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The Business Solution to Poverty

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The Business Solution to Poverty

Designing Products and Services for Three Billion New Customers

Berrett-Koehler,

15 min read
10 take-aways
Audio & text

What's inside?

How can the business world employ and sell to the almost three billion people now living on $2 a day?

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Editorial Rating

8

Qualities

  • Innovative

Recommendation

Paul Polak and Mal Warwick, two credentialed veterans in the war against poverty in the “Global South,” make a case that the decades-long efforts of public and private forces to better the lot of the world’s desperately poor have largely failed. They offer an alternative – a proven “business method that transforms the poor into employees of profitable local enterprises and improves improve their quality of life. The authors outline workable strategies and offer examples of successes and failures. They stress product affordability, simplicity, “aspirational branding” and the potential to scale up. The issue of scale – expanding from hundreds of thousands of customers to billions across the globe – remains a significant obstacle. Polak and Warwick hold that multinational corporations must recognize that their continued growth depends on creating markets and products for these populations. getAbstract recommends the authors’ illuminating work to transnational executives, entrepreneurs, inventors, investors, international development officers, NGOs and anyone who seeks viable answers to the problem of world poverty.

Summary

“A Compelling Business Case”

Allowing 2.7 billion people to subsist in poverty – meaning earning less than $2 a day – is a moral stain on humanity, but it is also a practical loss that affects everyone on the planet. Addressing poverty would eliminate a “horrendous waste of human talent,” alleviate tremendous suffering, reduce political repression and violence, and help protect the environment from degradation and overpopulation. Yet well-intentioned aid has so far not made a dent in poverty levels. Those in the “Global South” have received $2.3 trillion in assistance since the end of World War II but they are no richer. This expensive failure underscores that only a market-based mechanism can make a difference.

Along with the moral and social reasons for doing everything possible to lift people from poverty, companies need new markets and new customers, creating a business case for helping to eliminate global destitution. Such market opportunities have a significant dimension of social responsibility. Billions of impoverished people remain outside the scope of typical trade, but they are potential customers far from saturated northern markets. This “New Frontier...

About the Authors

Paul Polak founded IDE and Windhorse International, and cofounded SpringHealth India. Social responsibility advocate Mal Warwick is board chairman of Mal Warwick-Donordigital.

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