CK Prahalad on the BoP market creation: user driven innovation process

By | September 12, 2012

Here is a PDF of what is probably C.K. Prahalad’s last published article “Bottom of the Pyramid as a Source of Breakthrough Innovations” from the January 2012 issue of the Journal of Product Innovation Management. What catches my attention in this article are the process diagrams he shares:

Note that immersion in the BoP environment is the starting point and that the end point is not simply the design of a product or a service but an ecosystem, while the process itself is for the development of business model design. When we map it on to the human centered design approach, we see that the only difference, really, is the language used to describe this – that of business management and strategy, Prof Prahalad’s domain, rather than that of user centered design innovation.

And he adds, towards the end, that there is already sign of the upward mobility towards “middle class” markets, by the erstwhile BOP consumer demographic, that in the future these lessons on constraint driven innovation in business models, products and services, will have value for a far larger market than that being assumed at the moment:

There will be a major move toward “middle class”orientation to businesses. This is not to say that some luxuries will not exist as businesses, but the process of moving to the middle will prevail. It is estimated thatover 60% of the world population in 2020 will describe themselves as middle class, and 60% of these 2.6 billion will live in emerging markets. What we are witnessing in BOP is just the early indicator of a systematic structural change.

In other words, the characteristics of the current day informal economy’s buyer behaviour and purchasing patterns are those of the emerging global middle classes.

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