Diana Hollmann

Notes from the Base of the Pyramid(s)

Try Googling “Base of the Pyramid” and “Egypt.” You will learn about the size of the base of the Cheops pyramid, the length of its sides, and that it was built to be as square as possible. Not exactly what one might be looking for in the context of enterprise and development…

Before coming to Egypt, I did some research on development-through-enterprise initiatives in the country of pyramids as well as in the Middle East and North Africa (MENA) in general. And let me tell you: with most blogs, case studies and conferences focusing on South Asia, Africa or Latin America it is not an easy endeavor. The longer I am in here in Egypt, however, I see that there is not only a tremendous potential for entrepreneurial approaches to development challenges but there are also several exciting initiatives underway.

The need
The Arab region faces several major social and environmental challenges and holds a number of demanding records:

  • Most severe water scarcity: In MENA water availability averages at 1,200 m3 per person per year while the global average amounts to 7,000 m3. With lowering groundwater levels due to less rainfalls and an increase in temperatures, agriculture becomes increasingly hampered. Per capita water availability is expected to further decrease and compared to today’s level halve by 2050 due to population growth.
  • Youngest population: The median age in the MENA region is 22 years compared to 28 years globally. Education systems struggle to meet the demand and employment markets cannot sufficiently absorb school and university graduates. Youth unemployment ranges around 25 percent and higher.
  • Highest prevalence of diabetes: A staggering 24.5 million out of the roughly 300 million people living in the MENA region are affected by diabetes. The region hosts six of the ten countries with the highest prevalence figures worldwide. Diabetes is one of four chronic and non-communicable diseases that account for more than half of all deaths in MENA.

Other pressing issues in MENA include urbanization, polluted cities and desertification. Certainly, the region offers many opportunities for socially-minded entrepreneurs!

Things are moving
The Base of the (economic) Pyramid (BOP) concept might not be as mature in MENA as in South Asia or elsewhere; however, things are certainly advancing in the region.
Just last week the very first BOP study on Egypt was introduced in Cairo. The study was commissioned by the Embassy of Denmark and carried out by the Confederation of Danish Industry in collaboration with the Egyptian consultancy firm Sustainable Business Consulting. The authors applied a hands-on method to obtain the data for the study, essentially going on a 12-day field trip talking to people and observing life in low-income communities across the country.

The study describes the general characteristics of BOP markets (e.g. the need for a new set of business strategies and creative solutions) and provides first insight into high potential sectors in Egypt (highlighting food, health, water, and waste management). It also lists a set of ideas for potential business opportunities. Even though the results may not be statistically ascertained for a representative population, they serve as a point of departure to trigger valuable discussions and create much-needed awareness.

Attendees’ questions and comments at the launch event showed that “BOP” as a concept is relatively new to Egypt. Hopefully, publications such as the new study encourage businesses and new entrepreneurs to come up with innovative solutions. Currently, most companies in Egypt still seem to distinguish between community involvement and business. Philanthropy and charity are widespread in the MENA region and initiatives often lack strategic direction and (financial) sustainability.
On the other hand, however, several Egyptian companies have already incorporated a more inclusive approach to core business activities some time ago:

  • Founded in 1977, SEKEM is a conglomerate of companies working on sustainable development through businesses in organic agriculture, health care, and other fields,
  • Established in 1981, Environment Quality International (EQI) is a consultancy and investing firm that helps to address environmental challenges as well as governance and enterprise development, and
  • Initiated in 1992, Appropriate Development, Architecture & Planning Technologies (ADAPT) produces low-cost housing for low-income communities while sourcing local material.

The local business community and civil society might still have some way to go as hesitation for cross-sector partnerships persists. But now is a fascinating time to be here and see this process evolve. The private sector and development practitioners come together to discuss ways for collaboration and involvement in order to co-create sustainable solutions to the most pressing challenges. At least here in Egypt, there are several entrepreneurs that have laid a solid basis to learn from including SEKEM, EQI and ADAPT.

And there is more to come
2010 promises to be an exciting year for the MENA region. There are various initiatives underway to keep an eye on (and be assured Nextbillion.net will also keep you up-to-date):

To conclude
In MENA, there are considerable needs and opportunities for entrepreneurial approaches to development. Now it is important that the momentum picks up. Familiar organizations such as Ashoka and Endeavor already show presence while Acumen Fund considers to expand its activities in the region.

Hopefully, MENA will not be a blank spot on the maps of development-through-enterprise researchers and practitioners much longer.