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Getting into B-School - Fortune at the Bottom of the Pyramid (1581 views)

From:	girlykick	3/21/2005 11:49 am
To:	LBS_2004 unread	(31 of 53)

61871.31 in reply to 61871.24

I am working with the weavers, handloom artisans who are barely making 6 rupees an hour for backbreaking work (500ml of milk is 8 rupees). It is really interesting but frustrating at the same time. The problem is two fold; the weavers and related processes practitioners don't think of themselves as artisans, merely laborers, and secondly, even if they thought of themselves as artisans, they lack a way to access markets, hence they sell their product to middlemen making 600% to 700% profit on their work. But these artisans work long hours to make a subsistence existence, and hence, their specific art is dying (why would any logical person teach it to their kids and exile them to a barely subsistence lifestyle). My idea is that if they worked with companies like HP and Ebay to establish themselves. For a small fee, HP digital cameras could create digital portfolios (like the HP village photographer program), HP computers could be used to connect to the internet (I am using HP as an example, any company’s digital products could be used), Then take EBAY's model of connecting housewives with a consumer and create a way to access potential markets, both domestic (India) and export (high end fashion designers). But the idea is not perfect; there are issues, such as how do you create an entrepreneurial mindset in the mind of artisans, (they work 12 hours a day on this), and how can they achieve the capability to direct their own income, how do you introduce the concept of competitive business in a culture not used to it (India is into business, but at the lower socioeconomic sector it is not as viable as one thinks), and how to empower people but still stay within the cultural context of their day to day existence.

I have only been here two months, and only a month in my little town, so I am just now getting a handle on the situation, and even now, I realize that there are probably layers of the situation that I have yet to discover. And I am a tad disheartened, because there are so many other factors other than the business one that one can get overwhelmed, I think. But in spite of that, I think it is a real possibility; this is only one application, and I really think entire communities can be mobilized through microenterprise and small scale entrepreneur development. No one should overly romanticize the whole thing; I don’t think we can end poverty with this concept; anyone who thinks that is smoking something. But we can give a whole section of society the capability and OPPORTUNITY to make their lives better, something they might not have been given the way things are. At least in India, much like other developing countries, where who you know is 100 times more important than what is in your brain, the poor have very little chance of helping themselves and need something to push themselves out of the vicious cycle they are in.

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From:	prashant121	3/25/2005 1:11 am
To:	raychaur	(33 of 53)

61871.33 in reply to 61871.19

I would be really interested to know specifics of your experience. Have you actually worked on/with the e-choupal initiative.

I was working on a 4 month internship with an agri start up company . The company was in the seed potato space. They have a patented technology ( read horticulre process) which enables the seeds to be of high yiedling , low diesease prone and high quality variety. This company started with an Australian JV and eventually bought over the company. Its just 4 years old and is yet to make profits.

It employs local farmers in Punjan and UP through contract farming to supply and grow these seeds ( a buy back arrangement ) and enable thier production through agronomy support. These early generation seeds are then sold to companies like McCains,FritoLay's etc and also to farmers ( seed growers). They also supply tubers to various institutions. They have also had exports go to Pakistan and Srilanka.

My role with this company was to understand the dynamics of a start up organisation in the agri space, where the waiting period at times can be painfully long ( wheather and god being your best buddies ). I was also involved in the logistics operations setting the process and systems together. Being a start up company , these areas are at times overlooked. It was a phenomenal experience for me as I was interacting with some foriegn national agronomist,local scientists, farmers and uneducated villagers. Our team had 8 guys who had barely crossed thier 3'rd grade. Drawing a system that would involve people at the lower levels and also satisfy a Tech driven MNC was painful though eye opening experience. I also got to interact with farmers who were involved in the E-choupal initiative, though did not physcially see one. I have read a number of reports of thiers over the past few months and am able to appreciate thier work. Another project you would want to read about is 'SAFAL market'. An NDDB project that aims at providing consistent and high quality supply of fruits and vegetables. Though the project is there is parts of India, the main testing platform is in Karnataka. Visiting villages there was again an eye opener.

Being in the agri space for the past 4 months, I believe that there is a future for the BOP consumer. But to serve him the peseverence levels, emphasis on quality, value providing services in local langauges, and mindset would need to be given enough emphasis and importance.

Am currently drafting a document on contract farming , which I have to submit to a renowned scientist. Post my admit to Babson and ISB , I have been one helluva lazy guy and have not been able to get myself to work on it ......

Hope that throws some light on the work I was doing ........( though not a brief one :)

Seeya

Prashant

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From:	XENZZA	3/26/2005 2:17 am
To:	ARORDEN unread	(34 of 53)

61871.34 in reply to 61871.28

I think Prahalad does a good job in this book looking at cost benefit ratios of various anti-poverty programs and found that some of them the benefits vastly exceeded the costs.

For instance he estimate the benefits of AIDS prevention programs to be almost 40 times the costs. The other programs with very high benefit/cost ratio include malaria control and the provision of micronutrients (like vitamin A, zinc etc). Also trade liberalization which doesn't really have a cost since it usually benefits both sides.

As for Sachs, well I think he lost most of his credibility in the aftermath of the Cold War. He received all types of glowing publicity for his work then as the millions and billions were going into the pockets of organized crime, former government officials, and crony capitalists. I do not see where he has ever explained that tremendous failure of his applied theories and, barring a convincing explanation, would have a hard time trusting him with taxpayer dollars on a grand scale again.

$150 billion, even if the ideas were sound, would quickly turn into $200, 250, 375, 500 etc. It would be just like the war on poverty in global years - in the end there would be just as many people living in poverty...

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From:	Richard_Ivey	3/26/2005 8:49 am
To:	XENZZA unread	(35 of 53)

61871.35 in reply to 61871.34

Compare South Kore and Egypt.

In June of 1950 they were both peasant economies with about the same per capita GNP.

Then the Korean War happened. South Korea was, to put it shortly, completely destroyed. Millions dead, millions more homeless, the economic infrastructure completely destroyed. By some measures, South Korea suffered greater losses in just three years than Poland did in 5 and a half years of World War Two. In Egypt there were no big wars and no devastaion.

What happened in the next 50 years?

Well, let's see, Eqypt recieved more than $100 billion (current dollar values) of aid from the East and the West [true, much was military and not economic aid]. S. Korea recieved less than a 10th of that.

What do those countries look like now? Eqypt is still an impoverished (urbanized) peasant economy, while S. Korea is a first world nation.

I'm not saying that aid isn't useful, but culture matters much much more.

For a 1 country example - see India. For 40 years after independence India recieved (comparatively) massive aid to no discernable net effect. 15 years of entrepeneurship by the India diaspora and expats has brought about the first real economic improvement since the end of the Raj, lifting millions out of poverty.

Culture matters. Aid that can be diverted by corrupt officials will be, whether its by City governemnt of Chicago or the locals in what ever country you name.

Wanna help Africa this weekend? Hail cab driven by a African emigrant. Odds are that some of your fair will wind up back in Africa in the hands of the driver's extended family, doing something more revolutionary than Prahalad's programs ever will: not enriching corrupt local officials but starting small scale businesses and educating little girls.

Fortune at the Bottom of the Pyramid is a excellent way for wealthy doners to make conditions tangibly better for the world's poor. Prahalad's ideas will do more to help first world's private bankers and luxury retailers (where corruption-derived cash usually winds up) than they will do for the poor.

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From:	KELLOGGRULES	3/26/2005 1:21 pm
To:	Richard_Ivey	(36 of 53)

61871.36 in reply to 61871.35

Nonsense. India not receive massive amounts of aid at all. It did some receive some aid and a lot of it was used well. And the reference to the "first real economic improvement since the end of the Raj" is also incorrect. India did make major improvements even in the pre-liberalization era, ending famines (but not hunger).

And the economic liberalization in India has not necesarily impacted the great bulk of Indians. That was part of the reason the last government was voted out: the rural and urban poor had not benefited much.

I am a great supporter of India's economic liberalization, but it is only a partial substitude at best for well-directed anti-poverty programs.

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From:	GSB_2001	3/26/2005 4:35 pm
To:	ARORDEN unread	(37 of 53)

61871.37 in reply to 61871.28

The idea that international aid programs and international organizations are some kind of black hole of corruption of inefficiency is false.

Two enormous counter-examples which rank among the greatest achivements of the 20th century: the green revolution and the eradication of smallpox.

The first was pioneered by the Rockefeller foundation along with the Mexican agricultral ministry and spread throughout the developing world particularly the Indian sub-continent and saved the lives of tens or maybe hundreds of millions of people and enabled countries like India and Mexico to become self-sufficient in food.

The eradication of smallpox also saved the lives of tens of millions and was achieved in the 1960's 1970's mainly by the World Health Organization.

The world has made enormous progress in fighting hunger and disease in the past and there is no reason why we can't do the same in the future given the resources and will.

This isn't to say that we shouldn't attempt to tackle issues like corruption and poor government in the developing world. We should but these aren't an excuse for inaction or a reason for despair.

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From:	chicaghokie	3/26/2005 7:44 pm
To:	GSB_2001	(38 of 53)

61871.38 in reply to 61871.37

check this out... you might want to attend this conference if you have a chance...

- Attachments follow -

globalconffinal2.pdf
34KB

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From:	GASYU	3/26/2005 9:40 pm
To:	chicaghokie	(39 of 53)

61871.39 in reply to 61871.38

nice plug for hbs. let me guess, you'll be going there next year?

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From:	chicaghokie	3/26/2005 10:05 pm
To:	GASYU unread	(40 of 53)

61871.40 in reply to 61871.39

if i'm accepted this wednesday....sure i will :-)

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