The following SIX premises serve as the under-pinning of Emergent’s strategy:1. Co-Creation: Once entrepreneurs and companies recognized the BoP opportunity, they adopted wholesale changes in their business models, turning to local sourcing and production, extended distribution, single-serve “sachet” packaging, microfinance, NGO partnerships, and a variety of other innovations. This was indeed an exciting and positive trend. However, as happens with any emergent phenomenon, innovation tends to create new problems while it is solving old ones. Many of these initiatives have not scaled and some have failed outright, with some negative repercussions.
It is now clear that to succeed at the BoP, it is critical to work with people from within the underserved to communities to co-create a fortune with the base of the pyramid. 2. Leapfrog Green Innovation: Many BoP ventures and initiatives have also sought to simply adapt environmentally unsustainable products and services to sell to the poor and aspiring middle-classes. Left unchecked, this path leads inevitably to environmental oblivion. If the developing world were to suddenly catch up to current US standards, and with the population projected to go grow to 8 to 9 billion, world consumption rates would increase elevenfold. This could literally destroy the natural systems—soils, watersheds, fisheries, forests, and climate—that underpin all economic activity, and indeed, human existence.
Serving the BoP sustainably therefore requires “leapfrog” green innovation: the incubation today of the environmentally sustainable technologies and industries of tomorrow. 3. Green Leap Strategy: Because green technologies are frequently “disruptive” in character (i.e. they threaten incumbents that serve existing markets), the BoP may be the most appropriate socioeconomic segment upon which to focus initial commercialization attention. Learning to close the environmental loop in the base of the income pyramid is thus one of the key strategic challenges—and opportunities—facing companies and entrepreneurs pursuing the BoP in the coming decade. New technologies—including renewable energy, distributed generation, biomaterials, point-of-use water purification, wireless information technologies, sustainable agriculture, and nanotechnology—could hold the keys to addressing environmental challenges from the base to the top of the economic pyramid.
There is an urgent need for, what Stuart Hart calls Green Leap strategy — commercializing green technologies through BoP business experiments aimed at leapfrogging today’s unsustainable practices.
4. Reverse Innovation and Up-Market Migration: Each of these technologies has the potential to grow and become one of the 21st century’s “next-generation” businesses. If such a strategy were widely embraced, India and the developing economies of the world could become fertile ground for tomorrow’s sustainable industries and companies. Ultimately, many of these sustainable innovations can also “trickle up” to the top of the pyramid, making current unsustainable technologies obsolete, and dramatically reducing the “environmental footprint” for the wealthiest billion who currently consume the most resources and create the most waste.
Such “up-market migration” presents enormous growth and profit opportunities for companies through what is now being called “reverse” or “frugal” innovation.
5. Facilitating nascent Clean tech businesses first for BoP: Incubation of nascent clean tech businesses first in the emerging markets of the developing world at the base of the pyramid with huge populations offer huge growth potential. For aspiring Clean Tech entrepreneurs, therefore, expensive R&D and new invention are probably unnecessary; instead, the first step is to take a careful stock of what relevant clean technologies already exist on the shelf—either in existing large corporations, or at Universities. By gaining low-cost access to these technologies, it may be possible to engage in a form of modern-day green “alchemy.”
There is a rare opportunity here to turn “lead” into “gold” by repurposing the thousands of clean “shelf” technologies extant in the world to first serve the needs of the underserved at the base of the pyramid.
6. Symbiotic Relationship: The Green Leap is thus a new form of business strategy that can tap into the entrepreneurial spirit in all of us: It can empower and motivate change agents in global corporations and NGOs, social entrepreneurs, residents in underserved communities, investors, and public servants alike. It is a new form of Sustainable Enterprise that can potentially unite the world—east and west, north and south, rich and poor—in common cause, fostering peace and shared prosperity. And perhaps most importantly, it is a strategy that starts small and grows from the bottom up, beginning with the world’s poor and underserved: the base of the pyramid.
Such a strategy also has the advantage of fostering a symbiotic relationship between the “Triad” (US, Western Europe, Japan) and the emerging market giants (i.e. India, China, Brazil) to generate “co-prosperity”—a win-win solution.