Megatrends – The Opportunities at the Bottom of the Pyramid

The future of growth in many emerging markets is being shaped by significant megatrends. The fundamental driver of these trends is the global population that is expected to have reached 7 Bn. already and is expected to increase by another billion souls within the next 20 years. 

While this population strains resources for the entire world, the problem is particularly acute in highly populous emerging markets such as China, India and Brazil. While this “emerging” crisis is daunting, hidden within it are the seeds of many opportunities. The most significant opportunities are in addressing the fundamental needs of the millions of people at the bottom of the population pyramid, those that individually make less than $2 a day but collectively represent a huge untapped market. Here are three megatrends that identify severely unmet needs in this market:

1. Food Production: Agricultural output must double by 2050 to adequately feed the 9.3 billion people expected to live on this planet. (Source: United Nations). This increased productivity will need to occur as available arable land and resources remain unchanged, or in many areas, decrease. Worldwide, more than one in six people are already starving and half the world’s population is considered “malnourished,” lacking suitable amounts of nutrients, vitamins and minerals to ensure good health. As the world population grows, more people will go hungry and fewer will have access to the nutrients their bodies need – unless innovation can meet the needs of people in different places around the world. While companies such as Pioneer Seeds are helping to improve nutritional value and yields, technology providers such as IBM are using mobile technologies to reduce waste between farm production and markets.

2. Alternative Energy: Emerging markets are soon becoming some of the largest energy consumers in the world. Rising populations and standards of living in these markets are going to have a dramatic impact on already stretched fossil fuel sources. New business models and innovations are needed to generate, store and distribute renewable energy to hundreds of millions of customers being priced out of the market today. This could easily be the fastest growing sector in the energy market for the next 20 years. Interesting business opportunities are emerging in energy-deficient countries such as India where the over 300,000 telecom towers in the country run on diesel-based gen-sets today and could be supplemented with sustainable and eco-friendly energy sources.

3. Access to Fresh Water: Nearly a billion people, mostly in emerging markets, have no access to clean water, and 3.3 million people die from water-related health problems each year. The need to trap, conserve and efficiently distribute clean water is unleashing many forms of grassroots innovation – see more at www.nationalgeographic.com/freshwater.

The businesses that want to tap these megatrends have to be prepared to re-invent their offerings and focus on innovations and business models that can address problems at scale. The prize is immense and the cause could not be nobler.