The document discusses disruptive technologies and provides examples like personal computers and wireless telephony. It explains how disruptive innovations initially target new or less demanding applications and customers. The document advocates attacking the bottom of the pyramid, where nearly half a billion people in India live on less than $2,000 per year. It provides examples of technologies targeting this segment, such as village internet kiosks and computers for small stores. The document argues for a change in mindset to view the poor as a potential market and source of innovation, rather than just a problem.

1. 2008 Sem ICT4SED 1
Disruptive
Technologies
U. B. Desai
SPANN Lab.
Dept. of EE
IIT-Bombay
www.ee.iitb.ac.in/~ubdesai

2. 2008 Sem 2
ICT4SED
 What is disruptive technology?
 Working Definition:
 Technology which creates a major (positive)
disruption in the way society functions
 Best explicated thru examples

3. 2008 Sem 3
ICT4SED
Examples of Disruptive Tech.
 Sun Microsystems Workstations:
disrupted the market for main frame
computers.
 PCs disrupted the market for workstations
 Xerox plain paper copier: disrupted the
market for offset printing.
 Cannon’s desktop photocopiers:
disrupted Xerox’s high speed photo
copying market.

4. 2008 Sem 4
ICT4SED
 Honda motorcycle of 60s
 Japanese cars of 70s
 Korean Cars of late 80s
 Wireless telephony (GSM, CDMA):
disrupted the market for wire-line
telephony.
 Nirma …
 …

5. 2008 Sem 5
ICT4SED
 Impacting technologies are disruptive
 Disruptive innovations are products and
services that initially aren't as good as those
that historically have been used by customers
in mainstream markets, and therefore can
take root only in new or less-demanding
applications, amongst non-traditional
customers
Stuart Hart and Clayton Christensen

6. 2008 Sem 6
ICT4SED
Historically:
Major waves of growth
thru forays at the bottom
of the developed markets
(DM)
DM

7. 2008 Sem 7
ICT4SED
The World Pyramid
Tier 1
Tier 2 & 3
Tier 4
Population in millions
~ 200 mil
~ 800 mil
~ 5000 mil
Purchasing Power Parity (PPP)
>$20,000
$2000 to $20,000
less than $2000

8. 2008 Sem 8
ICT4SED
The Pyramid
 Examples of Xerox, Cannon copiers, PCs,
Cell phones, etc. represent technologies
developed for the second Tier (to some
extent Tier 3)
 To date most disruptive technologies have
been attacking Tier 2

9. 2008 Sem 9
ICT4SED
Advocated by C. K. Prahalad
Attack the bottom of the
pyramid. Likely to create
greater disruption
bottom of
the pyramid

10. 2008 Sem 10
ICT4SED
Pyramid for India
T1
T2
T3
T4
T6
Population in million
10 mil
50 mil
150 mil
200 mil
550 mil
Purchasing Power
> 5 lakhs
3 to 5 lakhs
1 to 3 lakhs
50K to 1 lakh
less than 50K

11. 2008 Sem 11
ICT4SED
Opportunities at the
Bottom of the Pyramid
 Nearly ½ billion in India (4 to 5 billion
world wide) at the bottom of the pyramid
 Need to develop new technologies for Tier
T4 and T5
 New business models are needed

12. 2008 Sem 12
ICT4SED
Examples of Attacking the
Bottom of the Pyramid
 New Business Models
 PCO-STD-ISD booths
(Pitroda)
 Hindustan Lever (Chache
Story)
 Amul Dairy
 Grameen Bank, SEWA Bank
(Micro-financing)
 Grameen Telecom
(Bangladesh)
 Microfinance (Vikram
Akula)
 Technologies
 N-Logue (Village Internet
Kiosk using CorDect
Wireless Tech.)
 TVS (Kirana Shop
Computers)

13. 2008 Sem 13
ICT4SED
N-Logue: corDECT Village Kiosk
 Consists of
 Wireless corDECT wall-set for Internet and telephone,
PC, dot matrix printer, battery back up, web-cam,
speakers, microphone --- for Rs.50K
 Local entrepreneur operates the kiosk
 These kiosks becoming community centers
 Expect cities to outsource their work to villages
(Indian villages could become back office to Indian
urban centers ~ a hyperbole)
 RTBI: Rural Technology Business Incubator

14. 2008 Sem 14
ICT4SED
TVS Kirana Computers
 For Kirana stores with sales of Rs.100,000
per month
 A rugged PC
 No out right purchase of software or
hardware: Pay Rs.2,500.00 per month.
 Software for accounting, inventory, etc.
 In 180 days there was a 3.9% increase in
profit

15. 2008 Sem 15
ICT4SED
Change of Mindset ...
(from C. K. Prahalad)
 Poor as a Problem
 Poor as Wards of State
 Old Technologies
 Old Technologies Follow the
West
 Resource Constraints
 Poor as an opportunity
Global Market of 4.5 billion?
 Poor as Active Market
 Innovation and development
of new technologies with
usefulness to the Poor
 Imagination Constraint
Information Access will be a great asset

16. 2008 Sem 16
ICT4SED
The Poor of
India is an
Intractable
Problem
Change of Mindset …
(from CK Prahalad)
The Poor of
India is a
Potential
Market
The Poor of
India can be
A Source of
Innovation
Poverty
Alleviation,
Subsidies
Creating a New Market,
Innovation, Growth

17. 2008 Sem 17
ICT4SED
Challenges
 The Market is Very Fragile:
(Monsoons, Subsidies,….)
 Middlemen and Moneylenders
 Fragmented Experiments
 Lack of a Global database
 Traditional Ways of Thinking

18. 2008 Sem 18
ICT4SED
References
 C. K. Prahalad and Allen Hammond, Serving the
World’s Poor, Profitably, Harvard Business
Review, September 2002
 C K Prahlad, spoke about at the annual session
of the Confederation of Indian Industry, held
recently in Bombay. Prahlad said the Indian
economy has the potential to grow 10 to 15%.
http://www.moneycontrol.com/promos/prahlad.
html
 The Great Leap Downward:
http://idbdocs.iadb.org/wsdocs/getdocument.as
px?docnum=996849

19. 2008 Sem 19
ICT4SED
Home Work: Questions
 Why is there so little technological
innovation and development, where the
need is maximum?
 Why has Fortune at the bottom of the
Pyramid not taken off?
 Is there something wrong with the theory?
 Think of three disruptive technologies that
can change the lives of poor in India

20. 2008 Sem 20
ICT4SED