Bottom Up Scaling: What is the Role of the Assets of the Poor?
Editor’s note: Guest Writer Piera Waibel writes about her PhD dissertation on Base of the Pyramid business models, calling interested companies and executives to take part in a survey that explores these challenges.
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Many exponents in the BoP-community call for a deeper engagement with the low-income population. And companies want to serve a community, region, country, but also on a global scale. BoP-strategies suggest integrating the poor into the innovation process by listening to closely and utilizing their knowledge. Co-creating products and services together that will benefit the specific community is also mentioned often. Some scholars even propose companies to become indigenous and develop native capabilities, an approach where the BoP Protocol leads the way.
This close co-operation is still seen little in practice. Why are there so few projects applying this approach? Are there not enough managers who want to be “totally immersed” and spend three months in a slum or village? Is it too difficult? Does it take too long? Is the result only suited to the community where the project is located? Will bringing it to a profitable scale be difficult? Earlier this year, at the BoP conference in Delft one statement risen was that scale OR bottom up processes can be achieved (Tata Ace vs. BoP-Protocol).
Development literature is a step further in this regard. Scholars in the area of development claim that development approaches with a bottom up perspective (as for example Community Driven Development, participation, empowerment or Asset Based Community Development) have the advantage that they can take poverty reduction efforts to scale. From this literature we learn that solutions developed through local knowledge need to be adapted to spread across regions with different contexts. To cut down costs in the process of scaling up, many local resources in the distinct communities have to be employed. The integration of local knowledge should be led by people in their respective communities, but we learn too that involving local knowledge is more viable in non-technical decisions than in technical ones*. Business models developed based on the BoP Protocol so far had the involvement of the poor mainly in non-technical decisions; for example SC Johnson had already developed the product that was part of the business model.
Integrating community members in the process of scaling up (or “bottom up scaling”) has proven to be possible and efficient in development projects, by letting the low-income population play a more important role in the business model. So, do managers really have to become indigenous? Can’t they hand a bigger part of the process over to the target group and let them do it themselves? How much power will companies be willing to shift over to the poor, letting them be in the driver seat? How could those kinds of business models be managed?
A current PhD thesis is trying to answer some of these questions with case studies in Latin America. Company representatives interested in filling out a questionnaire and take part of the investigation, can contact me at Piera Waibel (pwaibel(at)sunrise.ch).
*For an overview see the following:
Binswanger, H.P./Aryar, S. 2003: Scaling Up Community-Driven Development: Theoretical Underpinnings and Program Design Implications. Policy Research Working Paper, No. 3039, The World Bank: Washington DC. Link here.
Binswanger, H.P./De Regt, J.P./Spector, S. (2010): Local and community driven development: Moving to scale in theory and practice. World Bank Publication. The World Bank: Washington DC. Link here.