connecting business to sustainable livelihoods at the bottom of the pyramid in word
TRANSCRIPT
www.microaid.org | [email protected]
Connecting Business to Sustainable Livelihoods at the Bottom
of the Pyramid
Shrimp cluster producer, Aquaculture Livelihoods Services Centre (ALSC) Samalanga, Biruen, Aceh
For micro-producers1, connecting their livelihoods to commercial organizations is the only answer for
sustainability. For many commercial organisations, connecting to micro-producers is the only answer for
sustainable supplies. New breeds of social enterprise entrepreneurs are now reviewing the prospect of
connecting these microproducers to commercial organizations through the use of micro-connections. By
establishing these micro-connections, there is the potential to create sustainable livelihoods and provide high
quality traceable goods for commercial organisations, unlocking the benefits of the underperforming $197 trillion
prosperity gap; a win-win for all.
This article outlines this potential by firstly exploring what micro connections are, their use in the prosperity gap
and finally how these opportunities could be applied to your organisation.
Livelihoods Micro Connections
Micro connections are a combination of both hard (money transactions, written agreements) and soft (information
sharing, contacts networking, trust) relationships. Three key stakeholders in sustainable livelihoods supply chains
need to be connected.
Commercial Organisations –Markets, Buyers, importers and retail consumers who need to connect directly to
cluster supply chains for quality product delivery, traceability, adjustment to consumer demand, premium pricing
for and sustaining shared value.
Livelihoods Clusters – At village level micro-producers and farmers should connect together in clusters to
coordinate efficient production, processing and marketing so bridging the prosperity gap.
Micro Producers – Production steps and business processes in each livelihood must be connected so that
products quality and quantity can be synchronized with best management practices to meet market requirements.
(http://apps.facebook.com/pimdesigner/)
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Creating micro connections with sustainable livelihoods online
With the wide spread availability of ICT, many connection platforms2 and information services are now available
by mobile phone and internet. For example, patchouli farmers in Aceh, through improved crop practices, can now
sell their leaves at double the original price by connecting with patchouli oil distillery clusters established with Pay
and Bertrand, the French fragrance company, creating value added for all.
Prosperity Gap Opportunity
Just 16% of the world’s populations produce 70% of global productivity. If all people had the skills to be equally
productive and contribute to the global economy, then world GDP could increase to US
255 trillion, or over four times current GDP. Currently, world productivity is just under 30% of its potential and this
loss in productivity, which amounts to US 197 trillion, is called the ‘Prosperity Gap3’ of which livelihoods are a
major component. Using micro connections, this productivity at the bottom of the pyramid4 (BOP) can be
increased as more value added connected livelihoods are created.
See You Tube Micro Connections for Agriculture Video
With increased incomes, these new livelihoods owners become an enormous new market potential. BOP
population estimates are 2.3 billion. Early market entry gives large corporations brand loyalty and awareness that
is the bedrock of sustainable consumers over the long term.
How you can take up this opportunity in your organisation
With the wide spread availability of ICT and social (Facebook) and economic (LinkedIn) networking for all, this
multi dimensional web of connections is evolving naturally. Using mobile social networks and low cost cloud
technology, the opportunity to connect is now available to even the more remote areas where valuable human
and natural resource potentials simmer in waiting.
www.microaid.org | [email protected]
Surprisingly when you know what livelihoods connections an organisation needs to make, making these
connections is relatively straightforward: contact a knowledgeable friend, attend social enterprise meetings, visit a
market, research your product, use the internet (Google), advertise, publicise and set realistic targets of contacts
to connect with. Relationships with large and small corporations are now being democratised to the bottom of the
pyramid. Anyone can make a connection with anyone.
Indossential, UK essential oils buyer, visits Aceh in January 2012 to meet farmers, community distiller clusters and
Payand Bertrand France local branch to set up a new shared value supply chain for patchouli oil (nilam) for UK
aromatherapy market.
Your sustainable livelihoods entry point to start connecting must be decided.
Livelihoods micro connections are both vertical (scaling up) and horizontal (scaling out). Livelihoods have vertical
connections in market supply chains, horizontal connections with nearby micro-producer groups, clusters and
support services. Using Internet research techniques, these supply chain connections can be discovered and
developed. Previously livelihoods development was left to Government and NGOs designed to provide diverse
individual attention to this highly fragmented market place and production resources. The digital age has changed
all this. Fragmented livelihoods can now be connected and the volumes and quality required by commercial
organisations can be achieved. The BOP market is now open for your business.
Indossential, UK essential oils buyer, visited Aceh in January 2012 to meet farmers, community distiller clusters
and Payand Bertrand France local branch to set up a new shared value supply chain for patchouli oil (nilam) for
UK aromatherapy market.
MicroAid Mobile Application Prototype Patchouli
www.microaid.org | [email protected]
Investment and partnership opportunity
Investment will be needed to build these new clusters with micro producers that increase livelihoods productivity,
market quality and added value. Added value from each successful micro-connection generates additional
incomes and a good return on investment for the new age of social enterprise entrepreneurs.
This article has outlined a new framework for sustainable livelihoods connections in commercial organisations.
Experiences and ideas on building value in supply chains with micro producers can be shared online. There will
also be many connections not described here. There is no single solution to successful livelihoods and the
democratisation of commerce. We hope this article will give you some ideas on the opportunities to explore in
sustainable livelihoods waiting in the prosperity gap and understand the right micro connections for you. Please
share this opportunity with others, so they too may find their sustainable livelihood opportunities.
Good luck and don’t forget to connect to us if we can help with any further information.
Richard Beresford
Written by: Richard Beresford
Richard Beresford is a specialist in livelihoods connections with over 25 years experience in rural Indonesia’s
BOP and based in Jakarta and UK. Email: [email protected] | Web: www.microaid.org
www.microaid.org | [email protected]
1) Micro-producers include family farmers, herders and pastoralists, landless and rural workers,fisher folk,
gardeners, mini processors and added value traders.
2) Livelihoods networking platforms include Social (Facebook), and economic AliBaba, EBay, LinkedIn etc.
3) http://www.richardchandler.com/strategy
4) Fortune at the Bottom of the Pyramid CK Prahalad 2005 University of Michigan.