With noted economist C.K. Prahalad, Hart also wrote the path-breaking 2002 article ‘The Fortune at the Bottom of the Pyramid’, which provided the first articulation of how business could profitably serve the needs of the poor in the developing world. He has a lab in Cornell and now in India that seeks innovative green business strategies. He is in Agra to talk to some of the biggest corporate heads in India. Professor Hart spoke to Sonu Jain

• What’s the philosophy behind the ‘Bottom of the Pyramid’

approach?

The BoP Protocol is a business incubation process that enables multinational corporations to generate new business opportunities at the base of the pyramid. It marries MNCs’ resources, technologies and best practices with those of the community.

We are starting a lab in India with Indian School of Business in Hyderabad. One thing has become clear to the business community — a focus on corporate social responsibility or environmental management by itself will not generate the dynamic new growth needed to satisfy the demands of shareholders, society and nature. We believe it is essential that social and environmental challenges be framed as unmet market needs to be addressed by business solutions.

• What is the difference between a company that is trying to be green and a company that would use the BOP approach?

At best, companies try to reduce the cost so that they can sell to the rural population. But they go there with the same management tools and marketing practices. Their products are a one-way flow, mostly shoved down the pipeline. I call these BOP 1.O which means they are at the first level of evolution. They have successfully taken the cost out of products or have introduced new, affordable packaging. Hindustan Lever in India is a classic example.

In our model, a corporate will not go there with preconceived notions. It will evolve strategies with the locals. The Grameen family of services is a classic example. It views the poor as partners, not as consumers or clients.

• Isn’t this opposed to the idea of globalisation as we know it?

Not really. This is a transition stage. There will be national corporations with global strategies that can be locally responsive.

A corporation is an ongoing idea. Now corporates are in transition and learning how to do business by hearing the voices of those who have been bypassed by globalisation, and learning to co-develop technologies, products, and services with local people.

• Does your idea work for home-grown companies?

It is a big challenge for Indian companies to not fall prey to the lure of the same game that was played by the US, German and Japanese companies. Take the case of Mexico, it got lured into low-cost manufacturing. When China offered lowered rates, business shifted there leaving Mexico high and dry. Mexico did not develop the skills to make itself more competitive to China — no more capable of breaking the top of the pyramid market.

In India, companies have to think how they can be unique. Indian companies are in a better position to do all of this. In the coming two decades we are going to see whole new industries born, and whole new global corporations 15 to 20 years from now that we haven’t even heard of today will be large, dominant firms. And large, dominant firms of today will not be around.

• Is it not the job of government to deal with poverty?

Now government lags behind. Corporates are demanding from governments that they act in the area of climate change. Corporates are in a prime position to stake out the future and bring 4.5 billion people into the capital market. I take the contrarian view that business — more than either government or civil society — is uniquely equipped at this point in history to lead us toward a sustainable world in the years ahead. Corporations are the only entities with the technology, resources, capacity, and global reach required. And corporations of tomorrow have to stake out their position today.