THE BOTTOM OF THE PYRAMID : FORTUNE TO BE MADE SOCIALLY AND ECONOMICALLY

Late Professor C.K.Prahlad , one of the greatest Marketing Gurus in his book " The fortune at the Bottom of the Pyramid " popularized the idea of the LARGE MARKET available at the LOWEST VALUE END of the market .

The bottom of the pyramid, bottom of the wealth pyramid or the bottom of the income pyramid is the largest, but poorest socio-economic group. In global terms, this is the 2.7 billion people who live on less than $2.50 a day which means an economy of USD 2500 Billion and a GDP per Capita of USD 912 Dollars

In terms of overall GDP as against 2.7 billion people it is equivalent to the economy of France which has a population of 66.8 Million people only ,

And GDP per Capita it is equivalent to African Economies like Tanzania , Senegal , Zimbabwe , Chad and Mali and the biggest difference is that of imagining everyone living in the poor colonies of these countries with no access to clean water , sanitation , electricity 24 hours , Food in Calories terms as per requirement , Education , Health and other basics.

But if we look at it from the perspective of inequality it is the defining social, political and economic phenomenon of our time. Just 1% of the world’s population now holds over 35% of all private wealth, more than the bottom 95% combined.

Bad as this may seem, trends suggest that the situation will only get worse. Addressing it will involve multiple strategies working together, but one which is less well understood is how simple, affordable solutions to people’s problems can make a genuine difference from the bottom up.

Inequality is no more a problem of only developing economy anymore and is spreading in developed economies also.

Inequality is also a problem that exists on both the demand and supply sides of the economy

Large numbers of people are excluded from the fruits of the economic process as they lack access to basic healthcare, education, nutritious food, and clean energy. This is largely an emerging world problem, but it is also increasingly a problem in the developed world.

On the other hand large numbers of people are excluded from the economic process because they are shut out of employment in high-value-adding industries which rely heavily on skills and technology. This is largely a problem in the developed world where globalization and tech have hollowed out manufacturing, but it is a problem in some developing countries too.

In my views it is not going to get solved by creating jobs for them by Government sector or Large Private sector Companies as it would not be sustainable in the long term.

Rather it would need small companies with disruptive innovative ideas which would not only provide basic unfulfilled demands at much lower prices but also create jobs .

This is already happening in many parts of the world by the Start-up Eco System and many companies like AMAZON , FACEBOOK , TWITTER , SNAPDEAL , ALIBABA are all part of this Eco-system which have now grown into large corporations and they now support their own employees and new budding entrepreneurs to start new enterprises.

The biggest benefit is the AGILITY & FRUGALITY with which these companies can start their operation and be useful to the BOTTOM OF THE PYRAMID .

There are large SOCIAL SECTOR specific funds which invest in these types of sectors and industries .

Few examples worth mentioning

In India, such solutions in healthcare are bringing free or highly affordable services to large numbers of people in areas as diverse as cataract and heart surgery and prosthetics. Across the country, Devi Shetty has applied medical and management principles to reduce the cost of heart surgery to $1,200 while maintaining global quality standards. He wants to get the price down to $800.

In Africa, an earlier telecoms revolution is now driving a second generation of frugal solutions in key sectors such as financial services. M-Pesa, an SMS-based service that enables unbanked people to send and receive money though their mobile phones, has empowered over 25m Kenyans (many of whom have small businesses) to improve productivity and gain access to revenue-generating opportunities. Such mobile based payments are in turn driving affordable market solutions in areas such as solar lighting for those living beyond the reach of the electricity grid.

Similar frugal solutions in clean cook stoves, medical devices, transport, pharmaceuticals, sanitation, and consumer electronics are positioned to drive growth in Asia and Africa over the next few decades, helping to raise millions out of absolute poverty in the process.

Frugal innovations for social causes

Bringing light to darkness: This simple Solar Bottle Bulb designed by MIT students from plastic water bottles, clean water and bleach is lighting thousands of homes in Philippines.
N Das Jethwani of Darjeeling has invented a tubelight consisting of a tubelight frame without any choke or starter. It is capable of using 80% fused tubes which are considered waste and are usually thrown away.
Martin Riddiford and Jim Reeves, two London based designers, have come up with Gravity Light, a simple device charged by a bag that is filled with approximately 9 kg of material and hung from a cord below the light. As the bag descends, a series of gears inside the device translates this weight into energy, providing 30 minutes of light.
Alternate energy resources: Mehtar Hussain and Mustaq Ahemad have developed a drag type, low-cost, low-height wind mill for lifting ground water and can pump water from a depth of about 50-feetMaking water more accessible: In Japan, the social enterprise Nippon Basic has developed the Cycloclean– a bicycle that purifies water. Designers use pedal pressure to force water through a carbon filter, pumping up to six litres a minute.
.Use of mobile tech: M-PESA is a service that enables people to save, spend, transfer money using their cell phones without having a bank account.
Making use of waste: Swedish People has developed the Peepoo bag, a portable low-cost latrine. The bags are safe for burial underground, and within 2-4 weeks, their contents are converted into fertilizer.
EcoFaeBrick turns cattle waste into bricks that are greener, stronger and 20 percent lighter than regular clay bricks. The Indonesian organization was set up in early 2009 to tackle the problem of excessive waste in local farming areas.
Los Reciclados is an orchestra of 25 children from Cateura performing everything from Beethoven to Beatles in concerts around Central and South America, using Violins, cellos, saxophones and drums handmade from trash like empty cans, cello frames, etc.

Child healthcare: Dr. S.R. Daga, formerly a paediatrician in Mumbai has developed a low-cost incubator  from polystyrene boxes for preventing hypothermia among babies.

At $200 each, the Embrace baby warmer is a far cheaper alternative to expensive incubators for use in rural hospitals. The reusable sleeping bag-style warmer can maintain infants’ body temperature by using phase-change wax that stays around 37 degrees Celsius for up to 6 hours.

And Professor C.K.Prahlad who had lot of admirers like me and few opponents is also getting proven right  once again that there is indeed a FORTUNE TO BE MADE AT THE BOTTOM OF THE PYRAMID both SOCIALLY & ECONOMICALLY