chapter  1
Introduction to the Bottom of the Pyramid (BoP)
Pages 19

Despite the growth in trade and international aid, the number of people living in poverty around the world is increasing, particularly in Africa. This book is about understanding that micro-entrepreneurial activities at the bottom or ‘base’ of the pyramid (BoP) offer a fundamental mechanism to assist with the survival and life improvement of many poor communities. Most of these microenterprises are to be found in the informal economy. They take many forms, often providing services to other poor people. They can be minor manufacturers, crafts people or retailers in a range of market settings. In some respects, entrepreneurship at the BoP is not that different from what we witness in developed countries: there are few barriers to entry, there is fierce competition and only a few succeed whether based on either individual strengths and/or third party support. However, entrepreneurs at the BoP also face a range of other challenges that are not seen in the developed world. These challenges have often led to entrepreneurs in poor countries being excluded from entrepreneurial research because of lack of data and a different perception of those who enter business for survival reasons. This is what makes successful entrepreneurship at the BoP such an interesting topic. There are important examples of organisations, public and private, large and small, established and new, that seek to promote inclusive entrepreneurship practices, specifically targeting those most in need. In order to disseminate the knowledge gained by these institutions and improve on their efforts, it is important to introduce books that explicitly address this subject into business libraries, university courses and aid agencies. This is not always easy because the data comes from communities that are not in a position to

purchase any book and therefore success depends on interest from the developed world. In this book, the authors constantly prompt the reader with activities and real examples to encourage him/her to evaluate how the learning of theoretical perspectives, originating largely in Western developed countries, can apply to entrepreneurs in much poorer economies and to promote thinking outside the box. One case, of a small, not-for-profit organisation in Mozambique, is woven throughout the text to show the relevance of many of the topics covered even to the smallest project. Mozambique is among the poorest and least well known of the developing countries in Africa but faces many of the same challenges as other countries on the continent. The authors are familiar with this project and had direct access to some of the world’s poorest people who see starting and growing a business as a means of escaping poverty and helping their children receive an education they themselves did not have access to. Despertai Mozambique supports these people, who are often illiterate and have had little access to examples of successful entrepreneurship, and the project shows the relevance, or otherwise, of applying theories and practices to the very poorest who face not only personal challenges but a lack of infrastructure and positive business examples. The first two chapters aim to give the reader a good understanding of two fundamental concepts, the BoP and poverty, which provide the foundation for addressing the range of issues that follow. Here, the geography and nature of the BoP are outlined together with the nature and causes of poverty, and Despertai Mozambique and its context is introduced. In Chapters 3 and 4 the concept of entrepreneurship is explored. Here, the nature of entrepreneurship, the challenges for the entrepreneur and the barriers to successful entrepreneurship are investigated. A number of case studies are used to illustrate entrepreneurship at the BoP in different contexts. Chapters 5 and 6 examine issues that are specific to the BoP around the world. These include in particular the informal sector and its significance to the economies of developing nations, and micro-credit, a financial system that has been set up to assist the poor to access finance, very necessary to enterprise development. Chapters 7 to 10 examine various agencies and approaches that are used around the world to assist the growth of entrepreneurship among the very poor in developing nations. These include: a community-driven development approach where the community itself is deeply involved in the establishment and success of economic growth; the concept of corporate social responsibility (CSR) and the role of multinational corporations (MNCs) in stimulating entrepreneurial activity in the areas in which they operate; the role of aid and the work of non-government organisations (NGOs) whose primary objective is poverty alleviation; and the role of government in stimulating the economy and providing opportunities for the very poor to become economically active. Each of these chapters provides one or more case studies to illustrate what practice looks like in reality in a range of different countries. The final chapter brings all

these various perspectives together to provide a summary of the current situation with regard to entrepreneurship at the BoP.