Inclusive business facts, trends, and innovations – Wrap-up from the BASE III Forum

Across Latin America and the Caribbean, companies of all sizes are competing to meet the basic needs and aspirations of the base of the pyramid (BoP) for a better life.

In view of further strengthening its role as regional platform for dialogue and know-how on the road toward creating an industry ecosystem on inclusive business solutions that cater to the aforementioned needs and aspirations, the Inter-American Development Bank’s (IDB) Opportunities for the Majority Initiative (OMJ) convened the third international conference BASE III from June 29 to July 1, 2015 in Mexico City.

Published: Wed, Aug 12, 2015
Author: Davide Fiedler
Type: Insight

The forum brought together some 1,000 business executives, government officials, investors, international organizations, public sector representatives, NGOs, and academia from three dozen countries, keen on catalyzing inclusive business solutions for the BOP across the region and beyond.

As in the two previous editions (held in Sao Paulo in 2011 and Medellín in 2013), there was a strong business voice in Mexico City, with several executive-level representatives of companies speaking about their inclusive business ventures across value chains worldwide. The 90+ speakers included representatives of the following members of the World Business Council for Sustainable Development (WBCSD): Acciona, CEMEX, Firmenich, Jain Irrigation, Nestlé, PepsiCo, SABMiller, Shell, Unilever, and Veolia.

The IDB kindly invited me to moderate a panel on “Linking small producers to value chains”, which highlighted ongoing innovations, challenges faced, and lessons learned by firms in their ongoing work with small producers.

The following speakers shared their thoughts around the importance of creating a sound ecosystem for the long-term sustainability of inclusive agribusiness ventures; transferring of best practices; the new possibilities created by technology (most notably ICT); access to finance for working capital; and the role of impact measurement as a means to understanding what works and what doesn’t at the level of business models:

  • Fausto Costa, CEO, Nestlé Venezuela
  • Bérangère Magarinos-Ruchat, Vice President Sustainability Partnerships, Firmenich
  • K.C. Mishra, Founder & Managing Director, eKutir
  • Vincent Lagace, Investor Relations Officer, Root Capital

Other sessions in Mexico City addressed themes such the upgrade of "mom-and-pop shops" to better serve the BoP; the pending challenges of an emerging industry; the role of broadband connectivity as an enabler for improved business models, education, and development impact; the importance of gastronomy as a vehicle for social transformation and inclusion; the role of the public sector in enabling businesses at the BOP; affordable housing solutions; and innovation for distribution platforms.

BASE III was yet again an excellent occasion for the WBCSD, its members, and Global Network allies (representatives from our partners in Colombia and Argentina were present in Mexico City) to interact with an influential audience on lessons learned and solutions toward ever greater scale in this space.

Warm congratulations on behalf of the WBCSD to the OMJ team for staging yet again a successful event, and thanks for the kind hospitality to all participants across the three days in Mexico!

At the Forum, the OMJ team also launched a revealing study with new data, market intelligence and statistics about the market and population at the BoP across Latin America and the Caribbean.

Using national household and expenditure surveys, the study presents data on the BOP market size, socioeconomic characteristics, market segments, expenditure patterns, and demand-related factors. It also provides insights into what the region's BOP consumers want and identifies underserved markets and business opportunities.

Some key takeaways in terms of data:

  • The BOP market in Latin America and the Caribbean is made up of households whose members earn up to US$10 purchasing power parity (PPP) per capita per day in 2005 dollars, and it accounts for about 70 percent of the region’s population, or 405 million people.
  • The Latin American and Caribbean BOP is mostly urban, with three-quarters of BOP households in urban areas having access to basic services such as water and electricity.
  • The region's BOP market is made up of two segments: the poor, living on up to US$4 PPP per capita per day in 2005 U.S. dollars, and the vulnerable, living on US$4 to US$10 PPP per capita per day in 2005 U.S. dollars. Poor households are defined as those without sufficient resources or abilities to meet their current needs, while vulnerable households are defined as being able to meet some needs but still at risk of sliding back to poverty in the future. A significant share of the BOP still lives in poverty (45 percent), but overall, BOP households are finally reaping the benefits of a more stable economic environment and a period of high economic growth.
  • With average per capita income of US$1,873 PPP, the overall size of Latin America and the Caribbean’s BOP market is US$759 billion PPP, representing about 10 percent of the regional economy.

Through this report, OMJ also gets across its core message that market opportunities at the BOP in the region are “far more promising than ever before. This report challenges misperceptions of the BOP as a monolithic bloc of low-income people who lack the purchasing power to be a profitable market for business investments. On the contrary, Latin American and the Caribbean BOP consumers today are more urban, more connected, more educated and have more disposable income than ever before.”

About OMJ and the BASE III Forum

As indicated above, the BASE III Forum was organized by Opportunities for the Majority (OMJ), part of the IDB's Private Sector Group. OMJ promotes and finances market-based, commercially viable business models that engage private sector companies, local governments, and communities in the development and delivery of quality goods and services for the BOP in the region. OMJ provides financing to small, medium-sized, and large companies, financial institutions, and funds that support the development or expansion of business models that serve BOP markets. OMJ has so far supported more than 60 BOP business models in 18 countries of the region in different sectors such as health, education, housing, and financial services, among others.

The goals of the bi-annual BASE Forum are to:

  • Serve as a platform to connect leading practitioners in the development and delivery of quality products and services to the BoP in Latin America and the Caribbean and the rest of the world.
  • Encourage debate and discussion on the key financial, social, and operational challenges facing inclusive business models.
  • Present the IDB´s latest research on BoP markets and demographics.

Recommended readings emerging from BASE III Forum

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