transforming lives through entrepreneurship

THREE INCREDIBLE IDEAS

TRANSFORMING LIVES

TRANSFORMING LIVES THROUGH ENTREPRENEURSHIP

The impact of business research on people in the developing world

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RAISING PEOPLE’S PROSPECTS

By some estimates, half of the world’s poor make a living as microentrepreneurs in developing countries. And around one-third* of the world’s population, most living in developing countries, lack access to essential medicines due to inequalities in healthcare.

*Global Health Progress

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WHY THE WORLD’S BUSINESS IS OUR BUSINESS

“There are huge opportunities for business schools to address the problems of the world’s ‘other’ 99% of businesses: those beyond the large, mostly Western, businesses that are the focus of most business research and teaching today.”

Rajesh Chandy, Professor of Marketing; Tony and Maureen Wheeler Chair in Entrepreneurship; Academic Director, Deloitte Institute for Innovation and Entrepreneurship

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INVESTING IN MARKET EFFICIENCIES, RAISING THE PROSPECTS OF INDIA’S FARMERS

Between 2003 and 2010 the World Bank put US$4.2 billion into improving information and communication technology infrastructures in the developing world. But there was little evidence to show this led to more efficient markets and increased prosperity.

RESEARCH IDEA 1

THE CHALLENGE

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“Choosing to grow something that is perishable is risky. Having better price information can reduce the risk.

“If you are helping people get a better price for their produce, that’s exactly the sort of thing that interests government and business leaders.”

Kamalini Ramdas, Professor of Management Science and Operations; Deloitte Chair in Innovation & Entrepreneurship

THE OPPORTUNITY

RESEARCH IDEA 1


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The research looked at the prices of 170 crops across 13 states in India.

It showed that information – price data from multiple local markets for many types of produce – shared via daily text messages to farmers, reduces disparity in prices by 12%, thereby improving the welfare of both farmers and consumers.

THE RESEARCH

RESEARCH IDEA 1


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What does the research mean for farmers and policy makers?

FarmersWhen information is pushed to them, they can:

¢ better plan ahead ¢ make higher returns ¢ pool resources, such as shared transport

Policy makersNeed to understand that providing both infrastructure and better information are crucial.

THE IMPACT

RESEARCH IDEA 1


Malaria is one of Africa’s biggest killers, among the top five causes of death*. This is despite there being plenty of medication in many affected countries.

It is estimated that in 2013, 437,000 children in Africa died of malaria before their fifth birthday.

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IMPROVING ANTI-MALARIAL SUPPLY, SAVING LIVES

*World Malaria Report 2014

RESEARCH IDEA 2

THE CHALLENGE

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The ability to control malaria is directly affected by delays and inefficiencies around diagnosis and distribution. Professor Jérémie Gallien applies the supply chain science to global health delivery systems.

“I realised my research work in private sector supply chain analytics could prove useful.

“The agenda of analysing global health systems will likely occupy the rest of my career.”

Professor Jérémie Gallien, Associate Professor of Management Science and Operations

THE OPPORTUNITY

RESEARCH IDEA 2

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Research covered 16 of the 72 district pharmacies receiving medicine from a central warehouse. Districts sent drugs to 1,500 smaller health centres. The results proved that inventory control and transportation planning was the biggest problem – in essence, supply chain management.

THE RESEARCH

RESEARCH IDEA 2

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The research identified the underlying causes of local shortages and waste – and used supply chain science to improve distribution.

The project prompted development of a new inventory system known as eZICS, involving:

¢ Zambia’s Ministry of Health ¢ Medical Stores Limited ¢ IBM ¢ Crown Agents ¢ World Bank

eZICS

THE IMPACT

RESEARCH IDEA 2

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Almost 80% of the extremely poor live in South Asia and Sub-Saharan Africa. Jobs are scarce and many must make a living by starting their own businesses – but they often lack basic skills to help those businesses prosper and grow.

EDUCATING SOUTH AFRICA’S MICRO-ENTREPRENEURS, INVESTING IN LIVELIHOODS

RESEARCH IDEA 3

THE CHALLENGE

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Professor Rajesh Chandy and his colleagues* asked: could access to better business skills yield better results? And, do different skills have different performance outcomes?

“For most of the world’s poor, micro-entrepreneurship is the only way to eke out a living.

“If initiatives to remove the biggest impediments confronted by micro-entrepreneurs are successful, you could be looking at the wheels of progress accelerating before your eyes.”

Rajesh Chandy, Professor of Marketing; Tony and Maureen Wheeler Chair in Entrepreneurship; Academic Director, Deloitte Institute for Innovation and Entrepreneurship

THE OPPORTUNITY

RESEARCH IDEA 3


*PhD student Stephen Anderson-Macdonald (LBS PhD 2015, now at Stanford University) and Bilal Zia (World Bank)

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The study involved about 800 micro-entrepreneurs in Cape Town, South Africa. It compared three groups to measure the impact of business skills training on prosperity, growth, and survival among micro-entrepreneurs.

The results were striking.FOR

SALE

THE RESEARCH

RESEARCH IDEA 3


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It shows that business skills make a huge difference to micro-entrepreneurs. Moreover, the type of training given leads to different outcomes. The research forces policy makers to think differently about how they target investment.

¢ Profitability: their monthly profits were more than 40% higher

¢ Employment and sales: they hired more staff and had higher revenues

¢ However, the paths to profits were different:

¢ Marketing skills put entrepreneurs in growth mode: their sales were higher, and they hired more employees as well.

¢ Finance skills put entrepreneurs in efficiency mode: their costs were lower, and money was more efficiently allocated.

¢ Marketing skills training is especially important where the goal is employment-led growth.

THE IMPACT

RESEARCH IDEA 3


Compared to the control group, those who received marketing or finance training saw dramatic improvements in performance 18 months later:

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London Business School research has the potential to lift people out of poverty.

Find out more about the Deloitte Institute of Innovation and Entrepreneurship’s work.

Yes, the world’s business is our business.

http://www.london.edu/diie

http://www.london.edu/diie