government financial support. Services provided by private enterprises may be considered sustainable when the enterprises are able to make a profit. People without electrical power, safe water, and effective medicines are usually poor, but any firms that provide the poor with these essential services must be able to profit from doing so. Thus, they would require a business model designed for serving a large number of clients who have very little disposable income. The extremely dense urban environment and highly dispersed rural communities that characterize the bottom of the economic pyramid in the developing world require a new approach. Some companies have developed such models and do relatively well in other countries. Elements of these business models include the following:
a focus on the price performance of products and markets
incorporation of innovative hybrid solutions that use advanced technologies blended with the existing culture and with products designed to work in hostile environments characterized by, among other things, an irregular power supply, contaminated water, low skill levels, and unreliable infrastructure
an emphasis on reducing, conserving, and recycling resources, especially packaging
adoption of innovative processes for local manufacture
application of innovative methods of financing, distribution, and marketing
Microcredit, service contracts, and franchising opportunities also are important elements of the business models.
As limiting as the conditions in developing countries seem to be, the great advantage is the huge number of potential clients. An estimated 100 million Nigerians lack safe water, electric power in the home, and effective malaria therapy, or more than the total populations of all but a handful of countries. In India and other big countries with large numbers of poor people, companies (including multinationals) aiming at the customer base at the wide bottom of the economic pyramid have produced new, innovative products and services at substantial profit to themselves as well as with benefits for their customers.
This study aims to demonstrate that for the three examples chosen—solar electric power, safe household water, and effective malaria therapy—it should be possible to make a profit providing these products in Nigeria without direct government support (although for malaria drugs, a global subsidy of some kind probably would be needed). Nevertheless, actions the government might take to encourage private sector