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This week, we welcomed four new people to the NextBillion team: Maria Zheng, Andrew Eder, Bryan Farris, and Adeena Schlussel.  Watch for their contributions and insights! 

 This week, staff writers took new looks at how enterprises can intervene in education and early childhood to create new security and prosperity into the future:

What Social Businesses are Doing to Fight Terrorism

New staff writer Bryan Farris examines a topic often discussed in the media from a new angle - before education steers people towards radicalism or towards economic opportunity, the education must be paid for.   Credit and financial services for the poor and for student loans offer an alternative to large flows of funding from Islamist sources. 

Reversing the Cycle of Poverty: Targeting Early Childhood Development

Manuel Bueno highlights the critical nature of early childhood in determining long-term individual outcomes - and by extension, economic outcomes.  He asserts that early childhood is an overlooked market for base of the pyramid businesses.

The Bottom of the Pyramid: A Disruptive Force to be Reckoned With?

Mark Beckford argues that base of the pyramid markets are tailore made for the generation of disruptive technologies and approaches.  If it's not seriously cheaper and better than existing products and services, it probably won't succeed.  A powerful insight on why we are seeing so much polycentric innovation.

Feedback from Our Readers: NextBillion Readers' Survey

We're looking for your feedback to make NextBillion better, more responsive to its audience, and a more enjoyable read for you.  Please take a moment to fill out this survey.

We added some great upcoming events to the Take Action page.  Get excited for Sankalp 2010, India's larges social enterprise forum.  Readers of NextBillion know the sheer energy and breadth of new social enterprises in India - be part of it May 4-5 in Mumbai. This week, watch for reports from the Social Venture Capital/Social Enterprise Conference in Miami, Florida!

We also posted some fantastic jobs.  If you missed them:

The Center for Tropical Agriculture in Cali, Colombia has an open-ended call for recent graduates to apply for internships with their global programs on agriculture.  English and a 6-12 month commitment is required.

Ashoka's inspiring Housing For All initiative - tackling one of the biggest, most complex issues out there - is hiring a director for its Brazil program.  The position is in Sao Paolo.

News

This week a we posted a story that caught my eye at the intersection of social justice and market-oriented development.  Waste collectors - individuals that serve as the waste management system in countless urban areas in developing contexts - are vulnerable to their livelihoods being taken away by new modern municipal collection systems and particularly waste-to-energy incineration projects.  It's a thorny question, because large-scale waste management is a clear need.  A situation in Delhi illustrates the role that waste collectors may play in waste management that is a leap ahead of landfill dumping, even - there a friend has been involved in a community effort that has organized waste collectors to separate organic waste and divert this to local fertilizer and compost needs, even Delhi parks.  It saves the city huge fees in trucking organic waste miles (which makes up the vast majority of urban waste in India) out of Delhi.  And even the tiny margins on collecting and sorting organic waste can provide an income stream for waste collectors.  Organic waste in open landfills is a huge source of methane, a serious greenhouse gas, so there is real value being created by diverting organic waste from open landfills.

It may or may not scale, but the possibility for organic waste to join recyclables in the diverted waste streams creates real value.  Or perhaps waste collectors can be integrated into supply chains that sort waste according to highest value - local compost, recyclables, waste-to-energy projects, large-scale landfills with methane capture that can generate carbon credits. 

The venerable Self-Employed Women's Association in Gujurat got its start organizing self-employed people in Ahmedabad, like waste collectors, to give them a semblance of power in the markets that determined their livelihoods. No matter how the waste management systems evolve - through large-scale systems or community-scale sorting - the livelihoods of the waste collectors should be kept in mind. 

Around the blogosphere:

For San Francisco readers, from the Acumen blog: "The San Francisco for Acumen Chapter will be having its Wine Tasting Event on 25th March, at the SNOB Wine Bar & Lounge from 6.30pm - 9.30pm." (ed. note: Lest you get the wrong ideas, SNOB stands for Sonoma, Napa, Or Beyond.)

The Solar Electric Light Fund is partnering with Partners In Health to put solar panels on all of its clinics - including in Haiti.  As noted in the Economist, expect to hear more about solar for Haiti as Richard Branson's Carbon War Room pushes it as a major piece of Haiti reconstruction and development at a UN donor conference later this month. 

And finally, China is to India like Wal-Mart is to Target?  You'll have to read it to see if you agree. 

The last few weeks have been unusually busy at NextBillion. You've seen several new names, topics discussed, and the diversity of perspectives represented in our pages continues to expand. Moreover, the site's managing partners (Acumen Fund, WDI and WRI) recently met for a planning session where we discussed several ideas that get to the heart of our site's goal: bringing value to our readers and being the web's primary resource for analysis, news and opportunities related to market-based approaches to poverty alleviation. 

Lots of exciting ideas and lots of work, to be sure, but all of this has been accompanied by several conversations with a growing base of contributors. Today I'd like to introduce you to four new members whose name you'll see more and more often in NextBillion: Maria Zheng, from the University of Michigan, Adeena Schlussel from Acumen Fund, Andrew Eder from NextBillion's partner Technoserve, and Bryan Farris from Bain & Co.

While Maria will join as Editor, Andrew, Adeena and Bryan join as Staff Writers. For more information about their backgrounds and interests I encourage you to visit their profiles. Please join me in welcoming all of them!

I read a brilliant article 'Design Thinking for Social Innovation' published in the Winter 2010 edition of the Stanford Social Innovation Review today. The article is inspired from the work of IDEO, a global innovation and design firm, and is authored by Tim Brown (CEO and President of IDEO) and Jocelyn Wyatt (IDEO's Social Innovation Lead).

The article talks about the need for human-centric design to solve complex problems and takes one through the key elements in the 'Design Thinking' process. Through examples of the water treatment centre run by the Naandi Foundation in Hyderabad, India to the Mosquito Net distribution program in Africa, it brings out the importance of design thinking in every aspect of creating and delivering a product or service.

"The design thinking process is best thought of as a system of overlapping spaces rather than a sequence of orderly steps. There are three spaces to keep in mind: inspiration, ideation, and implementation. Think of inspiration as the problem or opportunity that motivates the search for solutions; ideation as the process of generating, developing, and testing ideas; and implementation as the path that leads from the project stage into people's lives." says Brown and Wyatt.

Inspiration is the first step towards creation of a product or service. Observing how things and people work in the real world (which might require living with local communities) is very helpful for drawing inspiration. The example of the use of the positive deviance initiative, where the problem of malnutrition in Vietnam was solved by discovering the solution within the same community, is a good one of drawing inspiration.

In the Ideation space, the authors highlight the importance of letting ideas flow (while deferring judgment) till the end of brainstorming sessions. Organizations often restrict choices while ideating on projects, which is easier to do in the short-term. However, divergent thinking and more ideas are what lead to disruptive solutions and are beneficial in the long-run. It is also advisable to have multi-disciplinary teams when collaborating. 

The last space is Implementation, which is the key to the creation of the final product or service. In this space, prototyping is extremely important. Testing within a small and well chosen sample set of users can help create a revolutionary product.

If you want to learn Human Centric Design (HCD) and use it for innovation, you can use the IDEO designed HCD Toolkit, which helps organizations understand people's needs in new ways, find innovative solutions to meet these needs, and deliver solutions with financial sustainability in mind. The toolkit was created in collaboration with the Gates Foundation and non-profit groups IDE, ICRW and Heifer International.

Early childhood development (ECD) is a term used to describe the personal growth of a child until the age of 6. During this period the brain of a child continues to develop and form neural connections – a process that started during the pregnancy. Adequate nutrition, cognitive stimulation and care strongly influences the extent to which a child’s health may develop to their fullest potential, as well as her cognitive and social and emotional abilities (Young, 2002).

Unfortunately, in many low-income countries, poverty also begins at birth. Children from low-income families are much more likely to be malnourished, live under unhygienic circumstances and receive low levels of education. A shortfall in early childhood development will have irreversible consequences on individuals’ future lifetime opportunities. This will reverberate later in life in the form of lower quality jobs, lower wages, shorter life-spans, worse health and lower cognitive abilities, thus perpetuating an intergenerational cycle of poverty.

Return on investments in early childhood will be higher than returns to investments made later in life.  Firstly, because beneficiaries have a longer time to enjoy the rewards from these investments; secondly, because investing on, for instance, better health or education has a stronger impact on young children than on any other population segment, even if the amount of years was the same. Therefore, supporting ECD generates a positive impact that will have a stronger impact on the individual’s wellbeing than at any other later stage of her life (Recent Nobel laureate James Heckman, has studied this topic extensively, see for instance, Heckman, 2006).

To assist ECD, the child’s family environment is pivotal, hence ECD interventions should at least also consider the child’s mother (as I suggested in a previous post) or at least the child’s primary caretaker. The parental environment and family income of a child are, moreover, far more decisive in promoting human capital and school success during early childhood than in later years (Vegas and Santibañez, 2010).

Although ECD is a very multifaceted concept (at the end of the day everything may have an impact on the child’s development), a recently published book by the World Bank suggests prioritizing 3 goals:

1. Enhancement of a child’s development early in life, including her cognitive and social and emotional development, physical growth, and well-being;
   
2. Enhancement of a mother’s antenatal care with services and information to strengthen the probability of delivery of a healthy baby;
   
3. The education of parents and/or caregivers in better parenting, health, and hygiene practices, as well as providing them the opportunity to participate in the labor force.
   

In other words, at the child’s level there are three main and interdependent needs: nutrition, education and health. At the family level, and especially for mothers, health and education about how to take care of a baby are essential. Therefore adequate ECD programs should ideally be multi-sectorial (straddling more than one industry) and target the child and her family. Along these lines, the most successful ECD programs are:

1. Conditional Cash Transfer (CCT) programs: CCT programs transfer money (in cash or in kind) to families in exchange for them to comply with certain conditions. These conditions normally revolve around children's education and health, such as school attendance or regular vaccinations. In Latin America, where CCTs have been successful, it is estimated that they have benefited more than 15 million poor families and over 60 million low-income people.
2. Parenting Programs: These programs try to educate parents in childrearing and child stimulation techniques and often also include child preschool programs that have been found to significantly affect long-term educational attainment.
3. Nutrition and supplementation programs: This third type of programs have been mainly geared to improve the children’s physical wellbeing and growth as well as stimulating better cognitive outcomes. For instance, subsidized milk and milk fortification programs for children and lactating women have been massively popular and successful in places like Colombia, Mexico or Guatemala.

Unfortunately, the role played by the private sector in ECD is minor at best. Such a state of affairs stems partly from the belief that nutrition, education or health for infants and young children are sectors better taken care of by the public sector rather than by private enterprise. Moreover, scandals such as in Nestle’s baby-feeding formula have not encouraged BoP firms to try to tackle this set of unmet needs for fear of a public backlash.

This represents a missed opportunity for BoP businesses. I believe that businesses operating in low-income markets would have three main advantages over state–run programs as far as ECD programs are concerned. Firstly, many BoP businesses have accumulated a very high degree of trust and legitimacy at the local level. This high status enables them to more convincingly sway families into changing the way many children are brought up and improving their health and hygiene standards.

Secondly, most BoP business are hierarchically flat in order to decrease operational costs to a minimum and be financially sustainable. This means that a smaller portion of investments in ECD programs would be devoted to the maintenance of business structures and a greater portion would end up on the hands of those who need it most. This is a serious problem in many state-run programs where often a big percentage of the money devoted to development is diluted after passing through the hands of several public organizations (even when there is no corruption).

Thirdly, the integrated nature of ECD programs, and the fact that the most effective interventions include components that are usually the domain of different government sectors (such as education, health, welfare, and labor), makes it complicated to implement and sustain them at the public level. However, most of the most successful low-income businesses exploit hybrid business models. The fact that they straddle more than one sector often represents a strength rather than a weakness or a source of difficulty in their business model.

As I have argued before, it is time to extend the focus of BoP businesses beyond male adults and try to develop products and services targeted to other comparatively hidden population segments such as women and, as I have argued in this post, small children. By refocusing and growing our field of vision, private sector development will achieve increased legitimacy vis-à-vis other more traditional forms of aid and realize higher social impacts.

Imagine that you're a 13 year old, the oldest of seven kids, growing up in Pakistan in a poor family.  As you try to fall asleep each night, you wonder whether you'll have something to eat the next day and your back hurts because you spent the last week lifting and pushing wheelbarrows to help your mother and father with their work.

Rather than dream about one day becoming a professional athlete or a world famous musician, you look ahead and expect that you'll be doing back breaking work like your mother and father for the rest of your life.  Life isn't terrible though; you have a very loving, happy family and wonderful friends.  Despite that, you know that your parents are fighting a daily battle to make ends meet and you have a growing sense of responsibility to help provide for your younger siblings.  If you're struggling to picture the desperate scenario I've described, just think of young people in gangs across the U.S.; this situation is not so different from what a lot of poor people in America face.

In their 2009 publication, 'Emerging Markets, Emerging Models', Monitor describes how many children find themselves in a condition of poverty across the developing world.  The report goes on to portray an economic environment that would be very challenging for poor families to navigate: "...current low-end markets are informal, inefficient, exploitative, and often dominated by monopolists, quacks, or crooks."  As you would expect, parents in situations like this want nothing more than to offer their children a life better than their own.  In fact, Monitor reports that parents are willing to spend a large portion of income on education for their children:

Even in one of India's poorest states, Bihar, parents earning over Rs. 3,000 ($60) per month (or $2 per day) are willing to pay more than 10% of monthly income to send at least one or more children to private school.  

Unfortunately, families in desperate situations are prime breeding grounds for the next generation of terrorists.  Al-Qaeda, FARC, Hezbollah and others that have been labeled as terrorist organizations are generally among the most influential and powerful groups in their local geographies. 

As noted recently in the Washington Post, terrorists are often recruited from poor families trying to break out of the cycle of poverty: "For poor people in countries where economic prospects are bleak, jihad can be one of the few jobs available...Of the 25,000 insurgents and terrorism suspects detained by U.S. forces in Iraq as of 2007, nearly all were previously underemployed."  For instance, many in the Arab world perceive Hezbollah to be an organization focused on social development.  Similarly, in Pakistan, the Taliban often offers parents the best chance for their children to receive a decent education.  In Colombia, the FARC recruit fighters from a very young age. 

These groups have so much money (The Middle East Forum reported that, "the Saudi government has admitted to spending more than $87 billion over the last decade in an effort to spread Wahhabism") in areas where many people are struggling to get by, that they can recruit members by offering them a better life.  Families that face desperation and degradation are willing to make difficult choices in order to end their despondency. 

The situation is further aggravated in countries and regions that have been torn apart by wars and natural disasters, which may add to the financial and emotional desperation that some families face when trying to get by. In his book, Capitalism at the Crossroads, Stuart Hart describes what drives individuals to join terrorist organizations:

It takes a lifetime of neglect, despair, dashed hopes, thwarted opportunities, or worse-intimidation, exploitation and humiliation-to drive most people to such extremes.

Individuals facing severe poverty often feel an intense sense of desperation and are therefore willing to do almost anything to escape their scenario.  Though terrorist organizations are usually led by religious fanatics and fundamentalists, their member base generally comes from disenfranchised poor families who seek a better life.  Hart, who is known to be a thought leader on this subject, goes on to say, "Terrorism, in short, is a symptom; the underlying problem is unsustainable development."

The Solution

It is clear that in the long run, the solution to terrorism is to deconstruct the life circumstances that encourage members to join organizations like the Taliban.  This is not an easy task, but social entrepreneurs are working diligently to help.  In the same way that social businesses are just a part of the solution to global poverty, they cannot fix terrorism in isolation.  Social enterprise, while critical, is only a piece of the puzzle; the severity of the problem requires solutions to a number of challenges, including social, government and economic reform.  Still, the work of innovative change makers is crucial and important.  As an industry, we are working to create solutions for those who don't have all the tools they need to help themselves.  We are providing access to proper education, health care, sanitation, energy, water, financial tools, and so on.

Though nearly everything social entrepreneurs do is meant to contribute to more sustainable development, two sectors of work stand out especially in terms of their ability to combat the seeds of desperation that lead to terrorism: education and financial tools.  Education expands the potential of young people to improve their family's life and financial tools help families to better manage their money, thus alleviating situations of financial desperation.  

Education

Providing one's children with an education is a desire shared across nearly all cultures and it is crucial for bettering the world and opening new doors of opportunity.  As Monitor reports, "Parents generally prefer to send children to private schools [which are perceived as higher quality than public schools]: between 1993 and 2002, 80 percent of new enrollments in urban India were in the private sector."  Anyone who has read Greg Mortenson and David Oliver Relin's 'Three Cups of Tea' knows about the inspirational work being done by the Central Asia Institute.  The institute is building schools in remote regions of Afghanistan and Pakistan to promote education, especially for girls.  Doing so in the heart of the territory occupied by the Taliban and other extremists, the CAI is directly influencing the life opportunities available to those whom it reaches. 

Another social venture, Vittana, is enabling person-to-person micro student loans over the internet, which makes it possible for the poor to receive quality education and pay off the loan with their earnings later on.  Through two vastly different approaches, the Central Asia Institute and Vittana are providing education opportunities for those at the BoP.

Financial Tools

As is clearly demonstrated in the book Portfolios of the Poor, the world's poorest are always coping with uncertainty, especially with regard to cash flows and the timing of when they receive income.  Financial instability can make life very difficult and can certainly force families to make difficult decisions. 

The work of Grameen Bank and the microfinance industry have provided some of the tools required for families to manage their finances, but more work is necessary.  Currently, M-PESA and FrontlineSMS are building the capability for the poor to store money on their mobile phones and make payments via text message. 

As Rob Katz described recently, M-PESA can be extremely useful for both rich and poor to manage their money and cash flows.  Not only will this enable users to make digital payments and have another way of moving cash, it will allow them to keep more of their money safe rather than stashed at home or with money guards.  For those living in tiny huts in the middle of urban slums, you can imagine how difficult it is to store money safely at home.  Financial security provides stability, which helps enable the poor to avoid the degree of desperation that leads them to join forces with terrorist groups.

Though this post has only touched on social businesses in the education and financial services industries, unsustainable development can only be cured through the collective impact of solutions across all types of needs.  Ultimately, social businesses and entrepreneurs will help local communities rise out of poverty.  When this occurs, terrorist organizations as we know them may cease to exist.

I was recently referred to an article written by Niti Bhan entitled "Emerging Markets as a Source for Disruptive Innovation: 5 Case Studies." I have my own blog, Disruptive Leadership, in which I frequently advocate the importance of embracing disruptive forces in product innovation and business model development.

I wrote a piece a year ago called "It happened first in emerging markets" in which I made a similar argument as Niti. In this article I used the example of SMS-based banking services, a phenomenon that started first in developing countries like Kenya, predicting that these service swould eventually make it into mature markets. (Mobile money is also one of my predictions for the top ICT4D trends for 2010.) Text-based bank services are still limited in mature markets, and may take a permanent back seat to full-service banking applications on smart phones (I have three banking applications on my iPhone).

This topic, the importance of emerging markets in driving disruptive innovation, isn't new to Next Billion. In 2006, John Paul wrote the article Innovation Blowback, in which he reviewed a Mckinsey report "Innovation Blowback: Disruptive management practices from Asia." He started by summarizing the concept of disruptive innovation as described in the Innovator's Dilemma by Clayton Christensen, and concludes that Western companies who ignore the importance of emerging markets do so "at their own peril."

Coming across this article recently gave me a bit of deja vu. When I started as General Manager of Intel's Emerging Market Platform's group in early 2005, there were three sources I was touting as "bibles" for those that joined my group: 1) Innovator's Dilemma, 2) The Fortune at the Bottom of the Pyramid", and 3) Innovation Blowback: Disruptive management practices from Asia. I even summarized these in a power point presentation that was used in developing the business plan for the group.

In Niti Bahn's article, she also begins her argument by referencing Christensen's Innovator's Dilemma (something I've done many times as well). She correctly uses the netbook market as an example of a disruption that started first in emerging markets. Both Negroponte's "One Laptop Per Child" and Intel's Classmate PC were the first to tout the importance of stripped down, cheap laptops for school children at the BoP. But netbooks didn't truly take off until Asus and Acer embraced the segment and found large demand in the developed world. Niti then goes on to list four other examples, including alternative power sources and "re-imagined" household appliances.

The rationale for why emerging markets are a source for disruptive innovations is simply because in order for a product or service to be successful, it has to be more affordable, easier to use, and offer more value then existing products on the market.

Using the netbook example, does it pass this litmus test? Netbooks are more affordable then notebooks. They typically have a simplified operating system or user interface that is easier to use. And they are providing something clearly of value to under-privileged students: access to a computer, the internet, and mobility.

I have found that many companies seem to focus more on affordability and less on ease-of-use or real value. Companies that embrace all three aspects find success. A source of many other great examples comes from the book "The Fortune at the Bottom of the Pyramid" by CK Pralahad, a piece of work so critical to business theories on the BoP that it was likely instrumental in the creation of Next Billion.

Wouldn't it be great for those of us who are passionate about disruptive innovation and the BoP to have a book co-written by Clayton Christensen and CK Prahalad? If you know of one, let me know.

Until then, fill your appetite with an article on the BoP by Mr. Christensen titled The Great Leap: Driving Innovation from the Base of the Pyramid or a summary of Mr. Prahalad's 12 Principles of Innovation for the Bottom of the Pyramid. 

After a couple weeks' absence, the weekly roundup is returning, in a new weekend slot!  This week I wanted to highlight announcements and videos from two increasingly prominent ventures that both came out of a class on "Extreme Affordability" at Stanford's D-School.   

If you're not at Stanford and you can't take that class, but you were inspired by Moses' recent post on entrepreneurship in a recession, I wanted to highlight the the great list of incubators and accelerators for new ventures the Foundation on Youth Social Entrepreneurship has put together (along with deadlines for applying for them!).  

Warmth: I'm looking forward to a slew of new 2010 TED talks being put online, but for now was content to be reminded by Echoing Green of a TED India talk by Jane Chen, founder of Embrace.  In this video, she discusses Embrace's $25 incubator for premature infants. 

Light: The news from d.Light, the manufacturer of solar lanterns that are similarly extreme in their affordability, continues to be of interest.  Last week on their blog, they highlighted an education campaign - "The Right to Safe Light" - that was launched in December in Tanzania after widely publicized fires that killed Tanzanian schoolchildren and were started by kerosene lanterns.  Fires from kerosene are frequent however, and solar-powered lanterns of course minimize the risk of fire from lighting.  

This campaign raises some interesting questions for me about the role of public education and social campaigns in base of the pyramid businesses.  In some cases, public education is necessary simply to inform consumers about the need for and existence of new products.  And I've heard of examples from things like water purification companies where to differentiate their product from unhealthy water that appears clean to the naked eye, potential consumers must be educated about what's in their water sources before they'll pay for clean, safe water.  

It is also possible for such efforts to completely ineffective if they're delivered without regard for how to craft a compelling public message.   But conversely may companies not to undertake such efforts because they don't see the opportunity, or they know they don't have the ability to execute and do not want to waste scarce dollars on ineffective marketing.

Where a product like a solar lantern can fulfill a social need - like modern energy and light without the risk of indoor air pollution and fires - it seems perfectly appropriate to run something that looks more like a social campaign than a product marketing campaign.  But to succeed as cost-efficient marketing efforts, such campaigns must be executed well, and this is a skill-set that many businesses lack.  Back on World AIDS Day, Nathaniel Whittemore at Change.org highlighted the effectiveness of the justice-oriented public messages used by AIDS activists - the red ribbon, etc. - and in my mind I contrast this with the limited public media efforts that base of the pyramid organizations have undertaken.  "The Big Squat" was one such effort, an admirable attempt to highlight sanitation issues in a humorous way.  But it demonstrated that there is a long way to go to ignite the world's imagination around World Toilet Day.  And we may have a long way to go if the task that sanitation organizations are putting in front of themselves is elevating something called World Toilet Day in the first place.  

There is a mismatch of skill-sets between base of the pyramid investment funds and businesses and public education campaigns, but not a lack of need. Much greater infusions of capital and public support are needed for market-based development approaches.   This will probably take individual companies highlighting their products in new ways, as well as sector-wide efforts to raise the profile of new solutions for investors and policymakers.

d.Light's is doing a good job by seizing on a topic of public discussion and emphasizing rights and justice, where this can be connected directly back to a product.  Injustice is not something businesses typically discuss in marketing - and it probably needs to delivered through different channels than would be used for typical advertising.  It may even be aimed at audiences that are different than a company's actual customers, but which are influencers of their customers or enablers of their overall business efforts.  In this case, Tanzanian schoolchildren are a great example, and their safety is a public concern worthy of talking about in the media and in schools.  

At the end of the day for d.Light, it's all about the nuts and bolts of selling more solar lanterns.  I've read a lot lately about the growth of the solar lighting industry in East Africa, but I've found that it's hard to describe to someone what this looks like when they think of solar as an energy technology that only wealthy people in California can afford.  In case you need a visual of what the solar energy economy looks like in Tanzania, you can check out this quirky video of the opening of a d.Light store in Dar es Salaam.  I love knowing what a solar energy store looks like in Africa, and I love comparing that storefront with a new solar distributor that I just saw pop up in Brooklyn.  

Today's discussion on development is a Marxist nightmare.  With patient capital, philanthrocapitalism, and venture capital models becoming ever more popular ways to fill the voids of the base of the pyramid (BoP), the power of the market is emerging as increasingly vibrant. Vestergaard Frandsen, a European manufacturer of emergency relief and disease control products (previously covered here), and an Acumen Fund working partner, is harnessing that very power.

In 1992, Vestergaard Frandsen underwent a mission makeover from producing hotel uniforms to delivering textiles such as anti-malaria bed nets, plastic sheeting, and water filters to the awaiting developing world.  Although the company exchanged its old input materials for new ones, and altered its ambitions from clothing production to solving global threats such as malaria and impure drinking water, it never abandoned its basic ambition to succeed as a for-profit business. 

However, at the core of its new self, VF was dedicated to helping the BoP.  The plan was to "do well by doing good," and thereby enact a truly self-sustaining solution to global poverty and health issues. Professionalism, with a dose of ethics, was to thread together the company's otherwise unlikely transition. 

VF sells its products, PermaNet, ZeroFly and LifeStraw directly to low-income customers and to aid organizations such as the Red Cross and Save the Children at affordable- yet undeniably-high impact prices. Some critics disparage the company for imposing costs on an already burdened population, while other opponents propose that aid dollars invested in sustainable infrastructure are dollars better spent.  However, the company sees things another way, and one does not have to look far to be convinced.  In fact, just check out their most recent press release.

The day after Haiti's tragic quake, VF pledged to donate LifeStraw and ZeroFly products to the ailing region. Mikkel Vestergaard Frandsen, the company's CEO, commented: "We are working at full speed to supply our partners with tools they need to contain the spread of disease that often follows natural disasters. We encourage those interested in joining our efforts to donate to one of the many organizations providing relief for the people of Haiti."

Rewind to months earlier for another demonstration of the compassion that supplements VF's financial aptitude.   More impressive than their decision to travel to Africa and donate their products in celebration of their 50^th anniversary, was the care with which they executed this plan.  Since HIV testing carries a weighty stigma in many regions of Africa, and is hence often neglected, VF constructed a salient strategy: any African to visit a communal clinic for HIV testing would receive a CarePack filled with the company's lauded products.  This incentive battled what has been a longstanding deterrent to HIV testing and succeeded in testing 80% of the population of Lurambi.

You can be sure that VF's social accomplishments are very much due to their financial prosperity. VF's use of capitalism does not perpetuate inequalities, rather enables their aid and bolsters their efforts.  VF continues to exhibit that one can give while getting, and that a business model can be as lucrative as it is altruistic.  To quote Fast Company, VF is "[g]ood indeed: The life-saving textiles business is now 10 times the size the old uniform business was just a decade ago".

"Once you don't have it - that's when you realize the value"
David Kuria, founder and CEO of Ecotact, speaking about toilets

When I first journeyed to Kenya in 2004, celebrating the launch of a public toilet facility was one of the last ways I imagined spending a Monday morning - or any morning (or afternoon, or evening), for that matter. In fact, unless I had enjoyed an elephant's dose of mango juice and was on a 5 hour safari across the Great Rift Valley, I might not have had reason to celebrate a toilet at all.

Six years later, however, armed with the realization that an estimated 2.6 billion people lack access to basic sanitation and 2.2 million die each year from water and sanitation related diseases, I now have billions of reasons to attend toilet parties, an emerging trend in the Nairobi slums thanks to David Kuria and Ecotact. So when the Acumen team received the invite to attend the launch of Ecotact's 17th Ikotoilet facility last Monday, I practically ran for my dancing shoes.

Sitting under a small tent adjacent to the about-to-be-launched Kawangware Ikotoilet, Rob Katz and I listened eagerly with the 200-plus gatherers inside and spilling out the edges of the makeshift party hall. The crowd - a mix of residents, officials and journalists - engulfed the architecturally distinct Ikotoilet structure. It was clear that Acumen wouldn't be dancing alone at this party.

The Minister of Public Health and Sanitation and the Chief Public Health Officer also showed up for the celebration. Given the honour of Chief Guests, they both made remarks before cutting the ribbon: this day marks the launch of a noble public-private partnership initiative, as we bring necessary services closer to the people and are no longer dependent on flying toilets.

The Kawangware facility is part of Ecotact's newly implemented slum outreach model; it is now the second Ikotoilet in the informal communities of Kenya.  And according to Kuria and the Minister, there will be more Ikotoilets in Kawangware in the near future - extremely exciting news for Acumen as a BoP investor!

Ecotact is experimenting with a school model in the slums as well.  After cutting the ribbon at Kawangware - and being mobbed by reporters as she toured the facilities - Minister of Public Health and Sanitation and Kawangware MP Beth Mugo led a delegation to the Dagoretti Secondary School, about 10 minutes away from the new Ikotoilet.

The school's 150 students currently use pit latrines. But with funding from the Solid House Foundation, Dagoretti will soon inaugurate a free-for-use Ikotoilet on site. What's more, a biodigester will generate valuable methane gas, pumped from the toilet to the school's kitchen.

With facilities in Nairobi's central business district, city parks, slums and schools, Ecotact is tackling the sanitation problem here in Kenya on many fronts. As an investor and partner with Ecotact, Acumen Fund is eager to continue the celebration with Kuria and his team, as they grow from 17 facilities to a target of more than double that within the next year.