Emerging Markets: Where Sustainability Is Simply Good Business

Speakers

• Paul Ellingstad, Director of Global Health, HP’s Office of Global Social Innovation
• Tracey Noe, Senior Director, Global Citizenship and Policy, Abbott Laboratories
• Mark Little, Director, Pharmaceuticals & Biotechnology Practice, Advisory Services, BSR (Moderator)

Highlights

• Entering emerging markets requires a clear understanding of the local context and robust local engagement—you can’t “plug and play” solutions for either products or philanthropy, as every market is different.
• Innovation is flowing both ways from and to emerging markets—companies that recognize this and adapt will be most successful.
• Partnerships—with government, civil society, consumers, and service providers—are absolutely critical to short-term success and long-term sustainability.

Memorable Quotes

“Our early infant HIV diagnosis program in Kenya started out as a typical philanthropic venture, but in process of doing it, we showed the government what HP’s capabilities are, and now they view HP as a solutions provider.” —Paul Ellingstad, HP

“To succeed in emerging markets, you have to really understand the specific consumer demands, patient demands, health care-provider demands within each mini market, as well as the social and environmental impacts and opportunities surrounding the defined target beneficiaries and/or consumers.” —Tracey Noe, Abbott Laboratories

“When trying to reach populations that have previously been underserved, we see a loss of follow up. For example, [we only see] a person who travels a day and a half for health care on foot once per year. We have to close that follow-up gap by making the services easier for them to access.” —Tracey Noe, Abbott Laboratories

“We have to recognize that we don’t have all of the answers nor a monopoly on expertise, but rather, we are part of a bigger ecosystem and need to embrace the change to remain relevant and an active participant in emerging markets.” —Paul Ellingstad, HP

Overview

Little opened the session by asking each company to introduce their current business activities in emerging markets, and how they are supporting that business with CSR practices. Ellingstad explained HP’s global work in the health sector, which focuses on providing ICT solutions for transactions between patients and providers. The company’s work in this area is being accelerated in emerging markets, he explained, because they are skipping a lot of steps with regard to health-provision innovation. Noe introduced Abbott as a global health care company developing and distributing pharmaceuticals, medical devices, and nutritional products. A challenge in emerging markets that has driven a lot of their CSR activity, she explained, is the limited capacity of local populations and systems, which has spurred investments in education and training of health care workers and patients in most emerging markets that Abbott enters.

Following their introductions, Little asked about the business case for social investments in emerging markets. Ellingstad shared details about HP’s early infant diagnosis program in Kenya, which is a partnership with the Ministry of Health and the Clinton Health Access Initiative. Through this program, HP developed databases and information-transfer systems via mobile devices to encourage treatment by improving the speed of diagnostic results delivery. This program, he explained, led the government in Kenya, as well as other countries in the region, to see HP as a solutions provider for building better health care systems. He emphasized the importance of making sure solutions meet the local needs, since relevant solutions are far more likely to lead to commercial opportunities down the road.

Next, Noe spoke about the business opportunities in product creation to meet local needs. For example, she announced a new partnership with international health nonprofit PATH to enhance the fortification of rice in India. This new process may be integrated into the Indian governments’ national food-distribution programs. She emphasized the importance of both external partnerships and local employee involvement in making products and programs locally relevant and thus more successful from both social and business perspectives.

The panelists then discussed their approaches to base-of-the-pyramid countries, and how these approaches might differ from more developed markets. Both panelists emphasized the importance of taking a needs-based approach, starting with a situational analysis in order to ensure relevance. Noe emphasized that the right resources to do this may be inside your own company or in partner organizations.

Little asked panelists to share challenges and lessons learned. Both panelists emphasized the importance of setting expectations internally, particularly around time frames and impact measurements. Ellingstad said recognizing and communicating things beyond the company’s control is crucially important, and he continued, “You have to be ready for things to not go as planned.” Finally, Ellingstad said that partnering with government is absolutely critical— without this, sustainability and commercial viability are limited. Noe again emphasized the importance of training and building the need for training into timing and budget expectations. Noe also pointed out that rigorous stakeholder engagement and supply chain management practices are critically important in emerging markets, and that they need to take a collaborative, mentoring approach rather than relying on a checklist. Little agreed, and said that communicating those practices at the local level is also important to make sure that local populations are aware not only of products but also practices, as this will help build trust.

Finally, Little asked the panelists to describe, five years down the line, their aspirations for making operations in emerging markets stronger and more responsible. Ellingstad pointed out that transparency, citizenship, and innovation are increasingly being defined in emerging markets themselves, so nimble adaptation and collaboration is required to ensure that responsible business is also locally relevant. Noe emphasized the need to integrate sustainability more effectively into core operations and throughout global operations, and particularly to encourage day-to-day business decision-makers in both developed and emerging markets to look at the spectrum of social and environmental issues surrounding the products they design. Also, Noe encouraged attendees to consider the end of a product’s lifecycle early on during the design phase.

During the Q&A session, one participant asked a question around the ability of Western businesses to remain relevant as emerging-market companies become more innovative. Ellingstad agreed, and said HP is approaching this issue by collaborating with the change agents in emerging markets, and changing the company’s business model where needed. Recognizing and actively participating in the “bigger ecosystem” of innovation allows companies like HP to be an active participant in emerging markets, he said. Noe also emphasized the importance of developing local partnerships to remain relevant on a global scale. She provided an example of a program with the Drugs for Neglected Diseases initiative to reexamine existing R&D materials for new applications. She also emphasized the importance of looking inward to the experts and innovators who are working for your company around the world.