CK Prahalad and the pyramids
CK Prahalad’s book “The Fortune at the Bottom of the Pyramid” (Order from Amazon ) has been attracting widespread attention. For one thing, it is a business book bestseller for 2004. Favourable reviews have come from leading financial journals, as the publisher’s blurb states:
Mr. Prahalad has compiled an array of insightful, detailed material about selling profitably to the developing world. This is where the achievement of his book lies. It takes verve and chutzpah to make a “win-win” on this scale not sound far-fetched.
--The Financial Times,
The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits is essentially a rallying cry for big business to put serving the world's 5 billion or so poorest people at the heart of their profit-making strategies. It has already been praised by everyone from Bill Gates—“a blueprint for fighting poverty"—to a former American secretary of state, Madeleine Albright—“if you are looking for fresh thinking about emerging markets, your search is ended.
--The Economist,
I, too, welcome Prof Prahalad’s book. It is about harnessing the undeniable power of market forces to the processes of social upliftment. However, if the BOP theme is not to become known crudely as a “Let them drink Coke” or similar (e.g. use Unilever shampoo) type of approach to Multi National Corporation marketing to poor consumers, it is essential that the broader context is considered. The broader context is about making markets that work, not just individual shining star firms, even though the power of demonstration from those may be necessary to make a market where there was none. Prahalad gives this issue some attention in the book, in the Chapter about what he calls Transactions Governance Capacity. This chapter is a useful extension of the earlier and cruder de Soto ‘dead capital’ thesis, which holds that capitalism depends on people being able to have formal, alienable title to assets (such as land or housing) which can be sold, pledged and encumbered. The state has a vital role in ensuring that markets are robust, sustainable and contribute to societal development. This is where the Making Markets Work approach of DFID and others is so important.
