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Insights 1 Aug 2012

Ideas and Inspiration from Emerging Markets

By Lindsay Clinton

Many multinationals, in the last few years, have ramped up their efforts to better understand their long-term future in a world where 9 billion people need to live amidst converging pressures on food, energy, and environment. Some, like GE, P&G, and Microsoft have turned to emerging markets to innovate new products, processes, and business models. Sustainability professionals looking for new solutions should also take note. Emerging markets provide a wealth of information, ideas and knowledge about how to thrive in the face of massively constrained resources – as well as being the current and future growth markets for many companies.1

An initiative of the Rockefeller Foundation, known as the Searchlight Project, tracks signals related to low-income innovation and sheds light on coming sustainability challenges in these regions.2 In a webinar conducted this month, SustainAbility presented insights about what several of these innovations mean for multinational companies thinking about sustainability.

Interesting Problems
Developing and emerging markets provide new solutions that may not be in the line of sight of traditional sustainability professionals. David Kao, author of Innovation Nation and Founder of the Institute for Large Scale Innovation, explains, “If you are a poor country in the emerging economies, you now have a very important asset, which is you actually own interesting problems, and the interesting problems are about sustainability, housing, health care, education, and access to information, etc.” Interesting problems inevitably yield interesting solutions. These solutions are relevant globally as we think about how to live more sustainably.

Trends and Signals
The Searchlight Project, comprised of 10 research groups based in developing markets around the work, identifies signals and trends that emerge from those signals. What is unique about these trends is that they don’t merely point to the next big thing – these innovations also increase societal well-being. The Searchlight Project covers hundreds of signals and trends. A handful are highlighted below:

1. Smart Communities: Throughout the developing world, communities are using technology to create smarter, more connected communities. New ICT infrastructures like smart cards and mobile phones connect the dots between cutting-edge services and people that have historically been excluded from them.

Connected communities have led to new suppliers, producers and consumers who were previously not connected and often not a part of the formal economy. A start-up organization called SamaSource has turned smart communities in struggling countries like Pakistan and Haiti into a new source of labor for multinational companies. SamaSource uses a micro-working model that enables marginalized communities to complete digital tasks like finding a phone number on a business website, tagging an image, or transcribing a business card. Google, LinkedIn, Walmart and others have sourced work from these communities through Samasource – which not only tells a great sustainability story, but is also an example of “impact sourcing,” which creates value in these communities.

2. Alternative indices: Another trend highlighted through the Searchlight Project reveals the use of “alternative indices” to measure progress by organizations and governments. For decades, wealth and poverty have been measured in terms of GDP and governments have often been evaluated on how quickly they can grow GDP. Across the world, progressive leaders have seriously considered how to incorporate other metrics into economic systems. Several groups in the developing world are already doing so. In 2009, Ecuador announced a national plan for “good living.” The plan defines 12 measures of good living to guide policy including objectives aimed at fostering social cohesion, improving quality of life, guaranteeing the rights of nature, and more.

New metrics and indices set standards of well-being that go beyond limited GDP measures and point to new interventions. For companies, using alternative indicators can demonstrate value creation and make a company’s sustainability story stronger. Indicators could include employee well-being (See NEF’s recently released Happiness at Work tool) or products and services that enable consumer well-being through experience rather than consumption. Reportedly, Virgin is already thinking about new models along these lines.

3. Local Practices: Mining the traditional practices of certain cultures can jumpstart sustainability outcomes. Developing nations face a resource challenge: untapped oil, minerals and forest land often prove to be an economic blessing, but an ecosystem curse. Some communities are choosing to preserve natural resources rather than engage in extractive practices, and they are doing so by employing community resources. In Bangladesh, community-based organizations (CBOs) restore fisheries and promote equal access to these resources. In Lebanon, the traditional practice of “al hima” encourages people to protect and conserve the environment.

Sustainability professionals may be able to plug into local networks in developing countries to simplify sustainability efforts in the value chain. Alternatively, they can use what they learn from local practices to bring new ideas inside their companies.

Going deeper
Several people are talking about emerging markets innovations right now, perhaps the most notable of whom are Vijay Govindarajan of the Tuck School of business who speaks about “reverse innovation,” and the authors of a new book about Indian innovation called Jugaad Innovation. They both offer fascinating examples of the kinds of innovations companies have adopted from their learning in emerging markets, or alternatively what social entrepreneurs have created in these marketplaces.

The Searchlight work from the Rockefeller Foundation is another source of alternative innovation concepts, and is unique in that indigenous researchers have identified the signals and trends it highlights. To find out more and to listen to the complete webinar, please click here.

1 The global poor make up the world’s second largest marketplace, with spending power of $10 trillion (second only to the US in terms of GDP).

2 Concepts and trends from the Searchlight Project are presented visually in the Catalysts for Change map, developed by Institute for the Future, and released in early 2012.

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