Adapted and excerpted from the BAM Global Think Tank report on BAM at the Base of the Pyramid.
The Call to Poverty Alleviation Through Business
Business has a role in alleviating poverty. Christians in business have a unique opportunity, and responsibility, to address the suffering and injustice of the 2.5 billion people who live on less than US$2.50 per day.
The call to bring poverty-alleviation back as a central focus and purpose of business as mission (BAM) is built on several foundational understandings:
1. We are all created in God’s image: equal, creative, and imaging God in our work
Every person on this Earth is created in God’s image, from those our world defines as the most humble to the greatest, we are equals. This foundational Christian understanding of who we are has profound implications for our understanding of work, of business, and unemployment. Timothy Keller in his new book, Every Good Endeavor: Connecting your Work to God’s Work, provides a fresh perspective on work, starting with Genesis and God’s work in Creation, to Christ’s humble role as a carpenter, and each of our own unique vocational callings in this world. On the definition of calling in his book, Keller states, “Our daily work can be a calling only if it is reconceived as God’s assignment to serve others.” (Keller, 2012 p66)
2. Christians are called to care for the poor, those at the ‘Base of the Pyramid’ (BoP)
Christians in business – as stewards of God’s resources – have a responsibility to care for the poor and to alleviate poverty. The working definition of BAM used by the BAM Global Think Tank reflects this responsibility to the poor. It calls for business to be concerned with holistic transformation, multiple bottom lines (including economic and social), and the world’s poorest. This responsibility is in line with the clear Biblical call for all Christians to care for and “spend yourself on behalf of the poor” (Isaiah 59:10), to see each person as creative and created in God’s image, and to alleviate the injustice and suffering of poverty.
Overcoming poverty is not a gesture of charity. It is an act of justice. It is the protection of a fundamental human right, the right to dignity and a decent life…
– Nelson Mandela, 2005
3. Business is essential, and uniquely positioned to respond to poverty
Business is uniquely positioned as an essential and sustainable solution to ending poverty. Current global economic shifts and technological advances are creating a unique opportunity at this point to bring this goal in reach. Business by its nature is a relational activity, and a potentially transformational activity. Business not only creates jobs, it is where networks and relationships are the norm, creating networks and relationships that are essential for community restoration and transformation.
I believe the only long-term solution to world poverty is business. That is because business produces goods, and businesses produce jobs. And businesses continue producing goods year after year, and continue providing jobs and paying wages year after year. Therefore if we are ever going to see long-term solutions to world poverty, I believe it will come through starting and maintaining productive, profitable business.
– Wayne Grudem, 2003
4. We are at a tipping point with the unique opportunities and responsibilities between business and poverty
The time is now for poverty alleviation to be an achievable focus of the Business as Mission movement. Poverty needs to be a central concern of every Christian in business, of every businessperson who sees business as their mission, as their calling.
The role of businesses and job creation in ending poverty
Thriving businesses and job creation are vital for ending poverty. Kaushik Basu, the Chief Economist and Senior Vice President at World Bank states, “Jobs are the best insurance against poverty and vulnerability” (World Bank, 2013). John Mackey, CEO of Whole Foods, shares from his own business experience, “Business is the greatest creator of value in the world. It’s helped lift humanity out of poverty and into prosperity” (Fox News, 2013).
From the voices of the poor themselves (in a survey of over 60,000), jobs and businesses were cited as major paths out of poverty:
In a large set of qualitative studies in low-income countries, two of the main reasons that people gave for moving out of poverty were finding jobs and starting businesses.
– Narayan, Pritchett, and Kapoor, 2009
The development world has reached a similar conclusion, that aid alone is not the solution to poverty. Recent books, from Dead Aid, to When Helping Hurts, and Toxic Charity warn us of the destructive tendency of “us to them” aid that wears away at the dignity and productive capacity of people and communities. Rob Tribken, owner of Best Fresh Foods and founder of the Center for Faith and Enterprise echoes the limitations of charity and need for increased focus on growth of indigenous business to end poverty:
I believe that for the (BAM) movement to live up to its potential for reducing poverty, practitioners need to re-affirm the moral and creative value of business as business, and without apology put business as business at the center of the development process… charity does not end poverty—only indigenous economic development driven by the creative process of business enterprise, operating within an adequate moral, cultural, and legal framework, can do this. For the sake of the poor we need to remember this.
— Rob Tribken, 2010
Small and medium enterprises and value chain development
Growth in the small and medium enterprise (SME) sector and inclusive value chain development are both crucial for addressing poverty at the BoP.
Advanced economies are paying new attention to small and medium enterprises (SMEs)… in most OECD (developed) countries, SMEs generate two-thirds of private sector employment and are the principal creator of new jobs. (de Ferranti and Ody, 2007)
Just as the middle class and small businesses have spurred growth in the US, the middle market enterprises in the developing world are essential economic engines for job creation, economic growth, and stabilization.
The middle market businesses or small and medium enterprises (SMEs), in developing nations are often referred to as the “missing middle”. This middle market is an essential bridge in the gap between the informal sector or microenterprises at the BoP and the formal sector businesses and markets.
Traditionally, the number of businesses and the support services for these businesses in the middle market has been scarce in developing economies, thus the term “missing middle”. The microenterprise sector in the developing world is now often served well by the microcredit industry and their services. Large businesses have access to traditional bank credit, global networks, and markets. The SMEs in the middle market however are too big for microcredit and too small for the banks.
Not only are SMEs a vital link in the economic value chain for the BoP, they are also an essential local leadership link for the communities in poverty.
Development scholars have identified three major contributions small and medium enterprises (SMEs) make to economic development: job creation and income generation; the potential for integration into global markets; and local leadership that helps generate social justice and political stability through civic engagement.
— Roland Hoksbergen, 2009
One member of the BAM at the BoP Issue Group who works with entrepreneurs and evangelists on the ground in Africa, stated his experience well that, “Without indigenous leadership no community transformation is sustainable.” The challenge then, is supporting and meeting the needs of these SMEs to grow, thrive, and become the compassionate servant-leaders that will transform families, communities, and nations.
The BAM Global Think Tank report on BAM at the Base of the Pyramid, ‘Business as Mission and the End of Poverty’ is available at BAM Global Think Tank.