NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

It’s nice to be back home in Washington, catching up with friends and enjoying the spring weather after quite some time away. After a field trip to Brazil I took off again, this time thanks to an opportunity to visit Spain and Peru. This modest allowed me to take the pulse at the base of the pyramid movement in the Spanish speaking world. Following are some notes and afterthoughts of the trip.

First stop was Madrid, where I participated in a Future Trends Forum organized by the Bankinter Foundation for Innovation. Bankinter is one of Spain’s largest financial institutions, having won several international awards over the years thanks to their innovations in products, services and the use of novel technologies. The Foundation is part of their CSR agenda; through it, the bank creates spaces for conversation among experts in emerging global trends, which are intended to inform the innovation agenda within the Spanish government and the private sector as a whole.

Two FTF take place every year, and topics are chosen from relevant and current trends that are suggested by members of the forum themselves. Previous venues themes include topics such as biotechnology, mobile technologies and the role of emerging economies in the 21st century; this year’s summer Forum was titled “Reinventing Support for Sustainable Development” and revolved around the challeng and opportunities in supporting entrepreneurial approaches to tackle poverty and environmental degradation.

Many NextBillion friends and allies paticipated, including Maria Blair from Rockefeller Foundation, Jocelyn Wyatt from IDEO, Chris West from Shell Foundation, Ted London from the University of Michigan and James Koch from Santa Clara Univeristy and the Global Social Benefit Incubator. It was also interesting to meet new people with very interesting insights and contributions to the BoP conversation, like Nishant Lalwani from Monitor Inclusive Markets, Andrew Wolk from Root Cause, Maria Wells from Ashoka and Mari Nuraishi from Gobal Giving.

Rather than a discussion about approaches and nuances in the support of social entrepreneurs, the conversation shifted, for the most part, towards tools and innovations that encourage greater collaboration and coordination among the organizations in this space. A lot was said about innovations that could be applied to sector so that knowledge sharing and management becomes more efficient, so that approaches known to work to address various challenges get to spread more rapidly. At one point, Ms. Blair suggested this space “needs more scalers and less solvers”, meaning that instead of more water purification technologies (for example), there is a need for more entrepreneurs and distribution systems that help existing ones to scale out. Her characterization -that of “scalers” and “solvers”- was a sticky one and kept being brought up throughout the whole event.

The specifics of the discussion and its conclusion will be turned into a paper that will become available here in NextBillion, as will the video recordings of the talks during the conference. My general feeling after visiting Spain is one of hope and enthusiasm, not only because of the growing interest I saw in this idea amongst the Spanish business community (mainly during the FTF) but also in the business schools of Madrid, whic are growingly international but largely inhabited by Latin American students. That was my feeling after having the chance to meet some of the students at IESE in Barcelona, who are very interested in this space and pushing for specific social enterprise courses to be offered in their curricula. Their Net Impact chapter is trmendously active and their second Doing Good and Doing Well conference is already scheduled to take place next February with close to 500 atendees.

I met with Max Oliva, who leads the area of corporate responsibility at Madrid’s Instituto de Empresa and with whom my colleague Rob Katz has done several workshops on base of the pyramid for new MBA students in the past. I would argue that these schools, together with TU Delft in the Netherlands and perhaps the Said School of Business at Oxford, are leading the way in making social enterprise and “the next billion” a mainstream theme in business education. I wonder if there’s an equivalent to the Beyond Gray Pinstripes report for Europe… I’ll look into it.

So after a few days with “base de la pirámide” enthusiasts in Spain I flew to Lima and took part in an interesting discussion on the challenges and opportunities for this work in Latin America. I left the meeting with mixed feelings. On the one hand, the language and idea behind development through enterprise seems to be gaining ground, especially among the business community in the region. The work done by groups like the SNV-WBCSD Inclusive Business Alliance and new initiatives like IDB’s Opportunitites for the Majority can take credit for what seems to be a change of paradigm among the business community, just like the efforts of organizations like Ashoka aimed at convening different actors and stakeholders to advance the concept and practice of social business in the region.

The flipside to this positive trend is just a feeling I have, an intuition without much empirical backup but important nonetheless. In short, I feel Latin American needs a much stronger sense of urgency around this work, specifically in changing the business paradigm among those living at the base of the pyramid. There are a couple of reasons why I think this is the case. First, I would argue that Latin America is a region with a particularly strong tendency to fall into the hands of populist governments that do a great job creating distorsion around the idea of markets and sweeping off whatever remains of the so called enabling environment for business. That discourse has the perfect background image in Latin America: The most unequal continent on earth; huge mansions back and beautiful buildings back to back with massive slums in cities like Rio de Janeiro and even Bogota. What happens when that kind of rethoric takes hold is now most in countries like Venezuela, where development efforts are more than urgent but development through enterprise (or, pretty much anything through enterprise) is no longer viable.

Again, these portraits send signals that businesses are vehicles only useful at making the wealthy even wealthier. The business community has taken note of the reivindication that is needed in such circumstances and seems to be taking an important step in exploring inclusive business as a viable strategy, thus moving away from transition concepts like CSR. However, this movement needs a lot more strength and urgency not only from the business community but from society as a whole to make inclusion a real and sincere premise of development in the region. We need a much more creative and bold vision for the region, clearly articulating the role of enterprise and markets in creating an environment where choice is not an exclusive and unaffordable commodity but an assetwidely available.

A long term vision of change requires that we incubate a new generation of inclusive business leaders, not only at the region’s business schools but also in the rural areas and slums of Peru, Colombia, Brazil, etc. This moment in time is key to build a smarter and more complex vision of what business is and what it is not, and the role different segments of society can take in it to fulfill their most basic needs. We need to do so creating spaces where collaboration between businesses and the BoP takes place and new business models are conceived, and new BoP entrepreneurs come to surface.

From my visits to both Spain and Peru I gather that the “political will” from the business community is there, and resources ready to be allocated to give inclusive business a serious try. Now we need the buy in from those we seek to include or, put another way, to come up with ways in which this concept also gains ground in those communities.

But outreach and advertising as usual will not suffice to shift the enterprise vs. poverty and inclusion paradigm among the poor. Collaboration and co-creation need to start taking place and this is where smart investments and innovative resource allocations will be paramount.

I’ll go into more detail about what these “spaces” could look like in a future post, perhaps. This is already a long one and I thank you for your time if you’ve read this far.