Development Environment

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DEVELOPMENT SECTOR

Usually when addressing the challenges of basic needs of the „poor“ in such regions as Sub-Saharan Africa it is a task of the traditional development community, such as the World Bank, International Finance Corporation, UN-Habitat, UNICEF, other NGO’s, Local Governments, and other Charities and Foundations. The focus is usually on the 1 billion people with a purchasing power of less than $1 per day.(3) But the reality is that almost 4 billion people, the majority of the World’s population are living in relative poverty, and deserve to gain benefits from the global economy from which they are detached.

THE BOTTOM OF THE PYRAMID

The „Bottom of the Pyramid“ (Bop) is a classification for the 4 billion people living under relative poverty, that is under $3,000 annual income in local purchasing power, and represents a $5 trillion global consumer market.(4) Compared to the wealthier mid- and high-market population segments the Bop market is faced with significant unmet needs, dependence on informal or subsistence livelihoods, and impacted by a Bop penalty. These factors entail a much higher market growth potential than any other.

EMERGING MARKETS

The capacity of the development community is just not large enough to resolve the everyday issues of the Bop needs. It is best suited to care for the people in complete poverty, earning less than $1 per day in purchasing power.

For the consumers of the Bop the emerging trend is to devise innovative business models devised to empower Bop entrepreneurs and local small- to medium-sized businesses, engaged in meeting the needs of the Bop consumers and incorporating them into a formalized global market. Investments into innovative local businesses rather than in large regional projects is showing great potential. Overcoming market access barriers such as unreliable infrastructure, corruption and socio-economic differences is still discouraging many international companies & investors.