It is a great and welcome
change that the corporate sector is becoming aware that for doing a good business nearly half of the world population
which lives on an income of less than 2$ a day cannot be ignored.
Scholars at high class places of learning and investigation like the Harvard Business School
are taking serious interest in the matter and it can be hoped that one day they will be able to make at least a majority of
prudent entrepreneurs and capitalists think; what Rangan explains in these words, "For business, the bulk of
emerging markets worldwide is at the bottom of the pyramid so it makes good business sense—not a sense of do-gooding—to
go after it."
It will be great that perhaps one day businesses will know that the bottom of the
wealth and income pyramid has to be taken care of, not for do-gooding only but for the long
term maximization of their own profits. I am sure it will be really a tough task for any one to come up with a formula through
which, those at the top make money, and those at the bottom also make money.
I can very well at least hypothetically visualize it. This can be achieved only by speeding up
the circulation of money from top to bottom and then back to top. But since the profit maximization concern without a sense
of do-gooding, will compel the businesses to ensure that the money they get back is more than what they sent down duly compensated
with the time value of money; it will be necessary to ensure that the money percolates to the lowest level of the bottom and
there it is gainfully employed so as to multiply many many times. Only then part of the money so generated will be able to
sublimate to the top after a part of it is left back at the bottom, at least enough to increase the future purchasing
power there, and to strengthen their role as a demand generator in future.
One of the problem with economics and other social sciences is that the
subject matter of the study and implementation of a particular solution are humans themselves,
as against physical and biological sciences. Thus every group involved views any particular result or implementation
of a solution as for or against its short term benefits.
Will we then, be able to develop a model in which the top and the bottom of
the pyramid are equally benefited in short term? By common sense it appears that the pyramid has taken its typical pyramid
shape only because money has historically and traditionally moved against gravity – from bottom to top. The top
naturally will not want money to move in the opposite direction! So the only solution possible is to lift the pyramid from the base to a place where the bottom too is
at least high enough to eat and live with basic amenities and is able to provide for individuals at the bottom, opportunity
to move upwards, if they strive for it.
But how low is the bottom of pyramid? How low?
