2012-02-16

Co.Exist

Ditch The Political Process, Bring In The Entrepreneurs

At the big RIO+20 conference, world leaders will talk about how to solve issues caused by global poverty. But the real solutions lie in the hands of business leaders who can find a way to tap into the enormous market.

In a little over four months, the world will take notice of the RIO+20 conference, a gathering of world leaders addressing the challenges of poverty and global environmental destruction—challenges like the fact that a billion and a half people in the world don’t have access to electricity, that two and a half billion people don’t have a toilet, and the list of horrible stats goes on.

Missing from the conference will be a silent majority. That majority is the five billion people who live on $1.25 per day or less. Also in sparse attendance will be the entrepreneurs who steadfastly listen to markets. And, in fact, the billions of people without running water and electricity are a real market that has been—and can be—tapped to create businesses.

These businesses include Celtel, a mobile phone network in Sub-Saharan Africa as well as mobile networks in India and the Philippines. The aforementioned companies have built industries worth approximately $57 billion, according to C.K. Prahalad, the late University of Michigan Business Professor and author of The Fortune at the Bottom of the Pyramid.

So, let’s rethink RIO+20. What if we brought together all the big business gurus with people at the bottom of the pyramid sitting face to face with hundreds of entrepreneurs? Instead of an exchange about saving people and the planet amongst world leaders, what if we had a discussion about the needs of the people at the bottom of the pyramid with the entrepreneurs that could find business solutions to meet those needs?

After all, a new market takes creative thinking. We need new business models to address different problems. And perhaps once we solve some of these problems, we will create new business and technology solutions to be deployed worldwide.

Take the case of the growth in communications technology in Africa, where 70% of people have cellular phones. Globally, however, 543 million people with phones have no access to an electrical outlet at home to recharge them.  Today, they pay an average of $5 per kWh (30 times the average price for electricity in South Africa and India) for charging to diesel engine owners.

This scenario leads to solving a problem most of us don’t think about: how to charge a phone when there is no plug. In these instances, it takes entrepreneurs to think small to solve big problems. Small-scale solutions like solar phones, solar chargers, wind-up chargers, base station charging, and village charging stations are all real and viable—in fact, they are cheaper than both the grid and the diesel power that feeds it.

Innovation occurs through understanding market problems, then finding the business solutions to deploy the technology that can fix these problems. At the Carbon War Room we have noted, “the emissions reductions necessary to meet 2020 requirements can be addressed today—and profitably—by existing technologies, under existing policy. This is an opportunity marked as a crisis—arguably the largest wealth creation opportunity of our lifetime.”

The same holds true for what Prahalad identified as the bottom of the pyramid. There is a fortune to be mined. We just need to listen directly to the consumers and have entrepreneurs standing by to take the risks necessary to make it all happen.

We are confident that world leaders at RIO+20 can help set the policies for entrepreneurs to create wealth from the bottom up. And it’s still not too late to invite fearless entrepreneurs and people from the bottom of the pyramid.

Note: Co-author Hilary McMahon is the director of research at the Carbon War Room.

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2 Comments

  • ana

    Dear Jigar hi,

    We were wondering where did you get the figures? What are the sources, for example for "five billion people who live on $1.25 per day or less"?

    The World Bank estimates in 2007 "(...) that "in 2001, 1.1 billion people had consumption levels
    below $1 a day and 2.7 billion lived on less than $2 a day.""  Where are the 5bn if we are today 7bn?

    Regarding "two and a half billion people don’t have a toilet", I understand that 1,2bn are related to "open defecation" and, +/- 900mll to "other unimproved sanitation", so there are the 2,5bn...

    It is only to clarify my (and my friends) mind ,-)

    Thank you.
    ana

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