The New Rules: Prahalad’s ‘Bottom of the Pyramid’ is Top-Notch Thinking

The New Rules: Prahalad’s ‘Bottom of the Pyramid’ is Top-Notch Thinking

This week, "The Thinkers 50" Web site named their 50 most influential business thinkers in the world. Atop its list stood the Indian-born, University of Michigan professor, C.K. Prahalad -- a visionary whose analysis of the market opportunities to be found in the emerging global middle class is must reading for anyone seriously given to strategic thought in the age of globalization.

Globalization is often described as a "race to the bottom," whether to the lowest price or the least protection for workers and the environment. While relevant, these statements are untrue: High levels of globalization connectivity clearly correlates with high wages, good regulatory regimes, and better protection of the environment. Conversely, low connectivity correlates with the worst abuses in each case.

Upon its arrival, globalization tends to temporarily make a bad situation somewhat worse, before ultimately improving things. Why? Once the chimera of zero-sum development is discarded, the locals quickly realize that improving their rules and husbanding their resources will pay off handsomely in income growth. In other words, the contact phase of globalization's deep penetration is crucial to alerting the culture to the true possibilities at hand -- beyond the immediate temptations of power and wealth redistribution, separatism, and payback for past inter-tribal crimes.

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