Innovation at the bottom of the pyramid

17 October 2013

Benedicte Faivre-Tavignot, Executive Director of the HEC Paris “Social Business / Enterprise and Poverty" Chair, made a speech on "Innovation at the bottom of the pyramid" at the Women's Forum for Economy and Society, on October 16th 2013. In this article she uses her research, field experience and interactions with Danone, Schneider Electric and Renault, sponsors of the Chair, as a basis to explain how innovative initiatives rolled out by multinationals can reduce poverty. She considers BOP as a lever for individual, collective and organizational transformation.

Women's Forum 2013

As the Millennium Development Goals are redefined, it is becoming increasingly clear that if poverty is to be reduced or even wiped out, then it will be through innovation and a new approach of multi-player partnerships. The private sector has a new and important role to play. Not alone, of course, but with the public authorities and civil society.

Over the past ten years or so, there have been increasing initiatives by multinationals, notably from Northern countries — corporations who realize that the world expects something from them and that it is in their interest to throw themselves into the fight, although they have tended to do it with their usual reflexes and, so far, with limited efficiency.

When we speak of innovation, we think immediately of technology. For multinationals in developed countries, innovation often means designing ever-more sophisticated products in large laboratories, partly cut off from reality and the needs of the population, in order to make themselves more attractive to the world of finance and stock markets. Ultimately, they are addressing only those at the very top of the pyramid.

Little by little, these multinationals are coming to understand that the innovation at stake here is of another kind:
- Innovation in their business models. Technological innovations very often already exist; the challenge is now to provide access to them for people living on $2 a day or less.
- Frugal innovation. Rediscovering simplicity; learning to live and work with fewer resources, less energy, less water and fewer materials; making greater use of local resources in an entrepreneurial mode (like Steve Jobs in his garage) and a circular way: spend even a short time in a slum and you will see that everything is recycled and re-used.
- Innovation in co-creation: players in the rich countries are realizing that they are not familiar with the world’s poor populations and that they need to interact with other players who are closer to reality.

The direct impact of the innovative initiatives rolled out by these multinationals can bring a certain reduction in poverty: for example Grameen Danone's impact on access to nutrition, Grameen Véolia on access to water, Schneider-Electric with Grameen and Gawad Kalinga in access to energy, etc, But perhaps their indirect impact on poverty is every bit as important, although more difficult to measure. For the effort helps transform the firms themselves.

- Starting with the individual transformation of the people involved in these projects;
- Leading (under some conditions) to a more collective transformation;
- Contributing, ultimately, to a more sustainable, inclusive and real economy.

Bénédicte Faivre-Tavignot is the Executive Director of the HEC Paris "Social Business / Enterprise and Poverty" Chair, and the Academic Director of the HEC Paris Master of Science in Sustainable Development, which she co-created in 2003.
Her research focus is on reverse innovation; she’s studying the processes through which social businesses and Base of the Pyramid business models can be a lever for innovation and strategic renewal. She received her PhD in Management Sciences in 2012.
She worked before 15 years in consulting and training, in Eurequip Consulting Group, and in Philips as a controller. She graduated from HEC Paris in 1988.

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