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Bottom of the Pyramid Business Opportunities are Growing
Microfinance and merrygorounds that pump water...business education offers green alternatives.
According to C.K. Prahalad and Stuart Hart, both Aspen Institute Faculty Pioneer Award recipients, companies should not ignore traditionally overlooked people, collectively dubbed the “Bottom of the Pyramid,” because of their considerable combined purchasing power.
The latest report from the Aspen Institute finds that business school courses dealing with the "bottom of the pyramid" -- markets serving the world's poor -- are growing exponentially in business programs around the world.
The "Bottom of the Pyramid," or "Base of the Pyramid," is a term for the roughly 4 billion people who live on less than U.S.$3,000 per year. A recent study found that the BOP markets represent as much as $5 trillion in revenue, and offers a key to significant improvement in the quality of life for people in poor and developing countries.
PlayPumps, a water pump that is powered
The Aspen Institute's report cites three examples of the kinds of businesses that serve the bottom of the pyramid: 2006 Nobel Peace Prize recipient Muhammad Yunus's Grameen Bank, which offers microloans to entrepreneurs at affordable interest rates; PlayPumps, a water pump that is powered by children playing on a merry-go-round; and cell phone companies who are reaching out to sell cheap phones to remote villages.
by children playing on a merry-go-round;
Leimsider said these direct-business practices are a big part of BOP's draw for business students. "This is not about corporate philanthropy, or a side aspect of business practices," he said. " It's about how mainstream product marketing can make the world a better place."
The report highlights just a few of the programs that stand out from the respondents of the survey. One example is the Arizona-based Thunderbird School of Global Management's Global Strategic Management course, half of which is dedicated to addressing the challenges of managing businesses in emerging markets. Another is the University of Stellenbosch Business School in South Africa, which offers an elective course the examines the business challenges posed by globalization, environmental degradation and the gap between rich and poor, all in the context of the bottom of the pyramid concept, and offers ways to turn these obstacles into entrepreneurial opportunities.
The fact that these issues are taking hold in business schools is encouraging to the Aspen Institute's work, Leimsider said. "If business leaders are going to make a difference, then we need to approach them when they're in a formative state. The idea is to get these future leaders, when they're on campus, thinking about the world and their place in it." He said that the goal of the report, as well as the Beyond Grey Pinstripes alternative ranking, is not to convert all business students into microfinanciers, but rather to plant the seed, so that tomorrow's leaders have an awareness of bottom of the pyramid issues.
Another finding from the survey is that BOP is the subject of a vigorous debate at business schools. Leimsider said that not everyone is sold on whether marketing to the world's poor can make a difference in people's lives. But even the existence of the debate is encouragement enough, he said. "There are too many business schools where the presumption is that your job is just to make money for yourself and your shareholders. so whether or not BOP is a way to change the world or not, we think it's wonderful that the questions are being addressed."
The full report, which is part of the Aspen Institute's "A Closer Look at Business Education" series, is available to download from BeyondGreyPinstripes.org.
Edited by Carolyn Allen