Business for the Other Billions: Addressing human needs at the base of the economic pyramid

John S. Rosenberg in Harvard Magazine:

BillionImagine a simple triangle diagram of the planet’s population. A fortunate couple of billion upper-income people—in the United States and Canada, much of Europe, Japan, Australia, and prospering urban centers in parts of Asia and Latin America—occupy the apex. The invisible hand of market capitalism supplies this prominent minority with bountiful goods and services. But that leaves a lot of people out. At the very bottom of the pyramid, a billion or more humans live in poverty (on less than $1.25 per person per day), often depending on government programs and charitable aid to subsist.

In between, pointed out V. Kasturi (universally, “Kash”) Rangan, live the low- and low-middle-income majority of mankind: perhaps four billion people who are entering or are already in the cash economy—but barely, with incomes of up to $15 per day. In a conversation, he compared the lives of these people, the base of the pyramid, with those at the top. Because they likely do not own property, and lack rent or tax receipts, they are not bankable, so they turn to exploitative money lenders for credit to stock a shop or start a small business. For medical care, they choose among local healers, vendors of patent nostrums, or queues at public clinics (where it may take a bribe to advance in line). Their labor, often interrupted by those queues or long bus trips to remit cash to a rural family, may be seasonal, itinerant, and legally unprotected. Functioning markets, he noted, imply a level playing field between consumers and producers, but most of these people aren’t getting a remotely fair deal. It is as if the broad base of the pyramid were an alternate universe where familiar rules don’t apply.

More here.