Martin Herrndorf

Guest Post: Research on Inclusive Markets – Anyone Up for Academic Leapfrogging?

Poverty has long been a blind spot in management research. Even research on emerging economies like China, India or Brazil – that house a significant share of the world’s poor – has evaded the topic. The field has been dominated by selected books and practitioner articles, but failed to make into the top journals. Recent publications on business and poverty could change this – and provide a roadmap for researchers attempting to bring more rigor to the field.

The status quo – do they or don’t they look?

This lacking presence might come as a surprise for non-academics – wasn’t the whole field started by academics, with CK Prahalad -sadly passed away recently– as the leading figure? First, many of the efforts in the field actually pre-date these publications. Second, while the early set of BoP publications is surely inspiring and had an huge impact of bringing the attention of practitioners to the topic, they’re not without flaws. Early research focused mostly on successfull cases. While many of the cases are inspiring, they might not be as successful as initiatially claimed. Many were unprofitable, did not really reach the poor or failed to deliver significant social benefits, says Aneel Karnani, a colleague of Prahalad from the University of Michigan.

And success cases might offer only limited insight into the traps and difficult choices companies could face. Some researchers will even insist you might not even identify “success factors” by looking at successfull cases, as failing ventures might have done similar things in the first place, but differed on other, then overlooked items.

A call for action!

Research on business and poverty could thus well need a boost – both by being more rigorous in its methods, as well as more relevant in the question it asks. In a bold move, at least for the turtle-speeded world of academic publishing, a journal of the prestigious Academy of Management has addressed BoP in its lates issue. Garry D. Bruton, an editor of the journal, identified „the Need for an Expanded Examination by Management Scholars” into the relationship of business and the world’s poor. Besides a good summary and overview of the literature, he points out four key findings:

  1. “Almost all of the [existing] articles are either theoretical articles or case-based research” – meaning we still lack quantitative studies with large case numbers or controlled experiments pioneered by economists in the last years.
  2. The research has shifted from the pure profit-oriented discussions of the 90s to a more nuanced picture – balancing profit requirements and societal contributions.
  3. Research often addresses the topics only indirectly – there “remains hesitancy to directly address the issue of poverty and business”.
  4. “Few of the authors of the articles in the review actually reside in nations that are home to the bottom billion” – it’s still US-americans and Europeans talking about the poor in developing countries.

Providing and example how to move forward, the journal also contains an interesting article on current research on microfinance. It points out ways by which we could see more research on such a dynamic sector in the near future. Currently underway is also a special issue of the Journal of Management Studies. It will significantly expand the presence of poverty-related articles in top-journals – and provide future scholars a stronger literature base to build on.

A community in the making?

Behind research are always researchers, and normally these form communities around their topic. This year’s mega-meeting of management scholars, the five-day-long “Academy of Management” in Montreal, has featured a wealth of sessions on the Base of the Pyramid – targeting community involvement, cross-sector partnerships and social innovation. The conference has also shown how the topic “crosses” disciplinary boundaries, as sessions popped in different of the numerous academy’s divisions.

To strengthen the community, Kevin McKague and Moriah Meyskens have run a third edition of their BoP-related professional development workshop, titled “Navigating the Tensions in Poverty Alleviation Research: Scholarly Rigor vs. Practical Relevance”. Additionally, the topic gained weight through sessions featuring academic heavyweights and potential “poverty converts” such as Jay Barney. Beyond any theoretical motivations, he explained his very personal drive to work on poverty – along the lines of “I’m sick of poverty, and want to do something about it” – to an audience listening to his business explorations in Bolivia.

In a parallel drive, oikos and UNDP have taken the drive to support young researchers dedicated their work to poverty through their annual “oikos UNDP Young Scholars Development Academy”, held this year for the second time, in Turrialba and Alajuela, Costa Rica. The academy brings together selected young researchers, that are likely to make in impact in the coming years. Feel free to check out the participants and their working papers, both for 2010 and 2009. (Full Disclaimer: The author organised both of these academies.)

How can you contribute?

Researchers rely on access to the field – a pre-condition without especially qualitative research cannot be successfully implemented. Practitioners can benefit from interaction with academics – but probably more from a prolonged, trustful engagement then from one-shot interviews. Leading BoP research exemplifies this – like the one implemented by Ted London and visionspring, Johanna Mair and Christian Seelos and Aravind Eye Hospital, or Samer Abdelnour’s work in Sudan.

These long-term engagements can be challenging for both sides, and raise issues like trust, confidentiality and cultural sensitivity, especially in a business and development setting. Handled well, I believe, such relationships can be mutually beneficial and help to propel the field as a towards the success that’s so urgently needed in many parts of the world.

Author’s Note: Thanks to Kevin McKague for providing comments to this article.