MNC to BoP: How Entrepreneurs Make The Link

Derek Newberry — Wed, 30 Apr 2008 11:24:47 -0500

We blog frequently on this site about the importance of large multi-nationals finding ways to tap into BoP markets. This often comes in the form of discussions on reaching the BoP directly as consumers (ie projects like the OLPC or microcredit initiatives).

But what about small and medium enterprises as BoP intermediaries? Those of us who support these enterprises in our work are familiar with the list of benefits often attributed to SMEs - they raise employment, they are correlated with a reduction in income inequality, they reduce the size of the informal economy.... - but what about SMEs as middlemen for engagements between large corporations and the BoP?

The WBCSD explores exactly this topic in a recently published informal survey of some of its member companies and SMEs in their supply chains. According to WBCSD, SMEs "usually have extensive local knowledge of resources, supply patterns and purchasing trends."

Their competitive advantage is an ability to quickly and efficiently innovate new technologies and services that meet the specific needs of BoP markets in different regions. New Ventures enterprise Big Tree Farms is an example of this in reverse, where they are offering Whole Foods value as a partner by supplying exclusive access to authentic Indonesian foods. In other words, SMEs are a perfect channel for MNCs based in Europe and the US to intelligently connect with new markets and producers in emerging economies.

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MNC to BoP: How Entrepreneurs Make The Link