Pyramid Schemes

Recent weeks have seen surprisingly effective demonstrations in support of animal testing in SustainAbility's home city of London, under the catchy title of "Pro-Test." Will support for the oft-reviled practice catch on? We aren't sure, but it made us think. If we humans are animals, is there ever an argument for treating people as laboratory animals? And if we want to "Make Poverty History," has the time come to put poor people under the microscope?

Hold the outraged emails! We don't mean literally. We are strong supporters of the human and civil-rights agendas. Our proposal is not in the Josef Mengele vein, nor even in the spirit of the experiments that GE (new darling of the corporate sustainability movement) helped conduct on Walla Walla inmates in 1963. (The prisoners had their scrotums and testes irradiated to see what effect radiation might have on the human reproductive system.) Instead, the thrust of our argument is that, with billions of poor people in the world, there is surely a growing case for bringing poverty "into the laboratory," to study with rigor what alleviates or exacerbates it.

We believe there is a forceful argument for a more experimental approach to tackling the challenges faced by the poor. Businesses should use every method at their disposal to learn how they can become involved, including whiteboarding, scenarios, market research, product testing, and, yes, focus groups involving those living at the bottom of the wealth pyramid.

We are not alone in this belief. Consider this: at the peak of the wealth pyramid -- in an Alpine world of après-ski, furs, and diamonds -- last year's World Economic Forum in Davos invited more than 700 of the globe's movers and shakers to a "Global Town Hall Meeting." They voted on the biggest global challenges, and to the surprise of many -- including, we suspect, the organizers -- the top issue, attracting 64 percent of the vote, was poverty. (Climate change, incidentally, came in third.) The question left hanging by that stunningly honest result was: What can we do to help the world's poorest people up the slopes of the wealth mountain?

Learning Lab

The scale of the challenge may well grow as the boom in sustainability-driven investments takes off. Certainly the growth of the underlying industries is trending up. "Clean tech" has now moved up to sixth place among U.S. industry sectors, according to the Cleantech Venture Network, behind software, biotechnology, telecommunications, medical equipment, and semiconductors. But the divide between sustainability haves and have-nots is yawning once again.

Despite the glib sales pitch, "give them capitalism" nostrums often fail, and can even increase have/have-not divides rather than bridge them. Even the notion that there are vast "bottom of the pyramid" markets for the taking needs rigorous testing. And that's one key reason why we are delighted -- more or less as this piece is posted -- to be getting the opportunity to peer over the shoulders of staff at the Cornell University Base of the Pyramid Learning Laboratory.

The lab brings together companies, NGOs, entrepreneurs, and academics to "create growth opportunities in underdeveloped global markets." Specifically, the Cornell team has been tracking six multinational firms as they conceive, propose, implement, expand, or terminate projects aimed at the base of the economic pyramid. These companies -- Coca-Cola, Dow Chemical, DuPont, Johnson & Johnson, HP, and Procter & Gamble -- have agreed to provide broad access throughout the study to a number of ventures aimed at serving poor markets.

It isn't hard to imagine such companies having quite unintended impacts on local firms and employment. Anticipating this, the Cornell folk agree that the most crucial aspects of this work involve developing a "Base of the Pyramid Protocol™," to guide firms in identifying and developing new sustainable products and business models in partnership with poor communities. The aim is to use open-source methods to "establish and test a 'protocol' for deeply understanding the needs, perspectives, and capabilities of BoP communities in a manner that provides them and the corporation with lasting value." If poor people are to become part of a vast, global laboratory designed to evolve market-based mechanisms to help them out of poverty, the existence and observance of such protocols will be a necessary condition for success.

Cornell isn't alone in this field. At the University of Michigan, Professor C. K. Prahalad -- whose book The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits did so much to put this topic on the political agenda -- teaches tomorrow's business leaders how to navigate the new economy. (See an example of their work.) And one of the neatest taxonomies of efforts in this field [PDF] was drawn up a couple of years back by the Global Business Network.

A few thoughtful multinationals -- admittedly under pressure -- are also beginning to investigate BoP potential. One notable pioneer is Unilever, which investigated how Unilever Indonesia impacts poverty, both positively and negatively. In a strikingly candid assessment, the study concluded that "participation in value chains such as UI's does not automatically guarantee improvements in the lives of people living in poverty." [Full disclosure: Unilever is a SustainAbility client, but not in this area.]. Of course, sometimes even the most BoP-friendly multinationals can produce negative impacts when they bulldoze into markets. That's why we are increasingly interested in the catalytic impact of smaller social entrepreneurs, who are sometimes able to approach the same market challenges more delicately -- while having greater impact.

Meanwhile, if you want to understand where the emerging critique of BoP approaches might eventually head, a good place to start is with Paul Hawken, interviewed recently by John Elkington. With the exception of organizations like Oxfam, Hawken believes that most BoP research has operated beneath the mainstream NGO radar to date, but that as it gains traction we can expect the temperature of the debate to rise.

Happily, some NGOs, like the Berkeley-based Greenlining Institute, are working the issue. They contrast the old (bad) habit of "redlining" -- denying poor communities services available to the better-off -- with the new (good) habit of "greenlining," which recognizes business opportunities in low-income and minority communities and aims to provide quality financial services and products at a fair price.

If the world's poor are ever to be more than laboratory animals at the mercy of the experiments' whims, finding out what they think should be the business world's top priority.