Is the Fortune a Mirage?

Professor C.K. Prahalad’s much-acclaimed book, Fortune at the Bottom of the Pyramid, lead the discussion on engaging with the poor and how the private sector could help lift people out of poverty. While his book lead to much discussion and attention to the so-called bottom of the pyramid (BoP), others such as Aneel Karnani of the University of Michigan, have questioned Prahalad’s assumptions.

In his paper, Mirage at the Bottom of the Pyramid, Karnani says the BoP argument is “riddled with fallacies,” and that the notion that selling to the poor can simultaneously be profitable and help eradicate poverty is a “harmless illusion” at best and a “potentially dangerous delusion.” Through the paper Karnani argues that rather than focusing on the poor as consumers, we need to view them as producers. When the poor engage in production, Karnani argues that it leads to a higher increase in real income, which is a better route out of poverty.

Read the entire article here.