The last series of WTO meetings ground to a halt, largely over the ‘developed’ world’s refusal to significantly cut agricultural tariffs and farm subsidies.  

While I am personally against the unwillingness of countries like the US to make real attempts at opening their economy to goods from developing country farmers, I am not particularly surprised.  It is also unsurprising, however, that such unrealistic expectations would be placed on the ability of trade liberalization reforms to directly impact the world’s poorest producers.  

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