Putting a Different Face on Disruption

Reuben Abraham points to an article in Knowledge @ Wharton on Euvin Naidoo, president and CEO of the South African Chamber of Commerce in America where he talks about the potential of Africa in terms of business and new technology.

…with the world pushing for alternative sources of energy such as windmills or geothermal power, it will be easier to develop and implement these new technologies from scratch in Africa than to impose them on the entrenched power grid in the West. “The key about disruptive technology is that it really has a chance to innovate at the base of the pyramid,” Naidoo said in his keynote address at the 15th annual Wharton Africa Business Forum. “The base of the pyramid is the bottom — the millions who are underserved.”
[…]
Naidoo showed his audience a map of global Internet connectivity, with bloated depictions of web-savvy western nations from Japan to Portugal to the United States. But the massive African landmass is virtually invisible. He insisted that the African void today represents a massive future opportunity for an entrepreneur who can develop a scalable solution for multiple nations on a continent that is currently divided into 53 different governments.

“Africa is in … a unique position. It almost has a competitive advantage due to that very situation of not having the connectivity, of not having the electricity grid,” Naidoo said. He cited the example of windmills as a low cost and innovative power solution that would work better in a local, start-up situation, such as a remote African village, than it would in the West, with all its regulatory and economic obstacles.

Like the previous post on Africa it provides a good example of business opportunities. More importantly, Naidoo provides a framework in which to capture the opportunities by connecting Africa’s lack of electricity and connectivity as opportunities.

This is true to most other bottom or base of the pyramid markets. Like the example of Harish Hande who provides the numbers where solar energy is cheaper to poor people than the current prices they pay. Disruptive innovation makes sense in “base of the pyramid markets”. (BOP)

Disruptive Innovations compete against nonconsumption – that is, they offer a product or service to people who would otherwise be left out entirely or poorly served by existing products and who are therefore quite happy to have a simpler, more modest version of what is available in the high-end markets.

– Stuart Hart and Clayton Christensen (Sloan Management Review)

If any technology entrepreneurs are looking for new markets, they should check out the BOP markets.

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