Information Design Trends

Tuesday, July 18, 2006

Bottom of the Pyramid

Week five’s video featuring Paul Braund focused on current global efforts to bridge the digital divide and included best practices for the implementation of ICT (Information Communication Technology) in developing countries.

In his lecture, Braund advocates human-centered research of end-users of technology to achieve sustainability. While addressing the topic of global digital opportunities, he referred to C. K. Prahalad’s concept of investment from “bottom of the pyramid” markets. Specifically, Prahalad contends that in order for developing nations to attain financial independence and sustainable growth, multinational corporations (MNCs) must view them as viable markets for products and services. If private investors and MNCs adopt a strategy of bringing the poor into the market, economic acceleration and infrastructure development will occur. In essence, Prahalad’s model centers on transitioning the poor into consumers of affordable, available and accessible goods and services provided by MNCs who offer products such as low-cost wireless networks and access devices.

According to Prahalad, if MNCs perceive bottom of the pyramid markets as potential business opportunities with competitive advantages and commit to investing in implementing ICT in these regions, several key benefits will emerge:

1. Reduction in the literacy gap

2. Decrease in infrastructure gaps in rural areas linking the informal economy to established markets and creating distribution channels

3. Promotion of e-commerce that reduces the need for intermediaries and provides transparency, thereby reducing corruption

See "What Works: Serving the Poor Profitably" by C. K. Prahalad.

Prahalad’s solution seems to benefit MNCs as much as people, but is it hopelessly optimistic? Is it realistic for MNCs to enter developing areas and accommodate varying incomes and technical requirements by shifting price, volume and distribution for their products? Further, although ICT can be a tremendous tool for enabling education and commerce, I wonder what the downside of such a paradigm would be and what standards would be in place to prevent the widespread exploitation of consumers from multinationals bent on generating profits first and sustainability second?

1 Comments:

  • Very best site. Keep working. Will return in the near future.
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    By Anonymous Anonymous, at 1:50 PM  

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