After connecting more than a billion people, Facebook’s (NASDAQ:FB) CEO Mark Zuckerberg is teaming up with first Internet.org to help the world’s poor get connected. Mr. Zuckerberg will be the keynote speaker in the first Internet.org Summit in New Delhi, India this week.
At issue is more than 4 billion people who are without Internet access — 3.4 billion of whom live within 20 countries, according to a new study released recently from McKinsey & Company .
“To connect everyone in the world, we need to solve some big barriers to connectivity” states a Facebook news release. “By examining the social, economic and infrastructure challenges in detail, we hope this report will be useful for innovators and organizations working to develop new solutions.”
The McKinsey report finds that the offline population is scattered among rural, low income, elderly, illiterate, and female populations. For example, between 1.1 and 2.8 billion people are out of range of an existing mobile network; 920 million people offline are illiterate; and, in developing countries, women are 25 percent less likely to be connected than men.
Solving some of the big barriers to Internet connectivity will be the first step to solving world poverty — and mine the “fortune at the bottom of the pyramid,” as C.K. Prahalad coined the term more than a decade ago.
There’s trillions in disposable income in the hands of the masses of poor at the bottom of the world income pyramid. That spells potential, which many managers and marketers routinely overlook or write off altogether, as these markets are either too small in terms of revenue potential or too costly in terms of the operating expenses required to tap into them.
The second step will be an entrepreneurial rather than a charity approach to the world’s poor, according to C.K. Prahalad.
“If we stop thinking of the poor as victims or as a burden, and start recognizing them as resilient and creative entrepreneurs and value-conscious consumers, a whole new world of opportunity will open up.”
This opportunity could be pursued with partnerships between the poor and the world’s multinational corporations to spark innovation and sustainable growth strategies, according to Prahalad. “What is needed is a better approach to help the poor, an approach that involves partnering with them to innovate and achieve sustainable win-win scenarios where the poor are actively engaged and, at the same time, the companies providing products and services to them are profitable.”
Already companies like Alibaba (NYSE:BABA) have been doing that in rural areas of China, where a big chunk of the world’s poor are, through E-tailing.
“E-tailing’s impact is more pronounced in China’s underdeveloped small and midsize cities,” reveals another McKinsey study. “We found that while incomes in these urban areas are lower, their online shoppers spend almost as much money online as do people in some larger, more prosperous cities—and also spend a larger portion of their disposable income online.”
“For these shoppers, the utility of online purchasing may be higher, since they now have access to products and brands previously not available to them, in locations where many retailers have yet to establish beachheads.”
That’s where the fortune at the bottom of the pyramid is.
This article is picked from Forbes Magazine
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