Why business models are critical to innovation in emerging economies – From social entrepreneurship to businesses

Why business models are critical to innovation in emerging economies – From social entrepreneurship to building an idea or a business – Part 1

Emerging economies represent new challenges for ideas and businesses, which is why new social entrepreneurship opportunities are now the Petri-dish for what is emerging. Some examples exist of great reference;

a. Grameen Bank www.grameen-info.org
b. STD (Phone booths) in India http://www.rediff.com/money/2003/jul/16spec.htm

What was critical to the above opportunities is the way in which these opportunities were leveraged through how their business models were developed and executed. What are the key drivers for business models if ideas, social entrepreneurship and philanthropy are to succeed in the next decades?

a. PPP is on an average varies between $300 ~ $2000
b. A vast (>70%) of that income has a weekly earning and a daily spend
c. Working capital for individuals and communities are the critical driver
d. Fragmentation of suppliers, providers and consumers, by geography, time and products or services
e. Last but not the least social and cultural capital is a basis for individuals and communities

Examples from our DV Program are:

Why Hispanics Don't Use Banks - Part 1 Margarita Quihuis
http://www.rediff.com/money/2003/jul/16spec.htm

Global endorsements of social entrepreneurship Karen Coppock
http://fellows.rdvp.org/karencoppock/blog/gobalendorsementsofsocialentrepreneurship

Mapping the Knowledge Society Carlos Miranda Levy
http://fellows.rdvp.org/carlosmirandalevy/blog/mappingtheknowledgesociety

I read in an recent interview of Vinod Khosla, http://en.wikipedia.org/wiki/Vinod_Khosla one the leading VCs in the world who talked about his investment interests in two broad areas of energy and microfinance, concluding that microfinance was the better opportunity. http://www.businessweek.com/smallbiz/content/oct2006/sb20061004_513595.htm

Microlending: An Anti-Poverty Success Story
http://www.gsb.stanford.edu/news/headlines/2004globalconf_khosla.shtml

Global interest in Microfinance http://microcapital.org/cblog/index.php?/archives/2006/03.html

So what will drive new opportunities that emerge will be the ability to understand these drivers and how the fundamentals to be “Sustainable and Scalable” will have to emerge as “For-Profit” based on micro and collective economics to create economies of Scale and Scope.