New Analysis Bolsters Poor As Source of Innovation 5/19/2004
From: Christopher Lagan of the World Resources Institute, 202-729-7684 or clagan@wri.org; Web: http://www.wri.org/wri WASHINGTON, May 19 -- Dr. Allen Hammond, vice president for innovation at the World Resources Institute, released new market research today supporting the controversial hypothesis that global poverty can be reduced by turning to the world's 4 billion poor people as consumers and partners of multinational corporations. "To date, the world's 4 billion poor people have been viewed as a passive population whose welfare is the province of governments or the object of charity by civil society," said Dr. Hammond. "These very same people represent a source of both innovation for business and sustainable enterprise as well as the largest untapped consumer market on the planet. They could very well be the solution for companies looking for growth and poor communities looking to end economic isolation and expand their opportunities." Hammond most recently advocated this idea along with University of Michigan business professor Dr. C.K. Prahalad in "Selling to the Poor," an article in the May/June 2004 issue of Foreign Policy magazine. The article included the first glimpse at the new structure of poverty data presented today. Hammond and his Digital Dividend team (http://www.digitaldividend.org) describe the "bottom of the pyramid" (BOP) as the 4 billion people in families earning less than $6,000 annually. In just 18 countries, the BOP market amounts to $1.7 trillion, roughly equivalent to the annual gross domestic product of Germany; worldwide it is significantly larger. "Business has all but turned a blind eye to the poor because of the assumption that they have no money," said Hammond. "Instead, global businesses continue to make the mistake of going after the 'upscale' consumer even though there are fewer of them in developing countries." The new market research released today is an in-depth analysis of the poverty structures of Brazil, China, India and South Africa. These countries are amongst the largest developing countries and are economic leaders in their respective regions of the world. Collectively, their BOP market share was estimated at $1.13 trillion in 2002. "The business opportunity at the bottom of the pyramid is enormous," said Dr. Hammond. "This analysis is proof that the markets exist and that the successful businesses of tomorrow will begin to explore ways to work within this market today." As part of its Digital Dividend project, WRI and its partners are documenting how businesses can tap these new opportunities with specific case studies of successful models in many sectors of the economy and many regions. To explore these opportunities, WRI will host a cutting-edge international conference bringing together leading corporations, social entrepreneurs and international agencies to explore business approaches to development. "Eradicating Poverty Through Profit: Making Business Work for the Poor" (http://povertyprofit.wri.org) will take place December 12-14, 2004 in San Francisco, Calif. "At the World Bank we are delighted to see the attention now being paid by businesses to working with the poor in developing countries. The developing world faces numerous challenges -- and many of these can be addressed though the concepts and practices that will be discussed at the conference," said Mohamed Muhsin, vice president of the Information Solutions Group and Chief Information Officer (CIO) at the World Bank. "By opening up new markets, focusing on 'making business work for the poor' we have the opportunity to realize the promise of the information age. Eradicating Poverty Through Profit has huge potential to really make a difference in people's lives." -- The World Resources Institute (http://www.wri.org/wri) is an environmental research and policy organization that creates solutions to protect the Earth and improve people's lives. |