The bottom of the pyramid is a term that is used when referring to those who live off, in a day, what most of us pay for a cold drink. These people pay for food, transport, housing and other living expenses with the amount of money that the middle to higher class won’t even bat an eyelid at. Most of us would believe that it is a phrase that was developed in recent times, with advancement in technology and the gap between the rich and the poor growing larger and larger, but it is a term that’s been around from before we inhabited the earth. Recent researchers on the topic suggests that those higher up the pyramid should stop looking at these poverty-stricken people with sympathy and as victim but instead recognize that they are harbouring a lot of untapped creativity. Aside from that, it is the largest socioeconomic group, which means that it is also the largest – maybe not most profitable – but definitely the largest market. It is encouraged that businesses work together with this demographic to develop businesses that provide a mutual benefit to both the income-poor community as well as the company itself.
The message one can take away from the video with Mr. Pralahad, is that the marriage of the people at the bottom of the pyramid with businesses, can help lessen that gap between the rich and the poor that seems to be increasing each and every day. Businesses, first and foremost, operate to make a profit, and by working with this large demographic, it allows the business to be opened up to a fairly larger market. This video highlights that the bottom of the pyramid can be seen as both a source of a new market as well as an opportunity for social transformation. Pralahad also brings our attention to the fact that allowing the poor to participate in a world that they previously would only dream of empowers them, and allows them to experience products and services of world class quality. Pralahad closes by highlighting that this way of thinking can introduce the idea of inclusive capitalism, and creating a world where one depends on another, a world that lives in peace.
The article on the growing business opportunities at the bottom of the pyramid aims to highlight the combined purchasing power that comes from this group. There are various programs aimed at specifically aiding this group to grow, by offering them opportunities that otherwise would be in other realm. This article highlights companies that target the bottom of the pyramid, offering them products and services at low rates, ranging from microloans to cell phones. Solid proof of the importance of tapping into this market is the fact that it is starting to infiltrate educational institutes. There are courses in business schools all over the world that specifically address the bottom of the pyramid concept, including our South African University of Stellenbosch. The idea is to get future leaders thinking not just about profits alone, but also about how they can help change the world, all the while making a profit. The importance of bringing this into our education is that in order for the leaders of tomorrow to make a difference, they seed needs to be planted early, in order to get them to start thinking about it.
The article on India’s development due to the cell phone, is a great example of the concepts discussed above. This article takes us on a journey to a country where the income gap could not be larger. It is country where you will find a slum next to a mansion. The rich are extremely rich and the poor are extremely poor. Or at least that’s what we’ve all heard. It seems that a device that is commonplace in first-world countries has the ability to change a life in India. The 2 people that this article discusses exemplify the concepts we have been discussing. People doing menial jobs and earning a pittance share their story on how owning a cell phone changed their lives, increased their income, and allowed them to grow. This article highlights the opportunity that telecom companies saw in the bottom of the pyramid and have become leaders in the world because of it.
The final article takes a more critical approach to the microlending concept. Recent research has shown no change in household spending. There has been no noticeable difference in the place a woman has in the household. There has been no discovered miracle that cures poverty. The article speaks of various situations in which people at the bottom of the pyramid take out a microloan and simply use it for other purposes, and not to start up a small business. They pay off existing debts, which could lead, researchers say, to an increase in their debt and inability to repay it. These researchers believe that the focus on microlending and its benefits – which they plan to debunk – discourages us from thinking of other means in which to rid poverty. They suggest investing in small and medium sized existing businesses in developing countries in order for them to employ more people from the bottom of the pyramid. They believe that the key to ridding poverty is not for more of these small startups to pop up, as developing countries are overflowing with them, but rather to provide people with steady salaries, and for this, they say, the key is small to medium sized businesses.
The articles that were read and the video that was watched undoubtedly give each of us a lot to think about. One can’t help but wonder what we can do to make a difference in the world, and how we think poverty can be reduced. Even within these articles, there is a mention of the role of education on developing future leaders, and getting us to think about how we can change the world, so too, I believe, is the key to bridging the income gap. Education and resources need to be pumped into the areas that house the bottom of the pyramid. Change needs to begin at the ground level, and the futures of these areas need to be made aware and have the seed planted in their minds that with education comes a better life. For example, the East Asian tigers, who invested a significant amount in research and development (which included education at a grass root level), have met, and are on their way to surpassing major economic players like America and the European Union.
The message one can take away from the video with Mr. Pralahad, is that the marriage of the people at the bottom of the pyramid with businesses, can help lessen that gap between the rich and the poor that seems to be increasing each and every day. Businesses, first and foremost, operate to make a profit, and by working with this large demographic, it allows the business to be opened up to a fairly larger market. This video highlights that the bottom of the pyramid can be seen as both a source of a new market as well as an opportunity for social transformation. Pralahad also brings our attention to the fact that allowing the poor to participate in a world that they previously would only dream of empowers them, and allows them to experience products and services of world class quality. Pralahad closes by highlighting that this way of thinking can introduce the idea of inclusive capitalism, and creating a world where one depends on another, a world that lives in peace.
The article on the growing business opportunities at the bottom of the pyramid aims to highlight the combined purchasing power that comes from this group. There are various programs aimed at specifically aiding this group to grow, by offering them opportunities that otherwise would be in other realm. This article highlights companies that target the bottom of the pyramid, offering them products and services at low rates, ranging from microloans to cell phones. Solid proof of the importance of tapping into this market is the fact that it is starting to infiltrate educational institutes. There are courses in business schools all over the world that specifically address the bottom of the pyramid concept, including our South African University of Stellenbosch. The idea is to get future leaders thinking not just about profits alone, but also about how they can help change the world, all the while making a profit. The importance of bringing this into our education is that in order for the leaders of tomorrow to make a difference, they seed needs to be planted early, in order to get them to start thinking about it.
The article on India’s development due to the cell phone, is a great example of the concepts discussed above. This article takes us on a journey to a country where the income gap could not be larger. It is country where you will find a slum next to a mansion. The rich are extremely rich and the poor are extremely poor. Or at least that’s what we’ve all heard. It seems that a device that is commonplace in first-world countries has the ability to change a life in India. The 2 people that this article discusses exemplify the concepts we have been discussing. People doing menial jobs and earning a pittance share their story on how owning a cell phone changed their lives, increased their income, and allowed them to grow. This article highlights the opportunity that telecom companies saw in the bottom of the pyramid and have become leaders in the world because of it.
The final article takes a more critical approach to the microlending concept. Recent research has shown no change in household spending. There has been no noticeable difference in the place a woman has in the household. There has been no discovered miracle that cures poverty. The article speaks of various situations in which people at the bottom of the pyramid take out a microloan and simply use it for other purposes, and not to start up a small business. They pay off existing debts, which could lead, researchers say, to an increase in their debt and inability to repay it. These researchers believe that the focus on microlending and its benefits – which they plan to debunk – discourages us from thinking of other means in which to rid poverty. They suggest investing in small and medium sized existing businesses in developing countries in order for them to employ more people from the bottom of the pyramid. They believe that the key to ridding poverty is not for more of these small startups to pop up, as developing countries are overflowing with them, but rather to provide people with steady salaries, and for this, they say, the key is small to medium sized businesses.
The articles that were read and the video that was watched undoubtedly give each of us a lot to think about. One can’t help but wonder what we can do to make a difference in the world, and how we think poverty can be reduced. Even within these articles, there is a mention of the role of education on developing future leaders, and getting us to think about how we can change the world, so too, I believe, is the key to bridging the income gap. Education and resources need to be pumped into the areas that house the bottom of the pyramid. Change needs to begin at the ground level, and the futures of these areas need to be made aware and have the seed planted in their minds that with education comes a better life. For example, the East Asian tigers, who invested a significant amount in research and development (which included education at a grass root level), have met, and are on their way to surpassing major economic players like America and the European Union.