Sustainable ManagementMetropolia, Business Ethics IP week

5 Poverty & Development

Hans Rosling

• For interesting data on poverty and development

• http://www.gapminder.org• Hans Rosling TED presentations

Assignment 4

• Visit Hans Rosling Gapminder site www.gapminder.org and load the gapminderworld software.

• Compare Finland, USA, China and Kenya on• CO2 emissions; which country emits most CO2 in total,

and per capita?• Tax Revenues (% of GDP)• Battle deaths per 100.000 people• Internet users per 100 people• Water withdrawal (cu meters per person)• Improved sanitation, overall access (%)

• Explain the differences you find.

Poverty & Development Initiatives

45 50 55 60 65 70 75 8040 85 90 95 00 05

1942Oxfam

Founded

1945International Bank for Reconstruction and

Development Founded

1960International Development

Organization created

1965United Nations Development

Program Founded

1985Live Aids concert

performed

1990UN Human

Development Index launched

1997UN Human

Poverty Index launched

2000UN Millenium

Development Goals launched

2002Bottom of the

Pyramid concept introduced

2008Make Poverty History and

Live 8

1987World Commission on Environment and

Development publishes Our Common Future (Gro Harlem Bruntlant Report)

Brundtland Report (1987)

• Major Proposals1. Reviving growth2. Changing the quality of growth3. Meeting essential needs for jobs, food, energy, water

and sanitation4. Ensuring a sustainable level of population5. Conserving and enhancing the resource base6. Reorienting technology and managing risks7. Merging environment and economics in decision

making

Agenda 21 (Rio 1992)

• Outcomes of Rio1. Convention on Biological Diversity2. Framework Convention on Climate Change3. Principles of Forest Management4. Agenda 215. The Rio Declaration on Environment and

Development

Millennium Goals (NY 2000)

• 1. Eradicate extreme poverty and hunger• 2. Achieve universal primary education• 3. Promote gender equality and empower woman• 4. Reduce child mortality• 5. Improve maternal health• 6. Combat HIV/AIDS, malaria and other diseases• 7. Ensure environmental sustainability• 8. Develop a global partnership for development

UN and Business

• Business at the heart of development• State failure: human rights, environment,

corruption, disease, poverty, etc., etc. • Globalization: companies confronting these issues• Enlightened self-interest to care:

societal expectations risk management business opportunities

• Sustainable societies and markets for all

Convergence

United Nations Business

Values

Prosperity

Peace

Development

Bottom of the Pyramid

Bottom of the Pyramid

• Concept of C.K. Prahalad• 4 billion people at bottom of economic

pyramid, with income less then $ 1.500 PPP• Can be seen as a latent market of goods and

services• Aggregated there is a huge potential

Bottom of the Pyramid

• Removal of poverty penalty (=high prices due to, local monopolies, inadequate access, poor distribution, strong traditional intermediaries)

• Find access to BOP market (urban easier than rural areas)

• Create capacity to consume (e.g. single serve packaging)

Bottom of the Pyramid

• Three A’s• AFFORDABILITY (single serve package)• ACCESS (high intensity of distribution)• AVAILABILITY (consumption when capacity is

there)

BOP market requirements

• Innovative• High price performance• Conserving resources• Focus on functionality• Deskilled work / operation• Education of customers• High performance / endurance

Critique on BoP

• By co-author Stuart Hart• Too many same products at lower prices, no

new approach• environmental unsustainable products and

services “dumped” on BoP market• Poor are not just consumers, should be

considered as partners in mutual learning

From Bottom to Base