The fortune at the bottom of the pyramid
March 15, 2009
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I read on the March edition of Fast Company an article about the way in which innovation works nowadays. It seems that the traditional model of developing new products is starting to change: Innovative products tend now to take shape on emerging first and then work they way to developed countries .
This is why Nokia is looking to use Kenya to debut Mosoko, a free classifieds service (a kind of mobile-phone version of Craigslist); why Danone launched Ecopack, a low-cost yogurt line in France, out of the lessons from operating in Bangladesh and why Western banks are seeking ideas from India’s ICICI when its average deposits are one-tenth of those in the West.
The article mentions a report led by McKinsey&Co. These are the main ideas:
- Developing markets have low-cost, high-quality workers who can both create and execute great ideas.
- These markets have hard-to-reach consumers who force companies to come up with new ways to serve them
- Emerging-market consumers don’t want Western retreads but their own unique products and services, some of which may also appeal to Westerners.
- There are suppliers in developing markets who are rapidly accessing developed markets.
Source: McKinsey & Co.
When I read this article, I automatically thought about the book The fortune at the bottom of the Pyramid. The author of this book, Prahalad, challenges readers to re-evaluate their preconceived notions about the business opportunities in serving the relatively poor nations of the world.
My experiences in developing countries- mainly Bolivia, Peru, Senegal and India- showed me that the only way to improve the world is thinking about this people and change the way rich countries have been interacting with them. We should promote micro finace programs to help them start up business, do investments in their communities, share our know-how with them... And we need to invest money not as a charitable act but as an actual profitable investment and a real engine of jobs and services for the poor.