A new, low-cost water filtration system will make it easier for poor Indians to access clean drinking water. Photo: Jackol (flickr)

Here's some conventional marketing wisdom: People who live on less than $2 per day simply aren't a worthwhile target demographic.

But recently, some Indian companies are challenging such ossified thinking with innovative products designed to fit the needs of India's poor, reports The Wall Street Journal:

Such inventions represent a fundamental shift in the global order of innovation. Until recently, the West served rich consumers and then let its products and technology filter down to poorer countries. Now, with the developed world mired in a slump and the developing world still growing quickly, companies are focusing on how to innovate, and profit, by going straight to the bottom rung of the economic ladder.

As the Wall Street Journal explains, Indian companies started to change the way they looked at impoverished consumers after they snapped up low-priced cell phones. Then companies began to design products that they hoped would find a similarly huge demand. Soon, Tata Motors released the Nano car, a small $2000 vehicle that made car ownership a possibility for a whole new slice of Indians since it sold for less than half the price of the next-cheapest car on the Indian market. Tata plans to export a more luxurious version of the Nano to Europe — providing an example of how the goods designed for local markets could increase global competition between Indian and Western companies.

There are several other examples of products redesigned with the poor in mind. Cheap battery-powered refrigerators are a huge help to families without electricity in their homes. The solar-powered cell phone base station won third place in The Wall Street Journal's Technology Innovation Awards earlier this year. And the introduction of mobile banking is revolutionizing banking and money transfers in rural areas via cell phones in many poor countries.

It's a newer way of thinking about poverty, and one driven by bottom-line concerns: How can firms sell the poor what they need now, rather than waiting until they have the money to buy what others already have?

Add banking to the growing list of things your cell phone can do.

A September special report in the Economist took a look at the expanding use of mobile banking in Africa and explained how it could play a large part in improving personal financial stability in the region. In essence, here's how it works:

You take your cash to a mobile banking agent and tell the agent that you want to send money to a friend or family member. They credit your mobile banking account. Once the funds are available, you transfer money by sending a text message to whomever you want. The recipient then goes to his or her local agent to access the transferred money. People can even pay utilities or pay for cab rides with the service.

There is a strong correlation between the increase in a developing nation's cell phone use and it's rise in GDP, notes the World Bank. Mobile money offers similar effects on the individual level. A study by researchers at the University of Edinburgh found that users of the Kenyan mobile money service M-PESA have seen a 5 to 30 percent increase in their incomes since the service began in 2007.

One reason for this is the increased convenience that M-PESA offers. Like many men in Kenya, Nairobi resident David Omuchilili used to have to take time off from work and pay for travel costs to deliver money to his family, whose village is nearly 200 miles away. With M-PESA, he is now able to avoid the traveling and can be more available for work, as he explains to Business Week.

Mobile money transfers also offers a safer, more reliable way to send cash. Citizens without the means for traveling no longer have to take the risk of giving an envelope full of cash to a middleman — like a bus driver — and telling him where to deliver it. In the aftermath of the 2008 Kenyan election, M-Pesa was used to send money to those trapped by the rampant violence.

One thing is for certain. As mobile banking continues to grow in popularity and scale, users will find opportunities for better financial stability.

Photo: voxphoto (flickr)

In a span of just ten days, 7,400 Cubans signed new mobile phone contracts. On April 14, President Raul Castro lifted a ban restricting ordinary citizens from purchasing personal cell phones. The number of contracts is impressive, the BBC reports, considering that a cell phone in Cuba costs six times the average monthly salary.

Under Raul's brother Fidel, only government officials and people working for foreign firms were allowed to own cell phones. In addition to lifting the ban on personal cell phones, Raul Castro has lifted restrictions on DVDs, car rentals and other goods.

What more changes in Raul Castro's Cuba lie ahead?