Posted by: bevmeldrum | January 14, 2008

Eradicating Poverty Through Profits

I have recently finished reading C. K. Prahalad’s book “The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits.”

The introduction to the book explains that:

“The world’s most exciting, fastest-growing new market is where you least expect it: at the bottom of the pyramid. Collectively, the world’s billions of poor people have immense untapped buying power. They represent an enormous opportunity for companies who learn how to serve them. Not only can it be done, it is being done–very profitably. What’s more, companies aren’t just making money: by serving these markets, they’re helping millions of the world’s poorest people escape poverty.”

The book is full of examples of companies that are innovating effectively in this untapped market – one sells branded soap powder in small sachets that people can afford, another has introduced IT to the villages to improve the soya bean market, another provides a mixture of savings and credit facilities that enables women to build building materials to build extra rooms onto their houses. Others tackle issues of health, banking, food, communication and energy to name a few.

The book itself if quite hard-going at times, but purely because it so thorough and well-researched. For any social entrepreneur this book is a source of inspiration. This quote from the introduction echoes much of what we talk about in social entrepreneurship:

“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.”

The Bottom of the Pyramid only really focuses on the opportunities for mainstream businesses to create a profitable enterprise from tapping into this market. There was much about how to create a product that would sell, less about how the poor could develop new enterprises themselves.

As a social entrepreneur I would like to take this one step further and highlight all of the opportunities for social entrepreneurs to be even more effective than mainstream businesses could be in eradicating poverty through profits.

Of course we have had David Borstein’s “How to Change the World: Social Entrepreneurs and the Power of New Ideas” which was a real inspiration.

Also released soon is John Elkington and Pamela Hartigan’s “The Power of Unreasonable People: How Social Entrepreneurs Create Markets that Change the World” which I am really looking forward to. I’ve been promised a copy so as soon as I have read it I’ll post a review.

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