This article is a counterpoint to Prahalad's BOM premise. The authors' main argument is that poor people are not all the creative entrepreneurs and informed consumers that Prahalad portrays, instead he portrays them as people who make bad choices, and suffer from anxiety, depression, etc. Personally, I don't find his arguments convincing as he does not provide any evidence (whereas Prahalad provides specific and real examples of where and how his principles have worked with this population)..and I couldn't help but feel a twisted socialist undertone as I read the article.Granted, I acknowledge that not every person, rich, poor, or in the middle feels, thinks and behaves the same as his peers, but I think this author's examples focus on a subset of the poor that may not be representative of their overall desires, drives, and choices (and perhaps Prahalad's examples are not either, but I don't think he claims they are).
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References
- Prahalad, C.K. (2006) Doing well by doing good
- Prahalad, C.K. (2006) Globalization effects on the global poor
- Allen Hammond (co author) responds to Karanani "Mirage at the bottom of the pyramid"
- Porter, M. (2007) Global competitiveness report
- Porter, M. (2006) What strategy is
- Rose, C. (2006) Interview with Michael Porter at Harvard Business School
- Mintzberg, H. (2006) Mintzberg on entrepeneurship
- Yunus, M. (2007) Building social business ventures
- Yunus, M. (2008) The social business model.
- De Soto, H. (2008) Property law and BOP poverty
- De Soto, H. (2008) Property law and BOP poverty 2
- De Soto, H. (2008) Property law and BOP poverty 3
- Biografia de Hernando de Soto
- Aneel Karnani (author) - Video
- The BOP debate: Aneel Karnani responds
- Aneel Karnani work and resume
Posts
1 comments:
Some comments from Mariano Bernardez
Interesting article, yet, considerably loaded with its own assumptions and based on flawed information.
Certainly, Nobel Prize Amartya Sen makes a point of the problems of poverty and inequality, but hardly in the terms suggested by the paper.
Since we are all entitled to our own opinions yet not to our own data, here go some precisions:
1. Market solutions do not "romanticize the poor" or assume the poor is "rational adn well informed". Quite contrarily, C.K. Prahalad in India and China, Muhammad Yunus in Bangla Desh, Africa and Latin America and Hernando De Soto in Perú experiences and research with diverse market-based models to extrincate people from BOP poverty are based on (a) improving access to information -from cell phones for transactions to village Web sites for trading without middlemen, (b) recognizing that poverty as a matter of fact, deteriorates nuclear family and promotes adictions and erratic behavior -hence Grameen´s bank focus on organizing entrepreneurial women to manage micro credit.
2. Results show that market solutions work much better than conventional "aid". Oxford and World Bank economist Paul Collier shows in The Bottom Billion how direct aid maker people poorer since it usually goes to the pockets to what he aptly calls "survival of the fattest" (alluding to dysfunctional countries governments). Development economist Smith in Ending poverty: what works and what not comes with similar conclusions and includes underestimating the poor´s ability to organize among ten deadly "poverty traps"
3. BOP markets according to Prahalad involve people making under 1,500 dollars a year -not just 2 a day- which represents a 3.75 trillion-dollar economy of 4 billion people, not just 320 billion. Even at 2 dollars a day, 2,500 billion (belonging actually to what Collier calls the "bottom billion", it still makes a 1.82 trillion dollar economy.
4. "CSR" is not a market-based approach to fight poverty. It actually is a "charity" approach that falls into the paper´s criticism. Prahalad, Yunus and De Soto are not CSR advocates, but the opposite.
There is a strong debate between conventional UN, WB and other international bucreacies that manage "aid to the poor" and new approaches such as Prahalad´s, Yunus´s and De Soto´s (each one of them, based on individual initiative and promoting different ways to access to markets for the poor).
Results have been so far overwhelming in favor of the later.
Their 60-year long record shows that UNPD, WB and other Washington-New York-based bureacracies managing billions in conventional aid to gthe poor haven´t done better reducing poverty than stopping genocidal war.
The paper, however, builds on a more dangerous stereotype about the poor: "brutti, sporchi e cattivï" (ugly, drity and mean) as an Italian comedy called them- has been a commonplace among those that blame the poor for poverty from the right -fighting the poor instead of poverty- and the far left -living on "aid to the poor" unaccountable international funds-
No wonder in these days when demonizing the markets is fashionable again...
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