Fortune At The Bottom Of The Pyramid: A Mirage Essay

10727 WordsFeb 24, 201143 Pages
Fortune at the Bottom of the Pyramid: A Mirage How the private sector can help alleviate poverty Aneel Karnani Stephen M. Ross School of Business at the University of Michigan E-mail: akarnani@umich.edu April 2007 This paper will be published in the California Management Review, Summer 2007. This paper can be downloaded without charge from the Social Sciences Research Network Electronic Paper Collection: http://ssrn.com/abstract=914518 __________________ I thank my friends Gautam Ahuja, Gunter Dufey, Pierre Dussauge, Sendil Ethiraj, Rob Kazanjian, Linda Lim, my wife, Felicia Karnani, and two anonymous reviewers for their constructive comments that improved the logic and smoothed the rough edges of earlier versions of the paper, and absolve them of any responsibility for the views presented here. UNIVERSITY OF MICHIGAN Fortune at the Bottom of the Pyramid: A Mirage How the private sector can help alleviate poverty Abstract The popular ‘bottom of the pyramid’ (BOP) proposition argues that large companies can make a fortune by selling to poor people and simultaneously help eradicate poverty. While a few market opportunities do exist, the market at the BOP is generally too small monetarily to be very profitable for most multinationals. At the same time, the private sector can play a key role in poverty alleviation by viewing the poor as producers, and emphasize buying from them, rather than selling to them. 2 Widespread poverty is an economic, social, political and moral problem. Eradicating, or at least alleviating, poverty is an urgent challenge. For many decades, various institutions have tried to address this challenge: local governments, developed country governments, international organizations (such as the World Bank and the United Nations), aid foundations and non-governmental organizations. So far, the intellectual discourse has

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