Investing in the poor

According to an article in the WSJ, Indian companies are investing in technology and innovation targeted toward the poor. The trend started this summer with the development of the Nano, an extra-small, $2200 car released in July.

"For the farmer who wants to save for the future, one Indian entrepreneur has developed what is, in effect, a $200 portable bank branch. For the village housewife, a wood-burning stove has been reinvented to make more heat and less smoke for $23. For the slum family struggling to get clean water, there is a $43 water-purification system. For the villager who wants to give his child a cold glass of milk, there is a tiny $70 refrigerator that can run on batteries. And for rural health clinics, whose patients can't spend more than $5 on a visit, there are heart monitors and baby warmers redesigned to cost 10% of what they do elsewhere." WSJ

I think it is really smart for Indian to be targeting the majority of its consumers. Up until now Indian has relied on information and technology that has trickled through developed countries. It is about time that they starting developing new products specifically designed for poor people, rather than simply adjust and adopting the old. This is also significant given that India is taking advantage of their vast supply of cheap labor in order to benefit the greater Indian population.

On a global scale, this new innovation could have an enormous impact. As the article notes, India is venturing into previously untapped markets. Furthermore, they are using unconventional distributing measures, such as self-help groups and micro lenders.

Pretty Neat-O.