One of Paul Polak’s 3 Great Poverty Eradication Myths is that big businesses will end poverty. He argues that multinational corporations know very well how to make money by serving high income individuals, but they have no idea how to make a profit by providing affordable goods and services to the bottom of the economic pyramid. Those living in poverty, therefore, continue to be declined essential products and services while big businesses miss out on reaching 90% of the population on Earth. This presents a win-win situation to be had. But as long as big businesses don’t learn how to develop inclusive business models, nothing will change and poverty will remain.
Japan’s consumer products giant Unicharm Corporation is learning. The makers of female hygiene products and diapers pledge to bring affordable products to 36 million low-income women in the Middle East, North Africa, and Asia. This is the type of big business change that Polak had imagined when revealing the false assumptions to alleviate poverty. It is the notion that it is possible for business to create economic and social wealth responsibly and for all.
Unicharm’s expansion is part of the Business Call to Action (BCtA) global initiative to reduce poverty and promote sustainable development through inclusive business. Under this expansion, the company’s annual production of diapers and feminine napkins is expected to more than triple from 10 billion and 12 billion by the year 2020.
Localization is key to the project. Forty percent of Unicharm’s total hygiene products are expected to be manufactured and sold to low-income consumers in the region of expansion. This means the company will employ an additional 8,000 underemployed women throughout Egypt, India, Indonesia, Saudi Arabia, Thailand, and Vietnam, which will nearly double its female workforce in these countries. To put things into perspective, the company currently has over 10,000 employees.
“Through this initiative, we will expand our reach while alleviating poverty and supporting and empowering millions of women across the Middle East/North Africa and Asia,” Unicharm Corp. CEO Takahisa Takahara said in a statement. “We are delighted to contribute in this way to sustainable and inclusive development, and to further demonstrate that good business practices and good global citizenship complement each other.”
Unicharm is able to offer feminine napkins and diapers to low-income consumers previously unable to afford them by localizing production, streamlining manufacturing, and simplifying packaging. One of the other myths about eradicating poverty is that we can donate people out of poverty. Well we can’t. For starters, donations run the risk of drying up. This approach also assumes that people at the bottom of the economic pyramid are too poor to invest in their own future when in reality, money exists. Therefore, rather than relying on limited-time donations, solutions that combine stable income and radically affordable products and services are more effective in helping eliminate poverty.
“This is a great example of a company proactively contributing to the third Millennium Development Goal (MDG), promoting gender equality and empowering women,” BCtA Acting Program Manager Sahba Sobhani said. “By creating hygiene products that are affordable to the poor and employing women in areas where full-time jobs are scarce, Unicharm is both expanding its business and enhancing quality of life for women in the Middle East/North Africa and Asia.” In other words, they’re making money and doing good. And proving that these words can exist in the same sentence.
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