News Roundup: Tierney, Hubbard, HP Suggest BOP Mainstream
Mainstream media coverage of the intersection between business and poverty has been strong of late, undoubtedly catalyzed by Yunus winning the Peace Prize last week.? Three stories–two from National Public Radio and one from the New York Times–bear special mention here on NextBillion.
John Tierney writes in the New York Times (subscription required) that those of us interested in making poverty history should stop lauding Muhammad Yunus long enough to recognize another hero in the poverty alleviation fight: Sam Walton, founder of Wal-Mart.? He argues that poor villagers often prefer working $2 a day jobs in factories that supply Wal-Mart’s famously low-cost goods, and that even low-income jobs are better than no jobs whatsoever. ?Unfortunately, Tierney misses the mark.? He oversimplifies the argument that jobs–even low-paying jobs–are a pathway out of poverty.? That villagers have the right to choose sweatshop wages is, in a way, the producer-side version of C.K. Prahalad’s much-maligned BOP consumer choice argument.? Unlike Prahalad, however, Tierney does not have a well-researched 400+ page book to back him up when critics come knocking.? More critical coverage of Tierney’s op-ed is at MicroCapital.
The other two stories of note are segments from NPR’s Marketplace.? In the first, Glenn Hubbard skewers the traditional aid establishment–giving it a ?slim chance? of long-term success–and suggests that foreign aid should instead focus on supporting good institutions.? He also argues that entrepreneurship is what separates successful Asian economies from poor African ones, and that microfinance will help close the gap: ?Fostering entrepreneurship, even on a small scale, can make a big difference for national economies and individual lives.? ?
While Hubbard’s commentary may not be anything new to veterans of the BOP hypothesis, it is further proof that the concept is getting into the mainstream–here you have the former chairman of the Council of Economic Advisors and current Dean of the Columbia Business School arguing that tiny loans to poor people will help Africa reach its full potential–and on National Public Radio no less.? A big hit, as they say.
Finally, correspondent Miranda Kennedy reports that Hewlett-Packard’s product development lab focuses on the ?next billion customers? and that the company believes that the ?large majority of these customers are going to come from high growth markets such as India.?? Need I say more?