Interesting series of proposals and exchanges coming out of the first gathering of IEEE’s Global Humanitarian Conference this week in Seattle … IEEE has committed to making this an annual event, so look for their planning updates for next fall.
I was speaking on a panel about the nexus of technology, global development and social enterprise in the VillageReach experience. Judging from the audience of early stage entrepreneurs and academics, there’s growing interest from this region’s community of professional engineers in developing technology innovations for broader social benefit.
An interesting question was asked concerning example strategies to develop demand for new innovations, given the economic challenges and low purchasing power of Base of the Pyramid countries and their communities. The question assumed we can apply to BoP what Steve Jobs famously said about wealthy consumers he was seeking: “give them what they don’t know they want …” (I paraphrase).
While it’s a great leap to make a connection between Job’s realm of innovation, investors and customers with the realities of BoP, social enterprises do need to be profitable and scale in order to sustain the social benefit of their work. That requires, among other things, an active understanding of the marketplace and the beneficiaries’ needs.
Developing that knowledge is difficult enough in markets in developed countries where there’s ready access to broad economic and market data, consumer trends, etc. It’s quite another challenge to evaluate the market opportunity for a product and service with a presumed social benefit in a country where there is little current or historical consumption data.
We have seen this in our own work with VidaGas, the for-profit propane distribution business we own with other partners in Mozambique. We created the business to provide fuel for rural health centers that otherwise would be unable to refrigerate vaccines, sterilize instruments and have light for evening medical procedures. In our case, the social benefit of supporting the health system was obvious, but in itself insufficient to support the business. We asked “can we expand the service to a broader customer base to achieve scale and profitability that in turn sustains the social benefit?”
Well, it’s a work in progress, but we’re excited with what we’ve achieved in the past year. In 2011, we expect a 40% growth in shipments: to the ministry of health, to small- and medium-sized businesses, and to consumers. The addition of a new filling plant facility gives us the capacity to deliver more fuel, but it’s the recent efforts in developing the customer base – sales and marketing, and an expansion of support for the ministry to a fourth province – that is driving both stronger financial performance and ultimately greater social benefit. More on the company’s work and results by the end of the year.