Idea in Brief

The Problem

Poverty reaches far beyond emerging markets. In the European Union alone, almost 120 million people—nearly 25% of the population—are deemed at risk of poverty or social exclusion.

The Current Approach

Corporations usually try to meet the needs of poorer consumers with low-cost, low-price offers while still making a profit. They have improved access to many products and services, but a substantial number of consumers are still largely excluded.

The Solution

In France, the not-for-profit Action Tank is experimenting with an alternative: the social business model. It differs in a number of ways from traditional low-cost models—beginning with the fact that its primary goal is to solve social problems for customers.

Poverty is not just an emerging-market problem. In the United States more than 45 million people, or 15% of the population, are officially poor, according to the Census Bureau. What’s more, this percentage has increased every year but one (2006) since the 21st century began. At 16%, Japan is doing no better. And in the European Union almost 120 million people—one in every four—are classified as at risk of poverty or social exclusion.

A version of this article appeared in the March 2015 issue of Harvard Business Review.