**Unlocking Potential: Inclusive Business Models for Sustainable Development**

1. PRME/GIM Webinar Agenda5 May 2011 • Presenters: • Sahba Sobhani, Program Manager GIM, UNDP: Presenting UNDP - GIM  and its relevance/implications for the future work of the WG • Al Rosenbloom: presenting results and implications of the 3-round survey on priorities and modalities for the future work of the WG • Milenko Gudic: presenting objectives and format of the WG Workshop in Bled in July (also in the context of the deliverables for the Global Forum 2012 in Rio and the 2013 Summit in Bled)

2. The Growing Inclusive Markets (GIM) Initiative

3. A new perspective on private sector contribution to development Development benefits Inclusive business models / inclusive markets CSR / Social investment Risk Philanthropy Business benefits

4. Premise: Opportunities exist to build bridges between business and the poor

5. The poor harbour a potential for consumption, production, innovation and entrepreneurial activity that is largely untapped Poverty is best understood as a lack of opportunity to lead a life one values. 2.6 billion people live on less than US$ 2 per day • Billions of people lack access to essential goods and services: • No clean water: 1 billion • No adequate sanitation: 2.6 billion • No electricity: 1.6 billion • No internet:5.4 billion

6. Inclusive business models include the poor on the demand side as clients and customers, and on the supply side as employees, producers and business owners Inclusive Business Models Human Development Impact Commercial Viability Environmental Impact Potential for Scale and Replication Innovation • Does the business improve poor people's access to basic goods and services such as education, health, housing, water and sanitation, etc. • Does the business reach excluded and disadvantaged populations (e.g., women, youth, disabled, ethnic minorities)? • Does the business contribute to environmental sustainability (e.g. by saving resources, reducing carbon emissions, conserving biodiversity, maintaining ecosystem services)? • (Should at least have no major negative environmental impacts) • Has the business already achieved scale (either by expanding regionally, or reaching deeper into poor populations, or extending its activities)? If not, does the business have the potential to grow? • Has the business model been replicated by others in the same region/sector? • Is the business profitable? (In case of a start-up: is there a business plan to achieve profitability over time?) • Does the business employ new solutions? Is it based on an innovative product, process or business model? Is it based on new ideas that can excite and inspire others?

7. Including the Poor Creates Opportunities for Business Business benefits Evidence • Smart Communications was the most profitable of the 5,000 largest corporations in the Philippi-nes in 2003, with a net income of about $288 m. • Fingerprint-enabled ATMs developed for illiterate banking customers in India are being introduced in the US. • The 4 billion people who live on less than $8 a day have a combined purchasing power of $5 trillion. • Through training employees, Denmor Garment Manufacturers could a occupy a niche in high-quality, highly flexible production chains. • SABMiller sources sorghum for its Eagle Lager from about 8,000 small-scale farmers in Uganda and 2,500 in Zambia, Generating profits Creating innovation Developing new markets Expanding the labour pool Strengthening supply chains

8. It also Creates Opportunites for the Poor Benefits for the Poor Evidence • RiteMed reached more than 20 million low-income clients in 2006 with 35 generic drugs, selling them at prices 20%–75% lower than those of name brands. • Amanco sells small-scale lemon farmers drip irrigation systems that can raise annual yields from 9 tons per hectareto 25. • Huatai provides alternative sources of income for local tree farmers and significantly increases the incomes of about 6,000 rural households. • Access to loans, such as those provided by K-REP Bank, are not only sources of investment but also of self-confidence and independence. Meeting basic needs Increasing productivity Increasing incomes Empowering communities

9. Core Business Contributions to the MDGs • In Colombia, Juan Valdez is offering higher, more stable incomes to over 500,000 small-scale coffee growers. • Tsinghua Tongfang (THTF) markets computers to China’s rural population that include distance education software, both for primary and middle school education and for minority language education. • In Russia over 80% of Forus Bank’s clients are women, most of them in retail businesses; in 2006 the bank helped create 4,250 direct and 19,950 indirect jobs.In Mali, where in 2000 more than 22% of infants died before their first birthday, Pésinet provides an early warning method for monitoring the health conditions of children under age five, greatly reducing the infant mortality rate. • In Cabo Delgado, Mozambique, the liquefied petroleum gas provided by VidaGas improves the sterility of medical instruments used to deliver babies, thereby improving maternal health. • In Tanzania, A to Z Textile Mills provides affordable, long-lasting insecticide-treated bed nets that prevent mosquitoes from spreading malaria, reducing deaths by 50%. • In 57 small towns across Uganda, the Association of Private Water Operators provides over 490,000 people with water and sewage services. • In the Philippines, Smart is reducing the ‘digital divide’ by providing low-cost, prepaid mobile phone airtime cards and is easing financial transactions to serve 24.2 million people.  9

10. Principles | Products | Objectives • - Conceived in 2006asplatform for collaboration focusedon research & advocacy • - Advisory Board gathering over 25 key stakeholders including business associations, academic institutions and development agencies

11. Network of 45 academic institutions in >30 countries Eastern Europe & the CIS Sub-Saharan Africa Latin America & the Caribbean Asia & the Pacific OECD MENA

12. Empirical research approach: 120 case studies developed (1/2) Cooperative Employee Non-profit • 4% MNC Producer Entrepreneur MSME Consumer Large domestic (incl. public) Type of inclusion Type of company MENA Sub-Saharan Africa Eastern Europe & CIS Latin America & Caribbean Asia & Pacific Region

13. Empirical research approach: 120 case studies developed (2/2) # of cases

14. GIM Case Study Database

15. Case study example: SELCO (India) “We set up SELCO to bust 3 myths: the poor cannot afford technology, the poor cannot maintain technology and it is not possible to run a commercial venture that fulfills a social objective.” - Dr. Harish Hande, Founder Description Opportunity: most of India’s rural population does not have access to electricity; 400 million depend on highly polluting and inefficient sources of energy, thus hindering productivity Business model: make solar lighting technology accessible to the rural poor (Karnataka) through credit • Constraints: • Negative perception about solar technology • Different clients’ needs and payment capacities • Solutions: • Demonstration effects: maintained solar street lights to demonstrate viability of the technology • Customized products (e.g. head lamps for midwives and flower pickers) and payback options Partners Suppliers: Tata BP, Shakti Electronics, Anand Electronics Investors: IFC, USAID, E+Co, Lemelson, Good Energies Foundation Results Loans: rural banks, credit cooperatives, MFIs Social: provision of solar lighting to >110,000 rural homes and 4,000 institutions (orphanages, clinics, schools), creation of jobs (170) and income opportunities for the rural poor (entrepreneurs renting SELCO lamps to street vendors daily), savings in energy costs, improved children’s education and health. Implementation: SEWA Classification Inclusion: Consumer, Entrepreneur Environmental: non-polluting and renewable source of energy Sector: Energy Economic: 25 service centers, average sale price of USD 450, broke even after 7 years, now worth USD 3.4 million, won national and international awards Type: MSME

16. Strategy Matrix – A tool to understand constraints and possible strategies • Strategies • Constraints

17. Market Heat Maps – A tool to improve market information Percentage of households in Guatemalaliving on less than $2 a day with access to credit by source

18. Actor Framework – Who supportsinclusive business models and how? Policies, infrastructure Incentives, PPP Awareness raising, best practices Expertise Tools, knowledge hubs Networks Patient capital, grants Equity, debt financing

19. Actor networks in inclusive business models Policymaking institutions Research and advocacy institutions Finance institutions Institutions with complementary capabilities MNC Large domestic company SME NPO 19

20. Global, Regional and National Reports “Business Solutions to Poverty – How inclusive business models create opportunities for all in Emerging Europe and Central Asia” (2011) “Creating Value for All: Strategies for Doing Business with the Poor” (2008) “Estrategias Empresariales para la Superación de la Pobreza y la Exclusión en Colombia” (2010) “The MDGs: Everyone’s Business” (2010)

21. Thank your for your attention For more information: www.growinginclusivemarkets.org

22. Summary of the Working Group Delphi Process PRME Working Group Poverty as a Challenge to Management Education PRME WG Webinar 5 May 2011

23. Delphi Process • A practical management tool • That helps group members that are in dispersed locations reach consensus

24. Delphi Process Recap • Round 1 • To develop a list of activities and ideas from WG members that is as complete as possible. • Began with 14 topic areas32 topics • Began with 20 “work products”  32 “ work products”

25. Delphi Process Recap • Round 2 • To vote for topics and work products of most interest to WG members • Resulted in both lists being divided into topics of high interest (largest number of votes) and topics of interest (fewer number of votes) • WG commitment: To retain all WG member interests  collaboration + partnerships

26. Delphi Process Recap • Round 3 • To determine strength of interest in the top 10 WG topics and top 9 work products • WG members were asked to allocate 20 points across each of the two groups • Responses: 21

27. Topics of Interest

28. Topics of Interest

29. Topics of Interest

30. Work Products/WG Outcomes

31. Work Products/WG Outcomes

32. Brief Recap: Where We Are Now • Worked through a three-stage process that first involved enlarging the domains of interest and then consolidating them • Identified common areas of interest • Know who is interested in specific topics • Sense of the various tangible products WG members are interested in

33. What We Might Want to Discuss Next • The possibility of topic champions/topic coordinators • Organizational structure • “Deliverables” in terms of immediate, mid-range and long term time frames • How to integrate the long list of remaining topics of interest into existing areas of interest • How the Growing Inclusive Markets (GIM) framework influences topics and work products

34. BLED 7-8 July, 2011

35. PRME Working Group Poverty as a Challenge to Management Education Current Status and Future Activities PRME WG Webinar 5 May 2011

36. Content • General frame of work • Current status • Workshop in Bled • Time horizon • Deliverables for Global Forum and Summit

37. Original Plan of Activities • Inviting faculty to join the group – Winter 2010/Spring 2011 • Creating database (profiles, interests) – Spring 2011 • Communication platform /Spring 2011 • WG meeting in Bled – Spring 2011 • Thematic workshop – winter 2011 • International conference 2012

38. Current Status • Working Group established • 70 members • 30 countries • Database: CVs collected (partially) • 3-round Delphi survey • Identification of interests • First prioritization • Concentration of interest areas and tangible products

39. Communication Platform • LinkedIn Group established • 35 members • First information being shared • Electronic communication • PRME supported Webinar, 5 May • Future development • To be discussed in the Workshop in Bled

40. Workshop in Bled • WG structure • Geographic • Thematic • Matrix • Future work • Thematic • Deliverables • Time horizon • Possible funding

41. Time Horizon • PRME Global Forum 2012 • Rio de Janeiro, May 2012 • Fighting poverty through management education in the context of dealing with social aspects of sustainable development • Thematic Workshop 2012 • Associated to Global Forum • Rio de janeiro, or Buenos Aires • PRME Summit 2013 • Bled, May 2013

42. Deliverables for Global Forum in Rio • Social aspects of sustainable development - Fighting poverty through management education: challenges, opportunities, solutions • Management education and constraints/strategy matrix • Management education solutions • PRME Working Group • Aspirations • Activities • Needs

43. Deliverables for Global Forum in Rio • Building blocks • CEEMAN Survey • PRME/CEEMAN Survey • GIM Report • WG projects and activities

44. Deliverables for Global Forum in Rio • Work methods • Global survey • WG thematic workshop • WG activities and projects

45. Welcome to Bled! • PRME WG Workshop • 7-8 July 2011 • Growing together by learning together about and for a better world