There are some people who argue that the picture that Prahalad paints.
This idea that Prahalad talks about is too idealistic and it's not always possible.
Because there's lots of complications in markets like these.
But let's see what Prahalad says.
He says we had to stop thinking of the poor as victims right.
That they're not victims you can stop thinking of them as a burden on society or
economies.
But you start recognizing them as value-conscious consumers and
entrepreneurs themselves.
And if you start thinking in this new way,
you start changing your mindset on what this market is, there's a whole
possibility of opportunities that companies might have in front of them.
So what this means for
companies is that you start looking at the rest of the world as a market.
You start creating products that offer value,
that are not cutting costs, cutting costs but not cutting corners.
And being offered to these large markets.
So if you're able to do that, then companies can still make money.
But it can still provide lots of value to the countries in which they
are being sold.
So that idea is what Prahalad referred to as the bottom of the pyramid.
Which is, people who make the least amount of money but
have the same needs as people in the rest of the world.
So this idea of innovating and creating products, and solutions and services for
that group of the market is what, base of the pyramid,
or bottom of the pyramid, is all about.
One another example is, if you think of the area of prosthetics,
or what's referred to as artificial limbs, very often in places like,
places where there have been old wars, there are lots of landmines.
They often what can happen is, people get blown up, they loose their limbs and
buying prosthetics in many cases can be extremely expensive and
some of this prosthetics are extremely high-tech prosthetics.
So what you see in this photograph is really high-tech prosthetics,
those can be really expensive but what about creating artificial limbs for
a really low cost for large percentage of the population.
So there is a lot of work going on in this area of low cost prosthetics.
Where a really high tech prosthetic could be tens of thousands of dollars,
if not hundreds of thousands of dollars.
Depending upon the kind of materials that are used, and
the kind of capabilities that that artificial limb provides.
But if you want basic walking, if you just want people to be able to get around,
who do not have limbs or who have one limb that has been injured in some way, or
lost in some way, these kinds of innovations,
which are done at a frugal level, which are done with low cost materials.
But provide the value that people need that becomes a really wonderful way of
trying to change society in a positive way by providing products and
services that are of good value but at a low cost.
So to go on to non-product based solutions what we have seen so
far innovations in the product space.
There are some innovations that can happen in the service sector as well.
Now in this case what we see here is an example of a bank
in the country of Bangladesh called the Grameen Bank.
The word Gram means village, and so Grameen Bank is a bank
that was started by a gentleman whose name is CEO Muhammad Yunus.
Muhammad Yunus started this idea of a Grameen Bank and
what he said was, if we start providing very small amounts of loan,
very small amount of loan two families that are in need.
Extremely poor families we can start changing their lives dramatically.
So he started the Grameen bank and he actually won the Nobel Peace Prize for
his work in this space.
So Yunus and the bank were given the Nobel Prize for Peace.
And this idea of what's called microfinancing, microcredit, microloans,
where the term micro essentially refers to extremely small amounts of loan.
This could be something like $25 US.
Which, if you translate to Bangladeshi currency,
ended up being a significant amount of money.
95% of these loans are given to women and these women either start small
cottage industries or able to get some education or
somehow are able to use a small about of money to really make large change.
They don't have to have any collateral, so one of the problems of getting a loan from
a bank is that you have to demonstrate the fact that you can pay back.
A bank is not going to give you a loan unless you have collateral.
You have to show a house.
You have to show some steady income.
You have to show something that the bank says, yes, I can now accept
your application for loan because I can see that you can pay it back.
