pathways out of poverty(2012) by ibop
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Pathways
Out of Poverty:Innovating with the BOPin Southeast Asia
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Pathways
Out of Poverty:Innovating with the BOPin Southeast Asia
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Editorial Team
Senior EditorsJessica Dator-BercillaDr. Antonio G.M. La ViaAtty. Brenda Jay Angeles-MendozaDr. Ellie OsirMary Grace P. Santos
Graphic Design and LayoutJulie Barcenas
ContributorsMarkus DietrichJoanne C. DulceRamon L. Fernan IIILilac C. FlorentinoJames L. KhoDr. Segundo E. RomeroMary Grace P. SantosKristian Paolo D. TorresLance Andrew D. Viado
iBoP Asia Secretariat
2007-2011
Director
Co-Director
Communications andNetworking Coordinator
Grants Administrator
Web & SystemsAdministrators
Project Assistant
2011 - present
UNIID-SEA TEAM
Director
Project Manager
Research Associate
Project Associate
Intern
Dr. Antonio G.M. La Via
Mary Jean A. Caleda
Mary Grace P. Santos
Lorenzo V. Cordova, Jr.
Broderick SapnuMark Aethen Agana
Marien N. Fulo
Segundo E. Romero, PhD
Mary Grace P. Santos
Lilac C. Florentino
Kristian Paolo D. Torres
Lance Andrew D. Viado
Pathways Out o Poverty:
Innovating with the BOP
in Southeast Asia
Copyrights 2012
Ateneo School o Government (ASoG)All rights reserved.
ISBN No. 978 - 971 - 8597 - 15 - 6
Produced by iBoP Asia
A project o the
Ateneo School o Government
supported by Canadas International
Development Research Centre(IDRC-CRDI)
Published by
Ateneo School o Government
Pacifco Ortiz Hall,
Social Development Complex
Ateneo de Manila University
Katipunan Ave., Loyola Heights
1108 Quezon City PHILIPPINES
URL: http://www.asg.ateneo.edu
This publication was produced with the
aid o a grant rom Canadas International
Development Research Centre
(www.idrc.ca).
No part o this book or the book in
its entirety may be reproduced and
distributed in any orm by any means
(electronic, mechanical, photocopying,
recording) without a written permission
rom the authors or the publisher.
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Table of Contents
List of Acronyms
Part One:Innovation & Development
Chapter 1: Introduction
Chapter 2: The Evolving Concept o the BOP
Chapter 3: Patterns in Innovation at the BOPin Southeast Asia
Patterns in Acquiring, Applying, and Sustaining Innovations
Patterns in Engaging BoP Communities and Sectors
Patterns in Innovation Intermediation
Chapter 4: What it Takes to Innovate at the BOP
Part Two:Pathways Out O Poverty: Innovation Stories
Innovation stories in Water and Sanitation, Health, Inormationand Communications Technology (ICT) and Business
Chapter 1: Innovation in Water and Sanitation
Chapter 2: Innovation in Health
Chapter 3: Innovation in ICT and Business
Innovation stories in Energy, Agriculture and Food, and ClimateChange Adaptation
Chapter 4: Innovation in Energy
Chapter 5: Innovation in Food and Agriculture
Chapter 6: Innovation in Climate Change Adaptation
ReferencesList of Figures
List of Tables
iv
1
3
8
20
22
27
33
45
57
58
86
96
132
164
180
194197
197
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iv
ADL
AER
AMCHA-MCPC
ASDSW
ASEAN
ASoG
BAP
BEMHaS
BIFA
BoP
BSF
BSM
CAPS
CARD
CLTS
CPU
DA
DENR
DepEd
DILG
DOCHSEI
DOH
DOLE
DRN
DSWD
DTI
Eco-Agri
Ecosan
ECP
AdDU EERC
EFR
EMHaS
EWB
FAO
FIN
FOSS
GILAS
GTH
GTZ
iBoP Asia
IBC
ICRC
ICT
IDE
IDRC
IHM
INM
IP
IPED IBON
IPM
IPSARD
ISSI
IT
ITB
ITDI-DOST
KATAKUS
LIST OF ACRONYMS
Acvies of the daily life
Acon for Economic Reforms
Atlas Mining Community
Handicapped Associaon
Mulpurpose Cooperave
A Single Drop for Safe Water
Associaon of Southeast Asian
Naons
Ateneo School of Government
Business Advisory Program
Bale-Endah E-Mulple
Handicapped System
Banaba Integrated Farmers
Associaon
Base of the Pyramid
Bio-Sand Filter
Basic Science and Mathemacs
Center for Advanced Philippine
Studies
Center for Agriculture and Rural
Development
Community-led total sanitaon
Computer Professionals Union
Department of Agriculture
Department of Environment and
Natural Resources
Department of Educaon
Department of Interior and Local
Government
Davao Oriental Coco Husk Social
Enterprise, Inc.
Department of Health
Department of Labor and
Employment
Dewan Riset Nasional
Department of Social Welfare and
Development
Department of Trade and Industry
Ecological and Agricultural
Development Foundaon, Inc.
Ecological Sanitaon
Ecosan Club Philippines
Ateneo de Davao Universitys
Energy and Environment
Resource Center
Emergency Food Reserve
E-Mulple Handicapped System
Engineers Without Borders
Food and Agriculture Organizaon
FishBase Informaon and Research
Group, Inc.
Free and Open-Source Soware
Gearing up Internet and Access for
Students
Gis, Toys and Houseware
Gesellscha fr Technische
Zusammenarbeit GmbH
Science and Technology
Innovaons for the Base of the
Pyramid in Southeast Asia
Interdependence-based model of
collaboraon
Internaonal Commiee for the
Red Cross
Informaon and communicaons
technology
Internaonal Development
Enterprises
Internaonal Development
Research Centre
Integrated hatchery machine
Integrated nutrient management
Indigenous Peoples
Partnership in Educaon for
Development
Integrated pest management
Instute of Policy and Strategy
for Agriculture and Rural
Development
Instute for Small Scale Industries
Informaon technology
Instute Technology Bandung
Industrial Technology
Development Instute -
Department of Science and
Technology
Kababayen-an Alang sa
Teknolohiya nga Haum sa
Kinaiyahan ug Kauswagan
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Pathways Out o Poverty:INNOVATING WITH THE BASE OF THE PYRAMID
IN SOUTHEAST ASIA
LAKAS
LBP
LGU
LLEE
MANCOR
MCD
MFI
MHP
MNC
MOU
MRD
MSMEs
MVINASA
NFCWPD
NGO
NOx
NTFP
OTC
PAGASA
PBSP
PDCC
PhilRice
SAIV
POC
PODS
PT PLN
R&D
rpm
RWH
SETARA
SNA
SnT/S&T
SRP
TIMSS
TNO
TRICOM
UDDT
UN
UNICEF
UNIDO
UP-NISMED
VA
VAWTS
Vietnet-ICT
WAND
WARECOD
WASH
WBDWHO
YBMU
Lubos na Alyansa ng mga
Katutubong Ayta ng Sambales
Landbank of the Philippines
Local Government Unit
Live & Learn Environmental
Educaon
Mindanao Agri NetworkCorporaon
Centre for Marine Life
Conservaon and Community
Development
Micro-nance instuon
Mulple handicapped person
Mulnaonal corporaon
Memorandum of Understanding
Mekong River Delta
Micro, small, and medium-scale
enterprises
MicroVentures, Inc.Naonal Aeronaucs and Space
Administraon
Naonal Federaon of
Cooperaves for Persons With
Disability
Non-governmental organizaon
Nitrogen oxides
Non-Timber Forest Product
Over-the-counter
Philippine Atmospheric,
Geophysical and Astronomical
Services AdministraonPhilippine Business for Social
Progress
Provincial Disaster Coordinang
Council
Philippine Rice Research Instute
Social and Agro Industrial
Ventures
Point of Care
People Oering Deliverable
Services
Perusahaan Terbuka Perusahaan
Listrik NegaraResearch and development
Revoluons per minute
Rainwater harvesng
Sejahtera Semesta Rakyat
Senator Ninoy Aquino
Science and Technology
Suggested Retail Prices
Trends in Internaonal
Mathemacs and Science
StudyThe Netherlands Organizaon for
Applied Scienc Research
Tri-People Concern for Peace,
Progress and Development of
Mindanao, Inc.
Urine diverng dehydraon toilets
United Naons
United Naons Childrens
Emergency Fund
United Naons Industrial
Development Organizaon
University of the Philippines Naonal Instute for Science
and Mathemacs Educaon
Volunteer Advisers
Vercal axis wind turbines
Vietnet Informaon Technology
and Communicaon Centre
Water, Agroforestry, Nutrion and
Development
Center for Water Resources
Conservaon and Development
Water, Sanitaon, and Hygiene
Water Borne DiseaseWorld Health Organizaon
Yayasan Bhak Mitra Utama
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Pathways Out o Poverty:INNOVATING WITH THE BASE OF THE PYRAMID
IN SOUTHEAST ASIA
This secon presents a discussion of the Base of the
Pyramid (BoP) concept and the BoP approach to
development, and how it can be integrated in science
and technology (S&T) innovaon to help address
specic problems and needs.
Innovation& Development
PART 1
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Pathways Out o Poverty:INNOVATING WITH THE BASE OF THE PYRAMID
IN SOUTHEAST ASIA
Dr. Antonio G.m. La Via
For three years now, the Ateneo School of Government, with Canadas
Internaonal Development Research Centre, has been working to promote
and support pro-poor innovaon in the eld of science and technology (S&T)
through the agship project, Science and Technology Innovaons for the Base
of the Pyramid in Southeast Asia, more popularly known as iBoP Asia. This
project ran from 2008 to 2011.
iBoP Asias aim is to foster science and technology (S&T) innovaons in order to contribute to
the development of aordable soluons to unmet needs, increase producvity and incomes,
and facilitate the integraon of the poor and excluded in the formal economy.
In the context of this project, S&T refers to the full range of social, natural, medical and life
sciences, as well as the physical and engineering disciplines, while innovaon is dened as
the use of new ideas, technologies or ways of doing things, in a place where, or by people for
whom, they have not been used before.1
Why focus on S&T? Scienc achievements and technological advancements have greatly
improved the quality of life and social well-being of millions across the globe. However, many
innovaons in S&T are mainly targeng the demands of well-o consumers, and are too high-
tech or too specialized that it limits those who can aord them and, more so, benet from
them. S&T innovaons in energy-saving systems, healthcare facilies and water delivery,
among others, have a huge potenal to have posive impacts on the lives of the poor when
harnessed to respond to their needs and budgets.
1 Spence, R. (2008). Research Councils and Support Organizaons in Southeast Asia: Instuons, Issues and Collaboraon: A
Report on Science, Technology and Innovaon Systems in Indonesia, Vietnam, Philippines, Thailand, Malaysia and Singapore .
Internaonal Development Research Centre (IDRC)
Introduction
Chapter 1
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4
The project drew lessons from the evolving
concepts, approaches and work at and with the
base of the pyramid (BoP), the socio-economic
segment comprised of billions of people living
below US$ 2 a day.
iBoP Asia, via its Small Grants Program,
partnered with 25 organizaons in 6 countries
in Southeast Asia - Cambodia, Indonesia,
Singapore, Philippines, Thailand and Vietnam
- to undertake innovaon research and help
nd soluons to specic issues and problems
of those at the BoP in the region. The iniave
looks into the engagement among government,
business, civil society and those at the BoP to
develop innovave approaches and products
that are not only aordable but also acceptable
to those at the BoP. Of parcular interest to
the project is how the various actors ulize
BoP approaches to encourage and harness S&T
innovaon for social development.
Most of the innovaon projects carried out by
our grant partners are exploratory in nature.
Yet, from them we gain signicant lessons on
pathways to S&T innovaon not only for but alsowith and by those at the BoP.
Going around Southeast Asia
and interacting with people rom
dierent sectors - innovators
and local communities, most
importantly - yielded valuable
insights on how pro-poor and
inclusive innovation works and isbeing practiced.
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Pathways Out o Poverty:INNOVATING WITH THE BASE OF THE PYRAMID
IN SOUTHEAST ASIA
Objectives this book
Pathways Out of Poverty: Innovang with the BoP in Southeast Asia is a collecon of innovaonstories and lessons from the research done by our 26 grant partners. These stories aempt to uncover
how organizaons, instuons and poor communies work together to develop, adopt or adapt,
and disseminate technologies and approaches to create soluons for poverty issues and needs in
Southeast Asia. The areas covered were: water and sanitaon, energy, health, agriculture and food,
climate change, and the cross-cung areas of informaon and communicaons technology (ICT) and
micronance.
By doing so, the book also hopes to
Contribute a disnctly Southeast Asian perspecve to the literature on
the applicaon of BoP principles and approaches in S&T innovaon;
Be a ready reference for praconers seeking new leads for new
innovaon iniaves;
Provide a robust set of case studies that can be used for systemacallyteaching courses in innovaon at the base of the pyramid, or innovaon
for inclusive development; and
Help inspire and guide further research that will help generate more
iniaves and collaboraon on innovaon at the base of the pyramid.
This book aims to capture how the principles
o working or and with those at the BoP are
used in S&T innovation or how they enhance the
innovation process.
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6
The stories featured in this book show theS&T innovation work done by the iBoP Asia
grantees and their partner communities from
2008 to 2010. These stories highlight key
ideas, insights and possible directions for pro-
poor S&T innovation.
The book does not only coveractual innovation attemptsbut also eorts to enhance
capacities through researchand the application o BoPprinciples and approaches in
S&T innovation.
The reader is advised to consider that the stories,
as presented in their abridged versions, were
developed based on our partners documentaon
of their respecve projects, as they aempted to
innovate for and with the BoP. iBoP Asia workedwith a pool of writers to arculate the innovaon
stories of our partners based primarily on their
project reports and on informaon gathered
via informal interviews and other means of
correspondence with our partner organizaons.
Part One discusses in detail the concept of thebase of the pyramid and how it has evolved over
me, not simply as an economic market concept
but also as a development and innovaon
approach. It also explores how BoP approaches
are being used to guide development and
innovaon in the eld of S&T, and how S&T can
be harnessed to address BoP needs and issues in
various areas.
Part One also presents the key insights that
emerged from the innovaon stories of our grantpartners. These insights focus on what it takes to
innovate at the BoP and the general movement to
make development more inclusive. Also discussed
is how iBoP Asia hopes to take this eort further
by working with key innovaon actors such as
educators and students in universies, research
councils and entrepreneurs.
In the next chapter, Chapter Two, iBoP Asia aims
to generate a beer understanding of the BoP as
a concept and as a development approach that
can be applied to S&T innovaon to improve
the quality of life of those at the base of the
pyramid. In Chapter Three, iBoP Asia gleans
from the stories paerns on how organizaons
and communies in Southeast Asia used BoP
principles, approaches and strategies to uncover
or produce S&T innovaons. In Chapter Four, we
explore some of the factors and condions for
eecve innovaon at the BoP in the Southeast
Asian context. From the reecons and lessons
learned, we present recommendaons on ways
towards beer uptake of S&T innovaons for
Scope and Limitations Overview o the Book
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Pathways Out o Poverty:INNOVATING WITH THE BASE OF THE PYRAMID
IN SOUTHEAST ASIA
Risks, Problems, and Barriers What were the challenges encountered in
researching, creang, launching or introducing
the innovaon?
How were these challenges overcome or,conversely, unable to be resolved?
Benefts, Outcomes, or Reach How did individuals, local communies, local
or naonal government and other partners/
stakeholders contribute to and benet from
the iniave?
What are the perceived, felt, or tangible
outcomes of the iniave?
Lessons Learned Regarded as one of the most important
components of the project, what was learned
from the experience the innovaon process,
implementaon, dicules encountered,
and gaps/shortcomings/errors made, if any?
The Future Where is the innovaon and the iniave
likely to head?
What are the post-grant plans, if any?
In the process of innovang at the BoP, poor
communies themselves and their take on
the innovaon are of primary importance. A
deeper understanding of the plight and needs
of BoP communies and their involvement
and parcipaon in all stages of the innovaon
process are crical to the overall success of
these eorts.
the poor, and enhance the parcipaon of key
stakeholders, especially of poor communies, in
addressing poverty issues through innovaon.
Part Two summarizes the case studies into
readable stories. These stories do not intend to
provide all the instrumental details of the cases,
only to engage the reader in the discovery of how
innovaons can create pathways out of poverty.
The Final Technical Reports of the 26 case studies
from these stories are based are available in full
at the new project website of UNIID-SEA, www.
uniid-asia.net.
The innovaon stories answer the following
quesons:
Project Brie What is the BoP problem or issue that the
project would like to address and what is the
proposed S&T innovaon to help solve this
problem or issue?
Who is the target community?
Is the innovaon a disnct iniave of the
organizaon, or is it ed to, related with or part
of an exisng innovaon?
In which domain or themac area does this
innovaon belong?
Process What led to the creaon of the innovaon?
At what stage is the innovaon currently
in (e.g. research, laboratory development/
prototyping, pilong, business model,
organizaonal or enterprise development,
scaling up)?
What is sll needed to take the innovaon
further?
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Markus Dietrich & Jessica Dator-Bercilla
The term base o the pyramid or BoP is primarily used to reer to thesocio-economic base o the income distribution pyramid. The concept
has grown across time and used in various approaches. O interest
to this section is how the BoP is viewed by these approaches and the
subsequent discussion looks into various thoughts on the BoP.
8
C.K. Prahalad, a business and managementguru from the University of Michigan in
the United States, puts forward that the
distribuon of wealth and the capacity to
generate income in the world [that] can
be captured in the form of an economic
pyramid. More than four billion people live
at the BoP on less than $2 per day.2
Prahalad and colleague Stuart Hart, another
leading authority in business strategy and
the implicaons of poverty and environment
in business, took this idea further and made
it the core of a business strategy in providing
products and services to the huge untapped
populaon of the BoP. This line of thinking
draws aenon to the lowest socio-economic
segment of society as a market opportunity
rather than as recipients of government or
philanthropic aid.3
Prahalad and Hart cemented the foundaon
of the BoP concept by asserng that
mulnaonal corporaons (MNCs)
investment at the BoP represents the biggest
potenal market opportunity in the history
of commerce.4
This idea ushered a paradigm
shi from viewing the poor as beneciaries to
the poor as customers. The opportunity was
esmated to be a mul-million market, with
billions of people at the BoP.
The BoPas a Market Opportunity
2 Prahalad, C.K. (2005). The Fortune at the Boom of the
Pyramid. Upper Saddle River: Wharton School Publishing
3 United Naons Global Compact (2009). www.
unglobalcompact.org/AboutTheGC/.
4 Prahalad C.K. and Hart, S.L. (2002). The Fortune at the
Boom of the Pyramid. Strategy + Business Issue 26, 1-14
The Evolving Concept o the BOP
Chapter 2
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Pathways Out o Poverty:INNOVATING WITH THE BASE OF THE PYRAMID
IN SOUTHEAST ASIA
5 Prahalad, C.K. and Hammond A. (2002). Serving the Worlds Poor - Protably. Harvard Business Review, September Issue, 48-57
Prahalad, in another piece co-authored with Allen Hammond, further elaborated on the BoP concept
and stressed three important advantages of serving the poor: a new source of revenue growth; [it]
contributes to greater eciency; and [allows] access to innovaon.5
In this follow-up work, Prahalad
provided some strategies for companies to eecvely tap into the BoP market, which included changing
the atudes and pracces of execuves, doing structural changes, and involving external partners such
as non-governmental organizaons (NGOs).
Prahalad and Harts business
model focused on MNCs as prime
actors in the model because of
their managerial and technological
resources and capacies, which few
local entrepreneurs have.
Apart from these
resources, MNCs also
have an established
knowledge base, have
the capacity to bring the
necessary people required
for certain operaons,
and the ability to push
innovaons in the market.
The Commercial Inrastructure at theBottom o the Pyramid
CreatingBuying Power
ShapingAspirations
TailoringLocal
Solutions
ImprovingAccess
Targeted productdevelopment
Boom-upinnovaon
Distribuonsystems
Communicaonslink
Consumereducaon
Sustainabledevelopment
Access to credit Income
generaon
fgure 1:The Original Business Models
Prahalad and Hart (2002)
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10
6 Prahalad, C.K. (2002). Strategies for the Boom of the Economic Pyramid: India as a Source of Innovaon. Reecons Vol. 3 No. 4, 6-17
Prahalad and Hart point out that the high cost economy of the poor (also called BoP penalty) where
the BoP customer pays higher prices for basic goods and services, results from local monopolies, lack of
or inecient access/distribuon channels and tradional intermediaries. This provides an opportunity
for larger and more ecient companies to ll in the gaps and serve this market at protable margins.
fgure 2:Prahalad and Hammonds Pyramid (2002)
Population (in millions)
> $20,000
> $2,000 - 20,000
< $2,000 - 20,000
Purchasing Power Parity (in U.S. Dollars)
In a separate arcle on economic development
in India, Prahalad underscored the importance
of reaching scale as one of four basic condions
for BoP soluons. The other three are price-
performance relaonship, environmentally
sustainable models, and harmonizing the most
advanced technologies and local condions.6
The
authors introduce addional case studies, such as
that of the Aravind Hospitals in India, in which a
system of eye-care features paying paents from
the top er of the pyramid subsidizing services
for paents from the middle and boom er.
In 2002, Hart and Clayton Christensen further
argued that working for the growth of the company
and helping to li the poor out of poverty should
not be mutually exclusive undertakings; in fact,
they are mutually reinforcing. As an example,
they menoned Grameen Telecoms Village
Phone venture, a protable wireless phone
service in Bangladesh for the rural poor. Their
paper also introduced the term base in lieu of
boom under which the current BoP concept is
known to avoid any connotaon of inferiority of
the BoP.
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Pathways Out o Poverty:INNOVATING WITH THE BASE OF THE PYRAMID
IN SOUTHEAST ASIA
7 Prahalad, C.K. (2005). The Fortune at the Boom of the Pyramid. Upper Saddle River: Wharton School Publishing
fgure 3:Hart and Christensens Pyramid (2002)
In the past, major waves of growth have been created by innovaons that
have had an impact only on the boom of developed markets. Disrupveinnovaons at the base of the pyramid - home to billions of the aspiring
poor - have much greater potenal than those that begin and end in
developed markets
Disrupting the Pyramid
the Baseo the Pyramid
the Base at theTop o the Pyramid
Business + Innovaon and development opportunies at the BoP
The BoP concept gained greater public awareness when Prahalad released his book, The Fortune at the
Boom of the Pyramid, in 2005, which expounded on his original arcle by building upon studies ofbest pracce in BoP strategy.
7
In this book, Prahalad crically unpacked a number of mainstream assumpons about the poor
--having no money, unable to be accessed protably, not valuing brands, disconnected from
informaon networks and not accepng of or open to new technology. He refuted these assumpons
by means of case studies supported the argument that the poor represent a huge and growing market
for corporaons who iniate appropriate changes in their business models, innovaon pracces, and
products and services.
At the core of this BoP business model development is innovaon, which shapes key processes
such as: a) price performance; b) scalability; c) ecological sustainability and d) product, process and
communicaon innovaon. This BoP model, according to Prahalad, focuses on small unit packages, low
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12
Hart and Ted London later introduced the concept ofnave capabilies, which puts a premium on local
community knowledge and capacies as key to doing business at the BoP.8
To achieve success at the
BoP, MNCs have to become embedded in that ecosystem and unlearn exisng pracces or, in other
words, move away from employing their own logic to understand the BoP.
A case study that exemplies such an approach is that of Honey Care Africa, which formed non-
tradional partnerships with NGOs and the local community to become the largest producer of highquality honey in East Africa.
margins per unit, high volume and high return
on capital employed. He further noted that
transacon governance capacity-building (i.e. the
guarantee of transparency and enforcement of
contracts) would be needed for feasible private
sector involvement and development.
These new insights promote the premise of the
BoP as a global market and of poverty alleviaon
as a business development goal. The expected
outcome was idened as a social and economic
transformaon that would ulmately lead to
the morphing of the pyramid into a diamond
with the middle class making up the largest part
of society.
the Very Poor the Middle Class
fgure 4:Prahalad: From
Pyramid to Diamond
8 Hart, S.L. and London, T. (2005). Developing Nave Capability. Stanford Social Innovaon Review, June 2005, 2833.
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9 Budinich, V. (2005). Market Based Strategies Serving Low Income Populaons. hp://www.caseplace.org/d.asp?d=1434.
The rst framework based on models for BoP market-based strategies was developed by Valeria
Budinich.9
Placing a strong emphasis on cizen sector organizaons, who, according to Budinich, have
more experience in delivering products and services to low-income consumers and small producers,
the framework stressed the importance of partnership between the business and the social sectors in
hybrid value chains.
Budinich idened nine (9) business models based on case studies and placed parcular importance on
the emergence of community as an important factor that inuences business models.
fgure 5:Business Models at the BoP
according to Budinich (2005)
World ClassQuality atAordable Price
David Green Health(Global)
Mul-Tiered
Pricing ModelRebecca VillalobosHealth (Costa Rica)
SharedPurchasing
Grameen TelecomICT (Bangladesh)
Combining Retail &Financing
Casas Bahia (Brazil)Consumer Goods
Group Micro-
Lending & DemandAggregaon
Prof. Muhammad YunusFinancial Services (Global)
Transformingeconomies of SmallProducers
Dr. Verghese KurienDairy (India)
AcquiringTechnology throughMicro-Leasing
Fabio Rosa Energy(Brazil)
Save and Built
Assets NowCEMEX/PatrimonioHoy Housing (Mexico)
Leveraging SocialNetworks
ICICI and CSOsFinancial Services(India)
Factors/Principles
Limitedpurchasing
o individualclients
High volumebusiness basedon small (eventiny) individual
transactions
Poor understandingo the human andsocial capitalso low incomecommunities
Change
radically thelogic behindyour businessmodel
Leveragethe power ocommunities asboth consumersand producers
Designproducts &services thattap into thewealth o poor
Mosaic of Market-based strategies beneng low-income populaons.
Examples from cizen-sector organizaons and businesses.
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14
Anew generaon BoP concept, which was
called BoP 2.0 based on the noon of creang
mutual value as opposed to selling to the poor,
was proposed by Hart in 2007.10
The following
year, BoP Protocol 2.0 was produced by Hart
and Erik Simanis, which was anchored on a co-
creaon logic that encourages close personal
partnership with the BoP, dialogue instead of
just listening to concerns of those at the BoP, and
mutual sharing and learning in order to foster a
shared commitment.
BoP 2.0: The Poor as aCo-Inventors & Co-Creators
10 Hart, S.L. (2007). Capitalism at its Crossroads: Aligning B usiness, Earth and Humanity (2nd ed.) . Upper Saddle River NJ: Wharton
School Publishing
11 Hart, S.L. (2011). Wring the Unnished Symphony at the Base of the Pyramid. hp://stuartlhart.com/blog/2011/05/wring-the-unnished-
symphony-at-the-base-of-the-pyramid.html
table 1:The Dierence between the First and Second Generaon BoP
Concept, adapted from Simanis & Hart (2008) and Hart (2007)
BOP 1.0 BOP 2.0BOP as a consumer BOP as a business partner
Deep listening Deep dialogue
Low cost producon Build local capacity
SELLING to the POOR BUSINESS CO-VENTURING
Extended distribuon Embedded processes
Reduced price point Expand imaginaon (bringingnew life into business ideas and models)
Redesigning packaging Marry capabilies and buildshared commitment
Arms length relaonshipvia NGOs
Direct, personal relaonshipfacilitated by NGOs
Aer years of study on the business potenal of the BoP, Hart and Ted London, came to the conclusion
that there is no fortune at the boom of the pyramid waing to be discovered, contrary to earlier
assumpons and proposions. The new realizaon is that the [real] challenge for companies is to learn
how to create a fortune with the base of the pyramid11
.
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Michael Porter and Mark Kramer recently
published a paper on creating shared value
that examines the reinvention of capitalism
to unleash a wave of innovation and growth.
This work proposes that business and society
have been pitted against each other for so
long that it may be useful to look further into
connections between societal development
and economic progress.
Their framework goes beyond the concept ofsharing an economic value created by business
(i.e. redistribuon) and seeks to expand social
and economic values by showing policies and
pracces that not only guarantee prot and
compeveness in business but also improve
the economic and social condions of the
communies where these businesses are
located. Re-conceiving products and markets,
examining how productivity is maximized in
the value chain, and the creation of industry
clusters in the locale of the companies are
among the pathways identified to effectively
create shared values.12
Sensivity to the needs of communies is vitalto this approach. Hence, though Porter and
Kramer did not explicitly refer to the BoP, they
further provide ways by which the BoP takes on
a crical and a more acve role in the creaon
of products, processes and systems that facilitate
innovaon and growth.
Another notable development is that of the
concept of collaborave interdependence that
builds on the second-generaon BoP strategies
of co-creaon and suggests a partnering strategy
that seeks ways on how various stakeholders can
be of help to each other. The framework was
developed by Ted London and Ravi Anupindi,
aer examining how food security and nutrion
investments can be beer directed for both prot
and poverty alleviaon.13
This encourages shis and changes in roles,capabilies, metrics and investments. Again,
New Developments: BoP as a stakeholder and collaboratorin developing shared value and poverty alleviation
12 Porter, M. and Kramer, M. (2011). Creang Shared Value. Harvard Business Review, January-February 2011
13 London, T. and Anupindi, R. (2011). Using the base-of-the pyramid perspecve to catalyze interdependence-based collaboraons. hp://
www.pnas.org/cgi/doi/10.1073/pnas.1013626108
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this new way of looking at engagement with the
BoP requires collaboraon with non-tradional
partners, embracing socially-oriented metrics,
supporng local capacity building, enabling
enterprise capabilies, and creang more
aracve market opportunies. Collaboraon
will be imperave in the design, implementaon
and sustainability of engagements under this
framework.
Thus, a new interdependence-based model
of collaboraon (IBC) is introduced with the
following strategies:
1. Catalyzing investment to encourage
more enterprises to seek opportunies in
designing iniaves that engage the BoP --
in this study, London and Anupindi refer to
small-holder farmers;
2. Balancing metrics and aligning
incenves in order to enhance the ability
of enterprises to pilot and scale viable
business models that are responsive to the
needs of the BoP;
3. Creang exible mechanisms that
facilitate experiments in the stages of
design and implementaon, aiming to
support business models that serve the BoP
in more sustainable ways;
The long and arduous search for soluons to
poverty has led many to the realizaon of the
limitaons of the wisdom of and approaches used
by governments, corporaons, and tradional
development agencies and organizaons, leading
to an increasing recognion of the important
role that the poor can take on in developing new,
creave and life-changing ideas and technologies.
Understanding and creating
values desired by dierent
stakeholders is at the heart o
collaborative interdependence.
4. Enabling compeve advantage
in order to improve opportunies for
enterprises to become more sustainable;
and
5. Ensuring skill transfer to develop
capabilies to scale engagements into new
market contexts.
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14 Market based Innovations Pro-poor Solutions. (2012). BoP Innovation Center. http://www.bopinc.org/images/documents/flyer-
bop%20inc.pdf
15 Miedema, M. (2009). Science, technology and innovaon for sustainable povery reducon. The Netherlands: TNO. hp://siteresources.
worldbank.org/EDUCATION/Resources/278200-1099079877269/5476641099079975330/Mathilde_Miedema_Science_Innovaon.pdf
The BoP Innovation Center, anindependent oundation in Europe
that employs a multi-stakeholder
approach to developing sustainable
innovations or BoP markets, used
such strategies in developing
alternative energy sources.14
In recent years, notable aempts have been
made to develop new products using pro-poor
innovaon strategies.
To guarantee successful pro-poor innovaon, Miedema proposed that aenon
should be given to these to types of innovaons15
:
However, Mathilde Miedema of The Netherlands
Organizaon for Applied Scienc Research
(TNO) looked into the value of the BoP in science
and technology and found the following hurdles:
(1) inadequate idencaon of BoP demands
and matching potenal for a business case;
(2) insucient co-creaon iniaves; (3) gap
in investments for research and development
parcularly for new, disrupve innovaon; and
(4) missing innovaon management, among
others.
Technical innovations. Development of sustainable and aordableproducts and technologies;
Social innovations.New partnerships and ways of interacon; Management innovations. Novel ways of product development,
markeng, purchasing investment; and
Value-chain innovations.Exploring new relaonships and arrangementswith suppliers and retailers alongside new nancing schemes.
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18
16 Oosterlaken, I., van den Hoven, J., Kandachar P., Mani, M. (2009). Technology and Human Development A Capability
App roa ch . Bangalore: Indian Institute of Science
There are those that question the
application o the BoP approach to
innovation in S&T. Oosterlaken et.al,
or instance, point to the insufcient
attention given to BoP involvement in
the engineering and design phases, and
to innovation that takes into account
local contexts. They encourage more
participatory approaches to innovation
in order to expand human capabilities
rather than just aiming to raise incomes
to address poverty.16
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Finally, we note the new concept of inclusive innovaon, a term
recently introduced by Dr. R.A. Mahelkar and is being supported by
the World Bank to deliver high performance products, processes and
services at an ultra-low price for resource-poor people by harnessing
sophiscated science and technology know-how to invent, design,
produce and market high performance products and services at
prices that can be aorded [by the poor]. On top of this is the call
for the inclusion of the BoP in innovaon processes to co-create and
co-innovate inclusive soluons.17
The process of inextricably linking innovaon as an instrument for
development for, with and by those at the BoP brings us further to
the emerging concept of innovaon for inclusive development. An
important idea is that innovaon must support a pace of development
of the BoP that outstrips the pace of the rest of society in order to
close the inequality gap. Without an equitable sharing and staking of
claims to the benets of development, it is and will not be inclusive.
iBoP Asias search for the key to unlock this dramac development
potenal of the BoP has led to the discovery of technical, social,
managerial and value-chain innovaons that can bring communies
out of the BoP.
17 Oce of Science and Technology Policy (2010), More from Less for More: The Imperave for Inclusive Innovaon, hp://
scienceofsciencepolicy.net/event/more-less-more-imperave-inclusive-innovaon.
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Segundo Romero, Mary Grace Santos, Lilac Florentino,Kristian Paolo Torres, Lance Andrew Viado
20
Therefore, these cases, as a set, can
be considered to represent small-scale
iniaves to respond to pressing social
concerns in BOP communies and sectors
that experts considered parcularly
technically feasible and had signicant
technical, nancial, socio-cultural, and
polical sustainability.
Taken as a purposive sample of S&T
innovaons at the BoP, the cases can be
characterized along the following variables:
As research projects, how muchme and resources were required to
generate the project outputs? What
does this say about the level and
range of eort required to produce
signicant S&T innovaons in BoP
communies and sectors?
What were the various types ofinnovaon outputs and outcomes of
the projects products, processes,
prototypes, informaon, knowledge,
capabilies, partnerships, and
collaboraon networks?
How were the projects distributed interms of their acquision, applicaon,
adaptaon, adopon and scaling of
the innovaons? The research projects
applied themselves to dierent points
and ranges along the connuum
Overview
Patterns in Innovation at the BoP
in Southeast Asia
Chapter 3
This chapter provides some o the relevant patterns that characterizethe 26 innovation stories. As previously mentioned, these stories were
the result o a Southeast Asia-wide call or research proposals on the
application o S&T innovations at the base o the pyramid.
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of entry to exit or mainstreaming
of the innovaon. Some projects
aempted to create new product or
process innovaons while others took
exisng products and processes and
applied them in new sengs. Some
projects focused on the acquision of
appropriate innovaons to respond to
idened needs.
To what extent were the targetbeneciary-partner communies
or sectors engaged in the research
projects? What was the depth and
breadth of their parcipaon? How
were the communies represented by
formal or informal leaders?
Which development actors andintermediaries played a role and
contributed to the project? What were
the similaries and dierences in the
parcipaon of government (naonal
and local), private sector, and civilsociety organizaons (academe, NGOs)?
What sustainability concerns technical, nancial, socio-cultural, and
polical) were raised and addressed in
the project? What follow-on acvies
were designed or implemented?
These are the paerns that this chapter explores.
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22
Patterns in Acquiring, Applying,and Sustaining Innovations
Innovang from scratch is not really a requirement
in order to address a social problem. Exisng
innovaons from dierent regions and created
within dierent contexts can be introduced into
similar or analogous problem situaons. The real
requirement for innovaon is to analyze a social
problem situaon and do a wide search of the
available (extant and feasible) innovaons that
can possible address it. If found, a suitable or
appropriate innovaon is acquired and applied.
If no suitable innovaon is found, then it has to
be created.
Acquiring the innovation and introducing it
into a specific social situation may take the
form of a purchase, transfer via grant, or
manufacture or construction.
There are many circumstances under which
innovaons are introduced into a BoP community
or sector. It is always assumed and usuallyestablished that there is a strong felt need by the
target community to resolve a parcular social
problem. It is, however, harder to establish how
the innovators themselves came out with the
idea for the innovaon proposal.
From among the innovation stories, two
peculiar circumstances are notable. In the
small-size wind turbine case (Innovation
Story 20), the researchers candidly admit
that when they started conceptualizing the
project, nobody from the research team
knew how to develop a generator. They
were thus overwhelmed with an inordinate
amount of queries to sort out: the position
of the generator when coupled with the
turbine; the availability of materials, locally
as well as abroad; and even the confidence
of the research team members to deal with
the unknowns.
In the project on Agri-based commerce
(Innovaon Story 22), the researcher recounts
how they purposively searched for an appropriateinnovaon in a global forum on agri-business
soluons held in Egypt at the me they were
designing their project:
This secon provides an overview of the process by which innovaons are introduced to solve pressingsocial problems of communies and sectors at the BoP in various countries of Southeast Asia.
The rst part of the secon characterizes the cases in terms of their locaon on the stages/ phases of the
innovaon process. The second secon presents the sustainability challenges, factors and mechanisms
highlighted in the cases.
How are Innovaons Idened and Acquired?
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The participation o the delegation rom the Philippine Department o Agriculture
to the Conerence on the Sharing o Agribusiness Solutions: From Farm to Markets,Providing Know How and Finance (November 2008, Cairo, Egypt) was the opportunity
to learn about a wide range o agribusiness development models all over the world.
With the objectives o the iBoP project at hand, the proponent was on the look [out]
or an innovative solution that optimizes science and technology innovations to enable
marginalized agricultural communities to participate in the global supply chain.
Among the solutions that were presented in the Conerence, the Egyptian Traceability
Center or Agro Industrial Exports (E Trace), was the best solution identifed.18
Boru Dothwaite provides us with a diagram of the stages and
milestones in the innovaon process19
:
gure 6: Stages in the Innovaon Process
Stages and milestones in the invention, innovation and diusion process
DIFFUSION
INNOVATION
INVENTION
Researchin a similar
area begins
Firstcommercial
sale
Researchon new (to
system)
techniquebegins
Widerdiusion
begins
Buildings ofrst concept
prototype
Use of newtechnology
becomesroune
Pre-Development Development
Development in
the laboratory
Field/market
materials
Adopon by
innovators, then
early adopters
Adopon by
early majority
Adopon by
late majority
and laggards
Start-Up Adaptaon Expansion Disappearance
18 Alfon, H., Rodolfo-Sawit, M., Scholten, P. (2010). Bridging the Base of Pyramid (BoP) to Mainstream Commerce: An acon research among
Southeast Asian Countries on policies and enabling factors for the BoP to eecvely parcipate in the R&D and trade of value-added agriculture-
based commodies. iBoP Asia Grants Program Technical Report No.22
19 Dothwaite, B. (2002). Enabling Innovaon: A Praccal Guide to Understanding and Fostering Technological Change. Zed Books. London, UK.
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24
Using this schema, the 26 research projects undertaken by the iBoP Asia grant partners appear to fall
under the following categories, based on the Final Technical Reports submied:
STAGE Case Illustration
[1] PRE-DEVELOPMENTResearch in a similar area begins
[5] EXPANSIONWider diusion begins (Adopon by
early majority)
[6] DISAPPEARANCE
Use of new technology becomesroune (Adopon by late majority
and laggards)
[2] DEVELOPMENTResearch on new (system) begins
(Development in the laboratory)
[3] START-UPBuilding of rst concept prototype
(Field/ market trials)
[4] ADAPTATIONFirst commercial sale (Adopon by
innovators, then early adopters)
N/A
N/A
N/A
10 Cases:
Community-led water services (Innovaon Story 4)
Household nance management (Innovaon Story 13)
Socio-econ impact of biofuels (Innovaon Story 17)
Bioethanol value chain (Innovaon Story 18)
Agri-based commerce (Innovaon Story 22)
Emergency food reserves (Innovaon Story 23)
Livelihoods under climate change (Innovaon Story 24)
Rainwater catchment systems (Innovaon Story 25)Disaster resilient food crops (Innovaon Story 26)
8 Cases:
Clean water from Red River (Innovaon Story 1)
Drinking water soluons (Innovaon Story 2)
Rural water system design (Innovaon Story 3)
Mulplex diagnosc test (Innovaon Story 7)
SnT in a Box (Innovaon Story 11)
Mulple handicap e-system (Innovaon Story 12)
Business development service (Innovaon Story 14)
Solar powered poultry hatchery (Innovaon Story 19)
Small-size wind turbines (Innovaon Story 20)
Teaching farmers rice quality (Innovaon Story 21)
7 Cases:
Sanitaon in oang villages (Innovaon Story 5)
Eco-sanitaon with food producon (Innovaon Story 6)
Medicine for communies (Innovaon Story 8)
Ecolife village Cafe (Innovaon Story 9)
Mobile phones for sh data (Innovaon Story 10)
Waste cooking oil into jeepney fuel (Innovaon Story 15)
Waste into biogas and ferlizer (Innovaon Story 16)
table 2: Milestones in the invenon, innovaon and diusion process
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Cases at the
Pre-Development Stage
It appears that none of the 26 cases fall into this
category. This suggests that the researchers
and proponents of the innovation projects
already undertook what would be considered
pre-development work that preceded the
project that was funded by iBoP Asia. In other
words, the projects were merely phases in a
continuing process.
Some of the projects, conceivably, could have
been pre-developmental, except that the
researchers, as in the small-size wind turbines
case (Innovaon Story 22), went on to learn the
basics while designing the proposed innovaons.
Cases at the Development Stage
There are ten (10) cases at the developmentstage. At this stage, the innovaon eort is
focused primarily on understanding how the
technology being considered can be developed
into an appropriate and adequate response to
the problem and the parcular BoP context/
condion at hand.
Some of these cases tried to understand physical,
chemical, and biological cause-and-eect
relaonships, many of them dealing with water
and sanitaon, and food and energy producon.
A very simple but powerful innovaon project
that focused on the applicaon of earth science
principles was that of the rainwater catchment
systems project (Innovaon Story 25). The powerof this project derives from the indigenous
knowledge embedded in the use of exisng
rainwater catchment systems in the Tigum-
Aganan Watershed in the province of Iloilo
in the Philippines. The project systemacally
documented and classied these systems
according to specic characteriscs and mirrored
back to the BoP community this systemazed
classicaon in such a way that can be used by
farmers in deciding whether or which rainwater
catchment system is appropriate for their needs.
While drawn from the experience of a parcular
region in the Philippines, the range of rainwater
catchment systems (7 types, 39 systems) are
applicable to other countries in Southeast Asia
and beyond.
Other cases tried to understand the inuence
of social and behavioral factors (or aributesof proposed social and behavioral systems),
including entrepreneurial soluons.
The research on household nance management
(Innovaon Story 13) aempted to uncover how
poor households in rural Philippines and India
cope with unstable income ows and manage
their meager resources. Understanding how
poor people earn, save, invest and spend their
income, and looking at how the development
of an innovave payment strategy can help
them manage their nances are relevant to a
systemac aempt to alleviate poverty.
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26
Cases at the Start-Up stage
Eight (8) cases fall in the start-up stage, wherethe projects developed a prototype and/or
conducted eld and market trials.
The sanitaon for oang villages project
(Innovaon Story 5) sought to demonstrate
to oang villages on the TonLe Sap lake in
Cambodia a comprehensive waste management
soluon. In doing this, the project accomplished
the following tasks:
1) eld trials of latrine opons;
2) idencaon of potenal waste/
recycling markets;
3) construcon and operaon of a
oang waste management barge;
4) demonstraon and gathering of
inial data on the use of appropriate
sanitaon systems in oang
communies; and
5) documentation of the lessonslearned.
Another case that illustrates the start-up phase
is the waste cooking oil as jeepney fuel study
(Innovaon Story 15), which examined the
nancial viability and technical acceptability
of waste cooking oil as an alternave fuel for
jeepneys. It also looked at the most appropriate
business model for the adopon of the technology.
In order to achieve the identified objectives
the project 1) formed a multi stakeholder
coalition involving groups from the transport
sector, local government, academe, business
to support the adoption of waste cooking oilas fuel for jeepneys; 2) tested and evaluated
the technical, environmental and economic
viability of the various modes of utilizing waste
cooking oil in jeepneys; 3) formulated a waste
cooking oil collection strategy, processing
technology and business model that will
ensure maximum benefits to the jeepney
sector; and 4) documented and disseminated
the study results for possible replication.
Cases at the Adaptaon and
Disappearance Stages
There were no cases at the adaptaon and
disappearance stages. The project duraon was
too short to enable the innovaon to advance
to these stages. It is clear, however, that for
many of of the projects, a follow-up phase --scaling-up the innovaon vercally (combinaon
with other elements) as well as horizontally
(implementaon in other communies) such as
the Hapinoy Healthcare Hub (Innovaon Story 8)
was in the works. Updates on these projects
may well show progress along the connuum of
the innovaon process. The documentaon of
the cases, however, did not cover details of these
follow-up phase.
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Acquiring the BoP Perspecve
Several development perspecves have been introducedto beer understand and address dierent dimensions of
poverty. What sets the BoP approach apart is the premium
that it gives on the engagement of poor communies in
the process of idenfying and understanding key issues and problems, and working on the best possible
soluons for them. As such, poor communies are now considered as benepartners (beneciary-
partners) and major stakeholders in innovaon and development.
As discussed in Chapter Two, there has been the movement from BoP 1.0 to BoP 2.0, which regards
the poor as an acve partner in
the development process.
We again present the presentaonof the rst and second generaon
concepon of the BoP approach by
Simanis and Hart:
BOP 1.0BOP as a consumerDeep listening
Low cost producon
Extended distribuon
Reduced price point
Redesigning packaging
Arms length relaonshipvia NGOs
SELLING to the POOR
BOP 2.0BOP as a business partner
Deep dialogue
Build local capacity
Embedded processes
Expand imaginaon (bringingnew life into business ideas and models)
Marry capabilies and buildshared commitment
Direct, personal relaonshipfacilitated by NGOs
BUSINESS CO-VENTURING
Patterns in Engaging BoPCommunities and Sectors
table 1: The Dierence between the First and Second
Generaon BoP Concept, adapted from Simanis &
Hart (2008) and Hart (2007)
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28
Using this community engagement framework as an assessment tool, we ask: how engaged are the
community partner-beneciaries in our 26 cases? Is it possible to idenfy factors and condions that
inuenced the level of parcipaon in each case?
The value of community parcipaon in development iniaves has been discussed and documented
by scholars and praconers alike. Hashagen outlined six (6) levels of community engagement20
:
20 Hashagen, S. (2002). Models of community engagement. Scottish Community Development Centre.
TYPE OF COMMUNITYINVOLVEMENT
Role of Community
Passive
Proactive communityparticipation
Community mobilization
Reactive communityconsultation
Entrusted communitycontrol
Interactive
Community is informed about what has been decided.
Community inuences the priories in the project, resource
use and service provision.
Community parcipates by taking iniaves to improve the
system. Community takes role in networking for resources
and technical advice that they need, retains control over
resources.
Community is consulted about issues but the process does
not equate to share in decision-making. Project implementer
is under no obligaon to take on the view of the community.
Community has same role with community mobilizaon
including the control of public budget allocaon.
Community engages in joint analysis, development of aconplans and empowerment of local groups. Community and
project implementer decide on how resources will be used.
table 3: Six Levels of Community engagement
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The table below classies the 26 innovaon stories according to the level of community partner-
beneciaries engagement:
Type of CommunityEngagement
Illustrations
Passive:
Reactive community consultation
Proactive community participation
Interactive
Community mobilization
Community is informed about what
has been decided.
Community is consulted about
issues but the process does not
equate to share in decision-making.
Project implementer is under no
obligaon to take on the view of the
community.
Community inuences the priories
in the project, resource use and
service provision.
Community engages in joint
analysis, development of acon
plans and empowerment of local
groups. Community and project
implementer decide on how
resources will be used.
Community parcipates by taking
iniaves to improve the system.
Community takes role in networking
for resources and technical advice
that they need, retains control over
resources.
Drinking water soluons (Innovaon Story 2)
Community-led water services (Innovaon Story 4)
Mulple handicap e-system (Innovaon Story 12)
Household nance management(Innovaon Story 13)
Socio-economic impact of biofuels (Innovaon Story 17)
Bioethanol value chain (Innovaon Story 18)
Small-size wind turbines (Innovaon Story 20)
Agri-based Commerce (Innovaon Story 22)
Clean water from Red River(Innovaon Story 1)
Mulplex diagnosc test(Innovaon Story 7)
Business development service (Innovaon Story 14)
Emergency food reserves (Innovaon Story 23)
Livelihoods under climate change (Innovaon Story 24)
Rainwater catchment systems (Innovaon Story 25)
Disaster -resilient food crops (Innovaon Story 26)
Rural water system design (Innovaon Story 3)
Mobile phones for sh data (Innovaon Story 10)
Medicine for communies (Innovaon Story 8)
SnT in a Box(Innovaon Story 11)
Waste cooking oil into jeepney fuel(Innovaon Story 15)
Solar-powered poultry hatchery(Innovaon Story 19)
Teaching farmers rice quality(Innovaon Story 21)
Sanitaon in oang villages (Innovaon Story 5)
Eco-sanitaon with food producon (Innovaon Story 6)
Ecolife Village Cafe (Innovaon Story 9)
Waste into biogas and ferlizer(Innovaon Story 16)
table 4: Level of Community Engagement in the 26 innovaon stories
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Factors aecng the level of
community engagement
Purposive embedding o participation in
the project design
The project designs of a number of our grant
partners facilitated community engagement
in the innovaon process by providing
venues for collecve sharing, deliberaon
and learning among community members
and project partners. In the sanitaon in
oang villages project (Innovaon Story 5) in
Cambodia, Live & Learn, in partnership with
Engineers without Borders (EWB)-Australia,
conducted a series of consultaon workshops
and meengs aimed at elicing inputs
from the community on exisng sanitaon
pracces and the preferred waste collecon
methods. Community members were also
tapped to be part of the project team, to help
idenfy locally available materials for and
take part in the construcon of the oangwaste management barge/ staon.
The project on teaching farmers rice quality
(Innovaon Story 21), the Sub Plant Protecon
Department (SPPD) of An Giang province
in Vietnam tackled the problem of the
transfer of agricultural technologies to rural
farmers. SPPD observed that despite several
legislaons from the naonal government
and aempts to expose local farmers to the
use of new farming methods and alternave
rice variees, the farmers sll keep to the
tradional ways and rice variees that yield
poor harvest. Thus, SPPD strategically shiedto a more parcipatory and praccal approach
of reaching out to local farmers through
lengthier and deeper dialogues (from the
usual 2-hour workshops to 4-month training
sessions) and actual eld demonstraons and
trials that eecvely improved the learning
process and encouraged the praccal
applicaon of learnings so that by the end
of the training sessions, the farmers already
observed an increase in rice yield and more
eecve pest management.
The purpose of the project also dictates the
level of engagement that is necessary. The
project of the Philippine Business for Social
Progress on business development service
for the BoP (Innovaon Story 14) is mainly to
assess the impact of the low-cost Business
Advisory Program (BAP) services that theyoered to small and microenterprises
(SMEs). As such, the engagement with
their clients was limited to key informant
interviews for data gathering.
Technical skills needed in innovation
There are cases wherein community
engagement was limited because of the
high technical skills that were required in
developing the innovaon. This was true for
the project of Aqueous Soluons (Innovaon
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Story 2), which primarily focused on
idenfying and tesng indigenous materials
as potenal carbon lters and how tradionalmud kilns can be enhanced to produce such
charcoals. This mostly required laboratorary
analysis of samples and the re-engineering
of kilns that can only be performed by
technical experts.
Consideration o the risks and change in
mindsets involved in innovation
BoP communies and those at the base of
the pyramid, in general, are risk-averse as
they try to protect and hold onto the scarce
resources that they have. Engaging poor
communies in innovaon entails certain
adjustments and disrupons in daily life that
can be perceived as risks (e.g. me spent in
meengs, workshops is me lost for livelihood
acvies, hence, loss of income). Hence, theinial hesitaon by community members to
parcipate in project acvies. This was seen
in the case of the waste cooking oil for fuel
project (Innovaon Story 15) and the project
on teaching farmers rice quality (Innovaon
Story 21),
Facilitang community understanding and
appreciaon of the innovaon process and
of the value of the innovaon itself also takes
me as these may go against certain norms
and percepons held by the community. This
is shown in the story of WAND Foundaon,
Inc.s eort to promote ecological sanitaon
(EcoSan) pracces in rural communies,
which required the handling, storage and
treatment of human waste. The thought of
reusing human excreta as organic ferlizer
for backyard vegetable farms did not sit wellwith community members at the onset;
thus, the project team spent some me
sensizing their partner communites to the
concept and to the benets of this waste
management approach. Eorts to clearly and
eecvely communicate innovaon goals
and outcomes to the community generate
beer buy-in of the iniave and serve
as a foundaon for an eecve working
partnership with the community.
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Use o indigenous knowledge and
capacities in innovation
Learning from poor communies themselvesis deemed key to innovaon at the BoP. An
understanding of exisng local knowledge,
pracces and behavioral and social paerns in
a BoP community are invaluable to ensuring
innovaon success. The rate of adopon/
adapon of the innovaon is made higher
when an innovator takes into consideraon
local capacies and knowledge in designing/
tailor-ng the technology or process for a
BoP community.
The Live & Learn project in Tonle Sap
(Innovaon Story 5) harnessed community
know-how on the local materials and skills
available for the construcon of the oang
waste management staon/ barge. The same
is true for the Kahublagan project (Innovaon
Story 25), where the research team took note
of exisng rainwater harvesng facilies usedand pracces by farmers, and made easy-to-
use guides on how the farmers can properly
use or maximize the use of these facilies.
Other projects such as that of SPPD (Innovaon
Story 21), Aqueous Soluons (Innovaon
Story 2) and ITDI-DOST (Innovaon Story 23)
built on and enhanced exisng community
technologies and pracces in order to make
them work more eecvely or eciently.
Engagement o community leaders
The inial engagement, at least, between the
innovator and the community were facilitatedby a recognized and trusted community leader
in all cases. All our grant partners sought
permission from and coordinated with local
authories as they worked on their respecve
projects. The community leader may be an
elected ocial (i.e. barangay chairman) or
simply a member of the community who has
signicant inuence within the community
who can help arculate the needs and wants
of the community, idenfy community
members who can and will be able to assist in
or parcipant in the project, rally support for
the iniave, and idenfy ways towards an
innovaons sustainability in his/ her locality.
Local authories were instrumental in
idenfying the research areas and informants
in the project of IPSARD in Vietnam (Innovaon
Story 24), in organizing community membersfor the operaon and management of the
Ecolife Village Cafe (Innovaon Story 9),
and in providing an ocial memorandum
supporng the reuse and conversion of waste
cooking oil into fuel in Los Baos, Laguna
(Innovaon Story 15).
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Patterns in InnovationIntermediation
It is important to note that because many of the cases were sll at the developmental and start-up
stage, community engagement in the innovaon process has not been fully ulized and maximized.
However, a considerable number of cases show the valuable contribuon that poor communiescan make to innovaon, as partners more than just being beneciaries.
Innovaon studies, over me, has shown thatinnovaon is a complex, dynamic and connuing
process driven by the collecve acon and
interacon of various agents engaged in creaon,
learning and negoaon, with the end-goal of
not just bringing about new ideas, perspecves
and technologies but more so meaningful social
idenes, arrangements and relaonships.
Integral to innovaon is the successful
combinaon of new technical devices and
pracces (hardware), new knowledge and modes
of thinking (soware) and new social instuonsand forms of organizaon (orgware).
21
Innovaon intermediaries are key to facilitang
this integraon and the interacon of various
actors in the process of innovaon. Inially
denong third pares, bridgers and brokers
between two or more pares, its denion
has since evolved to more broader denionspertaining to organizaons or groups within
organizaons that work to enable innovaon,
either directly by enabling the innovaveness
of one or more rms, or indirectly by enhancing
the innovave capacity of regions, naons, or
sectors. To the extent that an organizaons
or organizaonal units purpose is to enable
innovaon, it may be considered an innovaon
intermediary.22
Our case stories illustrate
the engagement of ve (5) sectoral agents
civil society organizaons, the academe, local
governments, naonal government agencies and
private enterprises in innovaon at the BoP,
and the intermediary roles and funcons that
they played in the process.
21 Smits, R. (2011). Innovae in de universiteit. Inaugurele rede. Universiteit Utrecht, Utrecht. 2000, and Aarts, N. and Leeuwis, C. Rethinking
Communicaon in Innovaon Processes: Creang Space for Change in Complex Systems . Journal of Agricultural Educaon and Extension Vol.
17, No. 1, 21 36
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Non-governmental Organizaons (NGOs)
The role of intermediaon is perhaps best embodied by non-governmental organizaons or NGOs,who in the democrac discourse are recognized as bridging agents between the people and the
state that facilitate public parcipaon in needs assessment, decision-making processes and acon-
oriented programs in order to sasfy basic needs; increase levels of polical parcipaon and social
empowerment of parcular sectors and groups, especially of the poor and dispossessed, women,
ethnic groups and other marginalized groups; and increase access to resources needed for the delivery
of development programs and operaons.23
Fourteen (14) of our grant partners are NGOs. Table 5 shows the types of non-governmental
organizaons that weve engaged as project implementers, the intermediary roles that they played and
the collaborators in their respecve projects:
Project Implementer,Researcher, Community
Organizing/Engagement,
Capacity-Building/Training
Project Implementer, Network
Brokering/Relaonship
Building, Capacity Building/
Training, Community
Organizing/Engagement
Instute for Small-Scale Industries of theUniversity of the Philippines-Diliman, local
governments of partner communies
Ministry of Rural Development, Engineers
Without Borders-Australia, Resource
Development Instute-Cambodia, Royal
University of Phnom Penh, local leaders of Phat
Sanday community
Innovaon Story 4:Community-led water
services
A Single Drop for Safe
Water
Innovaon Story 5:
Sanitaon in oang
villages
Live & Learn
Environmental Foundaon
Project/Implementer
IntermediaryRoles
Collaborators
Project Implementer, Technical
Support, Network Brokering/
Relaonship Building
North Carolina State University, University
of Colorado-Boulder, Pun-pun Sustainability
Learning Center, Sarabuvi Wood Energy
Research Center
Innovaon Story 2:
Drinking water soluons
Aqueous Soluons
Non-proft Service Providers
22 Dalziel, M. (2010). Why do innovaon intermediaries exist?Paper presented at the DRUID Summer Conference, London. June 1518
23 Novy, A. and Leubolt, B. (2005). Parcipatory Budgeng in Porto Alegre: Social Innovaon and the Dialeccal Relaonship of State and
Civil Society. Routledge, Urban Studies, Vol. 42, No. 11, 20232036, and Oce of Development Eecveness-AusAID (2009). Civil Society
Engagement Evaluaon
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Researcher, Policy
Recommendaon
Project Implementer, Product
Development
N/A*
GILAS(Gearing up Internet Literacy and Access
for Students)Project, Green Grants Fund of
Earth Island Instute
Innovaon Story 17:
Socio-economic impact of
biofuels
Acon for EconomicReforms
Innovaon Story 11:
Snt-in-a-Box
Computer Professionals
Union
Project Implementer, Design/
Product Development/Tesng,
Technical Support, Capacity
Building/Training, Community
Organizing/Engagement
Project Implementer, Design/
Product Development/Tesng,
Technical Support
Project Implementer,
Relaonship BuildingCommunity Organizing/
Engagement, Capacity
Building/Training
Project Implementer,
Informaon and Data
Management, Capacity
Building/Training
Project Implementer, Network
Brokering/Relaonship
Building, Community
Organizing/Engagement,
Capacity Building/Training
Deutsche Gesellscha fr Internaonale
Zusammenarbeit (GIZ, formerly GTZ), Xavier
University, Live & Learn Environmental
Foundaon, Center for Advanced Philippine
Studies, City Environment and Natural
Resources Oce of San Fernando, La Union
Peoples Organizaons in Negros Occidental
-- Jovita Garcia-Yogore Residenal Associaon,
Inc. (JGYRA, Inc.), Malvar Organic Farmers
Associaon (MOFA), Dancalan Waterworks
Mul-Purpose Cooperave, Cana-an Small
Farmers Associaon (CFA), Quinn Remo
Farmers Associaon, Naturay IrrigatorsAssociaon (NAI), Humayan Ministry; local
government units of Ilog, Moises Padilla and
San Carlos City in Negros Occidental and
Municipality of Argao in Cebu
Vietnam Naonal University, local authories of
Thuy An Village
Centre for Marinelife Conservaon and
Community Development (MCD), Ecolife Ltd.,
local authories and community groups of Giao
Xuan commune
Bio-ethanol producers in Central Kalimantan
and Banten, local authories in partner
communies, consultants from Martha
Tilaar Foundaon, Banten Instute for Social
Transformaon (Baist)
Innovaon Story 6:
Eco-sanitaon with food
producon
Water, Agroforestry,
Nutrion and
Development
Innovaon Story 16:
Waste into biogas and
ferlizer
Ecological and Agricultural
Development Foundaon,
Inc.
Innovaon Story 1:
Clean water from RedRiver
Center for Water
Resources Conservaon
and Development
(WARECOD)
Innovaon Story 9:
Ecolife Village Caf
Vietnet Informaon
Technology and
Communicaon Centre
(Vietnet-ICT)
Innovaon Story 18:
Bioethanol value chain
Sejahtera Semesta Rakyat
(SETARA) Foundaon /
NTFP Indonesia
Advocacy Groups
Project/Implementer
IntermediaryRoles Collaborators
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36
Many innovaon experts consider the ability to innovate as an inherent trait of non-government
organizaons because of their greater exibility and openness to risk-taking given their more informal
structure and culture, non-prot nature, and broader network of associaons.24
The projects involving NGO grant partners, as shown above, engaged the widest range of actors local
communies, local government units, internaonal development orgs, private companies, naonal
government agencies/ bodies, universies, research instutes, peoples orgs.
Our NGO partners also took on the widest range of intermediary funcons, from demand arculaon
(scanning, foresight, diagnosis), network brokering (idenfying, selecng, linking and forming
24 Bogacz-Wojtanowska, E. (2011). Innovative public services as a result of cooperation of public and non-government
organisations. Contemporary Management Quarterly
Project Implementer,
Technical Support/Quality
Management, Informaon and
Data Management, Capacity-
Building/Training
Project Implementer, Network
Brokering/Relaonship
Building
Project Implementer,
Community Organizing/
Engagement, Network
Brokering/RelaonshipBuilding
Researcher, Community
Organizing/Engagement
Bantay Dagat of San Juan, Batangas
N/A*
College of Engineering and Architecture, Ateneo
de Davao University
N/A*
Innovaon Story 10:
Mobile phones for sh
data
WorldFish Center
Innovaon Story 14:
Business advisory
services
Philippine Business for
Social Progress
Innovaon Story 20:
Small-sized wind turbines
Tri-People Concern
for Peace, Progress,and Development of
Mindanao (TRICOM)
Innovaon Story 13:
Household nance
assessment and
management
Emerging Futures Lab
Corporate Foundation
Think Tanks
*No other organizaons or groups were involved in the project.
table 5: Types of NGOs engaged in the 26 innovaon stories
Project/Implementer
IntermediaryRoles Collaborators
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partnerships among collaborators), knowledge/
technology brokering (disseminaon,
communicaon/ demonstraon, matchingdemand with supply) to innovaon
management (project implementaon, process
monitoring, mediang relaonships, providing
interacve spaces for learning), capacity
building (skills training, standards development,
organizaonal development), and instuonal
support (linking policy to pracce, providing
plaorms for policy advocacy, working for
instuonal change). NGOs were engaged in
eorts in 5 out of the 7 work areas of iBoP Asia
(water and sanitaon, ICT, micronance, energy
and climate change adaptaon).
Creavity and innovaon thrive in an open,
parcipatory and interacve environment, which
NGOs and other civil society groups champion. As
such, the leadership and experience of NGOs not
just in creang open spaces for change but also
in establishing trust with local communies arecrical to innovaon at the BoP. However, NGO
work, being project/ acvity-based and donor-
driven, connues to pose capacity limits and
makes the sustainability of eorts a challenge.
The Academe
Higher educaon instuons (HEIs) suchas universies and colleges are seedbeds
for innovaon given their extensive and
muldisciplinary knowledge base, their capacity
to generate and apply new knowledge in
research, and the ability to test new approaches
and validate theorecal assumpons through
praccal applicaon to real-world sengs and
interacon with external actors and communies
via their extension services. In what has been
called as the learning economy, innovaon
based on new knowledge or on fresh research
has always been at the core of all economic
and social iniaves, and learning becomes an
important, connuing social process.25
Eleven (11) projects engaged academic instuons
at dierent stages of the innovaon process
but primarily in demand arculaon (scanning,
diagnosis), knowledge/ technology developmentand brokering (matching with demand,
disseminaon/ transfer, communicaon), and
technology assessment. Most of our grant
partners engaged university/ college departments
or units to develop research methodologies and
tools; conduct laboratory tesng; and develop
and test innovaon prototypes. Table 6 shows the
universies/ colleges that were engaged in these
types of supporng intermediary roles:
25 Lundvall B.A. and Johnson, B. (1994). The Learning Economy. Published in Journal of Industry Studies, Vol. 1, No. 2
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We have cases where university departments/units themselves were the project implementers, where
apart from demand arculaon and knowledge/ technology brokering, they were also engaged in
innovaon management (execuon and monitoring), network brokering (linking and coordinang
with collaborators), and capacity-building (community development and training).
Project/
Implementer
UniversityIntermediary/
Partner
Intermediary
roles
Vietnam Naonal University
Royal University of Phnom
Penh
North Carolina State University
and University of Colorado-
Boulder
College of Engineering and
Architecture, Ateneo de Davao
University
Design/Product Development/Tesng
Researcher/Laboratory Tesng/Analysis
Researcher/Laboratory Tesng/Analysis
Researcher, Design/Product Development/
Tesng
Innovaon Story 1:
Clean water from Red
River
Center for Water
Resources Conservaon
and Development
(WARECOD)
Innovaon Story 5:
Sanitaon in oang
villages
Live & Learn
Environmental
Foundaon
I