Melbourne, May 18: A rapidly growing number of mainstream national and multinational companies are now engaging with the ‘world’s poor for profit’, according to a University of Sydney Business School expert in poverty alleviation and sustainable development.
Associate Professor Ranjit Voola was speaking ahead of a national inclusive business forum to be held in Melbourne later this month.
Dr Voola says the four billion people in the developing world – the highest being in the Asian region, including India and Bangladesh, exist on less than five dollars offer the private sector a golden opportunity to profit from a largely untapped five trillion dollar market while also helping to alleviating poverty.
Speakers at the Melbourne Forum will include representatives of retail giant Coles, the ANZ Bank, Coca Cola Amatil and multinational telecommunications firm Digicel.
The United Nations Development Program will also be represented.
Associate Professor Voola who is a marketing academic, and now oriented to ‘poverty alleviation and the role of business in it’, at the University of Sydney, said that “companies are now realising that the poor are key players in the market.”
Dr Voola has been invited to speak at the Forum hosted by not-for-profit organisation, Business for Development.
The Business School now offers a unit in its Master of Management program called “Poverty alleviation and Profitability”, which encourages students to radically rethink the traditional business focus on prosperous middle class markets and engage with the poor profitably.
As examples of how business can best engage with the poor, profitably, Dr Voola points to a venture in Kenya, which allows money transfers and access to microfinance via a mobile phone.
“This provides a return to the telecom company that supplies the service while enhances financial literacy and financial inclusion, amongst the poor,” Dr Voola said.
Founded in 2007, Business for Development has so far consulted to over 20 leading multinational companies keen to develop and implement business strategies that help to alleviate poverty in the developing world.
Dr Voola who is originally from Nellore, Andhra Pradesh in India, said that India’s Base of the Pyramid (BoP) “has around 114 million households, representing 76 percent of India’s rural residents and almost 60 percent of the country’s total population.
“In fact Prime Minister, Sri Modi has been highlighting the importance of business in eradicating poverty” Dr Voola said, talking to Bharat Times.
The Melbourne Forum, to be held on May 24, will provide insights into “how leading companies and their partners have successfully implemented commercially viable inclusive business models that provide scalable and systematic solutions to the problems of the world’s poor”.
It remains to be seen how this Forum will address the contention that a country’s economic integrity is compromised with operation of Multinationals.
A fast-paced consumerist culture promoted within a traditional sphere with operation fo MNCs, causes an unsustainable economic and social upheaval; yet “capitalism that is more inclusive may be able to address” this divergence.
Dr Voola believes that ‘shared-holder-focus’ by MNCs do have some ramifications for economic integrity, however, he argues that “there is a change in how some MNCs operate due to strong changes in the attitudes and perceptions of various stakeholders”.
“Consumers are increasingly expecting more of big businesses” – questioning MNCs operations, ethical purchasing increase, including students increasingly looking to work for broad-purpose companies.
“In fact businesses themselves have realized that it is ‘good business’ to genuinely engage with social issues”.
Dr Voola suggests that lives will be made better with “New concepts such as ‘creating shared value’, has legitimized this way of thinking”… and there is a “movement towards viewing profits as means to an end, as opposed to the end”.
Dr Voola will be speaking on the process of “engaging with poor, so that they are an integral part – in other words, how can we co-create value WITH the poor”.