Ever since management guru C.K. Prahalad first wrote on the fortune at the bottom of the pyramid, companies have spent a lot of seminar time exploring this idea. At the same time, critics have pointed out (with good reason, according to us) that the incomes of the poor have to increase before they can buy products that companies make for them. Production comes before consumption, in other words.
A new study by Harvard Business School shows how gaping the divide between hope and reality really is. The authors have estimated that only around 50 of the 63,000 multinationals have tried to reach out to the $5 trillion market at the bottom of the pyramid. There are two ways to look at this factoid. First, the global giants don’t get it, and this leaves the field open to smart and innovative companies from countries such as India. Second, there is no fortune out there. There is only poverty. Take your pick.