Our 2001 BELL Conference, hosted by the Wharton School, explored Digital Technologies and the Environment: New Challenges and Pathways to Sustainability.

WRI’s Digital Dividend project, led by WRI Vice President for Special Projects and Innovation, Dr. Allen Hammond, explores business strategies for providing poor communities in developing countries with efficient and affordable access to basic goods and services-and making a return on investment at the same time. Hammond and WRI board member C.K. Prahalad report their findings in "Serving the World’s Poor, Profitably," published in the September issue of Harvard Business Review. HBR captured the essence of the article this way:

By stimulating commerce and development at the bottom of the economic pyramid, multinationals could radically improve the lives of billions of people and help create a more stable, less dangerous world. Achieving this goal does not require MNCs to spearhead global social-development initiatives for charitable purposes. They need only act in their own self-interest. How?

The authors lay out the business case for entering the world's poorest markets. Fully, 65% of the world's population earns less than $2,000 per year-- that's 4 billion people. But despite the vastness of this market, it remains largely untapped. The reluctance to invest is easy to understand, but it is, by and large, based on outdated assumptions of the developing world. Although individual incomes may be low, the aggregate buying power of poor communities is actually quite large, representing a substantial market in many countries for what some might consider luxury goods like satellite television and phone services. Because these markets are in the earliest stages of economic development, revenue growth for multinationals entering them can be extremely rapid. Business leaders must confront their own preconceptions--particularly about the value of high-volume, low-margin businesses--for companies to master the challenges or reap the rewards of these developing markets.

The authors demonstrate, further, that those likely to reap the highest rewards from corporate involvement in bottom of the pyramid markets are bottom of the pyramid customers themselves. Perhaps counterintuitively, social and economic benefit to poor customers can be quite high. Consider the case of PRODEM in Bolivia: this microfinance organization is using multilingual, smart card-enabled ATMs to substantially reduce its marginal cost per customer, allowing it to serve more small borrowers at lower rates. Gyandoot in India uses a network of shared-access Internet kiosks to provide government services, education, health and other information to poor villagers who would otherwise have had no means of access save an expensive, time-consuming trip to the nearest city.

"Serving the World’s Poor, Profitably" is adapted from a longer WRI report, "What Works: Serving the Poor, Profitably," made possible with support from the Markle Foundation and Microsoft. The full report, along with more detailed information on the examples it cites, can be found on the Digital Dividend Web site (http://www.digitaldividend.org) or on the online Knowledge Bank (http://www.digitaldividend.org/knwldge_bank/knwldge_bank _01.htm.

In addition, the Digital Dividend Project Clearinghouse includes almost 700 examples of enterprises (both non-profit and for-profit) providing IT or IT-enabled services to customers at the bottom of the economic pyramid (including many of the examples cited in the report):http://wriws1.digitaldividend.org. This online resource contains many projects for students specializing in business or technology and is also a good resource for research in worldwide trends in innovation reaching the bottom of the pyramid. The authors welcome your comments and reactions to the piece; please send them to allen@wri.org