The condition of the world’s poor, those at the base of the economic pyramid (BoP), is the subject of growing attention. Global poverty is seen as both an unacceptable outcome of the current economic system and a challenge to commerce and security in wealthier nations. Indeed, the uneven distribution of benefits from globalization has led to increasing interest in new market-based approaches to poverty alleviation. Given the unique business context, however, private sector firms, entrepreneurs, and non-profit organizations have struggled to formulate effective business strategies for BoP markets. Furthermore, development agencies are facing greater scrutiny as to the effectiveness and sustainability of their current poverty alleviation programs.
Yet the intersection of two drivers—the growing interest in exploring new poverty alleviation approaches and the increasing appreciation of a larger role for market-based ventures in serving the needs of the poor—offers the potential for a new approach. The emerging BoP perspective on poverty alleviation aligns business-oriented incentives for growth, innovation, and profits with the development community’s efforts to create a more inclusive capitalism. Indeed, the relationship between profits and poverty alleviation in pursuit of mutual value creation is a central component of the BoP perspective.
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