Fortune at the Bottom of the Pyramid by Prof. C. K. Prahalad; Wharton School Publishing; Price: Rs.499; 401 pp

Once upon a time in another avatar, I used to harbour a high opinion of Indian business and industry. One tended to sympathise with entrepreneurs and professional managers in the organised corporate and small-scale sectors of industry, struggling in hostile environments to squeeze out goods and services to sell in the marketplace. Selling — which necessarily means selling at a profit because it is necessary to continually reinvest in a business to keep it alive — was a bad word in the heyday of neta-babu socialism (1950-1990) when businessmen had to run the gauntlet of business-illiterate (and proud of it) politicians and bureaucrats on a daily basis. Nevertheless despite adverse conditions, the pioneers of Indian industry built a foundation for industrial and service (if not agriculture) sector growth.

But one regrets to say that post-liberalisation India’s me-too businessmen have hardly justified the sympathy they received during the bad old days of licence-permit raj. Indeed since 1991, as a class they have increasingly exhibited the ugly face of Indian capitalism to the long-suffering public, caught between a non-performing public sector and greedy businessmen indulging in an orgy of insensitive conspicuous consumption.

Barring a few notable exceptions, the leaders of corporate India have displayed neither the imagination nor acumen to grasp the proposition that the nation’s 700 million poor and disempowered citizens constitute one of the largest and most high-potential markets of the contemporary world. Instead after liberalisation, most of them have made a lemmings-like rush towards the saturated middle class market, completely ignoring the dormant majority at the bottom of the societal pyramid. Because doing so requires stretch of the imagination and genuine management capability.

That’s the essence of Fortune at the Bottom of the Pyramid, the worldwide bestseller authored by Prof. C. K. Prahalad, the business management guru of Indian origin who teaches at the University of Michigan Business School, which should be mandatory reading for every business entrepreneur, professional manager and academic. In this mind-expanding tome of insightful scholarship, Prahalad makes a convincing case that the largely ignored 4 billion people who constitute the world’s poor are not as poor as is generally believed, and that they constitute a huge market untapped by multinational corporations as much as by native businessmen in under-developed countries.

The refreshing starting point of this book is that unlike most development economists, the good professor believes that private enterprise or “large-scale entrepreneurship” — rather than government — is best qualified to profitably mine the undiscovered lodestone at the bottom of the global social pyramid. And by transforming them into valued customers, they could also restore the pride and dignity of the world’s poor.

“What if we mobilized the resources, scale, and scope of large firms to co-create solutions to the problems at the bottom of the pyramid (BOP), those 4 billion people who live on less than $ 2 per day? Why can’t we mobilize the commitment of NGOs and the communities that need help? Why can’t we co-create unique solutions? That was the beginning of my journey to understand and motivate large firms to imagine and act on their role in creating a just and humane society by collaborating effectively with other institutions,” writes Prahalad, explaining the motivation behind this earth-shattering work of reasoning and scholarship.

Refreshingly, Prahalad disputes the basic premise of conventional development economists, politicians and businessmen that the poor in under-developed countries are an unbankable proposition needing paternalism and charity, rather than the goods and services produced by business and industry. Yet the truth is that the poor are not as helpless as is commonly believed. For instance they are obliged to pay higher rates of interest, more for civic services such as water and electricity, and usually have to shell out large lump sum amounts to slum lords and corrupt policemen to be permitted to set up their shanties and dwellings in cities, and often in their native villages. The fact that despite these glaring inequities, the life span of the average Indian has increased from a mere 27 in 1947 to over 60 today, is proof that the poor and indigent have the resources and ingenuity to survive and given half a chance, to prosper.

Certainly it has been often argued in the editorial columns of EducationWorld that in the main, it’s poorly conceived and badly implemented government policies rather than divine dispensation which have multiplied the problems of post-independence India’s BOP population. Although there’s no denying that over half the population survives on pathetic incomes of less than $ 2 per day, a large proportion of India’s neglected poor are asset (land) rich. But they are disempowered from leveraging their land assets by corrupt government officials who routinely deny them property titles and artificially depress its value.

Moreover they are continuously being done in by rock-bottom government school education and health systems which disable them from rising out of poverty. If despite these crippling systemic disadvantages, India’s poor majority is showing some signs of prosperity and advancement, it is indicative of their ingenuity, survival skills and propensity to save. In these inestimable virtues, there’s profit to be mined by intelligent business leaders and professionals, says Prahalad.

Yet this outstanding work of scholarship isn’t a mere polemic. Prahalad supports his argument for MNCs and domestic industry majors reaching out and creating BOP customers, with deeply researched case histories which are worth their weight in gold. Every business professional, academic and student in higher education needs to study the success stories of Casas Bahia (Brazil), Cemex (Mexico), Annapurna Salt (India — Hindustan Lever), the Jaipur Foot, the Aravind Eye Care System, ICICI Bank’s finance innovations for the poor and ITC’s e-Choupal to learn to practise enlightened self-interest.

Fortune at the Bottom of the Pyramid is certain to persuade every reader that lifting the poor out of the numbing poverty which is this country’s misfortune, is by no means a mission impossible.

Dilip Thakore

Useful primer

Online Journalism — A Basic Text by Tapas Ray; Foundation Books; Price: Rs.250; 266 pp

With over 1.2 billion people surfing on the world wide web everyday, it is only a matter of time before news reporting and journalism also go online. Widely acknowledged as the future of the news media worldwide, online journalism is the most interactive news medium ever invented; that’s its USP (unique selling proposition). According to one school of thought as internet access prices fall, the decline of newspapers and television news media is inevitable. Youth, especially in technologically advanced countries, are increasingly ditching conventional news media and logging onto the world wide web to surf online news portals, because they want more than news. They want interactivity, to respond immediately.

According to a survey report of the Paris-based World Association of Newspapers (WAN), during 1995-2003 the annual circulation of print newspapers fell by 5 percent in America, 3 percent in Europe and 2 percent in Japan. According to WAN projections, if this decline continues, by the year 2040 daily newspapers will cease to exist in the print form. WAN also estimates that in the not too distant future, online operations of global news corporations will be more important than print.

In India the scenario is slightly different. Though the internet as a news medium is relatively new and untested, almost all major newspapers have started providing downloadable versions of newspapers. This is because conventional wisdom in the country is that journalism on the net is the same as in print, differing only in presentation. In short, online journalism is nascent — if not unknown — in India.

Against this backdrop of the growing popularity of the internet as the new news medium, Tapas Ray’s Online Journalism — A Basic Text, which introduces the internet to journalists and advises them on how to use it proficiently, is timely and welcome. The 12-chapter compendium introduces the reader to the mind-boggling possibilities of net journalism. Starting with the history of the net which took shape from ARPAnet in 1961-62 in the Massachussetts Institute of Technology and the Pentagon, this textbook morphs into a how-to manual covering web authoring and publishing, revenue generation within the law, ethics and a peek into the future as media converge and broadband access is universalised.

“In this book I discuss, among other things, what news organisations are doing in practice as against the things that can be accomplished with the internet, since this medium has unique characteristics that take it beyond the print and broadcast media in certain ways,” writes Ray, an electronics engineering graduate of IIT-Kharagpur who pressed on to acquire a Masters degree and doctorate in communications at Ohio University. Ray is currently the director of Umeschandra College, Kolkata and also visiting faculty at Jadavpur University.

For print journalists aspiring to go online, the most interesting chapters are ‘Annotative Reporting and Open-source Journalism’, and ‘Computer Assisted Journalism or Reeporting (CAJ/ CAR)’. In these chapters Ray details ways and means to use the net as an effective medium of communication for the mass media. Likewise the chapter titled ‘Preparing Online Packages’ will prove useful for journalists who wish to plan, code, write programs and design their own webpages with the objective of broadening their readership base.

The chapter titled ‘Revenue, Ethics and Law’ is a must-read for all those who are currently managing online news sites as also those who want to promote new ones. Ray discusses in detail the various subscription revenue models of news publications such as the Albuqurque Journal, Business 2.0, Winnipeg, and the Times, London. In terms of advertising revenue, the author predicts that by the year 2007, 4.4 percent of all global advertising revenue will be generated from online space sales. The book also provides an overview of advertising and marketing techniques being successfully used to generate all important revenue.

Summing up, Online Journalism is recommended reading for media entrepreneurs, traditional media publishers anxious to get onto the internet as also for journalists aspiring to careers in web publishing enterprises which are recording a 22 percent rate of annual growth.

Srinidhi Raghavendra