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  • Flickr image by Victor

    This piece was originally published in the autumn issue of Radar Magazine – Issue 05: Unusual Activists.

    Society always will need medicines, and medicines always will require heavy investment in research and development. But signs indicate the pharmaceutical sector’s customers — governments, insurers, foundations and patients — are increasingly not willing or able to pay as much for its products. The $84,000 price tag for Gilead’s new Hepatitis C drug and the soaring price of vaccines in the United States has left many asking, “How much is enough?” Despite more tightly controlled pricing in Europe, pressure for drug price reductions also is mounting.

    The existing margin-based pharmaceutical model neither will continue to yield traditional profits, nor will it meet the rapidly growing and changing demand for healthcare, particularly in relation to non-communicable diseases. Some new approaches are emerging, particularly in developing countries, such as GlaxoSmithKline’s low-margin, high-volume model that’s been applied in the 49 poorest nations. Yet overall, profits still rely heavily on established markets where the reimbursement system for cutting-edge products exists. Pharma companies remain focused on making the existing business model continue to yield expected profit levels and are failing to see opportunities for business growth elsewhere. …

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  • Flick image of step pyramid by Ed Yourdon

    In 2004, the late CK Prahalad, an influential management professor and author, published The Fortune at the Bottom of the Pyramid, a book that urged companies to use a new lens to view the poor. Prahalad advocated for envisioning those at the bottom of the economic pyramid as producers and consumers of products, rather than merely as philanthropic beneficiaries.

    Ten years later, several large companies have adopted Prahalad’s ideas and, in the process, have demonstrated that serving the “base of the pyramid” consumer can make good business sense. I analyzed several of these “base of the pyramid” business models — what we call “Building a Marketplace” — in Model Behavior: 20 Business Model Innovations for Sustainability, a report that I co-wrote and released earlier this year….

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  • Leo Johnson talking to Rob Cameron at our London office.

    This article originally appeared in Radar Issue 03: What Chance Change? Exploring Sustainable Finance.

    Leo Johnson, a partner in PwC’s Sustainability and Climate Change team, has recently co-authored Turnaround Challenge: Business and the City of the Future, which explores how capitalism can reinvent itself to offer sustainable growth.

    Rob Cameron spent a morning with Leo exploring his views on the wisdom of Hollywood icons, tequila capitalism, jujitsu moves and the parallels between banks and rock ‘n’ roll.

    Rob Cameron: Let’s start with that most British of questions – what do you think of the recent weather here in the UK? I ask because I wonder if it takes this kind of flooding disaster to get politicians to pay attention to the risks of climate change?

    Leo Johnson: We should be so lucky. My take is that major progress won’t result from flooding. If anything my fear with big-time impacts from climate change is that they could bring what they call ‘threat rigidity’, the draw-bridge going up. My optimism comes from a different place than disaster. To me, it’s most simply put by Marilyn Monroe. She said: “Sometimes good things fall apart so that better things can fall into place.”

    This is exactly what Schumpeter was trying to say too. His idea was that there are these waves of ‘creative destruction’ where the technological model that was triumphant starts, as it gets fully deployed across the economy, to burn out and then becomes dysfunctional, creating the space for disruptive technologies to erupt. …

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  • Flickr image by Barefoot Photographers of Tilonia

    Rice paddies and colorful tractors are common sights in remote parts of south India. So, too, are small shanties, brightly painted shops and coconut palms. But nowadays, in some villages, solar panels have also become part of the landscape, covering shingled roofs and competing with the palms for sunlight.

    The panels are helping to catapult energy-poor villagers – who previously had no, or only very limited, electricity – into a more sustainable future. This leap to renewable energy is the result of an innovative business model that’s being rolled out to low-income communities in the state of Karnataka.

    The company behind this new model is Simpa Networks, a technology company that aims to make sustainable energy affordable to all – even those who make less than $2 a day. In particular, Simpa targets customers who have limited access to electricity and use kerosene lanterns, which can pose health and safety risks, to illuminate their small homes. It also targets customers with little, if any, disposable income, who can’t afford to buy its solar products for $200 to $400 each – even though Simpa claims its system could yield significant savings over its 10-year lifespan. …

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  • The idea of business model innovation—that a company could launch a new business model never conceived of before, or transform an existing business model—has long captivated business leaders. And yet, executives are often held back by vested interests in their current approach: “If it ain’t broke, don’t fix it.” But as global trends—environmental, social, political, technological—continue to shift the foundations of our current business models, incremental innovation will become less effective in enabling companies, industries and whole economies to adapt and succeed. There is an urgent need for fundamentally different approaches to value creation….

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  • The expanding legitimacy of waste picking. Image of Filipino waste picker by Global Environment Facility, Flickr.

    This is post 3 of 10. See next or previous.

    For over 25 years, companies have valued our ability to serve as their early warning system—to interpret emerging issues and trends in the sustainable development agenda and help them anticipate, understand and respond to shifts in the business landscape. In 2013, SustainAbility re-launched a dedicated function to regularly track and interpret “what’s next”—our Ten Trends of 2013 series is the distillation and public output of our thinking over the year.

    From 1900 to 2000, global population increased just under four times, while the amount of waste produced by humans increased ten times. With waste set to double again by 2025, and the world facing a number of drivers (e.g. less space for landfills, urbanization, volatile commodity prices) that are already upending the status quo, a variety of actors are viewing waste as an enormous business opportunity….

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  • Beyond executive pay, we’ve seen the inequality conversation manifest itself into ‘living wage’ campaigns rippling through the service sector in 2013. Image by Ari Moore, Flickr

    This is post 1 of 10. See next.

    For over 25 years, companies have valued our ability to serve as their early warning system—to interpret emerging issues and trends in the sustainable development agenda and help them anticipate, understand and respond to shifts in the business landscape. In 2013, SustainAbility re-launched a dedicated function to regularly track and interpret “what’s next”—our Ten Trends of 2013 series is the distillation and public output of our thinking over the year.

    “‘How can it be,’ he wrote, ‘that it is not a news item when an elderly homeless person dies of exposure, but it is news when the stock market loses two points?‘” That was President Obama quoting Pope Francis in a wide-ranging December speech on income inequality, which he called the “defining challenge of our time.” It also represented a high water mark in what has been a remarkable year in raising the profile of inequality as not only an urgent societal issue, but also a critical business one….

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  • The promise of business-model innovation has long captivated the sustainability field, generating plenty of hype. But all the talk has yet to yield many real business-model changes.

    You might not know it to hear companies talk. Any business change can end up being classified as “business model innovation”. In a BCG and MIT survey of executives and managers earlier this year, nearly half of the respondents said their companies had changed their business models as a result of sustainability opportunities. However, the majority of innovations we see involve changes in companies’ processes and/or products, not underlying business models….

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  • Greenpeace's recent scaling of London's Shard shone a light on the continuing lack of engagement by fossil fuel companies, but could targeting investors bring more tangible results? Photography courtesy of Sandison/Greenpeace.

    Between traditional news channels, blogs, and social media, it can be hard to keep up with what’s making waves in the field of sustainable development. In this roundup we aim to cut through the noise with a handful of highlights that have caught our eye.

    Fossil Fuel Divestment Gathers Momentum

    Last fall, climate activist Bill McKibben’s organisation, 350.org, supported the launch of fossil-free divestment campaigns across cities and college campuses. Modelled on the South Africa anti-apartheid divestment movement of the 1980s, the campaign has reached over 100 US cities and 300 colleges. Similar versions are also taking hold in Australia, the Netherlands and the UK.

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  • Many multinationals, in the last few years, have ramped up their efforts to better understand their long-term future in a world where 9 billion people need to live amidst converging pressures on food, energy, and environment. Some, like GE, P&G, and Microsoft have turned to emerging markets to innovate new products, processes, and business models. Sustainability professionals looking for new solutions should also take note. Emerging markets provide a wealth of information, ideas and knowledge about how to thrive in the face of massively constrained resources …

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  • Copyright (c) Kyra Choucroun

    Despite years of thinking about the traditional model of economic growth, it wasn’t until I drove through rural Ghana that it truly hit me just how spectacularly it has failed to deliver on the promise of global prosperity.

    In my last blog I challenged the widely held belief that infinite growth is both necessary and viable. That piece generated a flood of responses, from howls of protest at one extreme to speaking invitations at the other. And it was one of those invitations that led me to Ghana in the first place, to share my views on how Africa can play a part in tackling the world’s most complex challenges at a youth-led conference in Kumasi.

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  • Many companies have struggled to achieve meaningful returns from BOP markets, but they shouldn't give up quite yet.

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  • Despite its importance, agriculture is financially underserved and currently not prioritized in many emerging economies.

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  • Despite the hope microfinance has not made poverty history - once again we are in need of new inclusive business models.

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  • New microfinance rules in India have reopened a range of basic questions about microfinance wherever it is practiced.

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  • Reflecting on yesterday's CSV Forum 2010 in London, I confess that my expectations going into the event were low.

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  • There are important similarities in India and China's rapid growth, write John Elkington and Jodie Thorpe.

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  • There are important similarities in India and China's rapid growth, write John Elkington and Jodie Thorpe. As businesses now turn their attention to the base of India's economic pyramid, there may be important lessons for China.

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