Innovation in creating products and services, which are of high quality but reasonably priced, is the only way to include the 800 million of India that forms tier 4 of the purchasing power parity pyramid into the global market. | |
| These views were expressed by C K Prahalad, professor of business administration, corporate strategy and international business, University of Michigan Business School, while addressing the inaugural session of Great Lake Institute of Management's (Glim) executive MBA (EMBA) programme. |
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| "Focusing on the poor represents an opportunity rather than a problem, they represent a huge market for growth. We need to treat them as consumers rather than as the poor. The idea is to create new markets and not to manage current markets efficiently," Prahalad said. |
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| He gave examples on how innovation in new products and services can be created like the Jaipur foot which is available at a cost that is 200 times lesser than a similar product in the US and Aravind Eye Hospital that performs two-lakh eye operations a year delivers it at 100 times less the cost than in the developed countries. Yet both these organisations are profitable. |
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| Companies the world over have an issue with organic growth and the only two countries that can offer them this growth is India and China. |
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| "Companies are looking for growth and poor consumers want high quality products that they can afford. Including them will ensure that companies grow by having access to a five-billion market worldwide," Prahalad observed. |
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| His vision for India in 2020, is to generate 200 million graduates, 500 million trained workforce and ensure that at least India is home to 30 of Fortune 100 companies and constitutes 10 per cent of world trade. |
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| "If India is poor it is because of policy makers rather than something being inherently wrong with the population. We need to create women entrepreneurs so that their power can be unleashed," remarked Prahalad. |
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| He also stress that the poor generally are made to pay more for products and services than the general population. |
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| "If somebody from Dharavi wants a loan, he has to pay almost 50 times more in terms of interest as they do not have good credit ratings," Prahalad pointed out. |
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| Glim's two-year course focuses on finance, marketing, operations, technology and human capital management. It awards a joint international certificate along with Illinois Institute of Technology, Chicago. |
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