Technology: A Key to BoP Success?

Submitted by Nitin Rao on March 4, 2008 - 15:46.
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What do Aravind Eye Care, d.light design, Ekgaon Technologies, ITC's e-Choupal, and the much awaited Tata Nano have in common?

New market segments?
Radically new paradigms?
Technology?

As the BoP discussion moves from whether-to-invest to where-to-invest, there is an increasing need to measure the impact of new ventures. I see a strong correlation between Successful Models and Technology.

  1. One reason for this could be that by definition, addressing the needs of the base of the pyramid requires fundamental rethinking. Downsizing current models cannot yield this change, but technological innovation provides a solution.
  2. Leading technology universities such as Stanford and MIT have seen an increased demand for courses that tie technology with social entrepreneurship. For instance, Prof. James Patell's course, Design for Extreme Affordability, has been a launching pad for innovative startups such as d.light & Cosmos Ignite. MIT's Legatum Center for Development & Entrepreneurship promises to be a hub for social entrepreneurs driving bottom-up innovation.
  3. In social business plan competitions, innovators often turn to Social RoI to strengthen their proposals. Technology-backed plans here bridge the gap in numbers, make for a more compelling economic proposition and face shorter gestation periods.
As Neerja Raman, Senior Research Fellow at Stanford University writes:
I think the world ought to sit up and take notice. These are early indicators of a change in the making. An important change; a great change: where lower cost comes from reducing non-essential features in product design not from using older, cheaper technology developed for a market with completely different economic drivers. For years technology has been associated with “expensive”, “complicated” and most importantly “irrelevant” for the poor or people living on less than $2/day. This is a red herring. Give them food, give them medicines and ah yes give them education; but technology? Yes technology - the best and latest technology; the kind developed for the market that represents the next billion.

Continuing with the Indian context, I used Acumen Fund's India Portfolio (as listed on their website) as a sample set to study the use and impact of technology. I was not at all surprised to find that at least 6 of their 9 investments were the direct result of technological innovation. These are:

These examples point to a strong correlation between technology and success in BoP markets.

This trend should increase over the years as a new breed of socially conscious talent designs improved and cost-effective technologies specifically aimed at the needs of the poorest citizens.


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I wholeheartedly
Submitted by Christine on March 5, 2008 - 13:02.
I wholeheartedly believe that technology is essential to the success in BoP markets. We will not be able to fix the problems we have with the same technologies that we used to create the problems. Creating new products and developing new methods with technology is the answer. I recently read about SC Johnson's BoP efforts in Kenya. As you said, BoP efforts require rethinking and, often, downsizing. SC Johnson switched their focus from the traditional business focus on people at the top of the pyramid to BoP. This change involved switching from a high margin/low volume strategy to a low margin/high volume strategy. This method did require rethinking, but as can be seen by SC Johnson's continous growth, did not require downsizing. SC Johnson's BoP Protocol involves three phases, the third of which is creating the enterprise. However, SC Johnson knows that understanding the culture and networking are essential to success, which is why they perform these two tasks before actually creating the enterprise. SC Johnson has also embraced the idea of educating people in BoP markets. This task involves using technology to explain and fix problems occuring in the developing countries.
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Miles to go before BoP sleep
Submitted by Debashish Bramha on April 1, 2008 - 06:14.
It just the tip of the Iceberg, BoP has really changed the thought process of the business organizations. But enpowing the poor with the light of education ,good health has become a mandatory factor in present polarized world ie Human Capital Index. We are at the cross road of Capitalism and socialistic economy, it is ultimately the people who are going to benifit. Distribution of wealth is not so easy, empowering the poor is not so easy, and it is easier said than done. But obviously there is a light at the end of the tunnel. Regards, Debashish Brahma. http://debashishbramha.blogspot.com Calcutta. India
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