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