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Building the Pyramid At UNC-Chapel Hill, the sustainable enterprise program is built around two challenges, says Stuart Hart. "First, how do you improve eco-efficiencies and reduce material and ener- gy waste emissions, while ensuring legitimacy and maintain- ing your reputation with important stakeholders? Second, where are the growth opportunities for the future? For the second question, we settle rather clearly on the bottom of the pyramid. Growth will come from the four billion people whose needs have been unmet. We need to figure out how commerce can improve their lot in life—in a way that does- n't destroy the planet or compromise cultural integrity." Kenan-Flagler has constructed a whole program called the Bottom of the Pyramid Learning Laboratory that looks at "issues of poverty, inequity, and environmental degradation as business opportunities," says Hart. The Base of the Pyramid Learning Laboratory is supported by member cor- porations such as Johnson & Johnson, Hewlett-Packard, DuPont, Proctor & Gamble, Coke, Nike, and Ford. It also involves organizations such as World Resources Institute and private investment groups. The assembled groups develop cases, tools, and products for emerging markets. One project revolved around a British company called Adaptive Eyewear, which created inexpensive eyeglasses with fluid-filled lenses that could be manipulated until they were the right density to focus the wearer's vision. "Think about emerging markets in rural Africa, India, China—they don't have large numbers of optometrists and opticians, nor are there people with the income to buy glasses," says James Johnson. "A product like this creates business oppor- tunities for people who sell them, distribute them, and repair them. And there's a multiplier effect, because who knows how many people, by virtue of having improved vision, may turn out to be the next Bill Gates?" Not only that, the manufacturer itself stands to profit. "Let's say the company gets one percent of the China market. I'd take that," says Johnson. Another project focused on the AIDS crisis in southeast Asia. "At the time, they had an AIDS test that cost $12.50 and took two weeks to get results," says Johnson. "A local company developed an AIDS dipstick test that cost $1.50 and had a 24-hour turnaround. So we connected that compa- ny with an MBA from Thailand who had graduated from Kenan-Flagler. They formed a joint venture and sold 800,000 AIDS kits in the first six months. Again, there was a technolo- gy that fit the context, that addressed a pressing problem, and that was affordable." Base of the Pyramid companies are all focused on devel- oping innovative business models that do not harm the envi- ronment and that enhance social well-being, Johnson says. "Disrup tive technologies have to be developed, but under- standing the context is also important. In some places your product might have to be marketed at the village level. Understanding the cultural nuances is all part of corporate responsibility." looks like. I think a lot of this transformation is going to come out of the creation of new companies. Large existing compa- nies are going to be much harder to change. "The hottest areas in this niche right now are sustainable energy and clean tech," he adds. "There's also a lot of inter- est in water supply, food security, and food supply. If you're an organic food company, you're going to make all your busi- ness practices harmonious with the sustainable world. The emergence of the markets will converge with the entrepre- neurs who want to fill these niches, and then venture capital- ists will come and say, 'We choose to participate in this kind of venture. We want to start measuring not just the financial returns on our investment, but the social impact as well.'" While there is much left to be done—and many social and environmental messes to clean up—Whiteman thinks business leaders are up to the task. "One of the best things about busi- ness is that it's filled with people who know how to do things," she says. "They're not just thinkers and talkers. Perhaps the most innovative minds will be the ones who will be turned on to this the most." The question remains whether other academic and busi- ness leaders will take up the banner of corporate social respon- sibility. Given the inexorability of globalization, the fact that prominent corporations are already engaged in sustainable enterprise, and the very real environmental concerns facing countries all over the world, it seems inevitable that business schools will begin to pay more attention to this vital issue. How quickly and energetically they integrate the topic into their courses is yet to be seen—but the market may help determine the pace. ■ z BizEd SEPTEMBER/OCTOBER 2002 41