From Market Separation to Market Development at Bottom of Pyramid: Case Studies on Two Non-Profit Organizations

Abstract

In this working paper, we analyze two non-profit organizations, Digital Empowerment Foundation (DEF), and Barefoot College, and study how these NGOs helped to develop markets at BOP by reducing market separations. We use, and extend Bartel’s(1968) theoretical lens of market separations that suggest that markets fail to develop if one or more of the following market separations are present. These market separations aretemporal separation, financial separation, information separation, and spatial separation. In our case studies, we also find fifth and a new market separation which we label, “ Capability Separation” that connotes the lack of adequate market-skills with producers and/or consumers to participate in the markets, and which if present, can mitigate market development at BOP. We propose that our case studies provide new insights on market separations perspective to developing markets at BOP by paying more attention to specific market separations that inhibit market development, as highlighted in our case studies. We also propose that capabilities separation is the not only the ‘only human separation’ but also acts as a catalyst such that reducing this separation accelerates reduction in the other four market separations. Towards this objective, identification of capabilities or knowledge separation (of poor producers/consumers