Connecting business to sustainable livelihoods at the bottom of the pyramid in word

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Connecting business to sustainable livelihoods at the bottom of the pyramid in word

  1. 1. Connecting Business to Sustainable Livelihoods at the Bottomof the Pyramid Shrimp cluster producer, Aquaculture Livelihoods Services Centre (ALSC) Samalanga, Biruen, AcehFor micro-producers1, connecting their livelihoods to commercial organizations is the only answer forsustainability. For many commercial organisations, connecting to micro-producers is the only answer forsustainable supplies. New breeds of social enterprise entrepreneurs are now reviewing the prospect ofconnecting these microproducers to commercial organizations through the use of micro-connections. Byestablishing these micro-connections, there is the potential to create sustainable livelihoods and provide highquality traceable goods for commercial organisations, unlocking the benefits of the underperforming $197 trillionprosperity gap; a win-win for all.This article outlines this potential by firstly exploring what micro connections are, their use in the prosperity gapand finally how these opportunities could be applied to your organisation.Livelihoods Micro ConnectionsMicro connections are a combination of both hard (money transactions, written agreements) and soft (informationsharing, contacts networking, trust) relationships. Three key stakeholders in sustainable livelihoods supply chainsneed to be connected.Commercial Organisations –Markets, Buyers, importers and retail consumers who need to connect directly tocluster supply chains for quality product delivery, traceability, adjustment to consumer demand, premium pricingfor and sustaining shared value.Livelihoods Clusters – At village level micro-producers and farmers should connect together in clusters tocoordinate efficient production, processing and marketing so bridging the prosperity gap.Micro Producers – Production steps and business processes in each livelihood must be connected so thatproducts quality and quantity can be synchronized with best management practices to meet market requirements.(http://apps.facebook.com/pimdesigner/) www.microaid.org | richard.beresford@microaid.com
  2. 2. Creating micro connections with sustainable livelihoods onlineWith the wide spread availability of ICT, many connection platforms2 and information services are now availableby mobile phone and internet. For example, patchouli farmers in Aceh, through improved crop practices, can nowsell their leaves at double the original price by connecting with patchouli oil distillery clusters established with Payand Bertrand, the French fragrance company, creating value added for all.Prosperity Gap OpportunityJust 16% of the world’s populations produce 70% of global productivity. If all people had the skills to be equallyproductive and contribute to the global economy, then world GDP could increase to US255 trillion, or over four times current GDP. Currently, world productivity is just under 30% of its potential and thisloss in productivity, which amounts to US 197 trillion, is called the ‘Prosperity Gap3’ of which livelihoods are amajor component. Using micro connections, this productivity at the bottom of the pyramid4 (BOP) can beincreased as more value added connected livelihoods are created. See You Tube Micro Connections for Agriculture VideoWith increased incomes, these new livelihoods owners become an enormous new market potential. BOPpopulation estimates are 2.3 billion. Early market entry gives large corporations brand loyalty and awareness thatis the bedrock of sustainable consumers over the long term.How you can take up this opportunity in your organisationWith the wide spread availability of ICT and social (Facebook) and economic (LinkedIn) networking for all, thismulti dimensional web of connections is evolving naturally. Using mobile social networks and low cost cloudtechnology, the opportunity to connect is now available to even the more remote areas where valuable humanand natural resource potentials simmer in waiting. www.microaid.org | richard.beresford@microaid.com
  3. 3. Surprisingly when you know what livelihoods connections an organisation needs to make, making theseconnections is relatively straightforward: contact a knowledgeable friend, attend social enterprise meetings, visit amarket, research your product, use the internet (Google), advertise, publicise and set realistic targets of contactsto connect with. Relationships with large and small corporations are now being democratised to the bottom of thepyramid. Anyone can make a connection with anyone. Indossential, UK essential oils buyer, visits Aceh in January 2012 to meet farmers, community distiller clusters and Payand Bertrand France local branch to set up a new shared value supply chain for patchouli oil (nilam) for UK aromatherapy market.Your sustainable livelihoods entry point to start connecting must be decided.Livelihoods micro connections are both vertical (scaling up) and horizontal (scaling out). Livelihoods have verticalconnections in market supply chains, horizontal connections with nearby micro-producer groups, clusters andsupport services. Using Internet research techniques, these supply chain connections can be discovered anddeveloped. Previously livelihoods development was left to Government and NGOs designed to provide diverseindividual attention to this highly fragmented market place and production resources. The digital age has changedall this. Fragmented livelihoods can now be connected and the volumes and quality required by commercialorganisations can be achieved. The BOP market is now open for your business.Indossential, UK essential oils buyer, visited Aceh in January 2012 to meet farmers, community distiller clustersand Payand Bertrand France local branch to set up a new shared value supply chain for patchouli oil (nilam) forUK aromatherapy market. MicroAid Mobile Application Prototype Patchouli www.microaid.org | richard.beresford@microaid.com
  4. 4. Investment and partnership opportunityInvestment will be needed to build these new clusters with micro producers that increase livelihoods productivity,market quality and added value. Added value from each successful micro-connection generates additionalincomes and a good return on investment for the new age of social enterprise entrepreneurs.This article has outlined a new framework for sustainable livelihoods connections in commercial organisations.Experiences and ideas on building value in supply chains with micro producers can be shared online. There willalso be many connections not described here. There is no single solution to successful livelihoods and thedemocratisation of commerce. We hope this article will give you some ideas on the opportunities to explore insustainable livelihoods waiting in the prosperity gap and understand the right micro connections for you. Pleaseshare this opportunity with others, so they too may find their sustainable livelihood opportunities.Good luck and don’t forget to connect to us if we can help with any further information.Richard BeresfordWritten by: Richard BeresfordRichard Beresford is a specialist in livelihoods connections with over 25 years experience in rural Indonesia’sBOP and based in Jakarta and UK. Email: richard.beresford@microaid.com | Web: www.microaid.org www.microaid.org | richard.beresford@microaid.com
  5. 5. 1) Micro-producers include family farmers, herders and pastoralists, landless and rural workers,fisher folk,gardeners, mini processors and added value traders.2) Livelihoods networking platforms include Social (Facebook), and economic AliBaba, EBay, LinkedIn etc.3) http://www.richardchandler.com/strategy4) Fortune at the Bottom of the Pyramid CK Prahalad 2005 University of Michigan. www.microaid.org | richard.beresford@microaid.com

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