The Global Research & Innovation Hub
The Bottom of the Pyramid (BoP) has emerged as a dominant concept in business, propelled by C.K Prahalad's "The Fortune at the Bottom of the Pyramid". The BoP is the largest, but poorest socio-economic group, in global terms, there are 3.7 billion people who are largely excluded from formal markets, the group earns less than $2 per day and 60% of the 3.7 billion people live in China and India. Given the enormous attention the concept has attracted, it has the potential to impact billions of poor people in the world.
India in particular has created a mark on the global map with the concept and has been successful in changing the perception of India from a manufacturing and back-end process hub to a research and innovation Hub. Not only do Indian and Multinational corporations have innovative solutions for the Indian market but they are now taking these innovations to international platforms and are treating India as a BoP Innovation and Research Hub.
Over the years many new innovations are coming from corporations like Tata, Hindustan Unilever (Indian Subsidiary of Unilever), Godrej & Boyce, Narayana Hrudayalaya, and Vortex among others who have been working on innovative offerings for the BoP. The concept has been simple with working on a design and product with prior knowledge of the cost rather than the other way round and providing high quality and value for money propositions.
The most remarkable among the innovations is the Tata Swach range of Water Purifiers from Tata Chemicals-A Tata Group Company, which satisfies the essential necessity of purified water for the BoP for as low as Rs.499 ($10). This innovation not only provided a source of potable drinking water but also provided a low cost solution to the already existing purifiers in the Indian market without the need of electricity, which is a scarce resource in India.
Another landmark innovation was in the area of refrigerators from Godrej & Boyce called ChotuKool. It provides all the functionality of a normal refrigerator but could run on a battery and doesn't need continuous power supply unlike the traditional refrigerator. Priced at Rs.3250 ($69), weighing just 3-4Kgs and works on just 20 parts as compared to over 200 parts in a traditional refrigerator, it is the ultimate game changer, not only for the BoP but also for top of the pyramid consumers who could utilize it for camping and other leisure activities. It also provides an opportunity to the rural population to become the last mile connectivity of their supply chain and provided $3/refrigerator commission to the rural agent.
Narayana Hrudayalaya, The world renowned Heart Institute is setting up an ultra low cost Hospital near Mysore which will be a super-specialty hospital to provide medical treatments at a very low cost. The hospital won't be investing much in the infrastructure with the help of pre-fabricated material in the construction. The Intensive Care unit will be the only department to have concrete structure which will help this 300 bedded hospital to be constructed at a minimal cost of Rs.16 crores. The Hospital intends to extend this cost cuttings and provide medical services at a low cost wherein a Heart Operation which costs around Rs.2,00,000 will eventually cost Rs.50,000 to the end customer in this hospital.
Vortex is a startup from Indian Institute of Technology, Chennai which has been successful in making rural banking a reality with the low cost ATM's. The ATM has over 6 patents registered and operates at a low cost. At the same time the machine is able to work at ambient temperatures of up to 50 degree Celsius unlike the traditional machines which are high on power consumption as well as require air conditioning system to keep it cool. The company has also brought in Solar ATM and Biometric ATM now under its portfolio for catering to the rural needs.
Apart from the latest ground breaking innovations for the BoP, other innovations like the sachets of Shampoo priced at Rs.1/Rs.2 have been a runaway success. Further the budget business hotel chain, Ginger Hotel from Indian Hotels, Project Shakti from Hindustan Unilever has got the rural Self Help Groups (SHG) to act as its last mile connectivity in rural India and now having a commanding position in the Indian Rural market, and the world renowned Tata Nano, the Wonder car known for its marvelous engineering are also standout examples of innovation keeping the BoP in mind.
Government on their part has been providing a lot of subsidies for rural initiatives and promoting programs like Financial Inclusion, Unique Identification (UIDAI) and Internet and mobile connectivity for the BoP. Private Universities in India and corporations together are forming Joint Ventures like Manipal University-Philips BoP Initiative, which will enable the growth in Research and Innovation in the coming years, which will change the BoP market attractiveness not only in India but also worldwide through purely Indian Innovations.