BOP Skeptics and Today’s News
Today has been a very interesting day in terms of BOP news and notes. First, I heard from Professor Aneel Karnani at the University of Michigan. Many remember his paper, “Mirage at the Bottom of the Pyramid,” and C.K. Prahalad’s subsequent response. Professor Karnani sent me a link to his latest working paper, a case study on Fair & Lovely Whitening Cream that continues his pointed criticism of the BOP hypothesis. We will have full coverage of the new paper here on NextBillion in the coming days; those interested are encouraged to download and read the paper in full before weighing in. A brief excerpt:
This paper shows that Fair & Lovely is indeed doing well; it is one of the more profitable brands in Unilever and HLL’s portfolios. It is, however, debatable whether it is doing good. We…demonstrate Fair & Lovely’s negative implications for public welfare. We conclude with thoughts on how to reconcile this divergence between private profits and public welfare.
Next, I was pointed to a new blog, Changing The Pyramid, which, according to the inaugural post, “was founded on the belief that there is not enough critical discussion of what ’the experts’ claim are the latest and greatest of policies, paradigms, and panaceas; and that only through a critical lens can the most effective solutions come to light.” So far, topics covered at Changing the Pyramid closely resemble the news and blog content here at NextBillion, but with a fresh, critical angle. Welcome to the small community of bloggers in this space, CtP; I look forward to hearing your views in the coming days and months. A more complete list of other BOP blogs and web sites can be found in our Blogroll.Finally, there’s some big BOP news out there – NextBillion alum Ethan Arpi pointed me to a story in The Atlantic (subscription required), The Ten-Cent Solution, which highlights the efficacy and pervasiveness of low-cost private schools for BOP pupils. That a low-income household would allocate scarce resources towards tuition instead of settling for a lower-quality public school does not surprise me, but James Tooley’s empirical research (discussed before at NextBillion) puts it in perspective.
Second, the GSMA announced today that it was partnering with major financial institutions to push mobile banking even further towards universal adoption. The pilot project brings together 19 major mobile phone companies, scores of local and regional banks, and Mastercard, which will serve as a hub for interactions between the telcos and the banks.
Finally, the Wall Street Journal (subscription required) has a front page story today about the growing microinsurance industry. The piece highlights efforts by AIG, Aviva, and others to break into BOP markets with low-cost policies. It highlights these large firms’ effective partnerships with local NGOs – a clear example of cocreation in action. Without the partnerships, it would be difficult if not impossible for these companies to assess risk and earn trust in local communities. An interesting article, and a sign of the times that the Journal’s editors chose to place it on Page 1.