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The Great Leap: Driving Innovation From the Base of the Pyramid

October 15, 2002 | Stuart L. Hart, Clayton M. Christensen | Strategy

As multinationals unrelentingly seek new growth to satisfy shareholders, they increasingly hear concerns from many quarters about environmental degradation, labor exploitation, cultural hegemony and local autonomy. What is to be done? Must corporations’ thirst for growth and profits serve only to exacerbate the antiglobalization movement? On the contrary, the authors say, a solution to this dilemma does exist. Companies can generate growth and satisfy social and environmental stakeholders through a “great leap” to the base of the economic pyramid, where 4 billion people aspire to join the market economy for the first time. This is not a question simply of doing the right thing in order to lift people out of poverty — although that will surely be a result of the leap the authors have in mind. From a senior executive’s point of view, it’s a matter of finding the most exciting growth markets of the future. It is also where the technologies that are needed to address the social and environmental challenges associated with economic growth can best be developed. The authors illustrate their point with examples of companies that are already profitably disrupting such industries as telecommunications, consumer electronics and energy production.

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