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This is exactly the same question that was asked by the World Bank last year and I have recently had the chance to read their subsequent report “Unleashing India’s Innovation”.

All in all it was an interesting reading with a complete analysis of the main innovation levers in the country, although sometimes I felt it was much too vague in its recommendations.

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A quick roundup of base of the pyramid news and notes, including a few new publications that have made it on my to-read list:

The UN Development Program launched a new website highlighting its Growing Inclusive Markets Initiative, which Staff Writer Grace Augustine covered here. (Full disclosure: I sit on the Growing Inclusive Markets Initiative’s advisory board, though I take no responsibility for the site's painfully long Flash intro nor the nonsense background music. Memo to UNDP web developers – simpler is better.)

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"So, what do you think about the IEG report?" I was g-chatting with my friend Smita the other night when she brought up the World Bank. "What IEG report? What's the IEG?" I replied, showing my ignorance of the latest Bank goings on (and of the acronym – it stands for Independent Evaluation Group). Smita sighed. "I'm surprised you haven't heard. I'll forward you an e-mail from this listserve I'm on. Take a look."

That's how I found out about Doing Business: An Independent Evaluation. Released on June 12, the report criticizes Doing Business' (DB) reliability and robustness, suggesting that top-ranked countries may achieve high scores due to the absence of regulation, not necessarily the presence of smart, socially-beneficial regulation. Furthermore, the report found "no statistically significant relationship" between the DB indicators and any kind of economic outcome such as investment, gross domestic product growth or employment.

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Rose Shuman, founder of Open Mind and the innovative Question Box project, shared with us the following work opportunity. Please read on if you are interested in working with the venture that is making the 'Digital Alladin's Lamp' a reality. 

Position: Intern/ Volunteer

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There have been some interesting base of the pyramid-related topics afoot in both the mainstream media and the blogosphere lately, including a call for water privatization in developing countries and a self-critical blog post authored by the founder of a media-darling BoP startup. Without further ado, what follows is a quick roundup of the latest rumblings and grumblings in the base of the pyramid world:

Water privatization is not a new concept, nor an uncontroversial one. The latest to take up the banner is George Mason economics professor and Marginal Revolution author Tyler Cowen. I admire Cowen and read his blog regularly – he's particularly good at making esoteric economics arguments come alive in readable language. He authored an opinion piece in Forbes back on June 19 entitled Pay For It, in which he argues that government-run water monopolies in developing countries should be completely deregulated.

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When a Fortune 500 corporation says something, people listen. When the Fortune 500 company in question is Citigroup – in 2007, the world's largest firm – people REALLY listen. So when I received a phone call from Citigroup analyst Stuart Block earlier this year, I was all ears.

Stuart – with fellow researcher Richard Reid – was calling because he had undertaken an ambitious base of the pyramid project. He and Reid set out to examine the market and share their findings with Citi's audience of expert analysts and customers. Naturally, I was intrigued. I know that the base of the pyramid concept has become mainstream over the past few years, but here I had a Citigroup researcher on the line, asking me how we came up with the figures in The Next 4 Billion report. This was the real deal.

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This past weekend, I had the pleasure of attending the Growing Inclusive Markets Forum in Halifax, Nova Scotia. The conference was hosted by the Faculty of Management of Dalhousie University and the Coady Institute of St. Francis Xavier University.

The Growing Inclusive Markets initiative is a UNDP program that aims to "raise awareness by demonstrating how doing business with the poor can be good for poor people and good for business." The forum hosted a mix of development specialists, academics, and practitioners, who were all debating the growing role of the private sector in development.

There was a great energy throughout the weekend, and the people in the room seemed to have no problem connecting across the issues and committing to action. I thought that one of the best aspects of this conference was that numerous citizens from the developing world were in the room. Representatives from over 45 countries were present, and this shaped the conversation considerably.

In a conversation about the role of ICT in Development, one of the panelists was a Tanzanian Ashoka fellow, Joseph Sekiku, whose organization, Family Alliance for Development and Cooperation (FADECO), is utilizing a combination of mobile phone networks and radio to get accurate market prices to rural farmers. His most salient comment was probably that, "Africa has been dependent on donors for too long." In a discussion regarding the role of carbon markets for the poor, an organic farmer from the Caribbean shared her struggles with reaching the scale and capital required to access the established carbon markets. It was wonderful to hear these voices and witness their influence on the conversation.

The following outline was presented during the last session, and does a good job of summarizing the constraints and opportunities that were highlighted over the short conference.  It is also a concise summary of many of the same overall challenges and hopes we all face when considering the role of the private sector in addressing poverty and inequality in the developing world.

Constraints & Barriers

• Enabling Environment
• Lack of regulation or enforcement of regulation
• Lack of infrastructure
• Unstable political environment

• Finance
• Models need to be revised to match the different contexts in the developing world
• Both startup and continued growth capital in necessary to build up the private sector in the developing world

• Trust
• The poor have a history of being exploited, and are subsequently mistrusting of the private sector (i.e. Coca-Cola in India)
• There is continued worry about private sector provisions of what many see as "public goods" such as clean water, healthcare, and education

• Human Capital
• There is a need for building entrepreneurial skills in the developing world (there was an ongoing debate throughout the conference about the nature vs. nurture of entrepreneurial tendencies)
• Need to strengthen and retain the overall labor pool

• Market Awareness
• Extra effort is needed to inform citizens of the market opportunities / there is still a great problem with information asymmetry and lack of communication technology
  
  
• Market Access
• Lack of intermediaries
  
  
• Scaling Up
• It is difficult for businesses to scale while considering local cultural and geographical sensitivities and preferences

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A key issue that the BoP development world currently faces is generating a tangible connection between markets, enterprise and the poor. After all, if we are going to alleviate poverty through enterprise, we require effective strategies that enable the BoP to participate in profitable business endeavors as well as markets that serve the BoP's needs sufficiently.

In light of this difficult obstacle, WBI has taken steps to provide insight into how BoP development can be engaged successfully through its release of the special report "Business and Poverty: Opening Markets to the Poor." The report's 18 chapters-each about eight pages long-analyzes various effective strategies, obstacles and prospects for NGOs, non-profit organizations, corporations, banks, MFIs, and local enterprises working to serve those who are most marginalized and impoverished-the BoP.

Though the World Bank report does not provide comprehensive statistical analysis explaining clear steps that can be taken in order to address barriers to serving the BoP, it does offer numerous case studies regarding successful business models. It also offers supplementary analysis, which details how and why each example project was effective, and outlines what will need to be overcome in future years.

This report gives its readers the chance to learn from exemplars of corporate social responsibility programs that really make a difference, BoP entrepreneurship that accesses its market effectively, and NGOs as well as IFIs, NPOs, MFIs etc. that launch initiatives which greatly increase the quality of millions of people's lives. It is an excellent snapshot of business and organizational models that work well and offer clues for where we should head next. Here is a brief summary of the report's findings:

1. Connecting Businesses and Poverty: there needs to be a cultural shift in the business world toward serving the poor. Part of what businesses need to start doing is increase productivity and income for poor people, increase employment opportunity either through their products or through direct employment, and move away from "traditional" customers and to the four billion people that have been ignored until recently.
   
2. Collaboration Amongst Stakeholders: the best success stories come from collaborations between communities and businesses as well as other organizations such as NGOs, IFIs, and NPOs (the report provides several long anecdotal success stories on this note).
   
3. Keys For Success In Serving The BoP: Companies like Unilever, Nestle, CEMEX, Shakti etc. all provide clues for how we can generate viable markets and enterprise for the BoP. A powerful lesson to be learned from these examples is that businesses should emphasize synergistic cooperation between local communities and corporations in order to ensure social sustainability-a model which requires patience and substantial investment in research and consultation. These success stories also illuminate the importance of businesses' thinking being grounded in the BoP perspective rather than the "traditional" clientele. Goods and services such as mobile banking, voice operated ATMs, direct-to-consumer marketing, nutrient-rich soy sauce, and affordable independent LED lighting systems are all examples of product development that thought from the right BoP perspective and made significant changes as a result.
   
4. In order to address poverty we need to provide access to finance and markets for poor people by creating an economic and social environment conducive to their entry into the business-world. This requires a network of financial institutions (cooperative banks, local banks, and non-banking financial companies) that could develop low cost financial structures, which serve the poor as well as investment opportunities focused on the BoP. Lastly, to fully generate access to finance and markets for the BoP, we need to generate education programs that provide the BoP with business and management skills.

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Position: VP of Sales and Operations

Location: New York - with 30% international travel

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Guest blogger Jocelyn Wyatt works for the design firm IDEO, leading its base of the pyramid projects. Prior to joining IDEO, Jocelyn was an Acumen Fund Fellow in Kenya. She holds a MBA from Thunderbird. Jocelyn blogs at Design and Reach.

By Jocelyn Wyatt

As NextBillion.net mentioned last week, The Rockefeller Foundation and IDEO recently presented their research on how design firms can get more involved in social sector work. We presented this work in the form of a how-to guide and a workbook on how to use design to intentionally create positive social impacts and have posted the deliverables online.

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