This is a competition through collaboration, meaning that the Changemakers community gets to nominate projects, vet them and vote for the winner. (If you've never heard of Changemakers, check out Leslie Berger's concise profile of their work in the Stanford Social Innovation Review.)
The water and sanitation competition is coming to a close; 9 finalists have been selected by the community, and voting is open. If you haven't already, drop by the Changemakers site and vote - it only takes a few minutes, and your voice actually counts (the winner gets $5,000 cash and is eligible for up to $1 million worth of Global Water Challenge grants).
In an era when most decisions - political, business - are made in back rooms away from our inquiring eyes, Changemakers represents real change. By opening up the decision making process to anyone with a web connection, they are democratizing (and crowdsourcing) at the base of the pyramid. Happy voting...
It was sunny, and tempting to sit outside at the University of San Diego to enjoy the weather. Inside, however, a group of global practitioners and scholars - organized by Patricia Marquez of USD and Carlos Rufin of Sussex University and Babson College - were discussing the role of utilities at the Base of the Pyramid. (See 'attachments' at the end of this post, where I have uploaded the meeting's full agenda as a PDF.)
Utilities provide basic services - telecommunications, water, power - that are essential to people's lives and increase their productivity. But a decade ago, many utilities in emerging markets were failing—service to low-income communities was poor, and many of their customers simply didn't pay or acquired the service informally.
The picture that emerged in San Diego, however, was more optimistic. A number of utility companies have engaged BoP communities and increased their willingness to pay, in return for investment that improved service quality. Codensa, a power utility in Columbia with 400,000 non-paying customers (out of a total of 2 million), reduced non-paying customers dramatically. Manuel Bueno has an excellent analysis of the Codensa case in his post, "The Codensa Case: Electricity and Related Services for the BOP in Colombia," from December, 2007. And mobile phone companies improved service and access to service dramatically compared to legacy fixed-line telecom companies (sometimes another branch of the same company).
(This post continues past the break; click "Read More" to continue)
Today's New York Times front page features, once again, the pressing crisis that has risen from soaring food prices around the world. The debate has found its way to institutions like the UN and the World Bank, who have called for urgent measures to keep the world's poorest from suffering the hardest consequences.
Meanwhile, another issue is slowly gaining momentum and I'm sure we'll begin to hear more and more about it in the coming months: water scarcity. The past two weeks have seen extensive coverage, discussing everything from proper pricing and innovative technologies, to business models and new concepts like that of "virtual water." This is an issue I will explore in depth in the coming months as I will be joining Al Hammond in the Global Social Benefit Incubator project, studying and mentoring innovative business models that tackle the issue of clean water supply for the poor.
I'm very excited about this opportunity to learn more about a subject that will be increasingly important for my generation, so stay tuned for detailed coverage. Meanwhile, here's a quick roundup of the last two weeks for those of you interested in following this discussion:
Financial Times addressed the issue of proper water pricing, based on the penalty that the world's poorest pay for access and possible measures of accountability on behalf of the world's most water-intensive industries.
(This post continues past the break; click "Read More" to continue)
Slum-dwellers in Dar es Salaam pay the equivalent of £4 ($8, €5) for 1,000 litres of water, bought over time and by the canister. In the same Tanzanian city, wealthier households connected to the municipal supply receive that amount for just 17p. In the UK, the same volume of tap water costs 81p and in the US it is as low as 34p.
Figures from other countries confirm the evidence: it is generally the poorest who pay most for what is one of the most essential of all natural resources. Water is in short supply for a large proportion of the world's people: about 1bn lack access to clean water and 2.6bn have no sanitation. An estimated 5,000 children die every day from water-related disease, according to WaterAid, the London-based charity.
If the number of people lacking safe drinking water were halved, at a cost of about $10bn, the world would benefit by $38bn in annual economic growth, according to the United Nations Development Programme. Disputes over water rights can, the UNDP argues, lead to conflicts - such as in Darfur.
AFP, 31 March 2008 - Nobel laureate Muhammad Yunus on Monday unveiled a deal between his pioneering Grameen bank and French group Veolia Environment to provide clean water to poor rural communities in Bangladesh.
The Bangladeshi economist also sought support from President Nicolas Sarkozy for creating more microcredit schemes to fight poverty, particularly in Africa.
"I wanted to make him understand how effective a tool microcredit is in helping the poor people, particularly the poor women, to take control of their own lives and pull themselves out of the problems and benefit the children," Yunus told reporters after his meeting at the Elysee palace.
After meeting with Sarkozy, Yunus sat down with top business leaders at the Elysee including billionaire Vincent Bollore and announced the creation of the new joint company with Veolia Environment.
Called Grameen-Veolia Water, the company will operate several water treatment plants in Bangladeshi villages, with the goal of bringing clean water to 100,000 people.
Procter & Gamble's partnership with non-profit organisations is proof that local markets can be won over to new products.
In 2003, a $20 million R&D and marketing project at Procter & Gamble (P&G) had reached a financial impasse after eight years of work. A decade earlier, the company had spotted an opportunity to supply a water-purifying product to the developing world, which, it was hoped, would increase the company's share of the mass consumer market in the emerging economies.
At the same time, the company believed it could save lives by providing a simple way to purify household and drinking water. Unsafe water supplies and inadequate sanitation kill more than 3 million people every year, making this problem collectively more lethal than Aids.
The project stalled in late 2003 when it became clear that the financial returns for selling a powder product called PUR Purifier of Water did not justify further investment in commercial terms. At this point, P&G changed tack, transforming the project into a corporate social responsibility (CSR) programme. Alan Lafley, P&G's president and chief executive, moved it to the corporate sustainability department (CSD), itself a new division. Thereafter, the company developed partnerships with not-for-profit organisations in social, health services and humanitarian relief to market and distribute the product more effectively.
Guest blogger Mallika Ahluwalia works for ACCESS Development Services, an Indian firm providing inclusive and innovative livelihood solutions enabling the poor to ovecome poverty and live with dignity. By Mallika Ahluwalia
Yakalakshmi lives in Nekkunda village, part of the Telengana region of Andhra Pradesh, with her husband and two children. Though she has water piped to her house by the village panchayat, her entire family fell ill for a month last monsoon season by drinking water directly from the tap. "We all got high fever and severe diarrhea," and as a result, "we had to spend around Rs. 4000 ($100) on health care, which was very difficult for us." So, when Yakalakshmi got the opportunity this past January to buy an effective water purifier through her Self Help Group (SHG) on an installment basis, she was one of the first to sign up.
Yakalakshmi is just one of the beneficiaries of a unique tie-up between ACCESS Development Services, an Indian microfinance technical services non-profit organization, and Hindustan Unilever Limited, one of the country's largest producers of fast-moving consumer goods, to provide safe drinking water to rural poor. "Most of these villages have piped water or boreholes," according to Padma, Project Coordinator at a local NGO; "the problem is that tests by UNICEF in this district show that up to 70 percent of these sources are contaminated." The contamination gets even worse during the rainy season, especially due to poor sanitation and waste-management practices.
Though local bodies have been working to raise community awareness on the importance of safe drinking water, the major penalties of affordability and access remained. Enter the innovative partnership between ACCESS and HUL. HUL has designed a household water-purifier, PureIt, which uses a four-stage filtration process to remove all bacteria, viruses, dirt, and pesticides resulting in water that is 'as safe as boiled water.' It does not require electricity or running water. ACCESS facilitates loans for rural women to be able to afford these water purifiers through its partner microfinance institutions (MFIs).
(This post continues past the break; click "Read More" to continue)
NextBillion ally Cat Laine - editor of the excellent AIDG blog - posted a fantastic social marketing video earlier this week that I just had the chance to look at today. Entitled Don't Wait for the Rain, the video features Maasai rap artist Mr. Ebbo alongside actors portraying the MoneyMaker pump in action. It is a combination music video, advertisement and soap opera all rolled into one entertaining 5-minute package. It is not the first time Mr. Ebbo has signed onto a social or governmental cause.
I will embed it below, but if you can't see the video, click here for the YouTube link: Don't Wait for the Rain.
Lyrics are via the AIDG Blog - thanks Cat:
(This post continues past the break; click "Read More" to continue)
So far, 2008 has been a great year in terms of attention to BoP and market-based solutions to poverty. Out of Poverty, a new book by Paul Polak, founder of International Development Enterprises (IDE), just hit the shelves this month and will certainly add to this momentum. IDE's recent receipt of a $27 million grant from the Bill & Melinda Gates Foundation only makes Polak's book timelier, as widespread recognition grows for his leadership role in the BoP space and his innovative design solutions (including the treadle pump and micro-drip irrigation) that have increased the incomes of over 2.5 million dollar-a-day families living in rural areas and subsisting from small farms.
I've now had the opportunity to read through Out of Poverty, and am impressed that the book truly reflects the down to earth style and substance of Polak and his work. In fact, what's most striking about Polak's approach to attacking poverty is its straightforward, flexible, and results-based orientation.
The book covers a lot of ground quickly, challenging leading development theorists (Jeff Sachs, Bill Easterly, and even C.K. Prahalad), explaining why markets are not serving the poor, and demonstrating, piece by piece, why for-profit mechanisms have and will continue to trump charity in terms of lifting people out of poverty.
On NextBillion.net, we have chronicled these arguments many times before, but I was pleasantly surprised at Polak's ability to connect them, on the level of tomatoes and cucumbers, with the nuts and bolts of his years spent, literally, in the field. Out of Poverty strikes a good balance between economic calculations and human anecdotes, staying true to the author's principal beliefs that one must "go to where the action is" and "talk to the people who have the problem and listen to what they say," while also pursuing only approaches that "can reach at least a million people and make their lives measurably better."
The book is certainly worth a read, and I hope to see it appear on the development academics' reading lists soon. Out of Poverty gets beyond the fractious discussions of "what's gone wrong?" or "which approach is right?" and offers a welcome dose of common sense for getting people out of poverty, quickly and permanently.
Safe tap water is a luxury that many people in the world do not enjoy. In many developing countries, it is not safe to drink or use the tap water. The Center for Disease Control website of the United States government has health information about every country in the world, and it’s interesting to see how many countries fall under the advice: "Drink only bottled or boiled water, or carbonated (bubbly) drinks in cans or bottles."
Bottled water is expensive, of course, and people living at the BoP often cannot afford it. World Resources Institute’s research in The Next 4 Billion: Market Size and Business Strategy at the Base of the Pyramid showed that low-income customers pay anywhere from eight to sixteen times more for bottled or trucked water than they would for a local, public utility (page 58). If this isn’t a BoP penalty, then I don’t know what is.
Access to clean drinking water is a concern world-wide – but it is not the sole responsibility of government to provide it. The Next 4 Billion report concluded that there is a clear willingness to pay for clean water in the BoP. However, even if there is a willingness to pay, access to such services is not widespread, especially in rural areas. What the world needs are effective and innovative ideas on how to get these services to the people in the BoP, and to deliver them. Ashoka’s Changemakers has partnered with The Global Water Challenge to launch a collaborative competition to discuss and discover new solutions:
"Global Water Challenge is dedicated to finding solutions to the water and sanitation crises. We believe that we have both the resources and the will to live in a world in which everyone can drink clean water, and use a safe toilet. It is our goal to find and encourage ideas and individuals, wherever they may be, so that every school, every clinic, every home, every community, without regard to geography and income, has access to these basic needs."
(This post continues past the break; click "Read More" to continue)
International Development Enterprises (IDE) today announced a grant of $27 million over four years from the Bill & Melinda Gates Foundation in support of its micro-irrigation programs for Indian smallholder farmers.
Bill Gates, co-chair of the foundation, announced the project as part of a package of agricultural development grants at a press conference with Amos Namanga Ngongi, President of the Alliance for a Green Revolution in Africa (AGRA), and World Bank President Robert B. Zoellick at the World Economic Forum in Davos, Switzerland.
The project aims to directly affect up to 250,000 smallholder farm families—1.75 million people—in 14 diverse states of India, increasing farmers’ income by a minimum of $400 per year, and boosting the agricultural economy by $300 million at the grassroots level. To accomplish this goal, IDE will employ its proven, creative approach to manufacture, market, and distribute affordable, scalable micro-irrigation systems though a newly-created private sector supply chain; train farmers to use micro-irrigation; and link them to high-value crop markets, using little more than their own existing resources.
Today, Bill Gates' speech at Davos has thrown the spotlight on "creative capitalism" and an emerging groundswell of interest in market-based solutions and business models that can drive positive social and environmental change. The excitement around these ideas to create self-sustaining, scalable options for development at the bottom of the economic pyramid (BoP) is encouraging, and the potential for a snowball effect of increased action is huge.
Yet all of the grand words and fanfare remind me that what is most riveting - what really seems to capture attention and combat ingrained suspicions (about "development aid" and about "capitalism") - are the actual stories of the models themselves.
For more organizations, case-studies, and current information related to the BoP space, search our resource library, follow the latest news, and subscribe to our RSS to keep up-to-date on our latest blogs!
Indian officials have made it plain that they’ve given up using the annual diaspora conclave as a platform to woo investments of overseas Indians.
"The investment or money has not been forthcoming. Therefore, we decided that we will not ask for any investment this year (at Pravasi Bharatiya Divas 2008) but seek partnership from NRIs for philanthropic projects," Overseas Indian Affairs Minister Vayalar Ravi told the media recently.
In India, the contributions made by migrants are not readily apparent in economic terms. Overseas Chinese, for example, accounted for 80 per cent or more of the inward foreign direct investment into China in the 1980s and early 1990s, when that country opened up. By contrast, Non-resident Indians (NRIs) accounted for 10 per cent or less of inward FDI after India opened up. Most of the capital sent to India by NRIs has been personal transfers to family and friends, not FDI.
In the past, NRIs have been critical of the ‘hard sell’ on investment as they do not come to the Pravasi Bharatiya Divas as investors with millions of dollars but mostly as professionals to share their expertise and experience in India's forward march.
"We have found that there has been too much noise about investment and very little actual investment," says Ravi. According to him, only around five per cent of FDI in India is from NRIs. "Yet I have met many people, salaried people, not millionaires, who want to contribute to improving conditions in their home state," Ravi has been quoted as saying.
It was apparently with this thought that the government proposes to announce the setting up of an India Development Fund (IDF) at the NRI conclave to be held in New Delhi on January 8 and 9. January 9 marks the day the father of the nation Mohandas Karamchand Gandhi returned to India from South Africa.
The India Development Fund will reportedly be a not-for-profit trust, which will provide a single window to direct philanthropy funds to the social sector. The sectors have been identified keeping in mind the objectives of the 11th Plan, and these are mostly in micro finance, women’s empowerment, health and education. According to the ministry, reputed NGOs will be engaged and international accounting standards applied to the funds to demonstrate proper utilisation to contributors.
Today I'd like to highlight what I see as a frequently occurring theme in BoP business models, and an element that could make it or break it for companies that look to target BoP markets. Entrepreneurship is often cited as the critical component for small and medium-scale enterprises, especially ones that employ a franchise model. Enterprises such as Scojo, Medicine Shoppe, Drishtee, HMX Sumaya, Florestas and Berni Labs are among many examples of business plans that rely on entrepreneurial individuals to take a model and make it work in their own communities.
Despite this impressive list, I think what underlies some of these entrepreneurs' success is not based on ‘entrepreneurship' per se. Rather, there is another, crucial element that explains why smaller enterprises often are the ones to find a successful BoP niche, and why larger corporations (even when they have greater economies of scale and resources available) do not always succeed in these same markets.
That element: KYC. No, not Colonel Sanders; KYC stands for know your customer. And in the BoP context, that doesn't just mean doing market research about consumer preferences and purchasing power (though that IS important). No, KYC means becoming a provider of personal attention and building an individualized connection with initial and potential customers. The importance of this for a BoP business model is
Casey describes the success of a for-profit rural health franchisee based on the personalized attention that customers receive and a willingness to tailor services to meet a variety of needs and comfort levels. Evidence from SHEF clinics in Kenya shows that BoP customers are willing to pay for these services, even where the alternative option of a free government clinic is available.
Is this specific to the BoP?
(This post continues past the break; click "Read More" to continue)
Santa Clara University is known in social entrepreneurial circles for its work helping to organize and judge the TechMuseumAwards – a showcase for social entrepreneurs, mostly from developing countries. Less well-known about the school is the GlobalSocialBenefit Incubator, run by SCU’s Center for Science, Technology, and Society and a host of Silicon Valley volunteers.
The GSBI, under the guidance of Professor Jim Koch, selects 15-20 enterprises from developing countries and provides an 8-month mentoring process. The mentoring culminates with an intensive 10-day process in Santa Clara, where entrepreneurs work with their mentors, other experts, and each other to prepare themselves to succeed upon their return home. Applications for the fully-funded 2008 class of entrepreneurs are available now over at Social Edge.
This year, SCU has invited World Resources Institute to work with them on the GSBI process and accepted my suggestion that we focus a sub-group of the available slots on enterprises in the water sector.
The idea is to promote cross-learning among water entrepreneurs, and also to analyze the sector as a whole more deeply. This includes looking at geographic differences in the treatment challenge, the range of available and prospective technologies, business models, financing strategies, etc. The goal is to stimulate the sector as a whole.
(This post continues past the break; click "Read More" to continue)
NextBillion.net brings together the community of business leaders, social entrepreneurs, NGOs, policy makers, and academics who want to explore the connection between development and enterprise. Read more...
As Ana first reported back in February, Ashoka's Changemakers and the Global Water Challenge have partnered to open a worldwide search for ideas and projects with the potential to transform the provision of sanitation and water worldwide. The search, entitled Unclogging the Water and Sanitation Crisis, began with a call for projects and culminates this Sunday, when voting closes.
add to del.icio.us
add to digg
related at technorati
Today, 
On Solar Power Distributed Among Rural Poor in the Philippines
On Solar Power Distributed Among Rural Poor in the Philippines
On MicroEnergy Credits Corporation: Catalyzing Clean Energy for the BoP
On Announcement: New Ventures Call for SME Business Plans
On Compartamos: From Nonprofit to Profit