I, like many others, was saddened to hear of the untimely passing away of Prof. C. K. Prahalad. His career spanned over three decades during which time he introduced several innovative business ideas that quickly became mainstream. He was one of the first to identify ‘core competencies’ of a business and relate it to a company’s competitive advantage. His next book introduced the concept of ‘co-creation’ where corporations engaged their customers in creating joint value. It influenced many of the approaches used by companies in the 2000s to get their customers to co-design products.
Perhaps his most widely influential work was his last book on “The Fortune at the Bottom of the Pyramid: Eradicating Poverty through profits”. In it he outlined his take on how corporations could profitably service the very large market that consists of the bottommost economic strata. While the affluent tip of the global economic pyramid consists of less than 100 million people who make over $20,000 a year, there are over 2 to 2.5 Billion people who live on less than $2 a day. Yet these markets at the bottom of the economic pyramid also have needs and wants. By properly designing products and delivery mechanisms to satisfy this segment of the consumer population, he showed how companies could make money while helping this social segment.
His Bottom of the Pyramid or BOP approach quickly caught on and today a range of multinationals are focused on creating solutions that are targeting this market segment. Examples of these include Hindustan Lever, Godrej and GE Healthcare. His philosophy that even the poorest segment had a real market need and were a viable market has helped redirect corporate strategies and will have significant impact across the globe.
CK Prahalad has been honored for his work around the world including most recently being awarded the Padma Bhushan, one of the highest civilian honors, by the Indian Government. The world will miss this strategic thinker but his legacy will continue to improve the quality of life for millions subsisting at the bottom of the pyramid.
You can read an earlier piece I wrote about his work on my blog at “Designing for the bottom of the pyramid”.
Posted in BOP, bottom of the pyramid, creative capitalism, India, Poverty, Social Ecosystem, Social Entrepreneur, social Innovation
Tagged BOP, CK Prahalad, India, international development, Poverty, Social Business, Social Ecosystem, Social Entrepreneur, social entrepreneurship, Social Impact, Sustainable ventures
In the fall of 2007, a group of young potential entrepreneurs attending the course on Development Entrepreneurship at MIT struggled with a problem facing over half the developing world. As developing economies grew and provided new jobs, the infrastructure to communicate and broadcast the potential opportunities for employment was unable to keep up. The influx of migrant workers into urbanized centers provided a rich pool of available talent but the mechanisms for disseminating job needs were still rooted in the 19th century. Print advertising and, in extreme cases, roving cars with loudspeakers, were used in a scattershot manner hoping to attract potential candidates to interview for jobs. Online advertising wasn’t an option in most developing countries where internet connectivity was sporadic. The transient nature of most migrant and casual laborers made getting to the target audience even more difficult. Continue reading →
Posted in bottom of the pyramid, Information Technology, Latin America, mobile technology, Social Business, Social Ecosystem, Social Entrepreneur, social Innovation
Tagged Assured Labor, BOP, cellphone, Claro, Development Entrepreneurship, Empleolisto!, Information Technology, Latin America, MIT 100K, MIT IDEAS, Mobile, mobile technology, Nicaragua, Social Business, Social Ecosystem, Social Entrepreneur, social entrepreneurship, Social Impact, Sustainable ventures
A good article that touches on some of the issues in my last post is a recent interview of Vijay Mahajan on the Credit Suisse website. In the interview Mr. Mahajan points out to some of the prerequisites for microfinance to pull people out of poverty. He also highlights the need to match investment growth in this sector to the available management capacity in order to avoid a bubble in the sector. Here are some extracts from his interview. Continue reading →
Posted in BOP, bottom of the pyramid, India, micro-finance, microfinance, Social Business, Social Ecosystem, Social Entrepreneur, social Innovation, sustainable development
Tagged BASIX, BOP, Credit Suisse, micro-finance, microcredit, microfinance, Social Business, social entrepreneurship, sustainable development, Vijay Mahajan
Last week I had the opportunity to attend a panel discussion at Continuum, the design consultancy based in Newton, Massachusetts, on “Building Leadership in the Microfinance Sector.” Moderated by Ed Milano from Continuum, the panel consisted of a cross functional team that was studying the issue of talent acquisition and management in the microfinance sector and consisted of Peg Ross, Director of the Human Capital Center at the Grameen Foundation; Lyndon Rego, Director of the Innovation Incubator at the Center for Creative Leadership; Lynn Pikholz, President of Shorecap Exchange; and Anna Muoio, Principal with the Social Innovation practice at Continuum.
The presentation and discussion centered around some very preliminary findings based on an initial field immersion trip and set the stage for more detailed field research to be conducted later this year. I have outlined some of the observations that were shared at the meeting and my personal observations and reactions to what I heard. Continue reading →
Posted in bottom of the pyramid, micro-finance, microfinance, Social Business, Social Ecosystem, Social Entrepreneur, social Innovation
Tagged BOP, Center for Creative Leadership, Continuum, Grameen Foundation, Human resources, micro-finance, microfinance, mid-level managers, Shorecap Exchange, Social Business, social Innovation, Social Investment, Sustainable ventures, talent, yunus
Jhonatan Rotberg, was sent to MIT by Telmex, one of Latin America’s largest telcos, and teaches NextLab where he tries to bring cellular technology to the other 90 percent of the world. One of the labs startups, CelEdu, offers cellphone-based games and quizzes to teach basic literacy skills in India. Ranjani Saigal from the TIE Social Entrepreneurs Group helped connect CelEdu students to Tara Aakshar. You can see some of their work in progress at the CelEdu site
A great article in the Boston Globe highlights the many ideas that have spun out of this lab. Some excerpts below – click here for the entire article.
In NextLab, Rotberg challenged students by asking, “Can you make a cellphone change the world?’’ And students have responded, creating nearly two dozen projects and three start-up ventures that have been working with communities in developing countries like India, Vietnam, and Mexico.
Dinube, a NextLab spinoff that was tested in Mexico last summer, provides payment services to people who don’t have access to traditional banks. “One of the powerful things about cellphones in Mexico is that there is a 75 percent penetration rate,’’ said Jonathan Hayes, a cofounder of Dinube. “But only 25 percent of the population has a bank account. So a cellphone-based system can fill a huge, important gap.’’
Posted in BOP, bottom of the pyramid, Information Technology, international development, mobile technology, Poverty, Rural Development, Social Business, Social Ecosystem, Social Entrepreneur, social Innovation
Tagged BOP, Education, Information Technology, Jhonatan Rotberg, MIT, mobile technology, NextLab, Poverty, Social Business, Social Ecosystem, Social Entrepreneur, Social Impact, social Innovation, Telmex