The following is based on the article Bottom of the Pyramid as a Source of Breakthrough Innovations
In a world where four billion people live on less than $2 per day, there is a need for innovation that goes beyond just the adoption of a “blue sky” approach.
Because – let’s face it – the blue sky is barely visible for the bottom of the pyramid population living in places like rural India.
As economically deficient as many people are, a market does exist that can both better their lives, while creating an attractive business initiative.
Under-served population
The first step is recognizing the BOP – four billion under-served consumers – as a legitimate market consisting of micro-consumers, micro-producers, micro-investors, and innovators.
Recognizing the existing innovation taking place is also important. With BOP-led innovation projects like the biomass stove (a stove that increases the ease and efficiency with which people can cook) a market exists that merley needs to be utilized correctly.
What this stove does well is follow the 4 P’s of marketing:
- Creating an awareness of the product and service such that the BOP consumers and producers know what is available.
- Enabling access such that even consumers in remote locations are able to get access to products/services.
- Ensuring that the product or service is affordable.
- Focusing on availability, build trust and a loyal base at BOP.
Projects must not only follow these guidelines, but fit within a few more constraints.
The “Innovation Sandbox”
Like a sandbox with four sides, there are four constraints that a BOP-led innovation project must fit within.
- The project must be-
- Aspirational
- Meet global standards
- Be scalable
- Be affordable.
A balance must be established between global standards and local responsiveness, focusing on the development of an appropriate ecosystem – with the focus on the economy instead of the product – to enable a new business system to function.
The solution must also have a capacity for personalization built-in.
Defining the new middle class
By following the above guidelines, innovators will hopefully be able to answer tough questions like:
- How do we get access to rural markets at a low cost?
- What are the logistics challenges?
Answering these questions will help innovators stay afloat in a world that is making a major shift to the middle class.
It’s estimated that over 60 percent of the world population in 2020 will describe themselves as middle class with 60 percent of these 2.6 billion living in emerging markets.
Providing more products to the under-served BOP market can only facilitate this transition.
