What is BoP in "arre BoP re!!" all about?

I thought it would behoove me to begin by defining BoP from the perspective of this weblog. The term has been kicked around a lot over the past few years; no wonder then, the term BoP means largely different things to different people. Theoretically speaking, it refers to the 4-5 billion-odd people across the world living on less than $2 a day. However, there has always been a bottom to the so-called economic pyramid. It is quite possible that the Pareto principle was as much applicable to the distribution of wealth even during the period when barter system was prevalent, long before the invention of currency, as it is in today's era. Moreover, the need for creating large-scale social change at the BoP has not been a recent realization. Various charitable organizations, non-profits and philanthropic foundations have been tackling a host of issues at this very base throughout the 19th and the 20th centuries. Irrespective of the framework adopted, it would be highly egregious to claim that these organizations haven't significantly impacted the lives of those at the BoP.

Then, why this buzz surrounding the term "bottom of the pyramid" all of a sudden? We'll need to go back 16 years to figure that out. In 1995, CK Prahlad [considered to be amongst the greatest management thinkers of our time] had thrown open a challenge to himself - "What are we doing about the poorest people in the world? … Why can't we mobilize the investment capacity of large firms with the knowledge and commitment of NGOs and the communities that need help? Why can't we co create new solutions?" After trying to answer these questions in a couple of working papers , which were considered to be too radical to be published in the journals back then, he came out with "The Fortune at the Bottom of the Pyramid: Eradicating Poverty through Profits" in 2004. While many grew furious at the concept of extracting money of the already thin wallets of the underserved and the unserved, Prahlad was of the opinion that poor seek dignity and not dependence. This dignity, he believed, could be achieved by developing market based solutions around the poverty alleviation programs which would in-turn bring those at the BoP into the formal economy. The task, therefore, was to convert poor into consumers through market development. In no time, BoP was a multi-billion dollar market opportunity instead of the lowermost tier in the economic pyramid.

This framework has considerably evolved over the last decade. Although the core principle of developing market based solutions has remained intact, the role played by those at the BoP has evolved from customers to producers and now to co-creators. At the same time, there are are those who have critiqued the work of CK Prahlad, stating that the market at the BoP is nothing more than a mere mirage. Without getting into that discussion for the moment, I'd like to point out that Prahlad's work revovled around getting the private sector excited about the prospects of serving the unserved. However, the core principle of leveraging the sustainability of for-profit models to create large-scale impact has also been adopted by the so called social entrepreneurs. Alongside large scale multi-nationals, which are trying to create a dent in BoP landscape, grew an army of changemakers who are combining technological innovation with business acumen to achieve the same end. A number of incubators, impact investors and consultants have emerged to support these entrepreners and their ventures. Today, various for-profit models - social enterprises, social businesses, inclusive businesses - have sprouted at the confluence of business and social impact.

To sum it all up - there exists a plethora of potential solutions for improving the lives of those at the BoP. Nonetheless, I personally believe that the BoP is too complex for one solution to achieve universal goals. Eventually, the smarter ideas will survive the test of time and the weaker ones will go into the textbooks as lessons learnt. "arre BoP re" is not inclined to any one particular school of thought. Rather than concentrating on the market potential at BoP, "arre BoP re" concentrates on ideas which show the promise to create change. To me, Jeffrey Sach's Millenium village project, Bill Drayton's Changemakers project, Government of India's NREGA project and Unilever's Shakti project are all worth pursing as long as the project shows the potential to make a difference.

Because at the end of the day, it's this change created that counts!!