Google is a company that believes deeply in entrepreneurship. And this is a company that believes deeply in the power of information. We don’t think there’s another organization that combines these two things in a more compelling way than Ashoka.
Hybrid Value Chain
Transforming Markets to Generate Sustainable Social Change by Reducing Poverty and Unlocking Wealth
Large scale solutions to poverty are needed. Competitive market systems and innovative distribution channels are required to effectively deliver necessary products and services to low income clients. These products, such as improved housing, rural technologies, and health insurance, allow low-income populations to improve their livelihoods and quality of life.
Hybrid Value Chains are business models for commercial partnerships between businesses and citizen sector organizations that leverage the critical strengths of each actor to transform markets and meet these critical needs through market access.
Capitalizing on Business Social Convergence
In the last three decades, a large number of citizen sector organizations (CSOs) have emerged to create positive social change. Social entrepreneurs have been at the forefront of developing practical innovations to empower low-income populations as consumers, producers and wealth creators. While the citizen sector is becoming increasingly competitive, pioneering companies have also understood that being socially and environmentally conscious can make business sense. This changing landscape is an opportunity to instill a critical mind-shift within businesses and CSOs to foster business-social convergence and create value for all.
In the last three decades, a large number of citizen sector organizations (CSOs) have emerged to create positive social change. Social entrepreneurs have been at the forefront of developing practical innovations to empower low-income populations as consumers, producers and wealth creators. While the citizen sector is becoming increasingly competitive, pioneering companies have also understood that being socially and environmentally conscious can make business sense. This changing landscape is an opportunity to instill a critical mind-shift within businesses and CSOs to foster business-social convergence and create value for all.
The Opportunity to Create Profit and Social Change
Over 4 billion people around the world live in poverty, surviving on less than $2 USD a day. Collectively, they spend over $4 trillion USD annually on essential products and services such as food, energy, housing, health, and water. Due to market failures and limited options, they generally purchase more expensive, lower quality products through the informal markets than are purchased by middle income consumers in formal markets.
Over 4 billion people around the world live in poverty, surviving on less than $2 USD a day. Collectively, they spend over $4 trillion USD annually on essential products and services such as food, energy, housing, health, and water. Due to market failures and limited options, they generally purchase more expensive, lower quality products through the informal markets than are purchased by middle income consumers in formal markets.
By jointly transforming low income markets, businesses and citizen sector organizations generate profits for the social impact they create.
The Hybrid Value Chain Model
Hybrid Value Chain (HVC) is a business model that leverages the capabilities of the business and citizen sectors to enable the delivery of needed goods and services to low-income populations in a more cost-effective way. Companies tap into new markets and expand their client base. CSOs increase their impact by generating new revenue sources for their programs and expanding their service range to beneficiaries. Additionally, low-income populations improve their livelihoods as their basic human needs are met and new economic opportunities arise.
Hybrid Value Chain (HVC) is a business model that leverages the capabilities of the business and citizen sectors to enable the delivery of needed goods and services to low-income populations in a more cost-effective way. Companies tap into new markets and expand their client base. CSOs increase their impact by generating new revenue sources for their programs and expanding their service range to beneficiaries. Additionally, low-income populations improve their livelihoods as their basic human needs are met and new economic opportunities arise.
The HVC model is most relevant for essential goods and services that represent a significant investment for low-income populations and that typically require complementary services to develop markets and maximize customer value. Its implementation implies new roles and practices for businesses and CSOs.
The Impact
The HVC model goes beyond philanthropy and corporate social responsibility. By leveraging the core assets of CSOs and businesses, HVC partnerships are breaking the inefficient paradigms that separate the two sectors.
The HVC model goes beyond philanthropy and corporate social responsibility. By leveraging the core assets of CSOs and businesses, HVC partnerships are breaking the inefficient paradigms that separate the two sectors.
Hybrid Value Chains enable a world in which CSOs and businesses collaborate, compete, and learn to serve low-income markets with new business models so that all individuals benefit from products and services delivered by the formal economy in a way that improves their lives.
Hybrid Value Chain Examples
To demonstrate the effectiveness of the HVC model, Ashoka is applying the concept to transform three high-impact industries in a variety of locations. Additionally, through partnerships with select leading companies such as ICICI bank, Ashoka is incubating a series of pipeline initiatives that show significant potential to develop into Hybrid Value Chains.
To demonstrate the effectiveness of the HVC model, Ashoka is applying the concept to transform three high-impact industries in a variety of locations. Additionally, through partnerships with select leading companies such as ICICI bank, Ashoka is incubating a series of pipeline initiatives that show significant potential to develop into Hybrid Value Chains.