IDEAS home Printed from https://ideas.repec.org/p/ags/ubonwp/147921.html
   My bibliography  Save this paper

Innovative business approaches for the reduction of extreme poverty and marginality?

Author

Listed:
  • Baumuller, Heike
  • Husmann, Christine Ladenburger
  • von Braun, Joachim

Abstract

Extreme poverty is an immense political and market failure, wasting the potential of hundreds of millions of people. Investing in the creation of markets that include the extreme poor and marginalized should thus not only be considered as a charitable activity, but promises high returns on investments – in financial and humanitarian terms. However, while the potential of innovative business approaches to target the poor that live close to the poverty line is increasingly being recognised, the question remains how far these approaches can push the margin to also include those that are extremely poor. And how can those that are marginalized from development opportunities be brought into and benefit from market-based systems to improve the quality of their lives? The impressive rise of business approaches to combating poverty stems from a long history of debates on the role of businesses in society. From an initial focus on social objectives as an external add-on, leading business thinkers have increasingly been stressing the benefits for companies of integrating social considerations into their core business strategies, for instance by targeting lowincome consumers (or ‘bottom of the pyramid’ markets) or strengthening supply and distribution chains through the involvement of local communities as part of inclusive business strategies. Others – most notably Muhammed Yunus along with other social entrepreneurs – are taking this argument one step further, advocating the use of business strategies primarily to address social goals rather than for financial gains. Thus, in discussions on the role of business in society, profit maximisation as the primary objective of business operations is increasingly making way for business initiatives that are guided by social objectives. This trend is also being supported by growing interest among investors in financing enterprises that promote social or environmental objectives, either as their primary aim or in parallel with seeking to generate financial returns. How suitable these different approaches are to engage the poorest and marginalized depends in part on the extent to which they are able to involve the extreme poor themselves, their flexibility to direct business objectives towards the reduction of extreme poverty and marginality, and their ability to successfully operate with non-business public and civil society partners and in sectors of particular interest to the extreme poor. Further research and action is needed to identify outcome-focused indicators and measurement tools for social value creation, examine possible government measures to support business activities for the poorest, and consider complementarities between the different business approaches. While we recognise that it is unrealistic to expect businesses to be able to reach all of the extreme poor, we believe that the boundaries of innovative business operations can be pushed much further to include a far larger number of the poorest and marginalized.

Suggested Citation

  • Baumuller, Heike & Husmann, Christine Ladenburger & von Braun, Joachim, 2011. "Innovative business approaches for the reduction of extreme poverty and marginality?," Working Papers 147921, University of Bonn, Center for Development Research (ZEF).
  • Handle: RePEc:ags:ubonwp:147921
    DOI: 10.22004/ag.econ.147921
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/147921/files/wp80.pdf
    Download Restriction: no

    File URL: https://libkey.io/10.22004/ag.econ.147921?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Sharir, Moshe & Lerner, Miri, 2006. "Gauging the success of social ventures initiated by individual social entrepreneurs," Journal of World Business, Elsevier, vol. 41(1), pages 6-20, February.
    2. Certo, S. Trevis & Miller, Toyah, 2008. "Social entrepreneurship: Key issues and concepts," Business Horizons, Elsevier, vol. 51(4), pages 267-271.
    3. Aneel Karnani, 2009. "The Bottom of the Pyramid Strategy for Reducing Poverty: A Failed Promise," Working Papers 80, United Nations, Department of Economics and Social Affairs.
    4. Abhijit V. Banerjee & Esther Duflo, 2007. "The Economic Lives of the Poor," Journal of Economic Perspectives, American Economic Association, vol. 21(1), pages 141-168, Winter.
    5. Gatzweiler, Franz W. & Baumuller, Heike & Husmann, Christine Ladenburger & von Braun, Joachim, 2011. "Marginality: Addressing the Root Causes of Extreme Poverty," Working Papers 146653, University of Bonn, Center for Development Research (ZEF).
    6. Uwafiokun Idemudia, 2010. "Rethinking the role of corporate social responsibility in the Nigerian oil conflict: The limits of CSR," Journal of International Development, John Wiley & Sons, Ltd., vol. 22(7), pages 833-845.
    7. Mair, Johanna & Martí, Ignasi, 2006. "Social entrepreneurship research: A source of explanation, prediction, and delight," Journal of World Business, Elsevier, vol. 41(1), pages 36-44, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ganguly, Kavery & Gulati, Ashok & von Braun, Joachim, 2017. "Innovations spearheading the next transformations in India‘s agriculture," Working Papers 259006, University of Bonn, Center for Development Research (ZEF).
    2. Baumuller, Heike, 2013. "Mobile Technology Trends and their Potential for Agricultural Development," Working Papers 160565, University of Bonn, Center for Development Research (ZEF).
    3. Osman, Abdelrahman Khidir & Ali, Adil M., 2021. "Sudan - Land, climate, energy, agriculture and development: A study in the Sudano-Sahel Initiative for Regional Development, Jobs, and Food Security," Working Papers 308810, University of Bonn, Center for Development Research (ZEF).
    4. Coulibaly, Ousmane Nafolo, 2021. "Mali - Land, climate, energy, agriculture and development: A study in the Sudano-Sahel Initiative for Regional Development, Jobs, and Food Security," Working Papers 308805, University of Bonn, Center for Development Research (ZEF).
    5. Husmann, Christine & von Braun, Joachim & Badiane, Ousmane & Akinbamijo, Yemi & Abiodun, Fatunbi Oluwole & Virchow, Detlef, 2015. "Tapping Potentials of Innovation for Food Security and Sustainable Agricultural Growth: An Africa-Wide Perspective," Working Papers 228855, University of Bonn, Center for Development Research (ZEF).
    6. Mbaye, Linguere Mously & Zimmermann, Klaus F., 2016. "Natural Disasters and Human Mobility," International Review of Environmental and Resource Economics, now publishers, vol. 10(1), pages 37-56, November.
    7. Olayide, Olawale Emmanuel, 2021. "Nigeria - Land, climate, energy, agriculture and development: A study in the Sudano-Sahel Initiative for Regional Development, Jobs, and Food Security," Working Papers 308807, University of Bonn, Center for Development Research (ZEF).
    8. Siriwardane, Rapti & Winands, Sarah, 2013. "Between hope and hype: Traditional knowledge(s) held by marginal communities," Working Papers 151401, University of Bonn, Center for Development Research (ZEF).
    9. Adamou, Pr. Rabani & Ibrahim, Boubacar & Bonkaney, Abdou Latif & Seyni, Abdoul Aziz & Idrissa, Mamoudou, 2021. "Niger - Land, climate, energy, agriculture and development: A study in the Sudano-Sahel Initiative for Regional Development, Jobs, and Food Security," Working Papers 308806, University of Bonn, Center for Development Research (ZEF).
    10. Bowe, Colm & der Horst, Dan van, 2015. "Positive externalities, knowledge exchange and corporate farm extension services; a case study on creating shared value in a water scarce area," Ecosystem Services, Elsevier, vol. 15(C), pages 1-10.
    11. Salvatierra Rojas, Ana & Torres Toledo, Victor & Mrabet, Farah & Müller, Joachim, 2018. "Improving milk value chains through solar milk cooling," Working Papers 276621, University of Bonn, Center for Development Research (ZEF).
    12. von Braun, Joachim, 2018. "Innovations to Overcome the Increasingly Complex Problems of Hunger," Working Papers 271348, University of Bonn, Center for Development Research (ZEF).
    13. Iskandar, Deden Dinar & Gatzweiler, Franz, 2014. "An optimization model for technology adoption of marginalized smallholders: Theoretical support for matching technological and institutional innovations," Working Papers 182495, University of Bonn, Center for Development Research (ZEF).
    14. Schädler, Manuel & Gatzweiler, Franz W., 2013. "Institutional Environments for Enabling Agricultural Technology Innovations: The role of Land Rights in Ethiopia, Ghana, India and Bangladesh," Working Papers 159373, University of Bonn, Center for Development Research (ZEF).
    15. Desalegn, Gashaw & Ali, Seid Nuru, 2018. "Review of the Impact of Productive Safety Net Program (PSNP) on Rural Welfare in Ethiopia," Working Papers 278228, University of Bonn, Center for Development Research (ZEF).
    16. Kleemann, Linda, 2016. "Designing better donor strategies for inclusive business," PEGNet Policy Briefs 6/2016, PEGNet - Poverty Reduction, Equity and Growth Network, Kiel Institute for the World Economy (IfW).
    17. Daum, Thomas, 2018. "Of Bulls and Bulbs: Aspirations and perceptions of rural youth in Zambia," Working Papers 275061, University of Bonn, Center for Development Research (ZEF).
    18. von Braun, Joachim & Gerber, Nicolas & Mirzabaev, Alisher & Nkonya, Ephraim M., 2013. "The Economics of Land Degradation," Working Papers 147910, University of Bonn, Center for Development Research (ZEF).
    19. Bekchanov, Maksud & Evia, Pablo, 2018. "Resources Recovery and Reuse in Sanitation and Wastewater Systems: Options and Investment Climate in South and Southeast Asian Countries," Working Papers 274732, University of Bonn, Center for Development Research (ZEF).
    20. Gulati, Ashok & Sandip, Das, 2020. "India-Africa Partnership in Trade and Investment: With Focus on the Agriculture and Food Sector," Working Papers 304756, University of Bonn, Center for Development Research (ZEF).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Robin Stevens & Nathalie Moray & Johan Bruneel, 2015. "The Social and Economic Mission of Social Enterprises: Dimensions, Measurement, Validation, and Relation," Entrepreneurship Theory and Practice, , vol. 39(5), pages 1051-1082, September.
    2. Geoffrey M. Kistruck & Paul W. Beamish, 2010. "The Interplay of Form, Structure, and Embeddedness in Social Intrapreneurship," Entrepreneurship Theory and Practice, , vol. 34(4), pages 735-761, July.
    3. Choi, Nia & Majumdar, Satyajit, 2014. "Social entrepreneurship as an essentially contested concept: Opening a new avenue for systematic future research," Journal of Business Venturing, Elsevier, vol. 29(3), pages 363-376.
    4. Pradeep Kumar Hota & Balaji Subramanian & Gopalakrishnan Narayanamurthy, 2020. "Mapping the Intellectual Structure of Social Entrepreneurship Research: A Citation/Co-citation Analysis," Journal of Business Ethics, Springer, vol. 166(1), pages 89-114, September.
    5. Jan Lepoutre & Rachida Justo & Siri Terjesen & Niels Bosma, 2013. "Designing a global standardized methodology for measuring social entrepreneurship activity: the Global Entrepreneurship Monitor social entrepreneurship study," Small Business Economics, Springer, vol. 40(3), pages 693-714, April.
    6. João J. Ferreira & Cristina I. Fernandes & Marta Peres-Ortiz & Helena Alves, 2017. "Conceptualizing social entrepreneurship: perspectives from the literature," International Review on Public and Nonprofit Marketing, Springer;International Association of Public and Non-Profit Marketing, vol. 14(1), pages 73-93, March.
    7. Ignas Bruder, 2021. "A Social Mission is Not Enough: Reflecting the Normative Foundations of Social Entrepreneurship," Journal of Business Ethics, Springer, vol. 174(3), pages 487-505, December.
    8. Elisabet Ferri & David Urbano, 2010. "Environmental Factors and Social Entrepreneurship," Working Papers 1003, Departament Empresa, Universitat Autònoma de Barcelona, revised Sep 2010.
    9. Ruchita Pangriya, 2019. "Hidden aspects of social entrepreneurs’ life: a content analysis," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 9(1), pages 1-19, December.
    10. Ostertag, Felix & Hahn, Rüdiger & Ince, Inan, 2021. "Blended value co-creation: A qualitative investigation of relationship designs of social enterprises," Journal of Business Research, Elsevier, vol. 129(C), pages 428-445.
    11. Sanchita Bansal & Isha Garg & Gagan Deep Sharma, 2019. "Social Entrepreneurship as a Path for Social Change and Driver of Sustainable Development: A Systematic Review and Research Agenda," Sustainability, MDPI, vol. 11(4), pages 1-28, February.
    12. Barbara Bradač Hojnik & Katja Crnogaj, 2020. "Social Impact, Innovations, and Market Activity of Social Enterprises: Comparison of European Countries," Sustainability, MDPI, vol. 12(5), pages 1-15, March.
    13. Mariana Dragu?in & Dianne Welsh & Raluca Mariana Grosu & Alina Elena Iosif, 2015. "Social Entrepreneurship ? Innovative Solutions' Provider to the Challenges of an Ageing Population: The Case of Romanian Retirees," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 17(Special 9), pages 1183-1183, November.
    14. Sebastian-Ion Ceptureanu & Eduard-Gabriel Ceptureanu & Mihai Cristian Orzan & Irinel Marin, 2017. "Toward a Romanian NPOs Sustainability Model: Determinants of Sustainability," Sustainability, MDPI, vol. 9(6), pages 1-26, June.
    15. Elena-Simina Lakatos & Bercea Oana Bianca & Laura Bacali, 2016. "The concept of innovation in social economy. A review and a research agenda," Review of Applied Socio-Economic Research, Pro Global Science Association, vol. 11(1), pages 32-50, June.
    16. Rey-Martí, Andrea & Ribeiro-Soriano, Domingo & Palacios-Marqués, Daniel, 2016. "A bibliometric analysis of social entrepreneurship," Journal of Business Research, Elsevier, vol. 69(5), pages 1651-1655.
    17. Gupta, Parul & Chauhan, Sumedha & Paul, Justin & Jaiswal, M.P., 2020. "Social entrepreneurship research: A review and future research agenda," Journal of Business Research, Elsevier, vol. 113(C), pages 209-229.
    18. Sophie Bacq & Chantal Hartog & Brigitte Hoogendoorn, 2016. "Beyond the Moral Portrayal of Social Entrepreneurs: An Empirical Approach to Who They Are and What Drives Them," Journal of Business Ethics, Springer, vol. 133(4), pages 703-718, February.
    19. Karina Cagarman & Jan Kratzer & Katharina Osbelt, 2020. "Social Entrepreneurship: Dissection of a Phenomenon through a German Lens," Sustainability, MDPI, vol. 12(18), pages 1-18, September.
    20. R. Marshall, 2011. "Conceptualizing the International For-Profit Social Entrepreneur," Journal of Business Ethics, Springer, vol. 98(2), pages 183-198, January.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:ubonwp:147921. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/zefbnde.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/zefbnde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.