By Rebecca Busse
In C.K. Pralahad’s 2004 book “The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits,” Pralahad writes about what he sees as the most exciting growth market: the “bottom of the pyramid,” or the billions of poor people in developing countries. Far from being a “poverty pimp,” Pralahad posits that developing world ingenuity and resourcefulness can make for profitable and co-beneficial partnerships with the developed world. (Ed Note: C. K. Pralahad passed away on Monday).
As part of a Service Learning Trip with the Portland-based NGO Green Empowerment, business students from Presidio Graduate School saw firsthand how the “bottom of the pyramid” is increasingly turning toward alternative solutions for community development–and the opportunities those solutions can bring for developed world businesses. In many cases, developing in the traditional way (using national grid electricity or land line telephones) is simply not practical, so many developing countries are turning to off-grid electricity and cell phone technology because it is cheaper and easier to implement in rural areas. It’s not uncommon to see a Nicaraguan cowboy on horseback miles from a paved road chatting on his cell phone, or a solar array atop a rural house made of mud and corrugated metal.
Green Empowerment leads students on trips with organizations like AsoFénix around the world. The purpose is twofold: immerse students in the realities of day-to-day developing country economics, and attract revenue for AsoFénix’s programs. AsoFénix’s mission involves working closely with communities to find out what those communities want and need–and it helps them develop by initiating renewable energy, potable water, and business development programs. Part of the reason these projects have been so successful in Nicaragua is that the emphasis is on endogenous development: indentifying leadership potential within the community, cultivating it by training technicians and requiring that technicians teach their newly-learned skills in other communities to perpetuate the model.
NGOs like AsoFénix are tapping into community potential and helping local citizens to develop communities in a way that works for them. When asked what they wanted most in rural communities, villagers responded that electricity and easy access to water were at the top of the list. Without electricity, families must pay to use kerosene, which has negative health effects. Without access to clean water or power to pump it, much of the day is spent in the pursuit of this precious resource.
People often make the mistake of thinking that developing country markets are not worth pursuing because of the amount of abject poverty. However, even most of the desperately poor pay for food and electricity. Multiply the few dollars each pays per month by the several billion people living below the poverty level, and you have a pretty big market for renewable energy technologies. Bad news for Big Oil and Gas; good news for renewable energy companies looking for business in emerging markets.
Rebecca Busse is a current MBA student at Presidio Graduate School, where she serves as Co-Chair of the International Sustainability Club and also the PresidioSocial Committee. She is particularly passionate about how international development and poverty alleviation can be good for the environment. For a video interpretation of her Green Empowerment trip to Nicaragua, click here.