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Social entrepreneurs, not charities, will help the next billion out of poverty
Friday, Nov. 4, 2011
By Andy Lieberman
Special to the Mercury News
Posted: 11/02/2011 08:00:00 PM PDT
This week the world hits 7 billion in population, just 12 years after we reached 6 billion.
Virtually all of these new billion live at the so-called Base of the Pyramid -- that segment of humanity that, by virtue of economic and political circumstance, struggles to meet basic food, water and energy needs on incomes of around $2 a day.
Here at the Center for Science, Technology, and Society, we are confronting this problem every day and have come to the conclusion that the old ways of meeting the needs of this new billion -- and the next and the next -- will not be met with methods that have attempted to serve the underserved in our old world of 6 billion. Instead, we believe that the needs will be met with something many consider counterintuitive: social entrepreneurs selling -- not giving away -- vital products and thriving on unusual business and financing models.
The 140 entrepreneurs we have trained over nine years demonstrate the range of problems that can be addressed through social entrepreneurship. One example, Solar Sister, is a nonprofit organization eradicating energy poverty in Africa by dispensing solar lamps and other clean-energy products using an Avon-style direct-sale distribution network of women entrepreneurs. This network takes advantage of the fact that African women control the family's kerosene budget and uses women-to-women social relationships to allow them to replace polluting, dangerous kerosene lamps with solar lamps.
The entrepreneurs admitted into our programs understand local needs and identify or develop appropriate solutions. A recent IFC and World Bank study, Lighting Africa, concluded that current solar lighting technologies can pay for themselves in as little as eight months. With technological improvements, increased production and the rising cost of kerosene, the payback period could go down to as little as two months by 2015.
We believe that the old ways of serving the Base of the Pyramid, international aid programs and charities, have not had the impact that was hoped for and will fall even further behind with rapid population growth and the increasing speed of innovation. Those mechanisms will continue to play an important role in addressing many issues in education, human rights and other areas that cannot be readily solved with market-based solutions. However, with $5 trillion of purchasing power, according to research done by the World Resources Institute, the Base of the Pyramid can indeed finance much of their own development.
Even with such compelling payoffs for the consumers upon switching from kerosene to solar lamps, there are numerous challenges to reaching all 1.5 billion people living off the grid. Solar Sister has 130 entrepreneurs in its network today and, through the training and mentoring we provided, has developed a plan to reach 2,500 entrepreneurs, providing clean energy to 2.5 million Africans by 2015.
It will take many more Solar Sisters to turn the tide on the energy problem. Yet, because the data show that it is a critical need that can be met with money people are already spending, the United Nations has declared 2012 as the International Year of Sustainable Energy for All, entrusting entities including ours to form a practitioner network and share what works.
Looking across the entrepreneurs we have trained and the 74 million people whose lives they have touched, we predict the next billion will buy clean water from a local kiosk instead of waiting for an aid agency to drill a well, they will use solar lamps and cellphone chargers instead of wondering when the electric grid will reach their village, and they will thank the local entrepreneurs who serve them.
ANDY LIEBERMAN is GSBI online program manager at Santa Clara University's Center for Science, Technology, and Society, which for the past decade has trained over 120 social entrepreneurs through the Global Social Benefit Incubator. He wrote this for the Mercury News.