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21 / 07 / 2004
Stuart Hart: “The bottom of the demographic pyramid is a source of business opportunities”

The plenary session of the Dialogue “The Role of Corporations in the 21st Century” took a look at business opportunities in developing countries.

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Stuart Hart, professor of Sustainable Business at Kenan-Flagler Business School, spoke of the bottom of the demographic pyramid as a “source of business opportunities”. Stuart said that, currently, “there are 800 million people with 15 billion dollars at the top of the pyramid; 1.5 billion people with between 1.5 and 15 billion dollars make up the middle of the pyramid; and, at the bottom are the poorest—5 billion people with less than 1.5 billion dollars and major needs.”

Stuart added that, “informal economy is predominant at the bottom of the pyramid and there is a great amount of room for business, although it should be managed through non-traditional strategies.” Stuart explained that, “agreements and knowledge of the market need to be by local agents, even if there are illiterate, poor and outcast, because they know the real needs of the market.”

As regards the role of NGOs in these underdeveloped countries, Stuart explained that, “they have done very respectable work to solve the needs of this market, but the lucrative model represented by business can go even further and achieve better results.”

Jan Oostervel, former president of Royal Philips Electronics, spoke of the new technologies that “are emerging in poor countries more than in Western countries because they make it possible to solve the needs of these markets at lower costs.” Oosterveld mentioned that solar energy could make electricity available without the need of a distribution network. According to Oosterveld, the keys to business success are “understanding the needs of markets, get people involved on all levels, and developing product distribution.” Oosterveld holds that, “philanthropy has not made the gap between rich and poor disappear. Although it is not a panacea, it is an attempt to solve the problem that requires more time and attention.”