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Friday, Nov. 4, 2011
By Andy Lieberman
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.
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Wednesday, Sep. 14, 2011
I didn’t expect that my favorite quote at last week’s SoCap conference would be from Mike Tyson, but that is what makes SoCap so great… a gathering of people who are not afraid to bring in new ways of thinking from any sector, even professional boxing. Tyson was not there in person, but Josh Suskewicz of Innosight quoted the infamous heavyweight to emphasize his point that ~90% of successful entrepreneurs have changed their strategy 4 times before settling on one that lets their venture succeed: “Everybody has a plan until they get punched in the face.”
My second favorite quote came from Lisa Kleissner of KL Felicitas Foundation, who was in attendance and spoke on an uplifting and thoughtful panel entitled, From Crisis to Building Something New Together. When asked about the best way to have impact, she said that “the best way to have impact is to fail…. Because if you fail it means you took action.”
I’ve had my fair share of figurative punches in the face, real failures, and sudden strategy shifts in my careers as a social entrepreneur and a supporter of social entrepreneurs. I believe I have made a small or not-so-small difference in the lives of quite a few people, but it has never been easy, and it has seldom gone according to plan. SoCap is refreshing because most of the attendees are also practitioners, and we talk openly about the gritty, messy reality of the space we work in. Three days were not enough to have a thoughtful conversation with all 1500+ attendees (even though everybody tried their best), but it was enough time to invigorate me to keep moving forward with our Center’s plans to expand the Global Social Benefit Incubator program offerings to be able to help more social entrepreneurs become investor-ready.
So, how does clean energy fit in to all this? While there was no official clean energy track at SoCap, there was a large grouping of both clean energy entrepreneurs and other organizations working to tackle the problems of 1.5 billion people without reliable access to an energy grid and the 3 billion people cooking on dirty, inefficient stoves. It is more evident than ever that these are problems that can be solved through market-based approaches because the new technologies and innovative business models being deployed give cleaner energy to BoP consumers for lower prices than what they are paying now for inferior solutions like kerosene lamps and disposable batteries.
Last month, at our GSBI clean energy forum, we worked with 11 clean energy entrepreneurs and a variety of experts to discuss what it will take to accelerate the growth of the social enterprises serving this sector. Our two-day session led us to envision an ecosystem accelerator that efficiently finds and deploys human and financial capital to enable new and existing social enterprises to be built for scale and to be brave enough to experiment with innovations in pricing, distribution, and legal structures to find successful models.
This is an ideal sector for the SoCap community to get excited about because it provides the impact investing community with real opportunities for making a difference while making a profit. Impact investors are often criticized for being too risk averse or for favoring profits over social impact. Successful ventures such as Toughstuff are showing that in the BoP energy market, there are investment opportunities with lower risk and profits that correlate directly to positive social and environmental impact.
Lesley Silverthorn of Angaza Design was one of at least 10 GSBI alumni I saw at SoCap looking to connect with funders and other entrepreneurs. Her company’s solar LED room light is far brighter than other comparably-priced lights on the market and was designed to illuminate an entire room for multiple members in a family to use effectively at the same time. At $60, it is not an entry-level product for East Africans, but something that they aspire to own once they see the pros and cons of the lower-cost products. She commented, "I actually got so much more out of SoCap by meeting fellow energy entrepreneurs, thought leaders, and investors than I got from just attending the organized panels and speakers. Now there is a large group of energy companies forming a 'SoCap Energy Alliance' to further our collaboration to achieve our goals of a world with access to clean, bright light and the ability to power small electronics." (Contact Lesley at lesleys@angazadesign.com for more information on the Energy Alliance.)
An ongoing concern for everyone involved in the sector is how to make even the lowest cost products affordable for people living on a few dollars a day, who have limited savings and little access to credit. A recurring notion has been posited that BoP products need to pay for themselves within a year to be able to gain widespread adoption. Many of the clean energy products we see meet this requirement, especially if other benefits like increased productivity are factored in. The most obvious solution to getting these products out is microloans, but that has been challenging because it puts all the risk on the consumer. Even if the lamp breaks, is stolen, or otherwise fails to meet their needs, borrowers are still liable for the costs of the product plus interest. In response, entrepreneurs are coming up with a plethora of new models to overcome this obstacle. Typically these models are based on a rent-to-own or other pay-as-you go scheme. This greatly reduces the risk for the consumers, and with the right mixture of technological and social mechanisms in place, entrepreneurs can mitigate their own risks. Husk Power Systems is succeeding with such a model by operating community power plants in remote regions of India. It is still too early to point out a company that has made this work at scale for household products, although Sunlabob is having good success in Laos with its solar lantern rental system. These and other learnings about affordability have been documented on the Energy Map, which we will continue to expand to incorporate best practices from new companies.
I was pleased to see several noteworthy organizations especially engaged in clean energy at SoCap. The UN Foundation deserves accolades for its proactive role, moderating three clean energy sessions which helped the entrepreneurs connect with each other and the broader ecosystem. Other big names that were notably present at the clean energy sessions include the World Bank Development Marketplace, National Geographic, and E+Co.
Where does this leave us? As I reflect on the GSBI Clean Energy forum and my take-aways from SoCap, I am confident that we are moving in the right direction, but we have a long road ahead and we should expect as many punches in the face as inspiring stories of success in enabling millions more people to benefit from clean energy.
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Tuesday, Sep. 13, 2011
During this year’s GSBI, students from Radha Basu’s Engineering for the Developing World course engaged with the clean energy sector cohort social entrepreneurs to help solve their engineering challenges.
Students combined their knowledge of design principles for the developing world with the parameters set out by the entrepreneurs during a working group session, and solved problems ranging from designing system architecture and technical implementation of water telemetry tools for e-Health point water points in rural India, to determining the best solar heating system for a chicken hatchery in Haiti.
Whether the student teams addressed a problem set out by a GSBI entrepreneur, or created new products and distribution models for emerging markets, each team produced professional quality reports that displayed mastery of the factors germane to effective engineering in developing world contexts.
Team Hatchery designed a solar-powered heating system for a new chicken hatchery for Guirlaine Celius of Haiti Community Development. The new system will allow for simplified operation, minimal maintenance, high efficiency, and precise temperature control, which are all vital features to scaling Haiti Community Development’s impact on Haiti’s agricultural economy.
Team BGET created an analysis tool for water purification technologies designed for Salinee Tavaranan of Border Green Energy Team (BGET), to allow them to evaluate technologies based on cost, maintenance, simplicity, level of purification, etc. and choose the appropriate solution for the breadth of unique environments in which they works.
Team Soochak tackled the challenge posed by Al Hammond to provide water telemetry tools to e-Health Points' Water Points in rural India. They created concrete project parameters, conducted technology feasibility research for each functionality, provided three engineering solutions for automating water distribution, and proposed a phased implementation strategy to allow for upgrading as the facilities scale.
Team Vidya Vikas expanded from Al Hammond's guest lecture about e-Health Points, to create an education model to be co-located with e-Health Point facilities. Their solution utilized affordable mobile technology and existing educational content to provide low cost technical training for the most prevalent jobs in a given region.
Team Soladapt designed a portfolio of lighting products for off grid communities based on the recommendations and knowledge of Kamworks (GSBI’11) and Angaza Design (GSBI’11). They created product modules focused around a solar adaptor that allows customers to expand their lighting portfolios based on specific needs and income level.
Team Anna Sanchay created an innovative design for grain silos in rural Indian villages that reduce wasted grain, and thereby increase farmer income throughout the year, and provide greater food reliability for the community. Their design used local materials typically put in landfills, and created options for both small and large village needs.
Team Garbage to Harvest created a closed loop distribution solution for the bi-products of organic waste disposal. Their solution utilized the vermicompost and bio gas that are produced from organic waste decomposition, through a strategic distribution location they simultaneously improve farmers' crop yield, and encourage households to use bio-gas instead of hazardous kerosene.
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Tuesday, Jul. 26, 2011
Each year at Santa Clara University’s Center for Science, Technology, and Society, we review hundreds of applications from social entrepreneurs who wish to participate in our fully subsidized capacity development program, the Global Social Benefit Incubator (GSBI™).The GSBI is designed for entrepreneurs in the field - including many from Africa, India, South America, and the Philippines – to access an actionable business model curriculum in just eight months.
During this year’s discovery process, we found the large number of biofuels ventures out of Africa striking. There isn’t enough arable land to feed the growing population there, distribution and other challenges aside. So why are so many field-based social entrepreneurs growing fuel in Africa instead of using the sun?
Could economics be the reason? It is well known that corn-based ethanol production in the United States has resulted in increased food costs for the developing world. In fact, the IMF reported that in 2007, almost half of the increase in production of major food crops was related to biofuels. And, European energy companies may pay for source materials, as evidenced by the Agroils model, a social enterprise that produces sustainable biofuels from non-edible forestry species.
But we do not believe that economic reasons alone are driving African biofuel social enterprises. Our experience with more than 40 ventures in the sector reveals that a large majority of social entrepreneurs are delivering power directly to the communities they serve, not supplying power to the developed world.
An advantage of our practice orientation is that we can ask the social entrepreneurs naïve questions, and they give us great latitude, as well as deep insights. Why grow biofuels in an environment that is much better suited to technologies such as solar power generation? The answer is in the context: many African governments impose enormous tariffs on the importation of solar panels. Solar thus becomes an untenable technology solution for local energy production.
In an informal discussion, one of our professors at Santa Clara, Alexander J. Field, Ph.D., the Michael and Mary Orradre professor of economics and author of the book A Great Leap Forward, proposed two alternative drivers for the governmental tariffs:
1. Corruption: a known factor in African politics. Just this week,Omidyar Network announced $5 million to fund organizations that foster government accountability and transparency in Africa. But is corruption the entire rationale behind the development of biofuels?
2. Innovation stimulation: could the local governments be driving innovation by making solar panels cost prohibitive? Again, this contextual factor may contribute to the implementation of tariffs in Africa, and may work well for some needs of the underserved (such as agriculture) but have unintended negative consequences for technology diffusion in cases of extreme economies of scale, e.g., solar panel manufacturing.
The answers are not black and white. In a recent New York Times article, Anand Giridharadas poses a hypothesis that ‘Real Change Requires Politics.’ We’ve experienced this first hand at the GSBI. The bottom line is that in order to effectively help social entrepreneurs solve issues for those living at the base of the pyramid, we need to better understand the contextual factors, including politics, which influence the successful adoption of optimal technology solutions and business models.
Posted by Thane Kreiner, Ph.D., executive director of the Center for Science, Technology, and Society at Santa Clara University |
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Tuesday, Jun. 28, 2011
The following post first appeared in the SCU Today "News & Views" on Friday Jun. 17, 2011
A new “Energy Map” is giving students and teachers a rare glimpse into the struggles and triumphs of companies providing energy and clean fuel to people off the radar of the PG&Es of the world.
The site provides details about the business models, technologies, and regional conditions behind 40 social enterprises in 16 countries. The businesses are overcoming vast hurdles to bring electricity or alternative fuel to 500 to 500,000 people apiece in remote parts of the developing world.
The Energy Map was the brainchild of several leaders at Santa Clara University’s Center for Science, Technology, and Society (CSTS), which for the past decade has hosted an annual competitive training program for social entrepreneurs (Global Social Benefit Incubator) and judged hundreds of contestants for the annual Tech Awards from the Tech Museum.
The group saw that the 40 energy businesses that had come through GSBI or the Tech Awards were a great untapped resource. They spent six months surveying the 40 ventures, detailing in plain language how they overcame hurdles like limited resources; weak distribution or infrastructure channels; or lack of financing. The resulting site is helping to speed up the learning curve for students, researchers, aid groups and social entrepreneurs interested in the issue.
So far, it’s being well-received. “People really like the easily digested nuggets of information they get here,” said Andy Lieberman, the program manager for the Energy Map at CSTS. “They are surprised to see so many common elements among seemingly disparate companies.”
The map site includes quick explainers of terms like biomass, passive solar, and carbon offsets. It also provides mini case studies of companies like Cows to Kilowatts, a Nigerian company that built a “biogas digester” to process waste from slaughtered cows into biogas. The stories describe how the businesses ended up with their current business and financing models, and how they are dealing with problems specific to their region or industry.
For example, Sunlabob Renewable Energy, a Laos-based franchiser of solar energy products, learned that it was hard to disconnect tardy customers when the solar panels were affixed to homes, so they changed to a portable-lantern model.
The site contains video vignettes, links to company websites, as well as links to extra resources.
The solutions being described in the Energy Map are likely to become more and more pertinent, both to developing countries and to developed nations like the United States, Lieberman and his colleagues say. As oil gets more expensive and gas and energy prices start to spike, some of the innovations already underway in poor rural areas could be useful in the U.S.
“These ventures are making great strides in the fight for more just and sustainable access to energy for the 1.5 billion people who are currently excluded,” said Lieberman. “That’s core to our mission at CSTS.”
CSTS created the Energy Map in partnership with social-enterprise information company Ayllu.
Read more.
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