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A Base-of-the-Pyramid
Approach in Argentina
Preliminary Findings from a BOP Learning Lab

Miguel Angel Gardetti

Centre for Study of Corporate Sustainability, Argentina;
Argentina Base of the Pyramid Learning Lab

l Base of the
pyramid
l Bottom of the
The BOP Lab which has been established in Argentina consists of a set of compa-
nies, NGOs, government members and academics working jointly to create growth pyramid
and development opportunities in markets as yet untapped by companies. When it l Base of the
Pyramid
comes to creating a shared and local view of BOP, it is important to analyse and under- Learning Lab
stand the barriers and opportunities presented within each sector. Therefore, this l Argentina
paper focuses on the preliminary barriers and opportunities presented by each of the l Barriers and
four sectors involved in the Lab in relation to some of the topics raised during their opportunities
activities. l Sustainability

Miguel Angel Gardetti is Director of the Centre for Study of Corporate

Sustainability (CSCS) in Buenos Aires, Argentina. He teaches corporate
u Argentina Base of the Pyramid
Learning Lab, O’Higgins 3819,
sustainability in postgraduate programmes and has published two books in C1429BBU Buenos Aires, Argentina
Spanish on the topic. He holds a PhD in Environmental Management (Pacific
Western University, CA, USA). ! mag@instituto.ws

< www.instituto.ws/iesc

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T
he united nations confirmed its global commitment with the
‘Millennium Declaration’, the first objective of which is to eradicate abject poverty
and hunger (Nelson and Prescott 2003). Now that the Global Compact has been
established, which represents the private sector’s contribution to the Millennium
Development Goals (Gardetti 2006b), a better approach must be sought to help the
poor. This approach should include an engagement with poverty to innovate and pro-
vide win–win sustainable scenarios where the poor are actively involved and commit-
ted (Hammond 2001; Prahalad and Hammond 2002; Prahalad and Hart 2002;
Hammond 2004a, 2004b; Hart 2005a; Prahalad 2005).
When it comes to creating a shared and local view of the BOP (base [or bottom] of the
pyramid)—bearing in mind that a better future depends on the new paradigm of mar-
rying business with development, fostering social, environmental and economic stabil-
ity (Boyer 2003)—it is important to analyse some of the barriers and opportunities
offered by each sector at this preliminary stage. This paper therefore focuses on the BOP
Lab, which has been developed in Argentina since 2005, and examines the preliminary
barriers and opportunities presented by the four sectors involved in the Lab (the private
and public sectors, academia and NGOs [non-governmental organisations]) with respect
to some of the topics raised during their activities.

The base of the pyramid and the Learning Labs

The development of business strategies focused on the base of the pyramid (BOP)—the
name given to the social and economic group of 4 billion people who primarily live in
developing countries and whose annual per capital income is under US$1,500 per
annum—consists of establishing a thorough learning process which results in the joint
conception of ideas and opportunities that strengthen local capabilities and social and
economic systems to create value for the parties (Simanis et al. 2005). The BOP entails
managing substantial challenges in technical and economic infrastructure, education,
financial resources, and cultural differences. Corporate initiatives focused on the BOP
will require a major new conception of the current value proposition for business and
a thorough understanding of local needs and human development paradigms.
In January 2000, shortly after the working paper written by C.K. Prahalad and Stu-
art L. Hart (1999), called ‘Strategies for the Bottom of the Pyramid: Creating Sustain-
able Development’—which would provide a basis for the paper published by those
authors in 2002 entitled ‘The Fortune at the Bottom of the Pyramid’—one of the most
important milestones in the development of this concept occurred: Professor Stuart
Hart established the first ‘Learning Laboratory’ at the University of North Carolina, USA
(transferred to Cornell University, USA, in 2004). Subsequently, this Learning Lab would
give rise to an international network of laboratories: Monterrey TEC (Mexico, 2004), Cen-
tre for Study of Corporate Sustainability (Argentina, 2005), Getulio Vargas Foundation
(Brazil, 2005), Tilburg University and Triple Value (The Netherlands, 2005), Stellen-
bosch University (South Africa, 2006) and the Indian School of Business (India, 2006).1

The situation in Argentina and the Learning Lab

What turns out to be of greater concern in Argentina is the increased income gap
between the rich and the poor. Figure 1 shows the situation in Greater Buenos Aires,

1 For more information about this network, please visit www.bopnetwork.org.

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Numbers were taken on the equivalent household income distribution of Greater Buenos Aires based on October
data of the Permanent Houses Survey from INDEC (Instituto Nacional de Estadísticas y Censos [National Institute of
Statistics and Census]).
The income gap is calculated based on the ratio between the average income of the richest 10% of the population
and the average income of the poorest 10% of the population.

Figure 1 gap between rich and poor: greater buenos aires, 1974–2000
Source: data from Gasparini et al. undated. No data in years 1975–79 and 1983

including Buenos Aires City and the Suburbs of Buenos Aires (in Buenos Aires
Province), from 1974 to 2000; this it is the only area of the country for which it is pos-
sible to build a distributive series (Gasparini et al. undated). The gap is calculated based
on the ratio between the average income of the richest 10% of the population and the
average income of the poorest 10%.
As can be seen, since 1974 the inequality shows a clear upward pattern, with three
episodes of steep increases in income disparity: the second half of the ’70s, the late ’80s
and a good deal of the ’90s (Gasparini et al. undated).2
The Lab that has been developed in Argentina since September 2005 consists of a
group of companies, NGOs, government members and academics who, taking into
account the huge inequality highlighted, work jointly to analyse the best way in which
the private sector, as a proactive partner, can eradicate poverty, relying on the potential
of local players to cooperate in fostering and jointly promoting local development (Mil-
stein 2005).
Each Lab participant was selected based on the nature of their relationship with the
BOP. Thus the Lab has companies that, at a local level, have implemented business strate-
gies within the BOP, some that are developing strategies, and others that, while they have
not yet developed strategies in this area, have foreign parent companies with initiatives
in such markets. The NGOs selected to participate in the Lab are those that through their
work are closely connected with poverty. The guest social entrepreneurs belong to Fun-
dación AVINA and Ashoka Emprendedores, two organisations that support this concept
worldwide. Government participants belong to departments whose work mainly focuses
on the BOP (Ministry of Work, Ministry of Social Development and Secretariat of Envi-
ronment and Sustainable Development). Academic relevance has been defined based

2 From 2001 the gap, calculated using data from the Permanent Houses Survey, is: 27.2 (to May 2001),
25.8 (to May 2003), 28 (for the first half of 2004), 27.9 (for the first half of 2005) and 29.1 (for the
first half of 2006). Source: INDEC, www.indec.go.ar.

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on the postgraduate-level activities in both private and public universities. It should be

noted that the participation of both NGOs and social entrepreneurs represents a first step
towards the integration of representatives of the poor themselves into the Lab.
Boxes 1 and 2 show the number of participants per sector who took part in each of
the activities conducted.

t 34 participants from the private sector
t 8 members of the government
t 10 participants from NGOs
t 2 participants from business
associations
t 2 participants from development
agencies
t 7 social entrepreneurs
t 17 academics (from widely different
universities)
t 18 participants from the private sector
t 6 members of the government
t 4 Business associations
t 5 participants from NGOs
t 4 social entrepreneurs
t 2 participants from development
agencies
t 18 academics (from widely different
universities)

Box 1 argentina bop learning lab, first Box 2 argentina bop learning lab, second
activity (september 2005): number of activity (september 2006): number of
participants per sector participants per sector

The BOP Lab activities in Argentina, which are funded by the private sector, can be
classified as primary and secondary. The main (primary) activity consists of an annual
(face-to-face) meeting. Secondary activities generally derive from the needs that arise
during the development of the primary activity. Examples of secondary activities are
workshops specially designed by social entrepreneurs and NGOs, workshops for gov-
ernment members and workshops for the media.3 The methodologies used in the devel-
opment of Lab activities range from lectures and Q&A to a case study review. On
completion of each primary activity, a document is drafted with the collaboration of the
participants.
During the development of the first two activities of the Argentina BOP Lab, several
BOP-related topics came up, namely:
t The base of the pyramid as a concept

t The BOP–entrepreneurship and innovation relationship

t The prevailing culture in terms of assistance delivery (and especially where related
to political corruption)
t The multinational (large) company–small and medium enterprises dilemma

t The direct involvement of the poor in the BOP Lab

t The existing infrastructure for the development of the BOP in Argentina

t Sustainability

Below I discuss some of the barriers and opportunities that each of the sectors taking
part in this Lab highlighted in connection with some of the above topics.

3 The Argentina BOP Lab is the only one in the international network that has developed this approach
with the media.

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The base of the pyramid as a concept

In the private sector, organisational culture (and its inertia) represents one of the great-
est barriers: according to Hart (2005b), the BOP creates an acute tension between con-
tinuity (efficiency, operations, control, resource allocation and convergent thinking) and
discontinuity (imagination, innovation, creative destruction, resource attraction, diver-
gent thinking). This barrier led a major pulp mill company, Ledesma S.A., to disregard
an interesting BOP project that consisted of manufacturing and selling (through NGOs)
‘school supplies for poor children’. The entire organisation was used to thinking, acting
and doing things in a different way from the one required for the BOP.
Furthermore, most companies find it difficult to regard stakeholders as a source of
knowledge. And they find it even more difficult to understand and believe that ‘fringe
stakeholders’ (the poor, the illiterate, the divergent, the non-legitimate, the isolated, the
disinterested, the weak, etc.) can become part of disruptive change management and
the generation of competitive imagination (Hart and Sharma 2004). Some local pro-
jects addressing the BOP are currently being analysed in regular ‘internal’ processes,
which do not include input from the poor themselves. However, others, such as the pro-
gramme ‘Acceso a la Energía a Través de Sistemas de Autoadministración’ (‘Access to
Energy through Self-management Systems’), of the power and electricity distributor
Edenor S.A., have sought this input because ‘to do business at the base of the pyramid
you must familiarise with the poor in order to understand them and create win-win solu-
tions’ (Di Natale 2005). In addition, Aguas Argentinas S.A. (currently state-owned and
going under the name of AySA S.A.) through a participative management model devel-
oped the programme ‘Barrios Carenciados de Aguas Argentinas S.A.’ (‘Aguas Argenti-
nas S.A. Deprived Neighbourhoods’), the main goal of which is to make a significant
contribution to providing deprived neighbourhoods with universal access to drinking
water and sewerage systems.
Other, also significant, barriers are ignorance of the BOP and the human development
paradigms and distrust towards other players which inhibit reaching a shared view of
the BOP. Some executives—for example, the CEO of DuPont Argentina S.A.—come with
an attitude of humility and participate in the Lab ‘to learn’.
The concept is gaining acceptance among NGOs and social entrepreneurs, evolving
from doubtful and uncertain stances4 to the understanding that it is an approach in
which trust building is essential (Estenssoro 2005). It was by building trust among the
community of the ‘Cuartel V’ neighbourhood that Gas Natural Ban S.A. and Fundación
Pro Vivienda Social could develop the project ‘Red Domiciliara de Gas Natural’ (‘Natural
Gas Housing Network’). Furthermore, Fundación Pro Vivienda Social developed a
micro-credit project with 4,000 households from 1995 to 2000 in which 8,000 loans
were granted. In subsequent evaluation carried out by the Foundation to assess partic-
ipants’ experiences and to establish whether micro-credit had enabled households to
improve their conditions, an interview with one woman stands out. On being questioned
about the loan and how it had helped her economically, she said, ‘Now I feel part of soci-
ety because somebody trusted me and gave me a loan, and it feels really nice. I feel
happy.’ The remarkable aspect of her response, from Fundación Pro Vivienda Social’s
point of view, was that she didn’t appreciate the money or the improvements to her home
as much as the fact that somebody had regarded her as a ‘person’ (Zabalía Lagos 2006).
The above notwithstanding, the subject remains largely ignored among the non-profit
sector. And in those institutions or social entrepreneurs that have begun to address the

4 Such stances are illustrated by questions such as: Will the wealth derived from the BOP business
help? Will there be no more poor? Will this be an opportunity for a new distribution of income, or
will it further widen the gap between the rich and the poor? How is social entrepreneurs’ work towards
the empowerment of excluded communities regarded? (Estenssoro 2005).

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topic, the original concept of the base of the pyramid as a ‘consumer’ prevails, which
neglects the concept’s evolution which, among other things, establishes that the busi-
ness–poverty relationship can take place at any point along the company value chain.
One of the issues frequently highlighted is the distribution of the wealth derived from
business strategies at the base of the pyramid, disregarding essential aspects of the con-
cept, such as meeting the expectations and respecting the dignity of those in poverty sit-
uations: the learning process between business and community is based on the
principles of community empowerment, humility and ‘putting the last first’ (Simanis
et al. 2005). This is the essence of the Base of the Pyramid Protocol;5 in this connection,
Raúl Zabalía Lagos (2006) from Fundación Pro Vivienda Social has emphasised that
‘working with people with a low-income level for years results in an outstanding learn-
ing opportunity, since people may be deprived of money though not of capabilities and
skills’.
While Berger and Roitter’s paper (2005), ‘Argentina: El papel de los emprendedores
sociales en la construcción de alianzas’, was developed based on four social entrepre-
neurs characterised by forging successful alliances with companies, a slow evolution—
starting with non-profit-sector distrust towards the private sector, which is an important
factor when it comes to dialogue—is evidenced in the Lab. Moreover, dialogue was hin-
dered on several occasions, as some of these organisations adopted the stance of ‘audi-
tors’ rather than ‘promoters or facilitators’. People are slowly beginning to understand
that poverty alleviation requires complex collaborative alliances.
But, through their knowledge about the needs of people under conditions of poverty
and the culture of the poor, these organisations can promote and provide for the busi-
ness–poverty relationship, thus resulting in social inclusion, development, and increased
opportunities. Thus, according to Paladino et al. (2006), social entrepreneurs will fos-
ter new leadership and, above all, aim for behavioural change, encouraging cooperation
in sceptical and distrustful scenarios.
The BOP needs the balanced development of policy and regulation from the public
sector, and requires the latter to play a strategic role in fostering and promoting inno-
vation in all sectors of society (Bell 2002). And it is precisely here where this sector pre-
sents barriers. Historically, in this sector there has been a regulatory culture that to a
large extent takes precedence over policy development. The way in which regulation is
worded and even the way in which it is applied further contributes to this problem. This
scenario prohibits innovation in the business, or in any other, sector. Similarly, igno-
rance of the subject is a significant barrier to the sector’s integration into the Lab.
According to Mónica Gabay (2005), the state has an important opportunity to provide
for the key elements of the national macro-environment in order to create an environ-
ment favourable to investment and business at the base of the pyramid. The full effec-
tive exercise of the constitutional state, thus guaranteeing freedom and respect for
property rights, and an economic and social environment with clear, stable and realis-
tic rules that provide for free competition and freedom from social unrest with equity,
are elements of vital importance.6
Governments must provide for a vision and strategy to lead policy towards sustain-
ability and the base of the pyramid. In this regard, regulatory reforms and policy for-
mulation can foster an alternative growth pattern at the BOP (WRI 2005).
The base of the pyramid means a radical change in business vision: due to poor hous-
ing conditions and similarly poor condition of the electrical appliances within, home

5 For more information about the Base of the Pyramid Protocol, please visit bop-protocol.org.
6 Consequently, the strengthening of the constitutional state, the involvement of the private sector in
the formulation of public policy, the promotion of strategic alliances, and the utilities and basic infra-
structure required for productive development loom large.

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energy consumption in poor housing is clearly a waste of resources. This waste is trans-
lated into higher bills that often prevent these homes from having access to sustainable
electricity services. Paradoxically, for these sectors with major ‘structural difficulties’ in
accessing sustainable power, the service also becomes important for reasons other than
energy: the bill plays an additional role of certification (the electricity bill is used as proof
of address, to take out loans, ask for other services, look for a job, etc.). For this reason
Edenor S.A. has implemented a pilot project, ‘Casas por + Energía’ (‘Houses for +
Energy’), which tests the effectiveness of energy efficiency in low-income houses fol-
lowing the introduction of social activities (neighbourhood workshops on energy use)
and sustainable technologies (architectonic design focused on efficiency, insulating
materials that ensure thermal conservation and moisture removal). The estimated sav-
ings, based on these improvements, is 30%, which will eventually allow Edenor S.A. to
have a sustainable client portfolio. Despite this example, very few universities and busi-
ness schools have integrated this subject into their programme curricula; where they
do, they present it from a marketing perspective, missing the essence, which is ‘sus-
tainable development’. There are a few academics who undertake research on this sub-
ject, but, broadly, it is the educational system itself that fails to encourage research since,
aside from a few private universities, academics cannot focus on it full-time having, in
most cases, to teach at several universities.
The opportunity lies in generating knowledge to achieve development at the base of
the pyramid. Moreover, training leaders for both sustainable and inclusive business
management should be seen as a responsibility.

The BOP–entrepreneurship and innovation relationship

Poverty is an entirely creative market and also a source of entrepreneurship (Hammond
2004a). When GrupoNueva7 began to develop projects on the BOP, it organised a con-
test in 2003 called ‘¡Todos Ganamos! Imagine negocios inimaginables’ (‘Everybody
wins! Let’s imagine unimaginable business’), in which employees were asked to devise
a BOP-related business plan. Projects had to be about business (not philanthropy), inno-
vative, doable and consistent with the company’s strategy. They also had to offer goods
and services that would improve quality of life in this market. But this process did not
involve the poor themselves.8 It transpires that companies (and academia) at large do
not appreciate the source of creativity and entrepreneurial spirit of the BOP.9
For a company to be innovative over time, it is essential to include what managers
usually tend to avoid: experimentation, a quest for ideas, patience for ideas to develop
and succeed, flexibility, tolerance of failure, and generation and transfer of knowledge
(Milstein 2005). The Lab, therefore, presents an opportunity for the above to happen:
in the Lab’s second activity, Masisa Argentina S.A. (part of GrupoNueva) presented its

7 GrupoNueva is a private industrial holding founded in 1994. The group is made up of two business
divisions, Amanco and Masisa, which comprise a conglomerate of 45 companies in the areas of
forestry and construction materials.
8 Even so, GrupoNueva is a Latin American leader in the (successful) development of BOP-related busi-
ness strategies. The last strategic decision of its CEO, which has seen actual execution within the
region, exemplifies the innovative and visionary character of the company: ‘by the end of 2008, 10%
of total revenues should come from the BOP, and by 2010 this percentage should grow to 15%’ (Moura
2005).
9 Broadly (and regardless of the companies), the prevailing culture in Argentina associates poverty
with ignorance, marginalisation, discrimination, inequity, lack of education, resignation, assistance
delivery, lack of opportunities and hunger. It does not usually associate it with creativity and entre-
preneurship (Gardetti 2006a).

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BOP project. This included innovative, inexpensive, ready-to-assemble furniture called

‘Enkastrable’,10 which participants could review and add feedback and comments.
It is also an opportunity for companies to begin developing ‘native capability’ which,
according to Hart and London (2005), means being ‘native’ to the places where they
operate, listening to voices that to date have seldom been heard. For example, the com-
pany Transportadora de Gas del Norte S.A., serving the poorest region of the country,
the north-west, is carrying out a programme to develop skills for the currently deprived
and informal-sector, along with micro-enterprises called ‘Cadena de Valor’ (‘Value
Chain’), in order that such people and such micro-undertakings might become formal-
sector suppliers of the company. Thus, Transportadora de Gas del Norte S.A. has devel-
oped perfectly tailored solutions to real problems in ways that respect the local culture
and natural diversity. And NGOs and entrepreneurs can (and should) participate in such
private sector-developed processes. The operating guidelines on which this Lab is based
contribute to this (see Box 3). Thus, within a framework of real options, failures are con-
sidered not as wasted efforts but as valuable sources of information (Simanis and Hart
2006).

1. Suspend disbelief: willingness to admit ignorance

2. Put the last first: seek out voices that are seldom heard
3. Show respect and humility: all parties have something important to contribute
4. Accept and respect divergent views: there is no one best way
5. Recognise the positive: people must be doing something right
6. Co-develop solutions: mutual learning among the different players of the Lab
7. Create mutual value: all parties must benefit in ways important to them
8. Start small: small things are also important
9. Be patient: it takes time to promote relationships within the Lab and win the trust of
the different players

Box 3 operating guidelines for development of the lab in argentina

Source: Simanis et al. 2005

Argentina consists of a number of regions with differing needs and, consequently,

different priorities. Academia can foster the development of regional Labs, which would
contribute to the generation of local knowledge in line with the above needs and prior-
ities and, in turn, would foster relationships among different sectors.

The prevailing culture in terms of assistance delivery

(especially where related to political corruption)
On numerous occasions, actions taken by NGOs promote assistance delivery; the cul-
ture of providing goods or services for free, or charging below markets rates, is deeply
ingrained in the non-profit sector (Berger 2006). To step outside this mind-set, they
must review their operating principles (they need to build consensus about the impor-
tance of understanding and adopting economic and business-oriented principles and
criteria as a part of their decision-making process [Berger 2006]). Through various activ-

10 The concept is good-quality, practical, versatile furniture, with no tools or bolts needed for assembly
and with a totally innovative design.

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ities and alliances, these organisations, together with the private sector, can exert pres-
sure to effect change in the existing public sector’s situation.
The social strategies used by the public sector are based on assistance delivery and
are frequently combined with ‘political clientelismo’, ultimately resulting in the purchase
of votes. Martín Dinatale (2004) states that the real political clientelismo scheme goes
beyond the ‘political bully’ relationship, and rather is embedded in a complex scheme
led or developed by presidents, ministers, policy-makers, second-line officials of the
Executive Branch, governors and mayors. The real tools of use and abuse for the co-
option of an important segment of population living in abject poverty may be tied to
vote-catching interests, though they also act based on economic patterns and financial
returns.
Governance is essential in developing the base of the pyramid, and this implies trans-
parency, accountability, coordination mechanisms, bureaucratic efficiency and pub-
lic–private strategic alliances (Gabay 2005).

The direct involvement of the poor in the BOP Lab

Failure to listen on the part of the private sector becomes a barrier to interaction with
other types of organisation, as well as to the direct involvement of poor people in the
Lab. Repsol YPF (YPF S.A.), the largest energy company in Argentina, totally disregarded
the development of a think-tank with fringe stakeholders to generate divergent knowl-
edge and thinking, which might have helped to enrich the development of its projects.
Through the BOP’s spirit of creativity and entrepreneurship, companies can form a
basis on which to develop new technologies. And these local technologies can offer
global opportunities (Gardetti 2005). For radical transactiveness11 to succeed, compa-
nies should think out of the box and put the last first in order to listen to and empathise
with the poor (Hart 2005b). Based on their long track records, NGOs might be able to
play the role of promoters and facilitators in the integration of the poor within the Lab.
And academia, on its part, has an interesting opportunity ahead for learning from this
process and from BOP needs.

The existing infrastructure for the development of the BOP in Argentina

In many regions, the infrastructure required to access the base of the pyramid is not
even in place. It is worthwhile to point out that, in general, the habits and culture of poor
people are disregarded. A good example of this is housing development where, accord-
ing to Zabalía Lagos (2006), there is a primary distinction, since the ‘rich’ first build
and then move in, whereas the ‘poor’ first dwell and then start building over time. In
light of this difference, it is instructive that, for instance, all the housing strategies
devised by the private and public sectors for the poor are conceived from the paradigm
of the ‘rich’. This is clearly mistaken because they assume that the poor do not have the
ability to solve their problem, thus failing to support them in making their own actions
more effective. The fact that the poor dwell and then build implies that all known strate-
gies should be reconsidered and, in this process, NGOs should be included. Infrastruc-
ture development, through private–public alliances, for the promotion of the BOP
becomes an interesting opportunity for both sectors.

11 This is a capability that enables companies to deal with dynamically complex business environments
by engaging fringe stakeholders to manage disruptive change and generate competitive imagination
(Hart and Sharma 2004).

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Sustainability
According to Di Natale (2004, 2005), business executives possess certain characteris-
tics (higher technical training, decision autonomy, self-confidence, leadership, proac-
tiveness, management and self-esteem) that hinder the sustainability vision necessary
for sustainable business leaders. According to Hart (2005b), this vision is critical in
developing business strategies at the base of the pyramid—the return on investment
term changes from 3–5 to 7–10 years because it is necessary to gain people’s trust in
their communities, forge alliances, and raise social capital.
For business executives to have a sustainability vision, according to Di Natale (2004,
2005), in addition to the above current characteristics they should have an understand-
ing of the environment, an ability to dialogue, reasonable flexibility, a vision of the pre-
sent and the future, social sensitivity, commitment and passion. The Lab enables the
development of interrelationships in which many of these characteristics are being
implemented. Thus, executives can acquire an overall understanding of business from
a sustainability perspective.
Over time, certain NGOs are being recognised for the environmental and social
research work they have conducted; and the failure of government to adopt some of the
leading roles that it must play in order to achieve sustainability has becomes the main
barrier to the promotion of sustainability. According to David Bell (2002), such roles
are: vision/goal setter, leader by example, facilitator and innovator.
Anticipating rising world demand for sustainable products, services and systems is
both an obligation and an opportunity for government. Indeed, there exists a crucial role
in facilitating the transition to an economy that is much more efficient, much fairer and
much less damaging. Government has an opportunity and a responsibility to take on a
leadership role by creating a more suitable environment in which sustainable business
in general, and sustainable business at the base of the pyramid, can thrive (Bell 2002).
Additionally, it should be pointed out that several authors have undertaken research
into the business–development relationship.12 For this purpose, in 1999 the United
Nations created the Global Compact, an initiative consisting of development objectives
closely related to the Millennium Development Goals. In summary, the Global Com-
pact is an initiative focusing on social business responsibility in order to achieve sus-
tainable development (Gardetti 2006b). This last statement illustrates the essential
difference between the two terms: ‘sustainability’ is a more complex and multidimen-
sional term than ‘social responsibility’.
To understand corporate sustainability it is necessary to analyse global trends, such
as the increasing world population, wealth generation, health trends (including nutri-
tion), education, consumption, energy use, emissions, decrease in the productivity of
the planet, water shortage, urbanisation, acceleration in the product and knowledge flow,
access to communication and information technology, democracy as the basis for mar-
ket economies, the investment of the private sector, societal demand for transparency,
etc. These trends are all relevant here as they all have an impact on business. Academia
does not disseminate the differences between corporate social responsibility and cor-
porate sustainability.
It should now be clear that the size of the sustainability challenges—and, therefore,
potential opportunities for progress—exceed anything that has been faced in the his-
tory of humanity. So all sectors must learn to co-exist and, indeed, actively collaborate if
catastrophe is to be averted and a more ecologically sustainable, socially equitable and
economically stable world is to be achieved for a planet potentially home to up to 9 bil-

12 Among them we can mention: Wheeler and McKague (2002); Narayan et al. (2000); Hart and Chris-
tensen (2002); Hart (2005a); Boyer (2003); Porter (2001); and Warner and Sullivan (2004).

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lion people in the coming decades. Academia could make a very significant contribu-
tion by means of sustainability research, including an assessment of competitive busi-
ness scenarios.

Conclusions and future challenges

The base of the pyramid offers opportunities to create value for all parties, as well as
opportunities for both sustainable and human development. These markets involve
managing substantial challenges in technical and economic infrastructure, education,
financial resources and cultural differences. This is because the base of the pyramid is
a source of sustainable innovation and a scenario for future social and economic dis-
ruption. It is necessary to build an ecosystem that understands on a cultural basis the
area in which it will be developed. Both the ecosystem dynamic and a focus on the ‘local’
aspect are essential for the development of the BOP.
This requires the use of the imagination to forge alliances and make cooperative
approaches that blend the capabilities of business with those of both civil society and
the public sector in order to speed up development, even in the poorer regions.
The Argentina BOP Lab provides a scenario in which to develop trust and ideas in
which the four sectors involved attempt, on the one hand, to gradually overcome their
barriers, and on the other hand to begin to develop the capabilities required for the BOP.
The Lab encourages divergent thinking to reach a new level of analysis. Thus, compa-
nies are slowly beginning to listen to seldom-heard voices in an attempt to develop their
‘native capability’. Moreover, NGOs are beginning to think in terms of ‘corporate’ man-
agement, while the public sector starts to learn and participate in a model different from
that of assistance delivery, analysing the best way to create a suitable environment for
the BOP. Academia is slowly beginning to see the BOP as an essential element in busi-
ness leader training.
Several challenges lie ahead for the Argentina BOP Lab. The first is to determine how
poor people will be integrated in light of the ‘anti-enterprise’ culture, typical of this sec-
tor and historically fostered by political power. The second is to continue building a local
and shared view of the BOP, addressing questions such as: What are the local needs?
What kind of knowledge should be generated? How could this process evolve in
Argentina?
Other challenges may be expressed as a further set of questions: How can a company
turn its strategy at the BOP into a competitive advantage? What kind of business model
will work? How can we build trust in the informal economy? What kind of education
do business schools need? How does new technology integrate? How can we develop
the educational/social infrastructure? Moreover, from the viewpoint of regulatory and
policy formulation, if entering the markets at the base of the pyramid is a sound choice
for both development and business, what does it take to turn this into a reality?
The Argentina BOP Lab contributes to the establishment of the necessary learning
process, resulting in the joint development of ideas and opportunities that strengthen
the capabilities of the parties involved.

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