Bottom of the (Indian) pyramid
In another treat for World Bankers at headquarters, management guru CK Prahalad gave an engaging lecture yesterday on "Democratizing Commerce". It included many of the same examples we've heard of private sector solutions to development problems, plus some that are new to this blog: Jaipur Foot, ICICI Bank and Narayana Hrudayalaya. He made what I took as a veiled dig at William Easterly when he said:
You cannot solve the problem [of poverty] with highly localized, small-scale experiments. If you can't touch the lives of hundreds of thousands of people, it doesn't matter.
Prahalad spoke at length about the scalability of these solutions and repeatedly emphasized that the examples above reach millions of people. Obviously, these are excellent and exciting stories of how the private sector can engage in profitable activities that enhance the very poor's qualify of life. Yet Prahalad is Indian and studies India, and all of the examples above are drawn from India.
For its population size alone, I'd argue that India is a special case. How do these solutions "scale" in Nicaragua or Laos or Moldova? With deep respect for Prahalad, I'd like to see more examples of bottom of the pyramid solutions in smaller developing countries. Surely we're interested in more than the Indian or Chinese or Brazilian pyramid.
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Christine -- thanks for reporting back from Prahalad's talk, which I was unable to attend. Sounds like the stock presentation. As to your question about bottom of the pyramid solutions in other countries, we maintain a database of "BOP Activities" over at NextBillion.net. It is searchable by country/region as well as activity type (e.g. water, education, financial services, business development). While we do have many Indian examples, there are others from Latin America, Asia, Eastern Europe, and Africa. Check it out here:
http://www.nextbillion.net/activitycapsule
Posted by: Rob | Oct 4, 2006 2:27:31 PM
Christine - I agree with you on the geographic limitations of the examples Prahalad focuses on. In order to scale up we need to create conditions for thousands of firms in different regions to find models that work at the BOP.
Prahalad emphasized connectivity and access to knowledge in his presentation and this strikes me as a potential problem for scalability - not in terms of technology but government reactions. India is a democracy, but I can immediately think of many regimes where spreading poor people's access to knowledge and communication tools would be perceieved as a threat - potentially increasing political as well as economic awareness. Even the title of Prahalad's thesis - "Democratizing Commerce" - must ring alarm bells from Harare to Astana.
Posted by: Michael Jarvis | Oct 12, 2006 6:13:28 PM
Great post - I am heading over to India in a few weeks to explore the Indian BoP model (incl. microfinance) regarding water and sanitation programs. One of my goals is precisely what you recommend: discover what is working best in India, and how it can be modified to be socially, financially and technically sustainable in other (smaller) developing countries. A Nicaraguan is no less susceptible to waterborne morbidity or mortality than a Rajasthani. I'll report back.
Posted by: John Oldfield | Oct 18, 2006 11:36:50 AM
Recently our Central Bank in India (i.e. The Reserve Bank of India )has become conscious of the fact of widespread Financial Exclusion among the Bottom of the Pyramid constituents and have taken steps to address this problem through moral suasion and regulatory interventions by asking the banks to start offering no-frills accounts to people whose banking needs are otherwise very simple but who nevertheless require ATM/DEBIT CARDS & e-Payment solutions at times.
Posted by: OM PRAKASH | Jan 10, 2007 8:14:59 AM
Please see fortune at the bottom of pyramid at www.indivelop.com
Regards,
Anand
Posted by: Jim | Nov 26, 2007 8:27:19 PM