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Next Practices: Knowledge, Infrastructure, and Public Goods at the Bottom of the Pyramid

Julia Elyachar

NGOs, Organizational Infrastructure, and the Knowledge Problem

In April 2010 Harvard Business Review published a column by C. K. Prahalad, author of the acclaimed book The Fortune at the Bottom of the Pyramid. The column was called “Best Practices Get You Only So Far” (Prahalad 2010a). “Best practices” is a management concept that became central to the funding cycle of nongovernmental organizations (NGOs) in the 1990s (Elyachar 2005). The problem with best practices, Prahalad wrote, is that they are tied to the past. Identifying best practices engages us with what went before. Best practices cannot move us beyond an industrial system that has brought us, and our planet, to the brink of disaster (Prahalad 2010a). Managers and business leaders should turn their attention elsewhere — to “next practices.”

Next practices can be found at the bottom of the pyramid (BOP) among the poorest of the poor. Management and strategic thinkers could learn from those next practices if they would only use their imagination and see what is there (Prahalad 2010a). This goes beyond Prahalad’s earlier call to executives of multinational corporations (MNCs) to see the poor not as the needy but as potential consumers and a market. By the fourth edition of The Fortune at the Bottom of the Pyramid, Prahalad argued that managers should approach the BOP as a giant laboratory in which new business models, and a new kind of business infrastructure, could be found. In this iteration of Prahalad’s argument, NGOs became essential to this process of discovery. Waiting to be revealed at the BOP, Prahalad maintained, are extraordinary powers of connectivity among poor people. That connectivity, in turn, could be plugged into the most advanced telecommunications capabilities from the top.

Prahalad’s work is an implicit critique of individualist notions of the selfregulating market. The invisible hand is nowhere to be found here. Prahalad stresses instead the collective nature of knowledge and value among poor people. At the same time, his main goal in acknowledging the knowledge and value created by poor people is to create new profit- making opportunities for corporations. Since Prahalad is telling MNCs to search out new sources of value from the social and cultural practices of the poorest of the poor through the mediation of NGOs, some might characterize his approach as neoliberal. But calling the BOP (or NGOs) “neoliberal” can obscure some of the most interesting aspects of the BOP and its relation to the history of neoliberalism and of development as well.

In this essay, I bring together literature from four topics — the history of development, management studies, infrastructure studies, and neoliberalism — that are usually analyzed separately. I do so to elucidate the implications of the BOP for contemporary policy debates about the public sector, infrastructure, and privatization. The BOP approach proposes solutions to great problems of our times. To whom do national resources belong? What is the meaning of infrastructure? What is the place of the state in development? In what follows, I first review some of the main concepts advanced by Prahalad in the latest versions of his work before his untimely death in 2010. I pay particular attention to his focus on connectivity, NGOs, and infrastructure in the BOP. I then place the BOP in historical perspective. I review salient aspects of the history of development since colonial times, with strong focus on the questions of infrastructure and public goods. I then show how the critique of development in the 1980s and 1990s, together with the rise of alternative approaches such as the informal economy and microfinance, unintentionally laid the grounds for the rise of the BOP perspective and its erasure of the state and public goods in the provision of infrastructure. Finally, I turn to the question of knowledge in the BOP and in neoliberal thought. By the end of the essay, I present an alternative approach to the issues raised by Prahalad. In particular, I reframe the quality of connectivity that Prahalad finds at the BOP in terms of a “social infrastructure of communicative channels” (Elyachar 2010). By calling these channels an economic infrastructure, I do not advocate their dispossession. To the contrary, I emphasize their character as a collective resource or public good. I close with a brief visit to a previous vision of the economic pyramid, by the Industrial Workers of the World (IWW) in 1911, and the role of these pyramids in current debates about infrastructure and public goods.

BOP: A Brief Introduction

In a series of influential articles and in his multiple award- winning book, The Fortune at the Bottom of the Pyramid, Prahalad (2010b) argued that large corporations could benefit themselves by learning to see the world’s poorest, who live on less than $2 a day, as consumers and a market, rather than as “the poor” in need of aid. There is no contradiction, Prahalad argued, between earning profits and helping the poor. Approaching the poor as “potential consumers” and as a “market” would be more respectful. It would also unleash transformative powers for society as a whole. Attention to the BOP should not be shunted off into a marginalized department of “corporate responsibility.” It should be a “core competence” of the profit- making corporation.

Prahalad recounts that not a single journal in the field of management or strategic studies would accept his first article on the topic of the BOP, coauthored with Stuart Hart in 1997. His ideas were “too radical” and did not follow the work of developmental economists (Prahalad 2010b: xv). Prahalad began to circulate the concept on his own with the help of colleagues, students, and disciples on the Internet and in other forums. His approach was first picked up in the business world. It then made its way into academic management journals and then the first edition of his now famous book. The fourth printing of The Fortune at the Bottom of the Pyramid, published in 2010 by the Wharton School of Business, contains (together with a DVD of filmed ethnographies and case studies) numerous accounts of successful BOP projects instituted by MNCs after their executives were convinced by Prahalad’s BOP approach.

The publication of the first edition of Prahalad’s book sparked debate in management and business academic journals. Some said that Prahalad exaggerated the wealth, and thus the amount of money to be made for firms, at the BOP (Gordon 2008). Others critiqued the switch he advocated from seeing the poor as producers to seeing them as consumers (Karnani 2007) or claimed that the BOP threatened local culture (Gordon 2008). Despite this debate within the worlds of business and management, the BOP has still received relatively little attention from critical theorists or social scientists (but see Maurer 2011, 2012; A. Roy 2010; A. Roy, in this issue). I think that neglect a mistake.

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I presented earlier versions of this essay at the “Bottom of the Pyramid in Practice” workshop organized by Renee Kuriyan and Isha Ray at the University of California, Irvine, in 2009 and at a panel of the annual meetings of the American Anthropological Association that I co-organized with Ananya Roy in 2010. An earlier version of some paragraphs on the history of development was formulated together with Timothy Mitchell as an outcome of two conferences we co-organized at the Kevorkian Center of New York University in 2001 – 2, called “Development after Development in the Middle East and Africa.” For their comments on earlier versions of this essay, I thank Kuriyan, Mitchell, Ray, and Roy; Tom Boellstorff, Eric Klinenberg, Tomaž Mastnak, Bill Maurer, and Ruth Turner; and two anonymous members of the editorial board of Public Culture. Also for their assistance with locating the IWW poster, I thank William W. LeFevre and Marilyn Young.



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