Current business models fail the poor as a long-term investment.
Poor countries remain poor often because they lack the basic infrastructure that would allow their economies to grow. From physical infrastructure (roads, ports, rail) to basic infrastructure industries (water, power, telecommunications) to soft infrastructure (health, education), they lack the investment needed to take off. Public sector finances in low-income countries cannot begin to cover investment needs, international aid budgets are insufficient and under pressure, so private sector investment, especially international investment, needs to step up to the plate. Currently, only a fraction of the worldwide assets of banks, pension funds, insurers, foundations and endowments, and multinational firms, is in critical sustainable development sectors, and even less so in the poorest developing countries (least developed countries, or LDCs).
Current business models fail the poor as consumers.
People at the ‘Base of the Pyramid’ (BoP) – the large segments of the world population at the bottom of the income scale – are an underserved market. Many lack access to clean water, sanitation, power or adequate cooking facilities. Many more cannot readily obtain basic healthcare services or quality education for their children. Excluded from markets the poor have to find alternatives. They tend to resort to expensive substitutes to meet their basic needs. They effectively pay a penalty for being poor.
Business Schools for Impact
UNCTAD launched the Business Schools for Impact initiative as part of the World Investment Forum outcomes to bolster the contribution business schools and management education can make to development.
The initiative, undertaken in partnership with the Global Alliance in Management Education, the Global Business Schools Network and top business schools around the world, is part of UNCTAD’s proposed action plan for investing in the sustainable development goals – the set of targets being formulated by the international community to guide development efforts for the period 2016–2030.
The aim of this booklet is to explain how business schools can contribute to sustainable development in the poorest areas in the world by changing the mindset of business graduates and teaching the skills required to invest and operate in low-income environments with positive social impact.
Download the full paper here.