Impact of ICT-Enabled Product and Process Innovations at the Bottom of the Pyramid: A Market Separations Perspective

Abstract

Innovations in products and processes enabled by ICT such as mobile phones and the Internet constitute a rapidly emerging means of market development at the Bottom of the Pyramid (BOP), which consists of people who earn less than US$2 a day. However, these ICT-enabled market development efforts have not always yielded positive developmental outcomes, in part because market development is hindered by remote location and geographic dispersion of BOP communities, their low and uncertain incomes, and informal local markets having exploitative intermediaries. These conditions imply that BOP consumers and producers are 'separated' from marketers and customers, respectively, through physical distance, lack of financial ability, and information asymmetry. The paper examines the question: How do ICT innovations in products and processes impact development at the BOP? Drawing perspectives from the information systems (IS) and marketing literatures, we analyze how and why ICT-enabled innovations in products and processes deployed for market development at the BOP, enable developmental outcomes through reduction of market separations. Analyzing qualitative data gathered from interviews with 33 respondents in India, including BOP individuals, social entrepreneurs, and managers from private organizations, we find that ICT-enabled product and process innovations do have the potential to reduce four types of separations that 'disconnect' BOP consumers (producers) from marketers (customers). However, situated social conditions influence the impact of ICT innovations on reduction of separations. The reduction of separations leads to developmental outcomes at the BOP. Implications of our findings for theory, practice, and policy are discussed.

Developing Evaluation Frameworks for Business Models in China’s Rural Markets

“…Due to the lack of a reliable networks of electricity, road, technology, information, and transportation across rural areas, they cannot directly access relatively more mainstream buyers and social interest groups, and are unfortunately deprived of their earnings by intermediaries. As a result, their income generation prospects are limited [54]. Once joining the RDCBM innovation, farmers pay considerably more attention to the realization of self-interest.…”

Scaling up social innovation: a meta-synthesis

“…• rodrigo luiz morais da silva • adriana roseli wünsch takahashi • andrea paula segatto • markets, as the products or services offered mainly in order to mitigate some social problems related to poverty can be re-adequate (Karippacheril, De Reuver, & Bouwman, 2013), innovated radically or incrementally (Tarafdar, Singh, & Anekal, 2013) and even disruptively (Hart & Christensen, 2002;Nakata & Weidner, 2012). Previous experience with the business or the SI was another element identified as relevant because, according to Le Ber and Branzei (2010a) and Bhatt and Altinay (2013), the experience of the organization and its members is an important ally in step growth of a SI.…”

Corporate Social Responsibility: Linking Bottom of the Pyramid to Market Development?

“…All the market separations are generally high at BOP (Tarafdar et al 2013). Spatial separations exist due to remote location of most BOP communities, which are situated in physically inaccessible places with lesser accessibility (Vachani and Smith 2008).…”

“…This segment of population has unique needs, constraints, and challenges and majority of them live outside the confines of the formal economy (London 2008). Recent studies (e.g., Tarafdar et al 2013) have shown that BOP is largely an outcome of market separations. Bartels (1968) posited a general sub-theory of economic (market) separations which suggests that consumers are separated from producers due to geographic, economic, temporal, and informational separations.…”

“…Bartels (1968) posited a general sub-theory of economic (market) separations which suggests that consumers are separated from producers due to geographic, economic, temporal, and informational separations. Reducing market separations can result in market development (Tarafdar et al 2013), and reap direct benefits to the organization working at BOP by creating new market linkages.…”