Innovation for the base of the pyramid

There are lucrative markets all over the world that companies are vying for, and innovation is playing a role in all of them. The middle class is growing rapidly in India and China now, and millions of people join the global economic engine in these countries each year. But many people who live at the base of the economic pyramid are also seeing more economic opportunities.Since there are billions of people who are now rising from poverty, particularly in Africa and Asia, the economic opportunities for companies to serve their expanding needs are significant.But how do you do it? How do you innovate for those at the base of they pyramid?This fall we had an opportunity to work on this issue with our longtime client and friend, Gemalto. Gemalto is a world leader in design and manufacture of secure digital devices, such as SIM cards for mobile phones, electronic passports, and smart cards, and we've worked with them since 2005 on programs and projects including the design of the company’s innovation system, to many different executive education and innovation training programs around the world.This learning program had as its primary objectives to enable the participants to understand in a deep and intimate way what it means to live at the base of the economic pyramid, to learn what sort of products and services will be meaningful to people living there, and to begin to imagine what new products and services Gemalto could create to meet their needs.Of course you can’t do that by looking at powerpoint slides, reading, or video conferencing. The only way is to go there and learn from the people first hand. So with the help of our local organizing partners Seventh Sense and Reciprocity, off we went to Johannesburg, South Africa, where Gemalto University organized a fascinating innovation program for 30 of the company’s emerging leaders.To immerse ourselves in the reality of impoverished families we spent half a day doing construction projects at a day care and community center in one of the poorest sections of the former black township of Soweto, former home of both Nelson Mandela and Desmond Tutu. Working in teams side by side with the staff of Kliptown Youth Center, we build a brick wall, repaired classrooms, and painted.The following day, we traveled on a learning journey to Alexandra, one of South Africa’s oldest townships. We spent half a day meeting, listening, and sharing ideas with small business owners and ordinary people and from all walks of life, from single mothers raising their children in a shack to more established middle-class families. These exchanges gave us fresh insights into topics like transport, nutrition, financial services and telecoms.We also met with local leaders from other multinational companies that are operating in South Africa, including Vodacom and Danone, to learn about their business initiatives and the opportunities and challenges from their perspective.Between these field events, InnovationLabs led a series of innovation workshops to create a strong foundation of innovation concepts for all the participants, including short course on the practice of ethnography, a powerful innovation method that helps innovators to decode the hidden meanings embedded in communities and cultures.To bring all these learning events together, we created a project for the participants to develop models of ideal future base-of-the-pyramid communities in which Gemalto products and services would figure prominently. The goal of this was to take all of the things we had learned and devise specific ideas for new products and services that Gemalto could create specifically for this market. The trip proved to be a powerful and tremendously positive learning experience for the entire team.It certainly reinforced the view that there is tremendous opportunity in South Africa and other emerging markets for Gemalto, and indeed for all types of firms across the economic spectrum.We also learned first hand that designing, producing, and distributing products for markets at the base of the pyramid takes a specific and dedicated effort, and it must be built on a detailed understanding of the day to day needs, challenges, and beliefs of the people who live, work, and grow in these communities. We are grateful to Gemalto for inviting us to participate in this project.

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The photos, from top to bottom:-  Interviewing the proprietor of a phone booth in Alexandra, which in this case consists of a car battery, some cell phones, a cell phone charger powered by a car battery, all of which is located under an umbrella.  These services are used by people who don't have their own phones, or for whom the minutes they buy on their personal phones each month have all been used, so they must switch to pay per use for the remainder of the month.  On major streets in Alexandra there are phone booths every 50 meters or so.  Some of them are in small buildings, some are in shacks, some are under umbrellas like this one, and some are in  converted shipping containers.-  Construction workers at the youth center.-  An internet cafe in Alexandra.-  The phone equipment at an outdoor phone booth.-  A mailbox in Alexandra.-  Thinking through what an ideal community of the future might be.-  A model of an ideal community of the future in which Gemalto products and services provide essential improvements to the lives  of community members.

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