YakShaving

I’m writing this post to resolve, in my mind, the approach for MNCs toward opening product and service offerings in the developing world targeted at consumers who earn $2 a day or less.

I am currently working on a project called Design for the Emerging Markets here at the IIT Institute of Design… We changed the name recently from Design for Base of the Pyramid. A majority of the projects that we do here at the ID are funded by corporate sponsors; When I say this, most people automatically assume that these projects are written off as donations to charitable or scientific causes. Definitely not the case.. In my estimation, the benefits of sponsoring a design innovation project are vast– and the potential return on limited investment is immense. The company gets an addition to their workforce of young, talented design-minded students with the very best in design methodology. In return, the student has access to a well capitalized project in which they can complete research, and synthesize their insights into a new product platform or service offering. These byproducts then become part of the corporate intellectual property, and the student’s portfolio. A definitive win-win.

Now, back to my project. We had some doubts whether we are putting our best foot forward by naming our project “Design for Base of the Pyramid”, as it doesn’t seem to be directly aligned with corporate interests. Long term strategy dictates that creating markets for future revenue streams depends on creating a footprint– whether this means using the labor pool in a developing country, or seeking to sell a line of products there and developing brand consciousness. Whether or not the customers/employees benefit from this relationship is irrelevant, right? Hmm, not so much. Forward thinking, sustainable companies already think about the value of their brand– The warm fuzzy feeling associated with their brand has immense intangible value.

Moreover, let’s look at the other groups that wouldn’t be considered “Base of the Pyramid” in developing countries. The aspirational middle classes in countries like India and China are consuming like never before and are adopting Western consumerism at an unprecedented rate. Multinational corporations who seek to serve these markets need to ensure they are offering sustainable products that are ecologically friendly, and encourage reuse/recycling. These next-generation products, unlike their native counterparts that they might potentially displace, need to be functionally superior and offer more utility to their users.

Ideally, product platforms and services that are enablers of local entrepreneurship should be encouraged. Companies who seek to develop communities, improve lives and foster growth for the long haul should receive incentives by the Indian government for their FDI contributions. Ravenous, plundering corporations with the intent to seek profit only in these markets will fail, by virtue of their spoiled brand consciousness.

I know Stuart Hart might disagree, but I think that allowing companies to proclaim they are focused on selling to “emerging markets” to appeal to Wall St., but approaching this endeavor with the intent to enrich and sustain is OK by me.