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EXPLORING THE BOP: SUSTAINAINABLE USER-DRIVEN
INNOVATION AT THE BASE OF THE PYRAMID MARKET
Professor Minna HalmeJan. 17th, 2010
$3000-20 000
Purchasing power parity
(PPP) in USD
Population estimates
Level 1
Levels 2-3
Level 4
75-100 million
2 billion
4 billion<$3000
BOP IS 2/3 OF THE WORLD POPULATION• Around 4 billion poor or underserved people in the world (< 5 € /day)
STARTING POINT & GOALS
“If we stop thinking the poor as victims or a burden and start recognizing them as
resilient entrepreneurs and value-conscious customers, a whole new world of opportunity
will open up.”C.K. Prahalad, Fortune at the Bottom of the Pyramid, 2005.
• Business as usual and current aid strategies do not sufficiently address the poverty problem
Better business models: innovate products, services and business models that benefit both the poor and the firm
Better markets: developing markets to yield benefit also the poor
BUSINESS MODEL EXAMPLES
4
Building a house one room at a time from cement
School feeding program
ITC procurement hubs for farmers
M-PESA - Mobile banking
Nokia Money - Mobile banking
Microfinance banking services over the internet
TsinghuaTongfang and developing IT skills in China
Annapurna salt and decreasing mental disturbances
Investments in renewable energy
Improving city water efficiency
Electricity, water and sanitation to slums
Product for safe drinking water
Primary education for children in slums
Forest plantation with community involvement
EXAMPLES OF BOOKS
TRENDS & CHALLENGES WITH REGARD TO THE BOP DEVELOPMENTSTrends:• We are experiencing many
intertwined global trends and developments simoultaneously.
Challenge:• While Base of the Pyramid (BOP)
markets (< €5 / day) represent a very large market potential, at the same time humanity’s ecological footprint has grown rapidly and exceeded the world’s biocapacity.
Question:• How can these trends be addressed
at the same time in an innovative, efficient and effective way?
Poverty
Corruption
Humandevelopment
Consumption
Ecologicalsustainability
UrbanizationConnectedness
Population growth
6
CREATION OF THE NEW COLLABORATIVE NETWORK FOR SUSTAINABLE AND USER-DRIVEN
INNOVATIONS AT THE BOP
Teija Lehtonen, Aalto Service FactoryJan. 17th, 2010
VISION OF THE NETWORK
To create new wealth and reduce poverty through innovative, sustainable business enterprise
KEY ISSUES DURING THE WORKSOP
• How do we reach the poorest – needs, capacities, and methods for co-creation?
• Who should be involved in the network?• Role of different stakeholders?• Challenges and solutions for development of inclusive
business models?• New partnering opportunities between the Finnish and
partner country stakeholders?• Communication strategy and methods for the network?• Tools for innovative, user-driven approach?
Companies
Universities
FinproNGOs
Public sector
Tekes
BOP SERVICEFINLAND
BOP service• A collaborative network: private and
public sectors, research
organizations, civil society in Finland and
in partner countries• Learning and concept
development is carried out through concrete
pilots
Companies
Universities
R&D & innovation
Networking and partnering
Business development &
entrepreneurship
Market knowledge &understanding
FinproNGO’s
Public sector
Tekes
BOP SERVICEFINLAND
MOBILE BOPVietnam
Internationalisation &market entry
MOBILE BOPKenya
PILOT EXAMPLE• Mobile BOP / Finpro
and Finnish companies + local partners in
Kenya and Vietnam
CURRENT PILOT PROJECTS
• Mobile Business, Kenya and Vietnam, Finpro• Affordable Diagnostics, India, Aalto University• Textile Industry, Brazil, Aalto University• Biomass Energy, Kenya, Shalin Finland• Innovative Entrepreneurship, Afghanistan and
Nepal, Aalto University• Other pilots are in a planning phase• Implementation of 10-12 pilots in two years