From the Editor

By Matt Cooney, October 16, 2007 @ 3:37 am

Being poor is bloody expensive. The poor don’t control much; often they don’t have much to offer but their labour, which isn’t in great demand. They’re exploited by slum landlords, crooked officials and greedy employers. They don’t have the luxury of being able to shop around, to negotiate what they earn or what they pay or where they live.

Why should this be so? After all, there are a lot of people who have almost nothing, and it appears that poverty scales well. Combined, the world’s poor represent a huge market—US$5 trillion, according to a landmark study issued this year by the World Resources Institute.

The Next 4 Billion: Market Size and Business Strategy at the Base of the Pyramid, freely available from www.wri.org, is an inspiring document. It could have been merely depressing, pointing out, for example, that the less fortunate among us typically pay more for basic services than their wealthier neighbours. They’re excluded from markets, they have no access to essential services—like phones, electricity, bank accounts—that might improve their lot and they’re exploited by those who do. In short, they’re usually off the grid and out of sight.

But The Next 4 Billion lays out a compelling case to change this by treating the poor not as a problem, but as an opportunity for ethical trade. By investing in those at the bottom of the pyramid, goes the argument, market-based approaches can increase their buying power, reward their efforts, and improve their future prospects.

So we went looking for New Zealanders who are bringing entrepreneurial solutions, products or finance to the world’s poor—and we had no trouble finding them. What we didn’t expect was to find Kiwis who are playing both ends of the market: meeting a pressing need in the developing world and then selling the same thing into niche markets in the wealthy parts of the planet. It’s a virtuous circle: though it’s not something to crow about, the poor represent a market of almost limitless size; and the rich niches are where products find the most value.

It’s hard work, of course, and it’s a business for the idealistic, not the greedy. But whether it’s in Samoa, Mongolia or Ethiopia, New Zealanders are employing their much-vaunted innovative skills to help solve some of the world’s most intractable problems. Bravo.