Get to the ’bottom of the pyramid’
Monday, January 22, 2007
C K Prahalad can take credit for seminal ideas in business and management including core competence which he elucidated in a Harvard Business School article in 1990. His 1994 book Competing for the Future (with Gary Hamel) is also regarded as path-breaking. His latest breakthrough idea is on what he calls the fortune at the bottom of the pyramid.
Innovation, along with equitable distribution of wealth, was what you stressed on in your address (at the Pravasi Bhartiya Divas 2007) as the requirements for India to progress. How would you rate India in terms of innovation?
There are islands of excellence in India. All the examples I mentioned in my speech were Indian, whether it is Amul, which has organised a huge network of subsistence farmers, particularly women, into co-operatives, or ITC e-choupal, which now connects 2 million farmers in the country. Another case in point is Ferns & Petals, which has extended its supply chain to Karnataka.
You spoke of recontextualising social innovation. How can that be done and what roles can the government and industry play in this?
The last major social innovation was Satyagraha. It was focused on winning political freedom and it is 1920 vintage. In a global economy, with ubiquitous connectivity, and free flow of information, we need to rethink social innovations. The major social institutions that India has created is the wide-spread focus on self help groups. If not all across the country, in many parts of it, this institution provides the opportunity for developing inclusive capitalism where everyone can get the benefits of globalisation ? both as a micro consumer and as micro producer. Amul, ITC e-choupal, Project Shakti, Pratham and others are a manifestation of the opportunity we have for creating inclusive capitalism.
What can India teach the world in terms of innovation and what are the lessons from other emerging markets for India? Innovations in India, by definition, must conform to four key principles ? a new price-performance envelope (so the products and services are affordable to all), scalable (given the size of the country and the market), must be ecologically sustainable, and must represent world-class quality. Every time we can meet these innovation requirements ? ?the innovation sandbox? (the term I use) ? it is applicable to all India-like markets.
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(Thanks to NextBillion reader Nitin Rao for the pointer)