1. EXPLORING THE BOP: SUSTAINAINABLE USER-DRIVEN INNOVATION AT THE BASE OF THE PYRAMID MARKET Professor Minna Halme Jan. 17th, 2010

2. $3000-20 000 Purchasing power parity (PPP) in USD Population estimates Level 1 Levels 2-3 Level 4 75-100 million 2 billion 4 billion <$3000 BOP IS 2/3 OF THE WORLD POPULATION Around 4 billion poor or underserved people in the world (< 5 € /day)

3. STARTING POINT & GOALS “If we stop thinking the poor as victims or a burden and start recognizing them as resilient entrepreneurs and value-conscious customers, a whole new world of opportunity will open up.” C.K. Prahalad, Fortune at the Bottom of the Pyramid, 2005. Business as usual and current aid strategies do not sufficiently address the poverty problem  Better business models: innovate products, services and business models that benefit both the poor and the firm  Better markets: developing markets to yield benefit also the poor

4. BUSINESS MODEL EXAMPLES 4 Building a house one room at a time from cement School feeding program ITC procurement hubs for farmers M-PESA - Mobile banking Nokia Money - Mobile banking Microfinance banking services over the internet TsinghuaTongfang and developing IT skills in China Annapurna salt and decreasing mental disturbances Investments in renewable energy Improving city water efficiency Electricity, water and sanitation to slums Product for safe drinking water Primary education for children in slums Forest plantation with community involvement

5. EXAMPLES OF BOOKS

6. TRENDS & CHALLENGES WITH REGARD TO THE BOP DEVELOPMENTS Trends: We are experiencing many intertwined global trends and developments simoultaneously. Challenge: While Base of the Pyramid (BOP) markets (< €5 / day) represent a very large market potential, at the same time humanity’s ecological footprint has grown rapidly and exceeded the world’s biocapacity. Question: How can these trends be addressed at the same time in an innovative, efficient and effective way? Poverty Corruption Human development Consumption Ecological sustainability Urbanization Connectedness Population growth 6

7. CREATION OF THE NEW COLLABORATIVE NETWORK FOR SUSTAINABLE AND USER-DRIVEN INNOVATIONS AT THE BOP Teija Lehtonen, Aalto Service Factory Jan. 17th, 2010

8. VISION OF THE NETWORK To create new wealth and reduce poverty through innovative, sustainable business enterprise

9. KEY ISSUES DURING THE WORKSOP How do we reach the poorest – needs, capacities, and methods for co-creation? Who should be involved in the network? Role of different stakeholders? Challenges and solutions for development of inclusive business models? New partnering opportunities between the Finnish and partner country stakeholders? Communication strategy and methods for the network? Tools for innovative, user-driven approach?

10. Companies Universities Finpro NGOs Public sector Public sector Tekes BOP SERVICE FINLAND BOP service A collaborative network: private and public sectors, research organizations, civil society in Finland and in partner countries Learning and concept development is carried out through concrete pilots

11. Companies Universities R&D & innovation Networking and partnering Business development & entrepreneurship Market knowledge & understanding Finpro NGO’s Public sector Public sector Tekes BOP SERVICE FINLAND MOBILE BOP Vietnam Internationalisation & market entry MOBILE BOP Kenya PILOT EXAMPLE Mobile BOP / Finpro and Finnish companies + local partners in Kenya and Vietnam

12. CURRENT PILOT PROJECTS Mobile Business, Kenya and Vietnam, Finpro Affordable Diagnostics, India, Aalto University Textile Industry, Brazil, Aalto University Biomass Energy, Kenya, Shalin Finland Innovative Entrepreneurship, Afghanistan and Nepal, Aalto University Other pilots are in a planning phase Implementation of 10-12 pilots in two years