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Continued from previous page
Connecting to the Poor
Technological advances, particularly in
computing and communicating, seem
to be taking place almost entirely in the
developed world. Granted, India and
some of the Caribbean islands are providing
the staffing for sophisticated call
centers and India notably has a thriving
software development industry. But
the employees of those enterprises are
mostly well-educated and come from
the middle-class or affluent segments of
their populations. The inhabitants of
urban slums and rural villages have not
been targeted as a market for technologically
sophisticated products or services.
Yet when technology has been made
available to them, Prahalad has found
residents of the bottom of the pyramid to be readily accepting
of technology. In Bangladesh, women entrepreneurs with
cell phones do a brisk business renting out the phone by
the minute to other villagers. Indeed, Prahalad finds in the
spread of wireless devices proof of the size and viability of the
market at the bottom of the pyramid. By the end of 2003,
for example, China had an installed base of 250 million cell
phones. The market for wireless devices in India stood at
about 30 million installations and was growing at the rate of
1.5 million handsets per month.
Where connectivity exists it is resulting in major efficiencies
in traditional occupations. Within three months of the
installation of personal computers in some Indian villages the
farmers there were making decisions about planting based
on futures prices being quoted on the Chicago Board of
Trade. In Kerala, India, satellite-based images of fish shoals
are downloaded on village PCs and read and interpreted by
women who then direct their husbands where to fish. The
husbands, after a day of fishing, use their cell phones to
check prices at various ports along the coast to obtain the
highest bid for their catch.
To Prahalad, all these examples are evidence that there are
market solutions to the problem of poverty. The task that he
sets out for multinational corporations is to break out of the
dominant logic that views the world's poor as a distraction
to be aided by governments and non-profit organizations.
Involvement in markets at the bottom of the pyramid will
challenge many of the assumptions that managers of large
companies have developed over the years, ranging from packaging
and pricing to marketing and distribution. The result
of such efforts will not only be profitable, both for the large
companies as well as the consumers, but it might also contribute
solutions to the serious political and environmental
problems confronting the developed world.
To purchase this book or learn more about Wharton
School Publishing, visit www.whartonsp.com.
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