Strategies to help the poor

The United Nations Development Programme’s latest report on “strategies to create value for all” highlights viable business models that advance overall human progress by including the poor. While the findings reflect the imperatives of globalised competition for enterprises, they are of particular relevance to the emerging economies of Asia where, despite the impressive growth of recent years, issues of equity and employment generation have been given the short shrift. That the world’s poor — people who live on less than two dollars a day and constitute nearly one-third of the population — can spur growth and spark social change is the burden of the report commissioned under the UNDP’s 2006 Growing Inclusive Markets initiative. It argues that the four billion people living at the bottom of the income pyramid — earning less than eight dollars a day and having a combined income of $5 trillion — bring value as consumers, employees, and even as producers when native entrepreneurship is tapped and nurtured. The 50 case studies documented in the report, including the Sulabh paid-sanitation systems and Narayana Hrudayalaya’s telemedicine networks, identify five common constraints that hinder business activity in the developing world and five successful strategies that integrate them into the value chain. Among the latter are pioneering adaptations of technology and business processes that underpin many low-cost telecommunication, financial, healthcare and other services and products for the poor. Their impact on small and medium enterprises has been nothing less than revolutionary: wireless networks reduce dependence on physical infrastructure; smart cards do away with the need for banks and service providers to follow up on payments; and biometrics help overcome inefficient regulation.

Often, these innovative adaptations of technologies and business models offer solutions to the one billion who have no access to clean drinking water and the 1.6 billion who are without electricity. These bottom-up approaches lend hope in the face of traditional impediments — red tape and bureaucratic apathy.India’s massive strides in information and communication technologies are not matched by a realisation of its full potential in several domestic sectors. Drawing important lessons from the current report will go a long way in securing equity and fair distribution of the gains of development and sustaining the current economic momentum.

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