The Future of Social Business

A New York Times Book Review article on Muhammad Yunus’s recent book, Building Social Business, expands the discussion on business models that were discussed in Creating Successful Business Models, as part of this week's topic on Venture Development and Growth.

The book review highlights Yunus’ vision for social business and the great promise that it holds:

The way he envisions it, these companies would be run as efficiently as the for-profit variety. Unlike charities, they would make enough money to be self-sustaining. However, they would invest leftover money in expanding their humanitarian efforts rather than paying dividends to shareholders. … He even foresees the day when social businesses will be public companies whose shares are traded on their own stock market. This, he believes, will help pave the way for the elimination of poverty in our lifetimes.

In contrast to the current model of a typical for-profit business, a social business would be profit driven only to build the company and allow the financial value accrued to benefit society. I believe that this business model is itself a social innovation, as well as a mechanism to initiate and scale ventures.

In the Stanford Social Innovation Review, Yunus’s book is also reviewed. The author criticizes Yunus’s definition, stating:

... His limitations will severely constrain activity and discourage innovation. By insisting only on nil-return-seeking capital, he greatly restricts the available capital sources. This handicaps those of us who seek to encourage more capital into the sector. Even without Yunus’s rules, the pool seems far too small—why on earth should we further limit the capital available to them?

In the same way that people doubted the viability of Microcredit, people are doubting the possibility of social business as a viable scheme. Nil-return seeking capital inputs into a company make this giving a donation, rather than a typical investment. What if we were to link our own fate with the fate of others, and have a type of altruism, where the benefit to others accrues to and benefits ourselves? Our society would be quite different.

What obstacles must be overcome for social business to have a wide-spread impact with the potential to eradicate poverty, as Yunus envisions?

Social versus Enterprise

This week’s reading Creating Successful Business Models, Lessons from Social Entrepreneurship was a useful resource for thinking about different structures within our definition of social enterprise. Those differences seemed to focus on the revenue generation piece, which is always a contentious topic when discussing social innovation or enterprise. To add fuel to the fire, I came across an article (supported by research) that found social enterprises focus too much on making a profit instead of maximizing its programming within the community. However, the research was focused on 700 social service organizations in New York County, and most, if not all, of these organizations have separate profit-maximizing ventures unrelated to their mission. After reading the article, I almost felt compelled to comment that social enterprises must have their social mission and revenue generation mission linked as one, and that a non-profit that opens a coffee shop should not be considered a social enterprise (according to our class definition).

As I then read some of the comments related to the article, I noticed that Jerr Boschee, Executive Director of the Institute for Social Entrepreneurs and past Director of CMU’s Institute for Social Innovation, found this article to be just as flawed as I suspected. Although Mr. Boschee argues that in order to be a social enterprise “products and/or services provided by the enterprise must DIRECTLY address social needs”, the head researcher Rebecca Tekula, Executive Director of the Helene and Grant Wilson Center for Social Entrepreneurship, continues to disagree. Tekula’s definition is “external social enterprises are often unrelated to mission; their business activities are not required to advance the organization's mission other than by generating income for its social programs or overhead.”

While this heated online discussion is interesting to read, what is more fascinating is the fact that two “experts” within the social innovation and enterprise space could differ so much in how they define their sector! I wonder what the consequences of this confusion will be for the sector? How do you think the lack of a concrete definition will affect the success of social enterprises? As the reading stated, Model 3 social business ventures have not yet proven to replicate like traditional business ventures. Instead maybe their purpose is to inspire (Negroponte!). What do you think is more powerful: replication or inspiration? Is a globally agreed upon definition of social enterprise necessary for the sector to flourish?

Unreasonable Men and the Quest For a Malaria Vaccine

Billy Shore of Share Our Strength

My good friend Billy Shore is the founder and executive director of Share Our Strength, one of the world's leading organizations in the quest to end childhood hunger.  Billy was a senior aide to former U.S. Senators Gary Hart and Bob Kerrey and was selected as one of "America's Best Leaders" by U.S. News and World Report in 2005.


He has a new book coming out called The Imaginations of Unreasonable Men: Inspiration, Vision, and Purpose in the Quest to End Malaria (his fourth; see all of Billy's books here) which follows the story of two audacious scientists who have been racing each other for 30 years to develop the malaria vaccine. He uses the narrative to broach the question, “How do you solve the problems of hunger, disease, and other critical social problems with no natural market?”


Here an article link describing the book and Billy's insights on social innovation, published by Community Wealth Ventures, Share Our Strength's social enterprise consulting firm:
http://www.communitywealth.com/Newsletter/October%202010/Imaginations%20of%20Unreasonable%20Men.html

What is the technology being developed on the ground?

On Saturday, October 9th, 2010, I attended an event "A Morning with Microfinance Leaders," I learned about an organization called EarthSpark International. The founder Dan Schnitzer presented a video about the affects of dirty energy. He showed an experiment in Haiti that tested the cooking time of a locally designed stove. The stov was proven to be more efficients then the popoular stoves currently being used in Haiti. Earth Spark International aims to address the "energy poverty" that plagues BOP communities like those in Haiti. Part of his orgnanization's mission is to introduce techonologies to address the energy needs of the very poor. This morning, along with talk about technologies engineered in China and India, he also took time to discuss, technology engineered locally. The oven described early was developed and produced right in Haiti. He beleived in investing and promoting local innovation. I believe to be an interesting prospect for engaging BOP markets. But what is the best way to engage local entrepreneuers that is sustainable on both the local and global level?

Triple Bottom Line at the Bottom of the Pyramid?

http://green.blogs.nytimes.com/2009/09/18/innovation-at-the-bottom-of-pyramid/

We’ve been reading about companies that profit from additional revenue generated by serving populations at the base of the pyramid – with its $5 trillion in annual purchasing power globally[1]. I’m interested in cases where this kind of social innovation spawns savings and further innovations across a company’s product line and customer base. For example, Nicholas Negroponte created downward pressure on the laptop market, thereby triggering the notebook craze we can witness in university halls and on Best Buy shelves. Apple’s I-phone even seems to be an extension of the craze. In the Prophet of Cheap, Andy Greenberg wrote of Negroponte: Like any good visionary, he pushes our ambitions beyond what is realistic – occasionally changing reality in the process.

Can visionaries like Negroponte inspire a reality in which we vastly reduce the resource consumption and waste associated with products and their obsolescence? I am extremely interested in technological advances, but concerned about what seems to be an ever-decreasing life span for products like cell phones and computers. My phone dies in one way or another every 1-2 years and my laptop seems to be outdated in about 2-3 years. Will we see the same trend for products designed to meet the needs of the BOP population? Or, perhaps, can social innovators design creative retro-fits for existing products?

In this article – an interview with C.K. Prahalad – the professor of corporate strategy at the Ross School of Business of the University of Michigan says, “Consider the area of electronics. Every consumer will want a cellphone so product designers should be asking: why does every model of cellphone need its own unique charger? The charger is not a distinguishing feature. Imagine the savings in resources and waste, as well as savings to the consumer, if there were one universal charger?”

I agree with Prahalad, but it seems to me that companies see profit in selling proprietary things – whether it is bike parts, car parts, IT systems, or phone chargers because it’s a way of holding onto customers. Will the environmental concerns we face in both the developed and developing worlds lead to more universal items? What past examples can we learn from? Please weigh in.

I have heard concerns over the increased waste and pollution generated by bringing products and services to the BOP populations. Certainly, we will see increased global cell phone waste now that more people have cell phones, and we will see more pollution as a result of more people having electricity. But I’d like to think that the creativity and adaptation involved with SI will feed a vision for environmental sustainability across our culture.

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[1] Forbes article, From Microfinance Into Microinsurance, 11/26/08

Using principals of Microfinance to do things other than offer loans

At the core of microfinance is providing opportunities for credit that would normally be unattainable through conventional means, such applying for a loan. Much of the recent reading focused on microfinancing as a means to an end, whether that was building a sustainable home for low-income people at the bottom of the pyramid, or financing insurance for people in developing countries at affordable premiums. But if we can use the model of microfinance to power access to transportation.

Whenever possible, I try to promote local social innovation in Pittsburgh. In this case it happens to be a peer-to-peer car sharing company co-founded by my brother, Robert Hampshire, who is also a Professor at Heinz College along with Craig Gates a graduate of the Tepper School of business. There efforts are allowing people to access cars, that are rented out by owners.

Below is a quote from Mr. Gates, after winning the McGinnis Competition in New York.

“There are over 237 million private vehicles owned and operated in the United States today, many of which sit idle much of the time,” said Gates. “We tackled the problem of why there are so few car-sharing services in smaller cities or neighborhoods. TransportCHAIN’s analytics will enable people who leave their cars idle for most of the day a way to recapture some of their investment—to become mini-entrepreneurs themselves. We can make car-sharing a cost-effective, environmentally-friendly alternative to vehicle ownership.”

Their business model represents a win-win for everyone involved. This is proof that collaborative efforts exemplified by microfinancing can be applied to other areas of need. What other ways can you think of to adapt the model of microfinancing to address social needs that you are most passionate about.

Know the Client!

Reading the last article for this week “From microfinance Into Microinsurance”, I actually had bad vibes. From finance to insurance, all the practitioners working in this field have a good intention—make financial service available to the poor (and make big bucks out of it). But the status quo is, lots of MFI find micro-finance not as profitable as before, then they look at each other and do a quick shift to new market—like micro-insurance. It is perfectly logical to explore a brand-new clientele given the claim that “both the insurance markets in developed countries and microfinance markets in developing countries are saturated. “

Nevertheless, have we done enough to refine the product we have? Do we create customized strategy of a new product to woo the customer we already have? The way I see the problem, within and without the article, is we do not know our client enough in the first place. It hardly occurs to many MFI that business strategy, especially marketing, plays a huge role in success.

When you check MFI profile online, 99% of the big-players in the market use joint-liability model, a prevailing model Yunus created 30 years ago. Marketing strategy is barely mentioned, and everyone reaches a forced unanimity. Otherwise, how can you justify an everlasting elixir for all such distinctly different people in India, in South Africa, and in Brazil?

The “joint-liability model” is like “Macdonald”, may work all over the world. But Macdonald provides spicy wingding in China, “Mac Veg” in India, Taco in Mexico—Macdonald has billions of sales still they do market research and make customized change. MFI should conduct more researches; create messages that work for the target market, and design training for the customer if necessary, rather than jumping around get into another market they are unfamiliar with.

I am in a Tepper student club and currently working on micro-insurance project for a MFI called “VEG”, in Ghana. Through tons of online research, talking to client and people from Ghana, we are staring to build a plausible marketing strategy. It composes of “message”, “medium”, “training”, and “budget”. If we do not reach out to survey the client, it would never occur to me after-death expense and education opportunity for children is the major concern among the target group (young mothers), and we will choose to sell credit life policy (a wrong product that does not meet the client need), instead of group life insurance policy. What I am trying to say is, a successful product is based on knowing your customer, and then you find a suitable way of selling it—which most MFI overlook.

The article talks lot about “micro insurance is the NEXT FRONTIER”,”HIGH GROWTH POTENTIAL”, just like 2006 when Muhammad Yunus won the Nobel Peace glory, thousands of hundreds of paper portrayed microfinance “the grand new future for the poor” ,”hope to transformation”.  I am deeply worried this is just the beginning of an unnecessary market shift, which many MFIs roll into micro-finance, without knowing that standing where they are, they could do much better by just knowing more about their client.


My only question is, is the marking strategy we use (“message”, “medium”, “training”, and “budget”) missing sth big? as there's no formalized pattern or tons of case study from business. 

A shift toward collaborative consumption across industries?

As we discussed last week about innovation in transportation, we're seeing a shift in personal consumption to "collaborative consumption." Most of us are familiar with Zipcar which allows for renting a car by the hour instead of owning. Using public transportation is also important in many cities. How will the automobile industry change over the next decade with a focus on renewable energy, decreased consumption, and a transformation in personal transportation? How will companies like Ford and GM compete with Zipcar?

There are 80 million Generation Y'ers that are changing the way the U.S. views personal consumption of goods, and transportation is an example. Why own a car if its cheaper to rent, more convenient, and possibly more sustainable?

Having access to goods might be better than ownership. It also might be more affordable. Environmental concerns have shifted our focus to finding new ways of creating consumption with different resources. Companies like Ford and GM will have to create new strategies for consumers that want to share instead of own. GE and PPG might have to revamp strategies for a paradigm change in sharing consumption of consumer goods instead of ownership. As we continue into the 21st century, I'm interested in seeing how we change from hyper-consumption to collaborative consumption across virtually every industry.

What about internet contents for poor people?

Commonly, people talk about how important is that poor students have access to computers and internet. Even, there are measures to calculate how much a country’s GDP growths when more people gain access to these services. Nevertheless, sometimes we forget that computers and internet access are means, but not ends. They are only a tool to reach better conditions.  My question is: computers and internet access really improve poor peoples’ life?  Well, definitely the answer to this question depends how poor people use computers and internet.

After reading this week’s article, Dialing for Development by David Lehr, I have a better understanding what kind of applications could be developed for poor users’ cell phones. For example, texting about weather conditions or crop prices are good improvements in peasants’ lives.

In contrast, after reading about the initiatives to provide low cost computers and internet access in developing countries, I think something is missing. There is a lack lack of web pages and portals that address poor people necessities in developing countries.

I was trying to figure out how a poor peasant could have interest in surfing through pages as Amazon, Facebook, Ebay or Itunes. If you think it, most part of web sites and portals as Yahoo or Google applications are designed for middle urban classes, but not for poor people. It could seem stupid, but it is not.

The first time you use a computer, to continue using it you need to be attired; you need to find some benefit in it. For example, maybe an atom smasher has the potential to change my life, but I can’t figure out how is going to benefit my daily activities. Well, it is the same with computers; it is not enough to give access and computers to people from the bottom of the pyramid. A young peasant needs to find useful content in the internet to keep on using it as a tool.

In conclusion, poor people are gaining access to internet and computers are cheaper than before. This is an unstoppable trend. Well, there is an huge potential for social innovators to develop massively portals and web services for poor people. I was thinking in some examples. Look at these options and let me know your opinions:

1.       Music Online. Peasants from Mexico don’t like Lady Gaga or Jazz. They want their own music.

2.       Social Networks to provide low budget lodging. Poor people from rural areas need to travel to the city to buy/sell goods. Usually, they sleep at the streets because they cannot afford a hotel fee. A social network could put in contact poor people from cities with poor people from countryside.  Thus, peasants could get a very low budget lodgment, and poor city people could get an additional income from this.

3.       A motor search to find relatives that migrated. For example, in Mexico it is common that immigrants that came illegally to the United States, after a couple of years lose contact with their families. The opposite also happens, families that never know if its relative gained access to the United States or not. He never communicates back home.

What About the Adults?

As highlighted in this week’s “Frugal Innovation” and “The Prophet of Cheap” articles, one focus of social innovation these days is improving the educational tools available to children, both K-12 and college-age, within the developing world (Das) (Greenburg). Such tools are designed to help children complete their studies and become more technologically adept, all at a relatively low cost. Despite doubts regarding the feasibility of creating these tools at costs that the BOP can afford, few would argue that the endeavor to do so is not noble. Despite these honorable efforts, I contend that they are somewhat shortsighted in that they mostly focused on children and are thus missing out on a key market: adults. As mentioned in “The Prophet of Cheap,” 70% of adults in Afghanistan, a country targeted by OPLC, are illiterate (Greenburg). This situation is similar in other developing countries, accounting for a worldwide illiterate population of 18% of adults (CIA - The World Fact Book). Geographically, high illiteracy rates “are concentrated in three regions, the Arab states, South and West Asia, and Sub-Saharan Africa, where around one-third of the men and half of all women are illiterate (2005 est.) (CIA - The World Fact Book)” I argue that, if targeted at this adult market, socially innovative technological techniques can do much to reduce the issue of illiteracy within the developing world. Such a focus can lead to a reduction of BOP poverty and hunger issues since studies show that the ability to read is closely tied to “an individual’s ability to earn enough money to eat well” (Yates). Furthermore, studies indicate that, on a national scale, “low levels of literacy…can impede the economic development of a country in the current rapidly changing, technology-driven world” (CIA - The World Fact Book). Based on these factors, it is clear an increased focus on literacy can assist both individuals and nations with improving their economic standing. Although focusing on childhood literacy and education is both noble and needed, overlooking adults is not an intelligent solution. Rather, the focus should be on both raising a child’s educational level, thus increasing the likelihood for his family’s success in the future, AND increasing the literacy of his parents, thus helping to increase the family’s economic success in the present. Fellow classmates, what do you think? Is there an untapped market here? Should the focus of these educational toolmakers be broadened to include adults? Would doing so make a significant and sustainable difference to people’s lives? Or, am I off base; do you think that enough is already being done to address the issue of adult literacy? Share your thoughts! Sources: CIA - The World Fact Book. n.d. 2 November 2010 . Das, Saswato R. "Frugal Innovation: India Plans to Distribute Low-Cost Handheld Computers to Students." Scientific American 28 September 2010: 3. Greenburg, Andy. "The Prophet of Cheap." Forbes.com 10 January 2010: 2. Yates, Diana. "Hunger Atlas Takes a New Look at an Old Problem." News Bureau - University of Illinois 6 July 2010: 1.

The Nano is Great, But What About Driver Safety?

Professor Zak’s lectures and several of our readings have referenced the Tata Nano, India’s cheap, four-wheel remedy for the shortcomings of bikes and scooters. While the car satisfies the long-held desire of many Indians to own an automobile, it brings to light an essential question pertaining to safety: How can India train its vast population to be safe drivers? An article from the New York Times, printed around the time of the Nano’s initial release at the end of 2007, underscores and addresses this question. The article suggests that while the Nano is an ingenious innovation, the existing transportation infrastructure in India may not be ready for a mass transition from bikes and scooters to automobiles. The narrow, poorly paved roads in India’s major cities ensure that the flow of urban traffic in India takes the form of an anarchic free-for-all. This reality, combined with few opportunities for rank and file Indians to enroll in affordable driver training programs, makes the prospect of tens of millions of Nanos on the road a somewhat frightening one.

The need for bureaucratic efficiency in India is also problematic for driver safety. With the arrival of the Nano, the Indian government has had to administer a tremendous number of driver’s license tests over a very short time. The Government’s need to accommodate so many potential drivers in just the last couple of years has ensured that the standard test for a license in India is worryingly simple. Furthermore, some Indians are able to purchase licenses for the right price.

With the problem of Indian transportation safety being such a pressing one, there is a clear need for affordable driver training in India today. It seems as though this need could be met through a new social venture. Such a venture would require a significant amount of—human and financial—capital, but could be successfully launched by a resourceful, right-minded social entrepreneur. This entrepreneur could tap into a global market, as cheap cars such as the Nano will surely soon become widely available in many countries besides India with poor transportation infrastructures and large pools of untrained drivers.

"Proofiness" and social impact

A consistent problem in social enterprise is measuring social impact. We're all familiar with regressions, correlations, and reading MSE and R-square values. But do these tell the entire story, and can they ever really make a convincing causal argument? And how often do we simply know in our hearts that what we're doing is making a difference, so we go out and find data that support our intuition?

The New York Times recently interviewed the author of "Proofiness," whose advice I'd recommend we follow when conducting and reading impact analyses. "Proofiness" refers to "using numbers to prove what you know in your heart is true, even when you know it’s not." An excerpt from his interview:

I think the biggest thing to take home is that you have the right to question research, the right to think this number doesn’t make sense. I think the best thing to do is if something doesn’t make sense to you, you’re going to learn something by examining it. Sniff it. Figure out where it’s coming from. A little degree of skepticism is usually warranted, especially when there is a number that doesn’t make sense.

It's all well and good to be able to question others' analyses. But how can we assess our own impact in a convincing and meaningful way?

Doing more with less…how increasing technological capacity of a mobile phone can change the world…

David Lehr's, "Dialing for Development" discusses how mobile phones are improving the world in 5 distinct ways: spreading access, opening markets, delivering information, collecting data and facilitating finance. Lehr goes on to state, "To capitalize on each of the new mobile phone applications, however, organizations must make sure they are meeting the unique needs of poor users." Jan Chipchase traveled the globe working for Nokia as a human-behavior researcher or “user anthropologist" researching those needs. In the New York Times article, "Can the Cellphone Help End Poverty?," Chipchase described what being a user anthropologist entailed and how human centered design could improve not just profit margins and sales for an international company like Nokia, but how it could help people not only as a business tool, but as a localized point of communication for displaced people amid war, plagues, economic strife and natural disasters. His job at Nokia was to study people and how they used cell phones to tap into resources to improve their quality of life. He studied everyone, from fishermen who used their phones to check market prices, to prostitutes who used their phones to increase their turnover. He photographed everything and everyone, capturing dreams and hardships alike with one purpose in mind – how to improve the technological capacity of cell phones to meet the user needs all over the world at an affordable price. Chipchase’s job at Nokia was to relay the stories of the people he interacted with to the designers at Nokia, how a cell phone could save a wasteful 3 hour trek to an absent doctor with a child afflicted with malaria or how SMS could spread news quickly in war-stricken Kenya. The idea that cell phones might be a frivolous expense to people living without electricity, adequate shelter or clean water has come to question, but considering what information cell phones can impart, and how quickly, might clarify those questions when dealing with catastrophes and circumstances when time is critical. As Chipchase pointed out, "People once believed that people in other cultures wouldn't benefit from having books either." Human centered design is the foundation for technology and the user anthropologists of the world know that before they design a product, they better know their customers. The article quotes a 2005 London Business School study, “that for every additional 10 mobile phones per 100 people, a country’s G.D.P. rises 0.5 percent.” And looking at a small business owner who uses a cell phone to increase their income, thereby increasing access to resources to improve their quality of life makes the cell phone use seem more of a necessity then a luxury. Whether it is a fishermen in India who uses his phone to check in on the best market price or the “phone ladies” in Bangladesh, "...accurate timely information can save a day's travel time, a month's wages, or a year's vegetable crop" (Lehr). Grameen Phones, LTD has become the largest telecom provider in Bangladesh, boasting over $1 billion dollars in revenue a year on a simple premise – extend microloans to women in poor countries so that they are able to purchase cell phone kits and become a local operator for the rest of their community. Charging a small commission, these phone ladies are able to give telecommunications access to everyone in their village, regardless of their income, as well as construct a sustainable business for themselves. Mobile phones have become invaluable for banking in developing countries, allowing people who have never had the resources to suddenly have access to cash and capital. Lehr discusses Wizzit, a South African mobile banking company who trains independent agents to educate people about mobile banking. According to Lehr's article, "About 80% of Wizzit's customers previously had no bank account." One of the most interesting projects that Chipchase described is the Future Urban project, an open forum for people to come and sketch their dream mobile phone. One thing was the same no matter where the project was conducted - the phones capabilities always reflected their priorities and challenges. "One Liberian refugee wanted to outfit a phone with a land-mine detector so that he could more safely return to his home village. In the Dharavi slum of Mumbai, people sketched phones that could forecast the weather since they had no access to TV or radio. Muslims wanted G.P.S. devices to orient their prayers toward Mecca. Someone else drew a phone shaped like a water bottle, explaining that it could store precious drinking water and also float on the monsoon waters. In Jacarèzinho, a bustling favela in Rio, one designer drew a phone with an air-quality monitor. Several women sketched phones that would monitor cheating boyfriends and husbands. Another designed a “peace button” that would halt gunfire in the neighborhood with a single touch." In our world, our phones are a combination of organization, work, communication and entertainment. We are dependent on them because of their convenience and the instant access that they give us to the outside world. Why would we believe that people in developing countries would not need or desire those desired results? As Lehr points out, "The poor are not looking for hand-me-down technology from the developed world. They are demanding - and paying for - services that their more affluent counterparts have long enjoyed and also requesting services that are especially tailored to their needs." User anthropologists like Jan Chipchase are investigating these needs while mobile phone companies all over the world are scrambling to design phones with the information that people like Chipchase gather. The question is how do we make the technology and connectivity that we are so dependent on in work for developing countries? Will it be forced by entrepreneurship, like Nicholas Negroponte and affordable laptops or will mobile phone companies listen to user anthropologists that they send into the world? And what do we place more value on in the way of technological advancement - an iphone application that tracks our dinner cooking in the kitchen so we don't have to walk into the next room to check ourselves or the mobile phone that can detect a land mine from 20 feet away? http://www.nytimes.com/2008/04/13/magazine/13anthropology-t.html?_r=1&pagewanted=all

Slight Obsession With Frugal Innovation...

Coming out of last weeks class--and finishing this weeks reading--made me increasingly interested in this idea of "frugal innovation." The idea of using our minds--while minimizing cost(s)--to help those who need it most is both necessary and very possible. This is proven by people like, Nicholas Negroponte, who has shifted the mindset of all those involved with wireless computing. He is just one of the many leaders in this fight to use innovation to increase the quality of life in the undeserved regions of the world.

As I looked for which frugal innovation sparked my interest the most, my procrastination searches led me to innovations on the medical side. Physicist, Joshua Silver, http://www.vdw.ox.ac.uk/joshsilver.htm sparked my interest in the innovations aimed at helping those without access to adequate medical attention.

I had been looking at figures on the increasing amount of people infected with the HIV/AIDS--particularly in sub-Saharan Africa--and am continuously startled. How is it that we know of the AIDS death toll and still can't put the brakes on this rapidly spreading disease? Just to give a glimpse to those who don't know the spreading is rapid beyond imagination; 20,439,023 people have contracted HIV/AIDS THIS YEAR IN sub-Saharan Africa ALONE! http://www.vdw.ox.ac.uk/joshsilver.htm

This startling number is due to reasons like, "stigma, lack of education, poverty and transport difficulties." --http://www.avert.org/aids-africa-questions.htm

To address a few of these concerns, Katherine Klapperich, and her students at Boston University have created a portable DNA purifier [http://www.technologyreview.com/biomedicine/22980/]. This wireless/portable device [PICTURED ABOVE] easily extracts DNA from human fluids without using an electric source.The device is meant specifically for our underdeveloped countries because unlike here in the United States, getting tested is neither normal nor easy in many other places.

In sub-Saharran Africa--even when blood is taken--transporting the blood is very difficult as it must refrigerated. This device grants doctors with the ability to examine a quality sample, even in places where refrigeration isn't possible. Professors at MIT are currently finalizing a prototype of this machine.

If this could increase the small percentage of those who actually get tested/properly diagnosed with HIV/AIDS, then it is a great success. There is an obvious need when in some sub-Saharan African Countries, where less than 10% of adults have been tested in the past 12 months.
I ask you guys, where else can this type of socially focused innovation have its biggest impact? I happened to be interested in eliminating the spread of this terrible virus but I am sure there are thousands of other populations dealing with some type of issue which can be minimized by innovation. I am also sure that everyone reading can think of at least one issue, in particular that bothers them. I hope we continue to talk about what great thinkers are doing for people who desperately need them, as well as think of places needing a great thinker like those discussed above.

As a note: that figure of 20,439,023 has increased by 127 people in the past 5 minutes.

Frugal Innovation vs. Social Innovation: Has cheap as the new chic taken over the social innovation realm?

Numbers, Statistics, Figures, EBIT, ROI. Lean Management, Six-Sigma, Supply Chains, Logistics Interfaces. Micro-Finance, Micro-Insurance, Re-Engineering. Western Culture is obsessively doing more with less.One of our favorite ways to do more with less is through acronyms (who wants to spell out Return on Investment? It takes up SO MUCH SPACE!) Even our texting patterns tell the story. OMG, lmao, oic, brb, LOL, and the list goes on... However, doing more with less is commonly linked with creating a buzz word to describe the action. Isn't Synergy really just working together to accomplish more than we could on our own? It seems the Social Innovation sphere is in dire danger of being edged out by the new kid on the block: Frugal Innovation. The Economic Times describes Frugal Innovation as, "a whole new management philosophy, which integrates specific needs of the bottom of the pyramid markets as a starting point and works backwards to develop appropriate solutions which may be significantly different from existing solutions designed to address needs of upmarket segments."(http://www.peerpower.com/et/1269/Frugal-innovations-for-financial-inclusion) Personally, I interpret FI as removing unnecessary parts or finding cheaper alternatives until you slash the price of an existing product or service to a predetermined level. I talked about this a bit last week when discussing how Nigel Waller created the Cloud Phone when he failed to create a $5 cell. Would Waller's quest to create a $5 cell not qualify as Frugal Innovation if he first did not determine the baseline needs of the population but instead cut away from existing upmarket cellphones? This brings up the question, are all of these buzz words really accomplishing anything? After all, if an under served population can now utilize a product or service hasn't social innovation been accomplished? Does it matter whether it came from a utilization of existing private-sector supply chains or through eliminating expensive superfluous frills that were unnecessary for the needs of the population? I would argue in fact that Frugal Innovation is just another tool to accomplish Social Innovation. However, it has also now become a chief means of accomplishing SI. It is being utilized greatly in India in products from personal computers to affordable housing. I would be interested to hear from people who identify as Social Innovators / Entrepreneurs as well as Frugal Innovators / Entrepreneurs to see how their interpretation of the concepts may differ. The bottom line is, whatever buzz word you decide to use, everyday Frugal and Social Innovation are being employed to improve the lives of under served populations, and that's a good thing.

A milk chiller, a nutcracker and an egg incubator

There are many scientists and engineers that have come from developing countries to the United States for a better life. Many of them find jobs and happiness here and typically do not go back to their own countries where conditions are relatively harsh. Of course no one can really blame them, they are looking out for their livelihoods and their families. However, conditions in their home countries persist in being poor. Do they have an obligation to help the people at home?

William Kissalita is a professor and tissue engineer at the University of Georgia who is driven by a desire to help the people of his home country of Uganda. By day he develops innovative bioengineering solutions, but his true vocation is to bring simple engineering solutions to the poor of Africa.

Kissalita finds problems affecting the poorest of people in communities throughout Africa and attempts to find feasible solutions. Through grants from the National Science Foundation and partnerships with U.S. and worldwide organizations, he and his students are "slowly revolutionizing the milk market in Uganda, guinea hen breeding in Burkina Faso and nut-oil cooperatives in Morocco."

Evidently, this is a great example of a drive and its resulting solutions to deliver basic human needs: Kissalita feels that he has an obligation, having been so successful in the U.S., to help his people. Making a real difference for very poor people will require many individuals such as Kissalita, who have come from developing countries to innovate and develop products. Obviously, those from developed countries have a role as well, but this need to help one's own country is a very strong driver. Such as examples are recently becoming more and more prevalent with people going back to their own countries and making a difference.

Do you think that immigrants from less developed countries have an obligation to help their people? What can we do to promote such work?

You Can Always Find a Coke!

In villages where essential medicines are difficult to distribute, you can still buy a coke.

This was the striking observation that Simon Berry, founder of ColaLife stumbled across during field work in Africa. Having spent time volunteering in Africa as well, I understand this surprise. In the same village I lived and worked in, children were dying from a lack of life saving medications while nurses bought bottles of coke on their breaks.

Ambitious and socially minded organizations strive to deliver essential goods that could greatly improve the lives of individuals. However, so many of the people who could benefit from these goods live in rural areas that are difficult to distribute to without high costs to usually small companies. Yet Coca-Cola just seems to be everywhere.

Simon Berry focused on this seeming disparity and decided to utilize the distribution power of a giant like Coke to meet the needs of underserved people. With this idea in mind, he stated the organization ColaLife and developed the AidPod. The AidPod is a container that fits between the necks of coca-cola bottles in their crates and can hold essential items such as vitamins. The pods do not take up any extra room in the crates because they occupy the unused space.

Berry makes clear that the AidPods would be focused on the needs of communities as determined by the members of those communities. By allowing the consumers to decide what is most vital to their communities, they actively participate in the development of their public health sector.

While Coca-cola has not officially agreed to partner with ColaLife, the project has influenced the company to investigate alternative social uses of their elaborate distribution channels.

What I find most compelling about this project is its combination of an innovative product, the Aidpod, and the creative solution to distribution problems. We’ve discussed in class and through the readings that great ideas often fail because there is little consideration to how they will be distributed or sustained. Berry’s innovation has those considerations built into the design. In fact, it would even seem that the product idea developed from the solution to distribution. What other innovations incorporate clever implementation ideas?

The partnership of innovators and large global companies is becoming more common. What other creative partnerships between for-profit companies and socially minded organizations exist?

The Impact of Mobile Phones on Global Health

“Dialing for Development,” one of this week’s assigned articles, discusses ways in which mobile phones have been used to spur development in the developing world. In addition to the ways mobile phone technology can be used according to this article, it also has large implications for global health.
A relatively new development in this field has been using mobile phone technology to detect counterfeit prescription drugs. This strategy has been heavily employed in Africa, particularly in Nigeria, due to the large prevalence of counterfeit drugs to fight illnesses, such as malaria. “The United Nations estimates that more than $500 billion in counterfeit drugs is traded every year throughout the world. […] The International Policy Network, blames fake drugs for approximately 700,000 deaths world-wide from malaria and tuberculosis.”
When people take fake drugs, they experience decreased immunity, worsened illness, and even death at times. Mobile technology allows individuals to verify the authenticity of medicine by sending a text message with a unique identification number (found by scratching off a label on the box of the medicine) to a company, such as Sproxil, which received a several start-up grants, a $100,000 grant from USAID and Western Union, and money from a small group of shareholders in Nigeria. Sproxil then sends a text back to verify that the medicine is either “ok” or “fake.”
While I do believe that this technology does present a substantial increase from previously used ways of determining medicine authenticity (namely word-of-mouth, kinship networks, and local medics), I do not believe it to be the solution to all counterfeit drugs sales.
Does this technology help eliminate the original problem, or does it mask it? Is this the most effective and efficient way to address the original problem? How can this technology be improved? Nigeria is Africa’s biggest mobile phone market with 70 million users. Do you think similar technology would work in other places where mobile phone use is less common? How would this new strategy be publicized? Is there room for corruption between the medicine seller and the company/database/program that verifies the medicine?
Source: Connors, Will. "Start-up Helps Nigeria Combat Fake Drugs." The Wall Street Journal, 12 Mar. 2010. Web. 01 Nov. 2010.

Architects, Engineers, and Designers OH MY! Bringing Professionals Together to Meet Basic Human Needs

1 in 7 people around the world live in unplanned settlements (refugee camps, slums etc.) If nothing is done this number looks to increase to 1 in 3 in the next 20 years.

In 2006 Architecture for Humanity, founded by Cameron Sinclair, was awarded the TED prize for creating a platform for allowing professionals from a variety of fields together to tackle some of the issues involved with the global housing crisis. Sinclair felt that architecture should not simply seek to create a jewel on a pedestal, but should be based in socially responsible design that seeks to transform the ability of populations to live their lives. He found his moment to create this reality in 1999, responding to refugees returning to Kosovo. Sinclair made a call for architects, designers, engineers and entrepreneurs to create affordable, transitional housing for refugees using materials that were available in the region (including rubble, shipping containers, and natural materials). The purpose was to create housing to allow these refugees the ability to have the space and tools to rebuild their own homes.

Cameron Sinclair on open-source architecture | Video on TED.com

Since 1999, Architecture for Humanity has expanded to 40,000 professionals who volunteer their time and expertise to create innovative housing around the world (including here in the US). There are several different chapters across the country that handle regional issues as well as an open source website that allows these professionals to connect from around the world. Architecture for Humanity works to make their projects sustainable by involving local workforces, materials available to the region, and by utilizing expertise from volunteers allowing their cost to be kept at a minimum. They also strive to unite the architecture with the culture and to minimize the environmental impact of expanded housing projects. Architecture for Humanity now benefits over 10,000 people a year through building projects and impacts an additional 50,000 through training and outreach, building a network of people around the world who are working on issues of housing and shelter for their communities, both local and international.

A  few project that have been realized by Architecture for Humanity:

Vocational School in Bangladesh. Constructed using bamboo and other local woods. Solar lights and hot water. 2007

Rainwater Court, Nairobi. "A full-court basketball court with an integrated rainwater collection and UV purification system with solar panels for the water system and night lighting in areas without electricity. The full-court configuration has a 4,850 sq ft playing surface covered by metal roof and guttered to collect an estimated 90,000 liters of water per year. The building incorporates 30,000 liters of rainwater storage, with UV purification." http://www.openarchitecturenetwork.org/projects/rainwatercourt 

What really struck me with Architecture for Humanity was the realization of how powerful a network can be created just by giving people the platform to share ideas. With increases in technology, especially in communication, a village in Africa or a town in Montana can share their needs with the world and these needs can be met by an architect in New York or an engineer in Pittsburgh. Hopefully, we will continue to link these minds with the ever expanding toolbox that the internet and technology have provided us with.

A few final question to ponder when thinking about the issue of housing and shelter:

1. One of the greatest demands being placed on shelter is space. As the population of the world continues to grow and more and more people people are moving into urban areas, how will we meet the demands posed by this limitation?

2. How can the tools created by organizations like Architecture for Humanity influence the ways we think about out own housing and shelter and adapting it to be sustainable, environmentally friendly, affordable, and part of who we are as a culture?

PS I just found out that Cameron Sinclair spoke in Pittsburgh last Thursday :)

Electric cars for everyone?

As an employee of Carnegie Mellon, I found our discussion w/Bruce Hanington quite interesting and close to home. More specifically, I work in the College of Engineering and am familiar with the Master in Product Development program co-directed by Prof. Jon Cagan.  I actually assist with the course scheduling for the IPD course (Integrated Product Design), so I've worked with Jon directly.  I thought to myself, "what cool projects are these students working on now, and how could they relate to this course?" =)

This past spring, Nissan teamed up with CMU students from the IPD course to help design, update, and engineer new features for their electric car called the LEAF. 
http://www.prnewswire.com/news-releases/carnegie-mellon-nissan-team-up-for-electric-vehicles-93068629.html

Nissan states that the LEAF is designed for the "mass market" and is designed "to meet the driving needs of the majority of U.S. drivers."  The net cost will be as low as $25,280 with the MSRP totaling $32,780.  To me this price is more geared to the full time working adult/family opposed to students or young adults just starting out in the work force.

The students involved with the project came up with many creative ideas and concepts, some of which Nissan hopes to use in the future, barring variable costs.  Some ideas include a cargo-area organizer which would include a refrigerator to store cold groceries, along with various ergonomic features including a shoulder-massage and a posture-improving seat that senses incorrect posture to name a few.
http://www.autoobserver.com/2010/05/nissan-cmu-already-working-on-how-to-improve-next-leaf-ev.html#more
Many of these ideas made me wonder if anyone is attempting to introduce electric cars into developing countries. I thought about our discussion of the Nano and also about the readings we had for this week that showcased cellphones and hand held computers.  The human-focused design of the students' ideas for the LEAF are similar to those of a "frugal engineer" (although the LEAF is not very frugal).

After some digging, I could not find any company or venture that is actively pursuing the launch of electric cars in developing countries.  I found that Kofi Annan, the former UN Secretary General shared my wonder about this idea, as he stated, "I find electric cars very interesting ... but how do you ensure that the new technology is also available to 3rd world, so they don't repeat mistakes of past? How do they get electric car?"  He was commenting on the Clinton Global Initiative.

http://www.treehugger.com/files/2009/09/why-kofi-annan-is-skeptical-about-electric-cars.php

It seems that people could benefit from electric cars, more specifically in countries like India and Africa where the population is quite large and travel is mainly on foot.  Did TATA consider an electric car when designing the Nano? It may be a better option, as it would require no gas and create zero emissions.

Similarly, I found a company called EGG Energy that created a Battery Sharing program to be implemented in developing countries, more specifically in Africa.  EGG worked with a team from MIT and Harvard to bridge the power distribution gap. 

http://planetgreen.discovery.com/tech-transport/battery-sharing-developing-nations.html


Could a program like this help with the charging of electric cars in those countries?  I would like to see the IPD students extend their work with the electric car to focus on the social impact they could have in developing countries.