Introduction to The Fortune at the Bottom of the Pyramid, Revised and Updated 5th Anniversary Edition
- Introduction to The Fortune at the Bottom of the Pyramid, Revised and Updated 5th Anniversary Edition
- The Role of the Private Sector
- Who and What Is the Bottom of the Pyramid? What Have We Learned?
- Bottom of the Pyramid as a Business Opportunity
- Key Lessons from Experiments
- Business and the New Social Compact
- Democratizing Commerce: The Challenge for the 21st Century
New Introduction: Private Sector and Poverty: Progress During 2004-2009
Five years is not a long time to evaluate the diffusion of an idea; much less its impact on the ground. It has been less than five years since the book The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits was published. The first article on the subject appeared in 2002.1 At the time, the proposition that the private sector had a critical role to play in alleviating global poverty was generally met with skepticism. The idea that they could have the greatest impact through creating profitable businesses serving the 5 billion people who represented the “invisible, unserved market” was even more radical. I am profoundly grateful for the people in government, nongovernmental organizations, and large corporations who were willing to listen and experiment. The poor, of course, have long been hungry for change. Their enthusiasm and insights have been a huge inspiration to me.
We are a long way from solving the problem of global poverty. But I find reason to be optimistic that the conditions for creating significant and sustainable change are emerging rapidly. First, the idea that the private sector can and should be involved in creating market-based solutions for the world’s poorest consumers is gaining credibility. The market success of some multinationals that have taken up the challenge has created momentum. Respected business leaders such as Bill Gates championing the cause of creative capitalism has also contributed to a shift in perception.
Second, actively engaging with consumers in Bottom of the Pyramid markets has resonated with consumers in developed markets as well. The attitudes of the general public have begun to shift away from direct aid to an exchange of ideas and capital. For as little as $25, anyone can evaluate business plans and extend micro loans to Bottom of the Pyramid entrepreneurs through Kiva.org. A few clicks on Novica.com grants access to a network of traditional crafts and artisans, and purchases are accompanied with a note from the artist. Cell phones are a part of the lives of the rich and poor alike. Today, citizens are engaging with each other in ways that would have been difficult to imagine even a few years ago. As a result, awareness of the conditions and nuances of the Bottom of the Pyramid is increasing. This has translated for the push for companies to help in uplifting the Bottom of the Pyramid from civil society, governments, and nongovernmental organizations.
Support—or pressure—for companies to be involved in the Bottom of the Pyramid will not create sustainable growth. The original inspiration for this book—eradicating poverty through profits—seems more tangible today than it did five years ago. There is evidence today that the innovations in the Bottom of the Pyramid can and have produced profitable business, and consumers in these markets have shown that they are as savvy and demanding as those anywhere else. Through my work with the United Nations Development Commission and large multinationals, the most encouraging lesson in this journey has not been in just the validation of the business model originally put forth. Far more significant is the emergence of the Bottom of the Pyramid as a platform for global innovation in some cases; a development which has important implications.
In this introduction to the 2009 edition of this book, I briefly assess the impact of the idea and include the perspectives of executives who have led major initiatives in Bottom of the Pyramid markets. I also address some of the emerging questions regarding Bottom of the Pyramid markets. There are five major themes I talk about explicitly:
How has the role of the private sector evolved in poverty alleviation?
What have large firms, including multinationals, learned as they actively pursue nontraditional opportunities in the Bottom of the Pyramid markets?
What are the key lessons for developing these market opportunities?
Are these markets forcing a “new social compact” for business?
What are the emerging “rules of engagement” that should inform our approach to Bottom of the Pyramid markets?