Perspectives on poverty alleviation: Community-based enterprise, development of innovation capability, and the vertical integration mindset

Roland Gau*, Edward Ramirez, Ricardo Gonzalez, Ray Perez

*Corresponding author for this work

Research output: Chapter in Book/Report/Conference proceedingChapterpeer-review


Recent movements in business research have placed greater emphasis on the "Base of the Pyramid," the billions of people living in extreme poverty. These movements include Transformative Consumer Research, research on Subsistence Marketplaces, and the BoP Protocol, all of which have subtly different goals, but all focus on the improved conditions of consumers living in poverty through a deeper understanding of the individuals and marketplaces. A review of the research in this area reveals a number of articles that have examined these consumers and marketplaces from the bottom-up. On the other hand much of the traditional work in poverty alleviation addresses issues from the national-level, down. We propose that a missing, but vital link is the deeper understanding of the marketplaces and systems at the community-level. We argue that poverty alleviation efforts focused on empowering individual entrepreneurs, while potentially life-changing for these individuals and their families, tends to result in limited benefits for the community at-large. We then discuss the importance of innovation in lifting communities out of from what we describe as "Stage 0," (where communities are exploited for their labor and raw materials). We propose a 4-stage model, ranging from "Stage 0" to "Stage 4" (as communities progress from being exploited for labor/raw materials, to being able to manufacture components/products with older technologies, to being able to manufacture finished systems/products with modern innovations, to finally, being able to innovate independently). Finally, we discuss the importance of vertical integration, through a community-based perspective as an enabler of progress, from Stage 0 through the stages. This perspective is unique in that it brings the experience of bottom-up perspectives on poverty alleviation, with the raw potential of innovation as an agent for transformation at the community level.

Original languageEnglish
Title of host publicationEconomic Developments and Emerging Markets of the 21st Century
Subtitle of host publicationGlobal Practices, Strategies, and Challenges
PublisherNova Science Publishers, Inc.
Number of pages16
ISBN (Print)9781624179860
StatePublished - 1 Dec 2013

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