Pahalad, Hammond - Serving the World's Poor Profitably
Helping people and making money?
Pahalad, Hammond - Serving the World's Poor Profitably
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» Pahalad, Hammond - Serving the World's Poor Profitably
Perhaps there is a distinction between serving the world's poor and exploiting the world's poor, profitably. From a business standpoint, being able to use the largest base of the world population to make money would undoubtedly be ideal because the collective purchasing power from these people is great. However, from an ethical standpoint, this type of entrepreneurial work should have the people in mind; should phone companies really exploit the poor to use a larger fraction of their income to pay phone bills? I would disagree. What I would rather see is some type of entrepreneur work that can bridge the gap in purchasing power parity, perhaps by promoting community development in technology and in education.
Anyway, what struck me is the fact that even in the poorest regions of the world, there is a possibility of mobilizing economic and physical resources to help these regions become part of the global market. Last week, I went to a talk on the health disparities in terms of efforts devoted to treating diseases. Major resources are currently being applied to the major infectious diseases of the developed nations such as HIV, but much less resources are being used to help find cures or treatments for common diseases that affect developing nations, especially when those nations have a much larger population who is affected. However, there are organizations emerging nowadays that help to increase awareness of these lesser cared for diseases. Sometimes, certain cheap generic drugs are able to be distributed to the poorer countries. At that point, I realized that if there are any other cheap, generic drugs for combating the diseases of the developing world, then the infrastructure would already be there. Thus, it seems to be that even in health, the "market" is already present, but it would require an innovator, perhaps, to ascertain the needs of the people and address these needs in a financially-savvy manner.
I think basic services like telephone, water, electricity, etc. are much better when private firms go and lay down the infrastructure and charge for the service. It's much better than letting the government do it, they can't even pave the roads. Anyway, private companies will provide these necessities and provide them in good quality. Even if it takes out a significant portion from the people's pockets, these services will improve their living conditions, better their health conditions and thus reduce the cost of health treatment in the long run. It will also improve their earning potentials. of course it is best to have the more innovative companies go and provide their services that bridges the gap in purchasing power, but i think most of these developing areas lack foreign investment period, and having firms go there, no matter what they are and compete for the people's money might be a good thing for these regions. the most important thing is to find a convincing argument to attract firms to enter this market, i think Pahalad's article did a good job, but i think more examples would be more convincing, but i guess there aren't not too many examples for him to work on.
maybe we can do something like ashoka, but instead of looking for social entrepreneurs around the world, we look for companies that are making good money in developing markets so we can make a convincing argument for existing big firms to venture in these markets…i dunno what i'm talking about..haha
I was a little skeptical of this reading. Or maybe I just didn't like the tone. But I felt like it was mostly a bunch of wishful thinking. Is the reason the poor are underserved really because smart multinational corporations just haven't figured out yet that poor people can be served profitably? Or is because poor people CAN'T be served profitably by traditional businesses that look to maximize profit margins and shareholder revenue? (Unless your idea of serving people, profitably, is .00001 cent margins on candy for the poor?)
And I think the reason it's more easily swallowed is that it involves foreign places we know nothing about. India is this magical place where, it says, companies can thrive by selling to people with almost no money, if they have the right mindset! Imagine if the title were, "Serving America's Poor Profitably." Wouldn't you be a little more skeptical?
I'm all for helping the impoverished and working poor. I'm not sure if traditional companies are the ones to do it.
/forum/t-3436/pahalad-hammond-serving-the-world-s-poor-profitably#post-
