Sunday, April 25, 2010

My introduction to Prahalad’s “Bottom of the Pyramid” idea: A student perspective

By Michelle Deidun.

A “bigger picture” way of thinking surfaced in my mind when we were discussing the “Serving the World’s Poor, Profitably” article by Prahalad and Hammond in a recent Strategic Management class as part of my final term coursework. In particular, the image of the economic pyramid and the discussion that followed really got me thinking. Seeing that the top section of the pyramid (those who make more than $20,000 per year) was so small, and the bottom section of the triangle (those who make less than $2,000 per year) was so enormous in comparison, really put the economic situation into perspective. Obviously, I was aware that there are a large number of people around the world who are poor, and many poor areas which are overpopulated, but seeing it visually on the pyramid, that 65% of the world’s population makes less than $2,000 each year really stuck with me. I then thought back to the previous class in which we discussed that although vast differences exist across borders, there are also many similarities, and I wondered, why then, I had heard of so few businesses that would utilize these similarities to make their business or ideas adaptable for the poorer populations.

An example that was brought up in the article involves Grameen Telecom’s village phones in Bangladesh. Although each individual may not have the financial means to own a telephone, people still need to communicate and are avid consumers of products that make connecting to others easier. The village phones are owned by one entrepreneur and used by the entire community, on a pay-per-use basis, better fitting into the means and habits of the surrounding population. This really emphasized to me that technology, although growing at different rates around the world, can be adapted in various forms to serve even the world’s poor population.

Another example of this that was brought up in class [as part of Prahalad’s video] was the use of coin operated computers that citizens could pay to use rather than incurring the costs of owning one. Although I had known about similar uses of technology, that lecture in particular made me realize that, from a business perspective, it is not wasteful to focus time and resources into such endeavours. Not only would you be tapping into un-served markets- a great business opportunity, but by serving the world’s poor you are improving standards of living in general.

Further, we also discussed the [Prahalad’s] example of elephants in India carrying electronic polling booths to remote regions of India that would not otherwise have access to voting booths. Also, the SMS message technology of using cell phones to make purchases, although it is starting to gain attention here in Canada, is already well used in other places. I learned from these examples that not only can technology from the top section of the pyramid be adapted for use in the lower section, but poorer countries are also significant sources of innovation on their own. This really made me think about the potential in these untapped markets if new developments were looked at from both an adaptive and innovative perspective, utilizing relevant technologies from wealthier areas of the world together with the innovative nature of those who must come up with creative ideas or do without altogether.

The phrase [by Prahalad] that had been shared during class “if you don’t imagine, you don’t know what’s possible” was really put into useful context for me throughout this discussion, and will likely stay with me while making decisions throughout my professional and personal life, especially if I feel like I’m at a point where I need a change. It is important, for both the advancement of society as well as personal growth and development, to really imagine what is possible, go in with a well-developed plan of how to make it work, and give your all to making it work. If you don’t try out new ideas, you won’t know if they could have worked out.
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*Michelle Deidun is a fourth-year student in the Bachelor of Commerce degree program at UOIT, Oshawa, Canada. She is specializing in Human Resources and has been volunteering with UOIT’s Career Services department throughout the past year. Upon graduation, she hopes to pursue a career in Human Resources.

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