The man who saw tomorrow

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He believes in ‘fortune at the bottom of the pyramid’. Management guru C K Prahlad’s message for Indian companies has always been to concentrate on the economic needs of the society they operate in. At the just concluded Delhi Sustainable Development Summit organised by Teri, the world renowned expert spoke about corporates’ increasing role in fulfilling the needs of the poor. So, how do we wed together a commercial approach and needs of the poor for utilities like water and energy?

“The fundamental question that we have to address is how to reduce costs. The problem in case of utilities like water and energy is that there is no real price — distortions in subsidies have paid put to that. People are ready to pay, amply proved by the fact that people pay exhorbitant sums for private water tankers, but even then they do not get the required quality. So radical innovation is a must, and not just in product innovation, but in distribution strategies, maintenance and pricing strategies,” says Prahlad.

While business innovation is not so easy, it has been happening. According to Prahlad, more and more companies are now turning to address the needs of the rural poor, as proven by the successful efforts of FMCG companies like HLL.

“Albeit slowly and in fragments, corporate India is discovering the huge market waiting in rural India. The private sector and NGOs are delivering results. We see it in FMCG companies directing their energies to rural India, we see it in the mobile phone in the hands of the fishermen in the backwaters. It is happening on the ground,” says the Harvey C Fruehauf Professor of Business Administration at the University of Michigan.

“Look at the micro finance schemes — there are 2000 micro finance schemes covering 6 million women in Andhra Pradesh alone. But we have to accept that one single solution cannot cover everybody. We have to learn to grow in stages. The trick is to combine global standards, affordable prices and make it available to the consumer. A small start somewhere can yield results down the line,” he adds.

Talking about FDI, and the strong belief that it can cure all worries, Prahlad says that while FDI does help in ensuring global standards, it cannot drive growth.