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Vol. 16, No. 3, Summer 2005
Nirmal Sethia, Professor and Director, California State Polytechnic University, Pomona
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In this article, Nirmal Sethia, a professor of management and director of the Center for Business and Design in the College of Business Administration at California State Polytechnic University, in Pomona, calls our attention to what he calls "a pressing business responsibility that is a significant new business opportunity." The opportunity he refers to is what he calls "the Bottom of the Pyramid (BoP)-almost four billion people, or nearly two-thirds of humanity, who live at the bottom of the economic pyramid, with a vast majority of them struggling to survive on less than two dollars a day."
Established global markets, which basically comprise the top and the middle tiers of the economic pyramid, are reaching saturation levels in many product and service categories. In contrast, writes Sethia, "the BoP space not only offers vast, untapped markets that also happen to be legacy-free in terms of entrenched technologies and brands, but also offers a fertile ground for low-risk experiments and radical innovations."
There are other reasons business enterprises should consider looking more closely at this untapped market. One is the growing antiglobalization movement and the fact that a significant amount of the world population has come to view the corporate world with distrust and cynicism. Business enterprises will, Sethia believes, "increasingly face both practical and moral problems if they do not become involved in helping improve the quality of life at the BoP."
The challenge here is not so much the poverty of the people in the BoP, but the environment in which they live, which tends to lack traditional utilities, such as electricity, water, and gas. Communications and transportation structures are also very weak. It goes without saying that waste disposal is a problem. Most BoP communities are fragile ecologically, so products need to be very eco-efficient and eco-friendly.
But herein lies an opportunity. As Sethia writes, "The technologies used in BoP products and services should be inexpensive, simple, and well-developed to be bug-free. But achieving these conditions may require the most cutting-edge technologies, or even new inventions, to meet the unique mix of requirements while overcoming a wide variety of hurdles." Take, for example, mobile phones, which overcame the hurdle of the lack of traditional phone service, and which are now practically ubiquitous in the third world. Solar power is another interesting case. It may not have made much headway in the top and middle-tier markets, but many BoP communities use it, since alternatives are unavailable or unaffordable.
Here is a clear opportunity for companies to "do well by doing good," and perhaps develop some amazing new technologies in the process.
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