Innovate Today: 8 Ways Business Can End Poverty

Article by Steve Enders with contribution from Katherine Gustafson.

Some of the world's biggest thinkers gathered at the Clinton Global Initiative annual meeting in New York last week pondering transformative change for the world's poor. Bring four billion people out of poverty and create a whole new class of consumers. Good idea, right?

But reaching the people living at the so-called Bottom of the Pyramid is not that easy. They generally earn less than $2 a day and live in situations so diversified, there’s really no silver bullet to help them all. Despite the odds, eight ways for business to help end poverty emerged at the meeting.

Here's how it could happen:

Look inside: Innovation can happen from within the Base of Pyramid itself —people create devices and technologies on their own which, if discovered, could be scaled to help millions of others. Luckily, the people with the resources to scale products are working more and more with the people who are creating and using them. This needs to continue for any product or service to gain mass adoption and affordability.

Patient capital: Investors looking to put money down on products and technology need to be patient — they're not going to get a huge ROI overnight, and any return may indeed be small for a long while. Acumen Fund Founder and CEO Jacqueline Novogratz said during a panel discussion that the developing world needs the investment, and investors who are willing to wait for years while products become affordable, can be locally expanded, and later reach larger scale.

Internal sustainability: Sustainability means more than being environmentally friendly. Rather, the word can be used to drive product development within the companies that are looking to get their wares into the hands of the people who need them most. Internal corporate sustainability -- developing processes and organizations geared at making products compatible with different communities is key to getting products into the right hands. Products need to be made efficiently to keep costs down and to ship a ton of them out.

Market focus: So you have a widget that you think is going to change the world? Who is going to get access to it? Selco India's Dr. Harish Hande delivers solar power to poor people in India, and stressed that the needs of people making $2 a day are very different from those living in abject poverty and making less than $1 a day. The person who needs solar in a rural village outside of Mumbai might need a completely different system than someone living in a Brazilian slum. Your product has to meet the needs of the right market.

Embed innovation: Gordon Enk, Vice President of Strategy and Co-Founder Enterprise for a Sustainable World, and Erik Nikolajs Simanis, Senior Researcher at Cornell University’s Center for Sustainable Global Enterprise, are collaborating to develop the very concept of “Embedded Innovation.” The idea is to use social mobilization techniques as a part of business development to fan the flame of community interest in a new business. Simanis describes the concept in a paper in the MIT Sloan Management Review: Embedded innovation “entails the creation of new communities, where 'community' consists of diverse people working together to create and sustain interdependent lives. Innovation isn’t enabled by new relationships, it is the relationship.”

Keep the money flowing: David Porteous of Bankable Frontier Associates calls the use of social transfers "revolutionary." The transfers allow some of the world’s poorest people to receive small cash transfers from their governments. What were traditionally food programs are transforming into cash programs, which enhances the opportunity for financial inclusion of the poor, as the bank transfers require them to have bank accounts. In northern Kenya, for example, poor people are receiving $20 a month. This program gives the “bottom billion” the chance to climb the rungs of the economic improvement ladder in a way that those operating in a purely cash-based economy cannot. And that, in turn, creates a business case for governments to move in this direction.

Don't re-invent the wheel: Craig Mundie, Microsoft's chief research and strategy officer may not be planning to ship Windows 7 to Bangladeshi slums, but he made a point about product development worth remembering which can be applied to anyone making just about anything. Any solution worth anything, he said, has two parts: the part people see and use, and the parts they don't see — the infrastructure or platform components that work behind the scenes. So when thinking about big, transformative change he said, make the behind-the-scenes stuff solid so you don't have to re-do it every time you have a new product coming to market. He used cell phones as an example, saying that people don't need a new cellular grid each time a new phone comes out, what they need are better, more practical phones that work better on the existing infrastructure. Granted, there are a lot of infrastructure projects that need work, but it's always best if you can develop things without needing a huge platform change first.

Make people feel good: More than getting practical products into the hands of millions of people, why not try to make those millions of people feel better while you're at it? Novogratz said that while people need plenty of goods and services, they also need things that are accessible and beautiful. "Dignity is more important to the human spirit than wealth," she said. "People like to buy things that make them feel good. It's part of the human spirit." Steve Jobs knows this about computers. Now what if you could make that simple cook-stove a little more elegant?

Photo courtesy of stock.xchng.