Wednesday
January 2
2019

The New Fortune at the Bottom of the Pyramid

By Deepa Prahalad

Almost 20 years ago in a strategy+business article, my father, C.K. Prahalad, and his colleague Stuart L. Hart debuted a simple but radical idea. They argued that the 4 billion poor people around the world represented a vibrant consumer market, that this market could best be tapped with for-profit models, and that the poor themselves had to be partners in the process. This challenged many long-held assumptions about the role of both government and business in addressing poverty. At the time, their thinking (which had been rejected for four years by scholarly journals) invited polite skepticism at best. Much of the hesitation to engage with their ideas stemmed from a belief that uplifting the poor was the domain of government and nonprofits, or was simply too risky. Most businesses lacked the insight and cost structures to reach poor consumers. There was a persistent belief that needs such as shelter and nutrition had to be addressed before the poor could understand — and pay for — aspirational products and technology. Sadly, this pessimism was as common among elites in emerging markets as it was in the West.

Nevertheless, the idea of merging profit and purpose at what my father and Hart termed the bottom of the pyramid and that many now refer to as the base of the pyramid captured the imagination of both corporations and the development community. What began in strategy+business as a blueprint for what was possible grew into two editions of a book, The Fortune at the Bottom of the Pyramid, authored by my father, profiling companies and social-sector organizations that had created successful business initiatives in developing economies.

Photo courtesy of Chhor Sokunthea.

Source: strategy + business (link opens in a new window)

Tags
Base of the Pyramid, business, emerging economies, emerging markets, global development, poverty alleviation