Sunday, October 24, 2010

Do not disturb

One very eye opening fact that is emerging time and again in our research is that rural microentrepreneurs access very small markets. Our first survey found that about three quarters do not buy or sell beyond a 5 km radius and only 2% venture beyond 20 km (the ‘middle men’?).

Here’s a view from Google Earth of a region of rural Tamil Nadu that is 5 km across. It has a cluster of about 12 villages with a population roughly between 4 and 5,000, typical for most of India. That’s a really small market to be limited to.

Monday, October 11, 2010

It's not a pyramid!

CK Prahalad’s book The Fortune at the Bottom of the Pyramid has firmly established our visual impression of how incomes are distributed as a pyramid. A strong, solid structure with the poorest at the bottom that slowly tapers, kind of holding up the apex.

In reality it looks NOTHING like a pyramid. Here’s a 3D visualization of what it looks like based on real income distributions.

Of course, if I had a lot of time on my hands I’d figure out how to plot it in 3D a lot better, maybe starting with a square shape rather than a circle so it compares better to a pyramid. But I don’t. You get the picture though. (To get more of a sense for what income distributions are like check out my earlier posts Who Cares about the Average Income and Income Distributions around the World).

Rather than put my take on the different impressions and associations you get from these pictures, I’m really curious to hear yours. What are the associations you get from this over the pyramid? I think that we need a different term to replace the ubiquitously used ‘Bottom of the Pyramid’.