A guy called CK Prahalad has written a very cool book called The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits Botttom of the pyramid refers to the 4 billion people who live on less than $2 per day. Prahalad points out that these people have huge potential, both for themselves and also for private businesses. A reasonably good summary can be found here. He argues that it is not enough to simply apply traditional products to this grouping, rather new technologies are needed.
From the back cover: The world’s most exciting, fastest-growing new market? It’s where you least expect it: at the bottom of the pyramid. Collectively, the world’s billions of poor people have immense entrepreneurial capabilities and buying power. You can learn how to serve them and help millions of the world’s poorest people escape poverty.
An example of this are the telecommunications companies that thrived in Somalia as far back as 2004 without any form of central government, providing the “cheapest web access in Africa“. This is alive and well today despite the country continuing to be a ‘failed state’ following the invasion of the country at the beginning of the year by US-backed Ethiopia (to drive out the Muslim Sharia-court government which had formed after years of chaos). Cell-phones are now being used in innovative ways by poor people in Africa such as transfering money.
Some companies have already made great money out of the poor people of the world by the age old fundamental of bringing them what they need at a price they can afford.
Then there is Visionspring a global social enterprise which trains low-income men and women as “Vision Entrepreneurs” to start microfranchises that conduct vision screenings within local communities, sell affordable reading glasses, and refer those who require advanced eye care to reputable clinics.
The World Bank estimates that there is a $17 billion African market in off-grid lighting.
A company has tried to address this in India with solar lighting systems aimed at people surviving on less than $4 a day.
June 18, 2009 at 12:35 pm |
[...] Making a Profit at the Bottom of a Collapsing Pyramid While the global financial crisis arguably continues unabated it’s interesting to come across a story of a guy who’s acting on the idea of making a fortune from the bottom of the pyramid. [...]