Beyond Environmental Degradation:
Toward BoP Circular
Economy Strategies

Beyond Environmental Degradation: Toward BoP Circular Economy Strategies

Innovations almost inevitably create new problems while solving old ones. Sociologist Robert Merton identified this phenomenon in the 1930s as the “Law of Unintended Consequences.” While unintended consequences can be positive (e.g. taking aspirin for pain also appears to reduce the risk of heart attack}, it is the negative ones that necessarily concern us the most-precisely because they are unforeseen! Thus, a key criterion for determining if a given human endeavor is “sustainable” (or not) is whether the problems it solves are more significant than the new problems it creates. Tragically, many of our most notable technological and industrial innovations of the past century do not appear to have passed this test The BoP is no exception. As commercial momentum in the BoP has grown, new problems have now become apparent in the quest to ramp up sales and profits, for example, many companies have chosen to simply adapt environmentally unsustainable products to sell to the poor and aspiring middle-classes. Often these products also utilize low-cost versions of the production systems used in established markets, thereby perpetuating the prevailing “take-make-waste” mentality from the developed world. Indeed, it is often mistakenly assumed that “clean” technology and “green” products are only for the wealthy since historically such products-from solar collectors to organic food-have almost always carried a premium price. Left unchecked, this path of BoP business expansion leads inevitably to environmental oblivion. Per capita consumption rates in China are still about 11 times below those of the US. If the whole developing world were to suddenly catch up, world consumption rates would increase by an order of magnitude.

Serving the BoP sustainably therefore requires “leapfrog” green innovation: the incubation today of the environmentally sustainable technologies and industries of tomorrow. Indeed, new technologies-including distributed generation, biomaterials, internet of things, point-of-use water purification, wireless information technologies, 3-D printing, and nanotechnology – may hold the keys to addressing environmental challenges from the top to the base of the economic pyramid.

Because such green technologies are frequently “disruptive” in character (i.e. they threaten incumbents that serve existing markets}, the BoP may paradoxically be the most appropriate socioeconomic segment upon which to focus initial commercialization attention. China’s towns and small cities, Brazil’s favelas, and India’s tier 2 and 3 cities and rural villages present such opportunities. Learning to close the environmental loop in the base of the income pyramid is thus one of the key strategic challenges and opportunities-facing companies pursuing the BoP in the coming decade.

The BoP Global Network Summit will explore emerging strategies to move beyond landfills and waste through disruptive new strategies to pioneer the circular economy starting in the underserved space at the base of the pyramid.