BoP Barriers to Innovation

Thanks to Africa Unchained, I came an article on the Barriers to Innovation focusing on biotech development in Africa. Fascinating read that's a working paper at the United Nations University. Here's the abstract:

Translating R&D and inventive efforts into a market product is characterized by significant financial skills, and the ability to overcome technical and institutional barriers. Research into and translation of new technologies such as biotechnology products to the market requires even greater resources. This paper aims to understand the key factors that foster or hinder the complex process of translating R&D efforts into innovative products. Different pathways exist in developed countries such as firm-level efforts, the use of IPs, the spin-off of new firms that develop new products, or a mixture of these. Developing countries differ substantially in the kinds of instruments they use because of their considerably weaker institutional environment and for this reason our framework takes a systemic and institutional perspective. The paper comtributes to this issue by examining systemic institutional barriers to commercializing biotechnology in a develping context within a systems of innovation framework. [get the rest here]

BoP consumer behavior

Do the BoP spend in the same way that upper and middle classes do?? (photo courtesy: matthew winterburn)

I recently read an excellent article on BoP entrepreneurialism by Niti Bhan and Dave Tait talks about "Design for the Next Billion Customers." It highlights consumer patterns of the BoP in Sub Saharan Africa. I've been following Niti's excellent blog for sometime now, where she talks about research of the BoP with regard to the wireless market. She has extensive insight into the consumer patterns of the BoP.

A couple of years back, I did an extensive case-study analysis of two entrepreneurs in India working in the lighting sector (not published). The entrepreneurs who did well in BoP areas (regardless of whether they were BoP themselves or not) understood their customer consumption behavior well. What few people understand is that the BoP is almost exactly like the middle or upper classes in their desires, but because they have limited capital, they spend differently. Understanding their consumer behavior is key to success in the field. What I found interesting (yet probably not so surprising) is that African BoP consumers are similar to Indian BoP consumers, which means that there is greater uniformity than I had previously thought. It also means that simply by studying their behavior, they can reach and tap into larger markets easier...allowing them to be better innovators and entrepreneurs.

Getting Kids Involved in the Poverty Dialogue

Get kids involved in the dialogue early! (photo courtesy: Josh Hough)

BOPreneur blogger, Paul Hudnut has written an excellent blog entry about getting kids engaged in the poverty dialogue. He provides 6 ideas for moving forward:

It is that time of year... students are coming back on campus, faculty are scrambling to finalize syllabi. Sustainable design, social entrepreneurship, and and international development are hot topics on campus. If you are a teacher planning coursework in these areas (or at their "intersection"), or if you are a student that wants to do a project in one of your classes, check out these resources [...]

What defines a BoP business??

As BoP markets are being studied better, more standardized terminology is entering the business. Here NextBillion guestblogger Monica Touesnard blogs about what defines a BoP business.

Spotlight: Terracycle

Terracycle Gardening Products (source: Terracycle)


I love Terracycle. Its great for many reasons:

1. it takes waste and makes money on it
2. its eco-friendly
3. (a critical piece that few talk about) it shows us what our trash looks like.

Terracycle is a great model for developing countries that have long been the dumping grounds of the wealthier countries trying to push off their trash problems (eg. U.S.A). Often the ones left to bear the brunt of this dumping are the poorest of the poor. But if the BoP can "embrace the trash," see the value in it as Terracycle does, they could turn their biggest enemy into a cash mine. Here's where outsourcing could actually work extremely well (i.e. Terracycle outsourcing to countries like India, China, and Bangladesh...to name very few).

Sensibleunits.com

photo credit: Jek in the Box

Today I came across a great site called SensibleUnits.com. I thought it was the best introductory tool for people going into the field for the first time. (they should make a site for that...BoPunits.com??) Finally you'll know how the BoP think, with practical units that work best for them. They could care less about metric, british, or any other system. So you better learn how they think and measure. This is important for communication.

For example, BoP milestones are measured by events. This is important for survey development. The question "How old are you?" quite often gets a response of "I don't know." Instead, you should know to ask..."were you born before or after the 'Great Flood'?"...and " How many years before/after?" you can then guesstimate a person's age.

The BoP measures the worth of something in terms of barter. For example, to the very popular question "how much does a ticket to the U.S cost?" I sometimes say that it is the equivalent of trading 'n#' of cows or goats, and lest they think that I am loaded with cash I quickly add that in the U.S there are many cows, so the price is not that much there but its very much in Kenya (say)! Somehow, they get the point...

You'll also understand why when they say "that village is five minutes away in that direction" or "the bus is coming in five minutes," you end up walking or waiting two or three hours.

My point: Try to find a way to communicate in their language. It will take you far.

Practical education: The importance of field experience

I have seen FAR too many appropriate technologies and social enterprise methodologies fail. Why?? Generally, its because the inventor/implementor was not adequately prepared and did not take the time to adequately prepare (I say this of not just individual inventors, but of NGOs and government organizations). They were essentially not well-educated for the task.

I'd like to talk about the importance of practical education. If you are embarking on a career in Technology/Social Enterprise in the context of poorer economies, rural markets, etc, YOU ABSOLUTELY NEED field experience.

Nothing, and I mean NOTHING, in my opinion, can train an inventor or implementor as effectively as field work. This is true of whether you work in a social enterprise or the more capitalistic world - any successful entrepreneur in any part of the world or any sector will tell you is that you need to know your customer, your product, and the process of connecting the two, i.e. getting your product to your customer, extremely well. While this happens regularly among people who work in the regular markets, it doesn't happen quite so frequently among people who work in the poorer markets (let's call these BOP or Bottom of the Pyramid markets), even though its probably far more important. Why?? Let's examine the following:

Now in the regular markets, this methodology of "apprenticeship" is already integrated into the system. Firstly college/school includes mostly knowledge you need for application in the regular markets. After all, this is the most profitable and educated market. Consequently its better profiled, studied and documented. Once well theoretically trained, you get your practical training (you can also do this simultaneously). You intern or even get an entry level job at a company that provides financial incentives for you to get trained in the field. Let's say you want to sell computers to kids in the regular markets, you work "in the field," i.e. with a company (say "Dell") that sells the computers to your target market, and you learn the skills and the geography of your customer, product, and process. You get some training, get some skills and get paid at the same time.

Contrast that to anyone who wants to work in a BOP market. Firstly, there is little knowledge about these markets. So you come out of college or school already ill-prepared. Few people have any idea about the extreme variability in BOP markets - the difference in consumer spending, buying or saving; or the impact that caste, culture, ethnic identity, religion, lack of literacy, etc have on the BOP markets. They have no concept of supply chain dynamics in an area where there are no roads, or the lack of literacy on technology development. NOBODY teaches you that. Unfortunately you have to learn these from scratch while you are in the field struggling. Add on top of that the lack of financial incentive. People who go out to study BOP environments and train in the field do so at great risk to themselves financially, health-wise, in terms of safety and security, and others. No wonder few people venture out. If they do its for short periods of time, making the knowledge less complete. Consequently, their technologies fail and their implementation methodologies more so.

So let me save you some thinking here and just tell you that if you know you want to go into the BOP market area or do social enterprise or whatever, be aware that YOU NEED THE FIELD EXPERIENCE, that it will cost you financially, but that its the ONLY thing that will diminish the chance of failure of your technology or implementation model or your general impact. And more universities, NGOs, governments, etc NEED to step forward to encourage this, and help mitigate the financial risk for these people.

For those of you thinking...well, I know I need the field experience but am too poor to get out... there are MANY programs already out there that will help you mitigate the risks. You just have to reach out. Try to take advantage of programs like the Watson Fellowship, Peace Corps, Americorps (exclusive to the US), Teach for America (exclusive to the US but expanding internationally), Indicorps or Service Corps (for work exclusive to India), Rotary Scholarships, work for organizations like the Jameel Poverty Action Lab, that force you to spend considerable amount of time in the field learning quantitative/qualitative skills to understand your market. If you are in a university, look for classes or campus clubs who can put you in touch with resources like this. MIT and Stanford University have loads of appropriate technology/social enterprise classes, clubs, and scholarships that incorporate fieldwork.

Essentially the key to successful technology development and implementation in BOP markets is practical education and field experience. So, GET OUT THERE!