Testing the limits of inclusive capitalism : a case study of the South Africa HP i-community

In the run-up to the Millennium Development Goals of 2015, the United Nations GlobalCompact and others are targeting major corporations to play an active leadership role inpromoting sustainable development. Increasingly, corporations are encouraged to do sowhile pursuing profit-making business opportunities yielding social good in developingcountries. Beyond corporate citizenship, the ideal of “inclusive capitalism” ispopularized by C.K. Prahalad, who evangelizes to corporations about the benefits ofmarketing to the untapped market opportunity offered by the 4 billion poor consumersthat make up the “Bottom of the Pyramid”. Hewlett Packard, under former CEOCarley Fiorina embraced this concept; and, supported by President Thabo Mbeki,launched a high profile project to test this proposition at the 2002 UN World Summit onSustainable Development in Johannesburg. Launched as a three year Public PrivatePartnership between Hewlett-Packard, the Limpopo Province and the MogalakwenaMunicipality, the project aimed at “creating breakthrough models of sustainabledevelopment, not altruism, at global replication, not local exclusivity”. Influenced by theauthor’s status as an IT industry insider in Africa, this narrative case study draws onprivileged access to sources. While a single case study cannot serve to validate ordiscredit a development model, it can effectively expose tensions and contradictionswithin a modelThe case examines what happened in the company’s search for these “breakthroughmodels” in South Africa, and reveals how the competing logics between business realitiesand development imperatives are not easily reconciled. Early language around theinclusive capitalism or BOP discourse emphasizing unlimited business opportunities andpoverty eradication through profits may set unrealistic expectations for businessexecutives.