Practical Sustainability Strategies, 2nd Edition

CHAPTER 8Base of the Pyramid

In 1932, the United States president, Franklin Delano Roosevelt, made a radio address titled “The Forgotten Man.” As part of his address he said, “These unhappy times call for the building of plans that rest upon the forgotten, the unorganized but the indispensable units of economic power … that build from the bottom up and not from the top down, which put their faith once more in the forgotten man at the bottom of the economic pyramid.” This is the first known use of the term “bottom of the pyramid,” which has also been modified slightly to “base of the pyramid.”

That was close to 90 years ago, but today this term refers to the billions of people in the world living on less than US$2 per day. This was defined by the University of Michigan Professors C. K. Prahalad and Stuart L. Hart in 1998. They each wrote excellent books that thoroughly described the business model and its benefits. Prahalad published “The Fortune at the Bottom of the Pyramid” [1] in 2004, while Hart published “Capitalism at the Crossroads” [2] in 2005. Hart subsequently went to the University of North Carolina, then to Cornell University, and is currently at the University of Vermont.

Prahalad proposes that businesses, governments, and donor agencies stop thinking of the poor as victims and instead start seeing them as resilient and creative entrepreneurs as well as value-demanding consumers. He proposes that there are tremendous benefits to multinational companies (MNCs) who ...