Innovative business models
In developing and emerging countries, poor segments of the population are often unable to afford essential goods such as water, food or electricity, or if so then merely in meagre amounts. These people constitute potential markets which, once tapped by businesses, can contribute to reducing poverty. This is why the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH is supporting efforts by business enterprises to develop innovative business models which benefit the some four billion people at the bottom of the global income ladder (termed the base of the pyramid, or BoP) while at the same time offering profitable business opportunities.
Such inclusive models not only integrate and mainstream people in developing and emerging nations as customers, but also often provide the means for these people to become producers themselves. Solar-powered lighting allows vendors to illuminate their shops at night so they can increase sales, while decentralised power and water supply systems create new local sales structures. Local business and industry are strengthened, and both sides profit from sustainably designed models.
BoP Sector Dialogues – Our Service for Businesses
GIZ, acting on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ), organises events known as BoP sector dialogues where business enterprises from a particular sector can share ideas about opportunities and risks of inclusive business models and their market potential. Based on examples from actual practice, these businesses can then develop their own ideas for suitable products and services. For each sector dialogue, GIZ prepares a guide that provides an overview of relevant markets and approaches for entrepreneurial initiatives.
BoP Sector Dialogue on Affordable Housing
The market for affordable housing represents a broad range of market opportunities and entry points. One third of the world’s urban population live in slums. At the same time people at the base of the economic pyramid (BoP) spend more than USD 700 billion on housing every year. In other words one of the greatest development challenges represents also a business opportunity. Maybe your business opportunity? Pioneer companies in the sector show that it is possible to translate these staggering numbers into tangible business value. The BoP Sector Dialogue presents good practice and sets a spotlight on how to unlock this market potential?
BOP SECTOR DIALOGUE ON ICT
Companies can use Information and Communication Technologies (ICT) to broaden their existing business models and enter new markets in developing and emerging countries. Mobile phones are widely-used in low-income markets thus unlocking significant business opportunities. ICT-based approaches make it possible to provide low-income communities with products and services previously inaccessible to them. The BoP-Sector Dialogue ICT highlights the related opportunities and challenges that arise for companies from the ICT, energy, pharmaceutical, agriculture and insurance sectors.
BoP Sector Dialogue on Agribusiness
While integrating small farmers in value chains is not an easy task, it nevertheless holds major business potential for the agricultural and food industries. The practitioner guide and a workshop entitled ‘Growing Business with Smallholders’ support efforts by businesses to identify challenges, develop concrete solution approaches, and initiate cooperative undertakings.
BOP SECTOR DIALOGUE ON PHARMACEUTICALS
Many treatable diseases pose major problems for the poor, for medicine is often unavailable or too expensive. The 4A+1 Framework developed for our sector dialogue on pharmaceuticals enables companies to develop solution approaches and product ideas for supplying patients among poorer segments of the population.
BOP SECTOR DIALOGUE ON ENERGY
Electricity is often hard to come by in rural regions of many developing and emerging countries, and innovative solutions are in demand. The Energy Business Model Generator developed for this sector dialogue supports business enterprises that seek to develop sustainable business models aimed at creating clean, reliable and affordable energy solutions for BoP markets.
Activities of German development cooperation
BMZ has issued a publication providing an overview of German development cooperation activities promoting inclusive business models. Examples from actual practice illustrate experience gained to date.