Don't Turn BoP Business Into PR Exercise

If you frequently track BoP articles from business journals like WSJ, you'll probably come across 3 primary aspects of discussion: profitability potential, business strategy and key operating practices. It's implict assumption that if corporations achieve sales and create jobs, the poor will somewhat benefit. Their press release is never short of buzzwords like 'inclusive supply chain', 'direct purchase', 'job creation' and 'income growth' for BoP.

The fact remains that there's still a lot of vague reference on social impact created by large corporations, even on the much touted job creation and income growth. When attempting to target a new segment of BoP consumers with long-term view on profitability, investing in local infrastructure and leveraging on local resources are expected, that includes the necessity to hire local poor across supply chain to sustain the business. Indeed, they are paid directly by corporations but how much salary increase will make a difference? It's common knowledge that we have little clue how it helps them to improve their living standard and escape poverty, but corporations are already enthusiastic in claiming they help alleviating poverty with vague statistics and causal links before showing any commitment to rigorously assess the chain of social impact from their business.

Several large consumer companies that pioneer in BoP venture have also been well documented for their substantial upfront investment, years of experimental hard work to serve BoP market and the tremendous challeges they have to overcome. You rarely read about measurably significant assistance from government and also local NPOs which benefit corporations in terms of infrastructure support, policy incentives, subsidies, community outreach, staff training, product distribution and many more. And the less you find out if corporations benefit even more from the poor with overall lower wages and local infrastructure costs in the long run, but these benefits are often downplayed in their PR release except boosting that they proactively participate in 'effective cross-sector partnership'.

Don't get me wrong, corporations are important actors in poverty alleviation, but they just need to do more if their intention is really much more than profit seeking. Grand ideas of blending social mission with business inspire innovative experiments, but the reality of tackling poverty is hard and adapting business approach adds even more complexity. So don't hide it with feel-good stories about BoP initiatives from large corporations. For the informed readers, maintain skepticism until corporations are willing to show more evidence and commit to rigorous social impact assessment.