17th of June 2014 Fortum, Espoo
Co-creating Business Ecosystems in Emerging Markets Aalto Global Impact together with the New Global organized a one‐day event focusing on practical business cases and experiences of companies and NGOs doing business in low-income markets in Espoo on the 17th of June. The goal of the seminar was to enhance companies’ and NGOs’ abilities to tap into the growing market opportunities and to learn how to create inclusive business ecosystems.
Welcoming Words
existing markets, whereas at the Base of the Pyramid, it should be creating markets for existing needs. This requires taking a wider approach, a new set of skills and creating compelling value Heli Antila, Chief Technology Officer (Fortum) opened the seminar with addressing the need to change the way we innovate. propositions. Microfinance and mobile phones have taken off because they are enabling platforms allowing people to find out She noted that half of the companies will go bankrupt in the how to best use them. Co-creation has to be open, not readynext 15-20 years if they do not change their business logic - and planned, to allow genuine cooperation. co-creation is one way to do this. Teija Lehtonen, Director (Aalto Global Impact) The new generation of BoP Cemex and ChotuKool are examples of gave a short preview for Aalto Global (BoP 2.0) means embedded sustainable businesses created by this kind of business model. Impact, which promotes and facilitates innovation, where the The traditional view of BoP meant Aalto University’s research and educational structural innovation that considered programs for societal impact globally. Aalto poor are seen as business the poor as producers or consumers. It Global Impact supports multidisciplinary partners. required careful listening, reducing price action research in emerging markets, builds points, even distribution, derivative product students’ capabilities through interactive technology and an arm´s lenght relationship via NGOs. The real-life learning environments, promotes social entrepreneurship intentions were good, but problems were created. The new and responsible global leadership, and creates new global generation of BoP (BoP 2.0) means embedded innovation, where alliances for societal impact. (See her presentation: the poor are seen as business partners. This requires deep http://slidesha.re/1qIqJQs )
Keynote: Co-creating Inclusive Business Ecosystems “Until now, globalization has been driven by the west and imposed on the rest.” Global growth has driven globalization, but Stuart L. Hart, President and Founder (Enterprise for a Sustainable World, ESW) noted that we are currently experiencing decline in growth. The wealthy part of the income pyramid is becoming increasingly crowded and the limits of the growth are met in cost barriers and environmental tipping, especially in the middle class. New opportunities exist in the Base of the Pyramid (BoP), but it is a difficult market to do business and it requires new technologies, products and business models. Business at the top of the pyramid is about creating needs in 1
business opportunity and the project is still in an early phase. (See her presentation: http://slidesha.re/1jNs4Ov) Jussi Impiö displayed two mobile technology innovations, which were born by questioning prevalent thinking. If having nothing to read leads to illeteracy, bringing books and articles to people´s reach would result in higher literacy rate. Nokia’s mobile reading device did not only bring texts for people to read, but helped them to improve their reading and writing skills. Challenges and Solutions for Fuzu´s original mobile application was born by questioning the prevalent thinking of seeing unemployment as a problem and Co-creation considering it as a work force potential. The application helps user to discover his/her talents and leads him/her through a short Challenges for co-creation are many, from finance to establishing training for a desired position. The recruiting company has an trust, from finding right partners to the need to be inspirational. access to applicant’s test result information The session introduced four different types and learning curves, thus helping in the of businesses that have overcome these Having trust among recruitment process. challenges and created a business case in locals and officials offers Tiina Saukko, Chief Executive Officer, emerging markets. Jussi Impiö, Founder easier and quicker start (World Vision) emphasized the importance and CEO (Fuzu) pointed out that when of cooperation and partnerships in targeting BoP markets, one should actually for companies in new doing business in emerging markets. think about middle class, not the poorest, geographical areas. World Vision has a platform and local because no one wants to be associated connections that companies can make with the poorest. use of. Having trust among locals and officials offers easier and Heli Antila introduced one of Fortum´s several green energy quicker start for companies in new geographical areas. She projects, a challenge of solving traditional biomass dilemma in introduced a joint co-creation program Weconomy Start that India with solar ovens and solar energy systems. This solution is helping Finnish companies to build and grow sustainable would result in increased safety, reduced indoor air pollution and businesses in co-creation with poor communities in India and possibility to sell biomass to CHP plants; thus bringing business Sri Lanka so that they solve economical, ecological and social and improved standard of living for low-income people. CO2 challenges. It is produced by World Vision, Aalto University/ emissions in India could be reduced by 45 % by replacing coal Aalto Global Impact and Finpro and it engages local NGOs. She with biomass based CHP production. However, this is a long term dialogue and vivid imagination, married with capabilities and new, sustainable and often disrupted technology. It is based on direct, personal relationships, where NGOs are important actors alongside companies. The goal should be to create a fortune with the BoP, not from the BoP. (See his presentation: http://slidesha.re/1pAgv0O)
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the lack of revenue, especially in the first phases of the business life-cycle, were angel investors, governmental entities, disruptive innovation, spreading information and telling powerful stories. The heavy amount of recources would be needed, but in reality many companies do not have those resources that would be needed to spend long periods of time in the new field and in co-creating activities. However, open source product development can be in help and facilitate the process. In the core of BoP 2.0 seems to be the ability to redefine problems and to genuinely find new solutions through co-creation, iterative processes and creating value on demand. This may mean multiple initiatives within one company and pursuing courage to act differently - despite the challenges of finding business partners or being taken seriously.
reminded that Finnish capabilities and companies are needed in emerging markets for replication and rapid scaling up of business projects. At the same time economic development is probably the fastest way out of poverty for the locals. (See her presentation: http://slidesha.re/1mnyIjj ) Aape Pohjavirta, Founder, (Funzi) argued that having a job is the most important global matter uniting people. However, the unemployment rate in the world has increased to the level where also wealthier countries have become fragile. There is a need for new business mindset, thus creating a need for creative people and an opportunity for communities to make choices by themselves producing excitement and empowerment. Nokia Life is a mobile learning ecosystem of over 100 million global users, the experiences whereof Funzi is developing its services. It is a pedagogically solid mix of information and learning services combined with conversation tools to help the mobile-only and not-mobile users to shape their future by themselves. (See his presentation: http://slidesha.re/1iEtXlN)
Market Understanding and Partnering
Market understanding starts with curiosity. There is a need for a new business model and a way to do it is to learn from mistakes. The Danish BOP Learning Lab, Inclusive Business Sweden and CAD are examples of effective initiatives and ecosystems for coPanel Discussion creation, which are dealing with new ways of doing business in partnership. Lively panel discussion with questions posed by the audience The Danish BOP Learning Lab targets companies interested covered variety of issues: from cost of products and learning in conducting business at the to marketing and from creating BoP market. It cooperates with a visibility for biomass in India In the core of BoP 2.0 seems to be the range of national and international to China´s significant role in ability to redefine problems and to stakeholders including NGOs, BoP. A challence of financing new ventures at the Base of genuinely find new solutions through academia and government representatives. The focus is on the Pyramid was particularly a co-creation, iterative processes and market creation rather than market topic of lively discussion. Some creating value on demand. entry and the Lab has a set of tools solutions suggested to overcome
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strategy. (See his presentation: http://slidesha.re/1iEu4xs ) The development stages of mobile ecosystems include innovation roadshow to promote mobile innovation; development of informal hubs and networks to promote the developing ecosystem and providing a platform for support; and implementation of a full fledged pre- and incubation centre. Public-private partnerships, support channels and product innovation in universities are particularly important in ecosystem development, and they foster inspiration, innovation and learning. Johanna Klein introduced one example of a mobile company: Afroes application to reduce gender violence through games. (See her presentation: http://slidesha.re/1v5sgy0)
Business Creation with The New Global Sara Lindeman, Project Manager (The New Global) introduced The New Global and talked about how New Global facilitates Finnish companies in co-creation. It fosters capabilities of co-creation and inclusive innovation in emerging markets by organizing co-creation camps, having on site presence, networking with NGOs and communities, doing rapid prototyping and testing, and with ecosystems mobilization and multidisciplinary support. (See her presentation: http:// slidesha.re/1pMOWDF) According to Petri Allekotte, Business Engagement Manager, (The New Global), the biggest challenge for companies to send an employee to the field seems to be a lack of time. Compenies benefit from partnering with New Global by understanding quickly the new market, getting an opportunity to innovate and learn, and having an access to attractive and constantly growing markets. (See his presentation: http://slidesha.re/1pAix19) H.E. A. Manickam (Indian Ambassador to Finland) gave a presentation of India´s ongoing economical and societal challenges. India needs second generation factor market reforms and better infrastructure to revive the economy back to 8 percent growth and, thus to restore country´s competitiveness. Reforms in land acquisition, labour laws and transparent competitive allocation of natural resources combined with good infrastructure will attract investments and technology that India needs to be more competitive and create new jobs. The 2014 mandate is a bet by an aspirational India for a 10 trillion dollar economy by 2030 and India’s emergence as an economic powerhouse. There will be a lot of new business opportunities also for Finnish companies in the coming years, for example in waste and water management, healthcare and infrasturcture construction. (See his presentation: http://slidesha.re/1lOVzU9) The objective of Finnpartnership is to promote business cooperation between companies in Finland and in developing countries in order to increase long-term business partnerships. Finnpartnership offers support for developing country projects throughout a project’s lifespan; it offers business partnership support, matchmaking services, and advice and guidance. The services and activities include also, for example, financial support for projects developing vocational education and training, upholding a developing country database and sending newsletters. Another official entity in Finland brought out by Siv Ahlberg, Programme Director, is Finnfund, a state-owned development finance institution that offers risk capital for profitable private projects in developing countries and Russia. (See her presentation: http://slidesha.re/1loOcmX)
to develop hands-on methods for exploring low income markets. Sara Ballan introduced Learning Lab´s projects, including studying bicycle culture in Mozambique, showering in Ghana, cancer patients in Eastern Africa and finding wider customer base for milk in Ethiopia. (See her presentation: http://slidesha.re/1qIr0D7 ) The purpose of Inclusive Business Sweden is to formulate a strategic research, innovation and action agenda for engaging Swedish organizations with BoP opportunities through collaboration with large and small businesses, embassies and people living in the target countries. According to Mike Debelak, the work is based on supportive framework: knowledge development and change; needs-driven collaborative innovation; networking and partnerships; and finance and support especially for early-stage social entrepreneurs. He reminded that co-creation and partnering are critical components of a successful BoP 4