UN Report Urges Boosted Business With World's Poor
New UN report urges companies to boost business with world's poor
1 July 2008 - The United Nations Development Programme (UNDP) has encouraged companies to expand beyond traditional business practices and offered them strategies and tools to bring in the world's poor as partners for economic growth, in a new report released today.
Part of UNDP's Growing Inclusive Market's initiative, "Creating Value for All: Strategies for Doing Business with the Poor" draws on extensive case studies and demonstrates the effectiveness of more inclusive business models.
The report highlights the untapped potential of the poor for consumption, production, innovation, and business activity. The more companies include the poor, the more likely they are to not only boost growth but also contribute to the attainment of the Millennium Development Goals (MDGs) - the global anti-poverty targets to be achieved by 2015.
"The power of poor people to benefit from market activity lies in their ability to participate in markets and take advantage of market opportunities," UNDP Administrator Kemal Dervis stated. "Business models that include the poor require broad support and offer gains for all."
The report offers five strategies that private businesses have successfully used to overcome the most common obstacles to doing business with the poor. They include adapting products and services, investing in infrastructure or training to remove constraints, and leveraging the strengths of the poor to increase labour and management pool and expand local knowledge.
"There is room for many more inclusive business models. There is room for more inclusive markets. And there is room for much greater value creation," noted the report, which showcases 50 case studies from around the world which demonstrate that companies can increase profit while boosting their impact on local communities.
Among the examples is a company in China that offered affordable computers and training to rural farmers via a low-cost operating system and software that is easier for customers with limited education, thus expanding its market base.
In the Democratic Republic of the Congo (DRC), where the banking sector was decimated by years of war, a mobile phone company offered encrypted short message service technology to allow customers to wire money. The company now has two million customers in the vast African nation.
The report also offers new tools for interested businesses, such as heat maps - which offer a visual overview of the market or services landscape and a first look at potential new markets.