Is the market-based approach the solution to poverty?

             We often think of providing aid as a solution to alleviate and reduce poverty. But the article “The Next 4 Billion” gives us insight into using a different approach to help low-income people. The article urges us to think more about the four billion low-income people at the base of the economic pyramid (BOP) and target them with our innovations to ultimately reduce poverty.

            The article suggests using a BOP market analysis and a market-based approach to create opportunity for low-income people. Our view is shifted from providing charity to providing goods or services at reasonable prices that will benefit those in the base of the economic pyramid. By addressing the needs of those at the base of the economic pyramid through affordable services and goods, it is believed we can “rais[e] welfare, productivity, and income.” But have these approaches proven to helped low-income people in large amounts climb out of poverty on their own?

            There is no question that those at the base of the economic pyramid have buying power and need better services and goods. In fact as the article mentions, the BOP market is one of $5 trillion. But their needs seem too vast to think that using these approaches can make a significant difference. The first approach towards alleviating poverty should be to focus on improving the health, education, and finding a way to raise the income of low-income people. The market-based approach sounds very promising, but can we create enough inventions or reduce the costs of products enough to significantly make a difference in the areas of health and education? In the article “What Happens Next?” it was mentioned that GE devised an ECG monitor one-fifth of the price of one sold in Western countries. This will help hospitals in third-world countries to better meet the needs of low-income patients, but how many more advancements in the field of business and technology and how many years will it take to truly provide those base of the economic pyramid with enough services and goods to climb out of poverty on their own?