Think Bigg

Three years ago, University of Michigan strategy guru C.K. Prahalad proposed that multinational corporations could alleviate global poverty while boosting their bottom lines in his best-selling book, The Fortune at the Bottom of the Pyramid.

In an interview for Fast Company’s March issue, Prahalad gives an example:

FC: Can the poor–or even the “underserved”–really be a growth engine for companies?

Prahalad: Look at wireless. In India, wireless-communication companies are adding 5 million new subscribers per month. They expect, by 2010, to have 400 million subscribers connected wirelessly. If you’re Nokia, or Motorola, or Ericsson, and you don’t participate in that market, 50% of your future business is gone.

Though Prahalad’s critics have charged that the bottom of the pyramid (BOP) is smaller and less lucrative than Prahalad has claimed, a recent report by the IFC (the private sector arm of the World Bank Group) called “The Next 4 Billion” seems to back him up.

According to the World Resources Institute,

New empirical measures of their aggregate purchasing power and behavior as consumers suggest significant opportunities for market-based approaches to better meet their needs, increase their productivity and incomes, and empower their entry into the formal economy.

Drawing on income data from 110 countries and standardized expenditure data from 36 countries across the globe, The Next 4 Billion is an important first look at the market opportunity represented by four billion individuals who make up the BOP.

The sooner the developed world can bring the developing world into the club, the sooner they are regarded as an equally worthy recipient of all the necessities and all the luxuries the world has to offer, the sooner global poverty will become a hazy relic of the past.

Certainly charity has its place in the alleviation of global suffering. But long-term, finding ways to bring these people, these countries into the world marketplace will ensure that charity is no longer necessary.

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