Cultivating consumers from the world’s poorest people may sound like the
business model of an exploitative corporation, but that’s exactly what Aliza
Belman Inbal wants Israeli businesses to do.
In the interest of full
disclosure, she’ll tell you, there is a dual purpose: While
private-sector-driven technology has fertile ground for turning a profit in the
developing world, it’s also the best way to help bring people out of
“We’re so good at innovation and finding creative solutions to
difficult problems, particularly in fields that are of such crucial importance
to the developing world like food security and combating desertification and
renewable energy and medical technology,” says Inbal, stressing that the private
sector, and not the government, is the best catalyst for such technological
A former World Bank researcher with a doctorate in
development who directs the international development program at Tel Aviv
University’s Harold Hartog School of Government and Policy, Inbal argues that
consumers at the “base of the pyramid” (BOP) represent an estimated $5 trillion
in purchasing power. Because they tend to overpay for basic goods and services,
they also represent an opportunity for companies that develop smart
technological solutions – as so many Israeli companies do – to solve the
problems that the poor face.
Over the course of the past week, Inbal
huddled together with 70 young social entrepreneurs in Mizpe Ramon for the
first-ever ID2 (Israeli Designed International Development) gathering.
Partnering with ROI, an organization focused on Jewish innovation, the
conference was aimed at contemplating how Israeli technology could be used to
alleviate social problems and spur development, not just through non-profits or
charity, but with business and private capital.
“In order to do this
well, you need a partnership between technology people and development people
who understand these markets,” says Inbal.
“It’s something that’s good in
terms of profits but it’s also good in terms of Israel’s international
reputation and who we want to be as a nation.”
At the conference, Cecile
Blilious, managing partner at Impact First Investment, laid out a diagram of
investments with purely social outcomes (philanthropy) and pure profit (regular
market investments), pinpointing the area of overlap between the two as
companies that generate measurable social or environmental goals alongside
Such “impact investments” reached a new high of $8 billion in
2012, and are expected to grow a billion more in 2013, according to a survey by
JPMorgan and the Global Impact Investing Network (GIIN) released on
“What we’re looking to do is utilize Israeli technology and
innovation to create globally scalable social impact with companies that have
blended value,” says Jordan Feder, a principal at Impact First
“Essentially, we’re looking to mobilize market capital and
the power of the free market to achieve social goals.”
Fair Planet, an
agricultural company, provides an example of a socially minded firm. It seeks to
find which seed species grow best in specific developing countries, information
that could create new markets. Similarly, Amiran in Kenya sells a farmer’s kit
that helps small-scale farmers access modern agricultural technologies and
methods, many of them Israeli-made.
“You’re increasing the productivity
of poor people by bringing them technology and education and that enables them
to create their own economic value later,” explains Inbal. Similarly, there are
economic gains associated with alleviating many social problems.
added to the high level of education, research, and innovation that turned
Israel into the “Start-up Nation,” expertise in agriculture, health and software
could make it a world leader in development technology, says Gaddy Weissman, a
co-founder of the Dev Tech Hub.
“Look at venture capital firms
now. They have clean-tech and agri-tech,” he notes. “We’re going to add