The great leap: Driving innovation from the base of the pyramid

• Published in: MIT Sloan management review Vol. 44; no. 1; p. 51
• Main Authors: Hart, Stuart L, Christensen, Clayton M
• Format: Journal Article
• Language: English
• Published: Cambridge Massachusetts Institute of Technology, Cambridge, MA 2002
• Subjects: Business models; Competition; Competitive advantage; Corporate growth; Developing countries; Disruptive innovation; Economic growth; Growth industries; Industrialized nations; Information storage; Innovations; International; LDCs; Low income groups; Market potential; Multinational corporations; Profit margins; Social responsibility; Strategic management; Success
• ISSN: 1532-9194

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? 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 of simply doing the right thing in order to lift people out of poverty. From a senior executive's point of view, it is 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. This is illustrated with examples of companies that are already profitably disrupting such industries as telecommunications, consumer electronics and energy production.