The Next 4 Billion
Market Size and Business Strategy at the Base of the Pyramidby , , , and -
Discussions of base of the economic pyramid (BOP) markets have, until now, relied principally on business case studies and rough estimates of market size. The Next 4 Billion uses previously unreleased data to measure market opportunity at the BOP.
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Four billion low-income consumers, a majority of the world’s population, constitute the base of the economic pyramid (BOP). New empirical measures of their aggregate purchasing power and behavior as consumers suggest significant opportunities for market-based approaches to better meet their needs, increase their productivity and incomes, and empower their entry into the formal economy.
This volume, based on unique access to the household income and consumption surveys of developing and transition countries, offers a new and compelling perspective on low-income communities worldwide. Drawing on income data from 110 countries and standardized expenditure data from 36 countries across the globe, The Next 4 Billion is an important first look at the market opportunity represented by four billion individuals who make up the BOP. The analysis for the first time provides a quantitative assessment and characterization of BOP markets, at several levels of analysis:
- How large is the BOP and what is its income-by country and region?
- What is total market size and consumer ability to pay within a number of critical sectors, including water and sanitation, energy, IT/telecom, healthcare, and financial services?
- What is nature of the penalty faced by BOP consumers in the form of higher prices, poorer quality goods and services, or lack of access to services?
- What does the BOP penalty imply for needed policy reforms or opportunities for market rationalization?
|The Next 4 Billion would not be possible without the support of the following organizations. Visit their sites for more information on BOP market-based approaches.|
Like consumers everywhere, the poor are constantly looking for products and services that improve their quality of life at an affordable price. The poor are also vital producers and distributors of an immense range of goods. Companies that are smart enough to tailor their offerings to the needs of low-income consumers and entrepreneurs will thrive in the 21st century. As illustrated in this important volume, The Next 4 Billion, companies that provide affordable solutions in areas such as housing, sanitation, public transport, and connectivity will also make a vital contribution to human development.
Luis Alberto Moreno
President, Inter-American Development Bank
C.K. Prahalad and Stuart Hart’s ground-breaking work alerted private sector businesses to the importance of the market at the base of the pyramid. Now, for the first time, we can express that importance in hard numbers—a 5 trillion dollar, 4 billion person market. That represents a massive opportunity for private sector firms to engage in ways that improve poor peoples’ lives.
Vice President, Financial and Private Sector Development, International Finance Corporation and World Bank, and Chief Economist, International Finance Corporation
Global productivity, education, and the sciences have advanced at an increasingly fast pace due to information technology and access to the Internet. Yet, most of the world’s population who inhabit the middle and bottom of the “economic pyramid” is being underserved in realizing the transforming benefits of IT. The IT industry can narrow this gap by helping local communities evaluate and pursue inventive approaches to realizing the benefits of technology, and through co-creation of new business endeavors with NGO and public sectors that focus specifically on the needs of middle- and bottom-of-pyramid customers.
Senior Vice President, Microsoft Corporation
It is very clear that the private sector has an important and constructive role to play in addressing the needs of the poor and disenfranchised. The Next 4 Billion lays the foundation for the empirical, market-based approach necessary for private enterprises to bring scale and sustainable solutions to heretofore intractable problems.
Executive Vice President, Global Brand and Marketing, Visa International
It is great to see an extensive study correlate the facts that The Next 4 Billion are a viable market place and that private sector engagement with the BOP can help drive sustainable growth and capacity building for these new economic actors.
Vice President Sales and Marketing Group, General Manager Emerging Markets Platform Group, Intel Corporation