User Innovation at the Bottom of the Pyramid

[ Project: Sarah Praceus ]

[ Advisor: Prof. Cornelius Herstatt ]

This project has been completed and research results published, see publications.

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The so called “Bottom of the Pyramid” or “Base of the Pyramid” (BoP) refers to a cross-national population group living at the lowest level of the income or economic pyramid. More than a billion people or one fifth of the world population lives from less than 1 USD per day. The BoP concept implies the idea of seeing the BoP as a market with consumers and production resources not only as poor people being development aid recipients. The involvement of the private sector with its resources, know-how and skills enables the development of solutions for the BoP allowing at the same time to increase the quality of life via affordable products and services as well as to create entrepreneurial drive and opportunities for the poor to lift themselves out of poverty through the inclusion into the global, formal economy. Furthermore the BoP is a huge market with a combined Purchasing Power of more than a billion USD and high projected growth rates therefore representing an attractive, largely untapped new market to companies.

Companies need to overcome various e.g. cultural, religious, societal, infrastructural, and climatic challenges and to offer specific business models and product portfolios compatible with the BoP requirements in order to be successful at the BoP. The development of these products and business models is extremely complicated as they must differ significantly from conventional solutions for the developed world and require very difficult to access information on the BoP. These prerequisites highlight the potential relevance of User Innovation at the BoP because users dispose of this necessary information on BoP specific needs and preferences as well as of solution information based on local solution space.

User Innovation is a Western driven concept, detected and analyzed in the developed, “rich” world. The Indian National Innovation Foundation (NIF) collects and documents ideas and innovations developed by people living at the Indian BoP. Based on this comprehensive data collection I am analyzing patterns and characteristics of User Innovation at the BoP and researching similarities and differences compared to User Innovation in the developed, “rich” world.