Innovation in nations such as India, with low cost operations and high levels of poverty, can be ada
Monday, June 5, 2006
According to Prahalad, the secret to India’s corporate success is not just the low cost of labour. Instead, it is judicious use of capital investment, a hefty reliance on outsourcing, smart use of technology and creative cost-cutting practices – techniques which can be adapted to other parts of the world.
Named by BusinessWeek as ’the most influential thinker on business strategy today’, Prahalad points to the ’bottom of the pyramid’ as the foundation for future business success. The poorest people in the world, numbering 4 billion, could be worth up to $13.75 trillion annually when corporations understand how to tap their potential.
This market, he says, could be co-created by multinationals, NGOs and the poor themselves, who he believes will become the middle classes of tomorrow.
He claims that poor nations are incubating new business models and innovative uses of technology that will begin to transform entire global industries within the next decade, whether they are in the financial sector or telecom services, through to healthcare and engineering.