Innovation at the bottom of the pyramid

A country’s greatest concern is how it will bridge the gap between the poor and the rich. First world countries spend millions of dollars to put in place support structures for the less fortunate in their societies. These are inadequate in most cases, and passable at the very best. This begs the question — if these programs are in such dire straits in the first world, then what can we expect for the newly industrialized countries in the imminent future?

While the second wave of Industrialization has been a boon for countries like India, Brazil and China, their leaders have failed to address the ever progressing gap between the rich and the poor. The stark rural-urban disjoint, is evident particularly when the benefits of technology and modernization fail to reach the poor, creating a feeling of disenchantment within the youth.

Governments are always under pressure to address this disparity, and in India the government has launched an ambitious project called the National Rural Employment Bill (NREGB). This scheme guarantees every rural household 100 days of labor at minimum wage. It will initially be granted to 200 of the poorest districts — to be extended to all the 600 districts in the country within five years. This scheme was devised by Belgian economist, Jean Dreze, who is currently with the Delhi School of Economics. While grandoise, the scheme has its fair share of disbelievers – and rightly so. There are genuine concerns that the huge cost of the scheme might not be affordable for the country and could lead to a sharp rise in both interest rates and the nation’s ficial deficit. It must also be noted that the Indian National Congress Party and its predecessors have a history of launching schemes riddled with corruption that have siphoned off millions from the National treasury with little or no progress to show … case and point – Garibi Hatao Scheme under Indira Gandhi.

A more plausible solution would come from the Industry. Thinkers like Professor C.K. Prahlad (author of The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits) talk about hidden opportunities that lie at the bottom of the pyramid – indicating people below the poverty line. Prahlad believes that philanthropy is not the way to get rid of poverty and that there is a need to enable the world’s poor to get them out of their poor economic state. He also talks about the role of MNCs, in identifying markets, which lie at the bottom of the pyramid. If a combined effort is made, we might be able to realise his dream to eradicate poverty.

Due to their extremely limited resources, every purchase has to be balanced against the most basic daily needs of food, clothing, clean water, and medicines. Professor Prahlad points out, “If we stop thinking of the poor as victims or as a burden and start recognizing them as resilient and creative entrepreneurs and value-conscious consumers, a whole new world of opportunity will open up.”