This morning I hear a very good comment on the need of doing "shared business cases" where not only the value gets shared, but also the risks, costs, etc. Local partners are many times motivated to keep good relationships with local governments, so having local governments as partners helps in making the case for them
Shuan Sadre Ghazi said:
Hello, Hola, Hallo! This is Shuan, researcher on pro-poor innovation at the UN University (UNU-MERIT). My question is about the incentive mechanisms for the local partners. Some potential partners might have a greater power in the local network, and it might not be easy to bring them onboard and convince them to share their resources (the typical "what is in it for me?" response). Are there examples of incentive mechanisms to bring such local partners on board?
This has been a very rich discussion. What it highlights to me is the need to combine new shared value business models, technology, training, finance and public policy to make this work – to support small businesses at scale. And this suggests the need for collective action. We all need to help build the ecosystems that will enable small businesses including small retailers to succeed.
Our apologies to those in Europe and beyond who were shortchanged due to the change in time difference this past weekend in the US.
But we will leave the discussion open. I would like to encourage panelists and participants to read through the great contributions we have had today and contribute to the conversation in your own time! Please also see this week’s blog series on the 4e program at http://snipbfp.org/1BYiMfl
Jane, will you post some conclusions? For me, one of the first bullet points is about technology access for the base of the pyramid and what we saw in the first part of the discussion
This has been a very rich discussion. What it highlights to me is the need to combine new shared value business models, technology, training, finance and public policy to make this work – to support small businesses at scale. And this suggests the need for collective action. We all need to help build the ecosystems that will enable small businesses including small retailers to succeed.
Our apologies to those in Europe and beyond who were shortchanged due to the change in time difference this past weekend in the US.
But we will leave the discussion open. I would like to encourage panelists and participants to read through the great contributions we have had today and contribute to the conversation in your own time! Please also see this week’s blog series on the 4e program at http://snipbfp.org/1BYiMfl
Is this the scheme that Coca Cola has used in Africa? Other examples?
Miguel Aldaz said:
SMEs can be challenging for the aspects you mention among others, but can also be part of the solution. Per example, in inclusive distribution channels we are seeing the use of microdistributors (i.e. SMEs) as a way to enable door to door sales channels, microfranchises, etc.
Gaston Bilder said:
Is it the case that there normally are disadvantages to working with SME? quality, lack of economies of scale; etc?
Great discussion and comments. On behalf the IDB, thanks for the opportunity to participate. Programs like 4e are groundbreaking in terms of public-private partnerships, impact and scalability. Hope to see it grow and many more like them.
Agree. The whole thread is very valuable, but it could be great to find some summary or conclusions.
Regards,
GB
Nicolas Murillo Gomez said:
Jane, will you post some conclusions? For me, one of the first bullet points is about technology access for the base of the pyramid and what we saw in the first part of the discussion
Hi Nicolas - yes we'll be pulling together a summary of the discussion.
Nicolas Murillo Gomez said:
Jane, will you post some conclusions? For me, one of the first bullet points is about technology access for the base of the pyramid and what we saw in the first part of the discussion
Technolgy is realy important but sincronized with local culture and local infraestructure. It could be realized with zero money investment to small business. Just time and effort investment with inmediatly positives revenues backs.
Hi All, my apologies for missing the discussion. I am in the process of reading the thread below, but wanted to ask a few questions (Sorry if this was already covered):
In my research, it seems that a lot of the ventures that reach scale (affecting 1M+ impact) are really focusing on decentralizing the supply chain with inclusive model structures that allow local entrepreneurs and business owners to take advantage of the new market (or reinvigorated market) created, do you find that to be true? If so, what examples do you have to share? Im thinking about the Maleria Bednets the Gates Foundation has supported.
It also seems like the key component to reaching scale is the partnerships between private and public sector. I am trying to map out some examples of the supply/ value chain for projects that reach 1M+ scale, and would love to know if anyone had relevant examples of this as well.
I am also interested in understanding what the formula for successful scalability is? I am reading Paul Pollocks research on zero-based design and would like to know if anyone has other examples of successful methodologies.
Agree. The whole thread is very valuable, but it could be great to find some summary or conclusions.
Regards,
GB
Nicolas Murillo Gomez said:
Jane, will you post some conclusions? For me, one of the first bullet points is about technology access for the base of the pyramid and what we saw in the first part of the discussion
A big thank you to everyone for joining today's discussion! As Jane said, we'll leave the discussion open, so please do continue to post your comments.
For more stories and discussions on this topic, be sure to check out our Enterprise Zone, supported by SABMiller.
Dear Justin, You've made a great point with this because there is a huge cost involved in collecting and processing diverse and non uniform data / infortmation from small suppliers. What we have seen is that small suppliers also get tired from a plethora of new requirements where they don't see / feel impact from it. As information users we should value it more and make sure that we are taking decisions relying on it. There are too many baselines and indexes, not so much actions plans / policies that have direct impact on small suppliers sustainability (like supply chain finance). I read an article a couple of weeks ago about a pledge (http://vietnamsupplychain.com/en/share/news/supplierpay-and-the-next-stage-of-supply-chain-fin/15744) and it got us thinking on different alternatives to assess and report suppliers profiles / performance (quick and easy, after, obviously, idnetifying a baseline) and right on connecting them to adequate funding resources or financial products.
Justin Bakule said:
I think the most important initial mindset shift needed is for national governments to see and embrace the private sector as an engine for helping solving social and economic issues. The development community has philosophically accepted this concept, but the change process is not complete. National governments also are the natural overseers of corporate commitments. New tools, like the Social Progress Index, help form the basis for country or even regional conversations about setting investment priorities that companies and governments can agree on. In particular, I think it's important that governments can help set the ground rules for defining success - in other words, you want to insure that social value and business value are being created not just incremental business value otherwise we would be back to business-as-usual.
Hi Camilo and Justin. Iinvite you to visit www.reciclajeinclusivo.org it is an alliance among the MIF/IDB, Coca-Cola Latin America, PepsiCo, Avina and the Latin American Wastepickers Network (RedLacre). We are working together to make a more inclusive recycling sector in the region, including rural and island communities, also providing information on different producer extended responsibility schemes.
Camilo Santa said:
How about including an inverse logistic commitment as part of the company´s value proposition? ..Most rural communities in Latin America don´t have nor the institutional strenght nor the budget to develop recycling so interiorizing negative impacts of the business should most definately be considered, don't you think?
Jane Nelson said:
Camilo, there is an example of a tendero's community leadership project that is about recycling. This could be an opportunity to deal with those issues and potentially generate additional income - it depends on the recycling environment in the country/locality.
Camilo Santa said:
Thank you Justin, I'm thinking about the impact socially and on the environment that may generate scalating the distribution of products to rural communities that may not be able to deal with it by its own. For example indigenous or afro communities with no trash dissposition or no comparable experiences of having permanent alcohol distribution. I mean this must be taken in account as a core item and not as a marginal CSR matter. It is just as important as providing tools for financial endurability of the small businesses; it is about sustainability of the business as a whole.
Justin Bakule said:
Camilo, thanks for this question - can you elaborate on what you mean by the "post consumption responsibility strategy"? In a program like 4e, I see the benefit case accruing to the company and to the retailers but you make a good point that there is a bigger loop created here that includes consumers.
Camilo Santa said:
If the purpose is to create shared value, it is most important to incorporate a post consumption responsibility strategy when scalating markets through rural retailers, if not then it is just business as usual, don´t you think?
There is great concern regarding how valuable it is fos small businesses and entrepreneurs to use the sysstems and processes developed by corporations. Corporations are very different from businesses and entrepreneurs, therefore a different approach is required. To give some examples about the difference: Corporations share value can increase even if their profits fall, i.e. their value does not depend on performance, whereas in a business performance and value are dependent on each other. Corporation can be bailed out, businesses just go broke. In a corporation employees work on a need to know basis. In a business department independence is detrimental to their success.
Corporations face very small risk in their operations because of mass accumulated over time. The phrase "too large to fail" summarises this idea.
In today´s world for small businesses to succeed they need to learn the rules under which they operate, rules that are very different from those of corporations. Business must be understood as a science and apply this science to thrive for success. Some business systems and processes can make a difference but, let's face it, 10% sales growth on average in a project will hardly make a difference to the "tiendas".
It is possible to transform a "Tienda" into a large business. The example of "Wong" in Peru is a clear example of this. The "tiendas" business needs to evolve it they are to survive the competition from convenience stores set up by stronger companies and brands. In Bogota in the area where I live there are many "tiendas", most of them just a few meters away. Most of them are not run by their owners, and effectively these owners own two to three of "tiendas" located in different "barrios". This shows that some level of scale has been achieved but not large enough to move away from the small business structure.
In our company we believe that there is enormous potential in shared value provided that we work on expanding brain space and capability with the "tenderos". They do support a large number of people and are an integral part of our society and economies. They need to build systems and processes that are relevant to their small business situation.
In summary, we must acknowledgs that the small business needs a very different approach and that the current level of sucess falls short from what is required.