Tag Archives: Social Enterprise

Bottles to Bricks: An Idea Worth Spreading

Of Elephants and Castles

When I am in the US, I am admittedly a bit of an anti-soda humbug (“anti-pop” for my readers in Minnesota). It’s not just that soda is gratuitously unhealthy, but the bottles that contain it are as bad for the environment as their contents are for your body. Even if you recycle your plastic bottles, they’re still wreaking environmental havoc.

In Uganda, I’ve become much less anti-soda. This is due to no less than three factors: 1: Soda here is not made with high fructose corn syrup, as it is in the US. 2: It is much more common to find soda in glass bottles than plastic bottles here, and the empty glass bottles are ultimately re-used. 3: There is a delightful, gingery soda called “Stoney Tangawizi” which can only be found in East Africa (to my knowledge).

And now there’s even better news: SOMEONE HAS FOUND A USEFUL AND…

View original post 508 more words

Advertisements

A ‘cure’ for medical brain drain

Several months ago, I wrote a post suggesting that outsourcing (from developed countries to developing ones) should be viewed  as a potential cure for brain drain (which flows in the opposite direction).

One problem with that argument, which I acknowledged then, is that even if skilled workers stay in their home countries, they are still contributing their skills to the economies of developed countries.

But I now unveil to you, an idea which works around this problem, at least in medical outsourcing. When I say, “medical outsourcing” by the way, I’m excluding medical tourism (I don’t think that really qualifies as “outsourcing”). For a discussion of medical services that can be outsourced, see here.

The Idea

Let us establish a medical outsourcing facility in an African country that has a diaspora that includes many doctors practicing in other countries (Uganda, Ethiopia and Liberia, among many others). The doctors employed here will provide medical services outsourced by hospitals in rich countries.

BUT! We will restrict their hours to one of the following schedules:

Doctors may only work 20 hours per week -OR-

Doctors may work 40 hours per week, every other week

The agreement will be that those doctors who only work 20 hours per week will practice medicine in or around the city where the outsourcing facility is located.

Those who only work every other week, will practice medicine in rural (or otherwise more distant) areas during the alternating weeks.

This model overcomes two obstacles:

1. Doctors’ standard of living: Developed countries are sometimes accused of “looting” developing countries of their skilled professionals. In truth, it’s the individual workers who make the choice to use their skills in another country. Understandably, someone who has invested so heavily in their own education and skills wants to be compensated with a good salary and comfortable standard of living. Hospitals in the developing world are often unable to provide this, and consequently, doctors emigrate.

Although our facility would have to be able to provide a particular medical service at a lower cost to entice hospitals in the West to outsource that function, the difference in cost of living indices should allow our doctors to make a salary that is equal at purchasing power parity (but not at exchange rates) to what they would make if working in the US, Europe, Japan, etc.

2. Contribution to home country: A traditional outsourcing facility has obvious economic benefits for the workers employed there, but beyond that, it’s harder to gauge its benefit. In our setup, the doctors are practicing medicine in their home country, not just providing a second opinion on cases from somewhere else.

True, they would still only be seeing patients in their country half the time, but that is much better than practicing medicine there none of the time, which is the situation in the status quo, when a doctor chooses to practice medicine in a distant land.

Overall, this model has the potential to cure brain drain in a sector where it is particularly severe, and its consequences most harmful.

THOUGHTS???

Gardens in the Sky!

While January 13 may seem rather late for my first post of 2012, the subject of this post will seem rather early in the year for the majority of my readers who are in the northern hemisphere. I’m leaving plenty of time to plan and scheme to make this happen…

A few years ago, I saw a church in North Minneapolis that had expanded its community garden to cover part of its parking lot. No, they didn’t tear up the parking lot and replace it with the garden, they just created a garden on top of the asphalt.

I don’t know why this was so surprising to me at the time — if relatively tall and healthy plants can grow in pots which have less than a foot of dirt on top of plastic, why not on at least a foot of dirt mounded in rows on top of asphalt? In any case, the fact that people were growing food on top of a parking lot demonstrates the popularity of community gardens, but also the dwindling amount of space for such gardens in densely populated areas. Community gardening is more than just a fun weekend activity. As the world becomes more populated and more urbanised, urban agriculture is being recognised as a important component of food security.

So far, the amount of available land seems to be the main constraint on the growth of urban agriculture. But the garden-on-asphalt suggests there may be a way around that.

Green Roofs are already growing in popularity for new construction projects. Community gardens are already popular on the ground. But as far as I know, these two concepts have not been merged on the scale I now propose:

The Idea: Gardens in the Sky!

Rather than suggest that we start installing rooftop gardens on new buildings, I believe there are already plenty of existing garden-ready surfaces in places where people already live. I would suggest that there are three criteria a surface must meet to be viable for rooftop gardening:

1. It must be flat. Sorry, Al Johnson’s Swedish Restaurant in Door County is not a suitable model

2. It must have a large, continuous surface area. If it is to be viable as anything more than a hobby garden for a few individuals, the surface needs to be large, and if it is to be functional, the area needs to be mostly continuous

3. It must be in a densely populated area. This isn’t necessary for the rooftop garden per se, but if it’s not in such an area, then it wouldn’t have much advantage over the conventional ground-level garden.

There are a few places that meet these criteria for sky gardens. The first that came to mind was the area in Loring Park near downtown Minneapolis where I lived several years ago. Here’s are screenshots from Google Street View and Bing’s Bird’s eye view of the street on which we used to live:  

As you can see, these apartment buildings are the same height, probably because they were built around the same era in the early 1900s. They are all relatively close together, making it possible to join them with walkways to make an even larger continuous area. There are plenty of areas with this same characteristic (concentrated apartment buildings of almost uniform height) in older neighbourhoods in most American cities. For example, these rowhouses in Washington, DC would make a good candidate:

Another category of rooftop suitable for sky gardens is the mass-produced concrete apartment blocks that sprung up in every country the Soviets touched. What these buildings lack in style or charm, they more than make up for in sky garden-suitability!  Once again, uniform height and close proximity would make it possible to link several buildings’ roofs together to make one continuously accesible surface.

One of these pictures is from Mongolia, and one from Latvia. Can you tell them apart?

Sky gardens in those parts of the former Soviet Union with heavy groundwater and soil contamination would have an extra advantage over ground-level agriculture.

So far I’ve been focusing on groups of buildings of uniform height that could be amalgamated into one large growing area. But, there’s one more category of building that rivals the Soviet apartment blocks in both architectural elegance and sky garden-readiness. These individual buildings are suitably massive by themselves, without any need to be  adjoined to adjacent buildings. I’m talking, of course, about the big box stores.

Here are a few stats to consider: the average Super Target covers 174,000 square feet or 4 acres. The largest Wal-Mart (in Albany, NY) covers 260,000 square feet, or almost 6 acres! That’s plenty of room to grow anything. Heck, even I might be convinced to darken the doors of a Wal-Mart if I could buy the most local produce possible — grown directly above the place where it’s sold.

There might be some other surfaces that meet the criteria for sky gardening: public housing projects in the US? Certain airport terminals? I don’t know, maybe you can help me think of more.

I’m also aware that there might be some technical challenges to sky gardening that wouldn’t bedevil conventional green roofs. Maybe you can help me identify those and find a way around.

THOUGHTS???

Luxury Bikes for the BRICS!

New format: Idea up front, explanation later.

Idea: Luxury bicycles marketed specifically to emerging economies

Explanation: Anyone who knows me, or who reads my other blog, knows that I will go to great lengths to ride my bike, even if only for short lengths. Because of my appreciation for these machines, I now posit the Maus Hypothesis of Bicycle Appreciation. 

My hypothesis is thus: that the appreciation for bicycles in a given country or society correlates to income along a U-curve. That is, in the poorest of countries, where bicycles are ubiquitous, they are appreciated for their many functions. Here in Uganda, bicycles serve as taxis, pushcarts, and even, as bicycles.

As incomes increase, appreciation of bicycles lowers. Because bicycles are associated with the days of poverty, they are shunned by the new rich who see cars as a status symbol.  But at the highest income levels, bicycle appreciation recovers. Here, people now have time for recreation, and thus view bicycles as fun. Also, in some places, cars have become so passe that they no longer carry value as a status symbol, and in densely populated urban areas, have diminished value as a mode of transport.

Here is how I would visually depict this hypothesis:


Obviously, there would be some outliers on this graph. The US has higher incomes, but lower appreciation for bicycles, due mostly to America’s deeply entrenched car culture, and low levels of physical fitness (although this is perhaps both cause and effect). Additionally, in some poor countries, say Mongolia, cycling has never gained widespread acceptance due to geography or culture. Also, keep in mind that the y-axis plots appreciation not usage of bikes.

It’s mostly in the emerging markets that bicycles face the biggest challenge. I’m thinking specifically of the BRICS – Brazil, Russia, India, China and South Africa, and even more specifically of India and China. The BRICS account for over 40% of the world’s population, a quarter of its landmass and most of its current economic growth. Thus, the transport and lifestyle habits of people in these countries will have a massive impact on the future of the planet.

As I’ve suggested, bicycles are by no means scarce in these countries. But as soon as people have enough money, they usually trade them in for automobiles. There might be any number of reasons someone decides to purchase a car, but I would guess that the main one is status. After all, if you live in China or India, and you’ve ridden a bike your whole life, it’s probably because that was all you could afford. If you continue to ride a bike, people will assume your situation hasn’t changed. But driving a car will make it clear that you’ve done well for yourself.

If 1.4 billion Chinese people and 1.2 billion Indians start driving cars at the same rate as Americans, it’s curtains for those countries’ infrastructure and air quality. As in the US, the individual desire for status will probably trump any feeling of societal obligation.

If I’m correct that people buy cars to display their wealth and status (it’s hard to explain any functional benefit to having a car instead of a bike in Beijing or Delhi), the disadvantage of bikes is that they are associated with poverty, rather than wealth.

But not so for the luxury bike!

How is a luxury bike different from any other bike? In the same way that an Acura is different from a Honda: different branding and nicer accessories. A solid bike with a plush leather saddle, brake and shift levers made of chrome or some other unnecessary metal, and the right brand name on the frame could quite effectively convey one’s status.

Coming soon to a bike near you?

The production and manufacture of these bicycles would be the easy part. The branding and marketing would be more difficult. We could either try to develop a brand from scratch, equating our bikes with power and sophistication and recruiting a celebrity or two to endorse the brand. Or we could licence the name of an existing luxury brand, e.g. build our bikes and then paint the name ‘Gucci’ on then (and then perhaps encrust the name with diamonds).

These bicycles would be marketed to the fast-growing middle classes in emerging economies. This segment has shown a high degree of brand consciousness and is at highest risk of buying a car.

Who wants to go in on this venture???

The Remittance Fund pt. 2

About three weeks and two continents ago I began writing about remittances, those financial transfers from emigrants working abroad to their family and friends back home. I noted that they have a number of advantages over more traditional types of aid (government, foundations, FDI, etc), but suffer from a critical weakness:

They don’t necessarily finance development per se.  They may help individual family members purchase important goods and services, but they don’t contribute to the provision of public goods, or to broader social and economic development.

So now, the moment you’ve all been waiting for…

The Idea

Set up Remittance Funds, that will channel investments from diaspora communities into projects of economic and social value in their home countries. Possible examples of projects in which the Fund would invest could include:

  • Renewable energy projects in off-the-grid areas
  • Expanding internet access or other telecommunications links
  • Funding co-ops for crops

Investments would be open to anyone, but because these sorts of projects have more of a social return on investment than an immediate financial one, they would probably be most attractive to immigrants who have connections to the places where the Funds invest.

So far, I’ve focused on how to get around the weakness of traditional remittances, but haven’t yet shown how we might still capitalize on the advantages thereof.  So now let’s discuss an important feature of this Fund:

Investors in each Remittance Fund will have rights rather like shareholders, only more so.  That is to say, they will propose and vote on the projects in which each Fund will invest.  Assuming that most of the investors are immigrants who still have strong links to their homeland, they will be more informed about what sorts of investments will add value, which are feasible, and how to carry out investments in a way that is sustainable in the target communities.

In this way, investors in the Fund could still have the confidence that they have when sending money directly to family members.

I’m always eager to get feedback on my ideas, and on this one I’d be particularly interested to hear from my friends who are immigrants. Specifically, I wonder: Are remittances to family already too big an expenditure to  think about participating in such a fund?  If you were to participate in such a fund, would it replace or complement traditional remittances?

THOUGHTS???

The Remittance Fund, pt. 1

Thanks to my upcoming move to Uganda, and this unfortunate habit I developed of checking to see if anyone else had already thought of MY ideas, I haven’t posted anything recently.  I was going to blog about my idea for a goat rental lawn service, but thanks to aforementioned habit, I discovered that that one’s already taken.

I’ve finally concocted another idea that is both so crazy that it hasn’t already been proposed (at least not on teh interwebz), and so crazy IT MIGHT WORK!

GET ON WITH IT!!!

Yes, right.  Remittances, for those of you who are unfamiliar, are financial transfers from migrants working abroad to family and acquaintances back in their home country.  For countries that lack economic opportunities at home, remittances sent from abroad are a huge source of income.  In Lesotho last year, remittances were estimated to be 26% of GDP. In Tajikistan, they were 35% of GDP!

Remittances are significant both in the countries in which they are received, and in the countries from which they are sent. As you can see from the table at right, immigrants in the US send more money to developing countries than the US Government, and all forms of philanthropists COMBINED!  In fact, immigrants in this country, who make up only 12.5% of the population (and not the richest 12.5% either) manage to spend 3 times as much on ‘foreign aid’ as the US government, which represents all of us.

Remittances have several advantages over the other types of capital flows noted.  They are thusly:

1. Because the motivations of the suppliers of remittances are social, cultural, and indeed moral, the supply of remittances is relatively inelastic.  Put another way, in an economic downturn, a migrant worker is more likely to keep sending money to his/her home country than either fickle investors or governments loth to spend too much money in faraway places with no votes.

2. There is a high level of trust between the remitter and recipient.  Taxpayers in some rich countries can be squeamish about foreign assistance because they don’t know for sure where the money is going and don’t even understand the need in the first place.  This is not true of the immigrants sending remittances to family and friends back home.  They know exactly to whom the money is going, and probably have a good idea of how it will be spent.

For all their advantages, however, remittances have one major disadvantage:

Because they are usually sent to individuals or households, their contribution to broader economic or social development is limited.  Think of it this way: Remittances can pay for school fees for a younger sibling, but they can’t do much to improve the quality of the school to which that sibling goes.

The irony is that the defining advantage of remittances over other forms of financial aid  — that they are diffuse and interpersonal — is also their greatest weakness.  If only there was a way to circumvent that weakness while still preserving the benefits of remittances…

TO BE CONTINUED…

 

Maybe Mary Kay could help Africa?

The Problem

Melinda Gates has a quote that has become popular among development advocates that goes something like “Why is it that Coca-Cola can make it to remote villages in the developing world, but life-saving medications can’t?”

The answer usually is ‘insufficient profits’ or something alluding to a lack of economic incentives for the makers of those medications.  But the problem to which Melinda is alluding goes well beyond goods with a high development and manufacturing cost, like pharmaceutical drugs.  There are a host of high-impact, low-cost interventions and products –antimalarial bed nets, solar cookers, etc. — that would probably be of greatest utility in remote, under-developed areas, but that are much more prevalent elsewhere.

Why?

Naturally, the reason is complex, multi-faceted and multi-layered (poor infrastructure is an overly-obvious but important factor).  But from an economic standpoint, the reason is clear: a misalignment of resources and incentives. Observe:

Many of the promoters of world-saving, life-improving products like those mentioned above are non-profit organizations who have a desire to distribute them everywhere they are needed, but often lack the resources to actualize that desire.

Many of the companies that have adequate distribution chains don’t stand to make much profit from selling goods — like solar cookers for example –that will probably have to be sold at just above production cost and will only have to be replaced every few years (unlike soft drinks, which can be replaced daily, if not hourly).

The Big Idea

This is where Mary Kary (or Pampered Chef, or any number of other product lines your underemployed friends and their moms have tried to sell you) comes in.  Yes, there are a lot of problems with Mary Kay’s ilk, not the least of which is that they tend to operate like a pyramid scheme (“multi-level marketing” is the euphemism).

Moreover, Mary Kay has such a high turnover rate that very few of their”consultants” make a profit.

But the basic idea that makes these “network marketing” models so effective could be harnessed to bring transformative innovations into under-developed rural markets.  Pampered Chef, CUTCO et al rely on the basic (and somewhat manipulative) principal that consumers are more likely to buy something from a friend than from a stranger at a store.

But there are two deeper assumption that undergird their success:

1. Diffuse networks of individuals are better at identifying potential customers than even the best market research.

2.  Diffuse networks of individuals are more effective at getting products to the right places than a centrally-managed supply chain.

On point 1, consider: A scientific market survey might determine that because you are an 18-24 year old female, you are statistically more likely to want to buy acne cream.  The manufacturer of that product will therefore sell their product in stores in which other studies show your demographic is most likely to shop.  But your friend, who sees you regularly, notices that you are breaking out and can recommend a specific product and sell it to you directly.

Now, imagine if we replaced cosmetics or expensive cutlery with bed nets or solar ovens.  Imagine we hired several hundred “Consultants” who carried with them a small inventory and collected profits on whatever they sold.

There are quite a few advantages this model would have over a conventional supply chain model:

1. The sellers would have added incentive to sell their products in remote areas that normal supply chains wouldn’t reach because of the opportunity cost.  If, for example, the seller had family in that remote area or if there were clan ties, there would be incentives supplementing the profit motive.

2. Using the direct-marketing approach for interventions such as bed nets can insure they are used correctly.  There have been studies that have shown that antimalarial bed nets distributed by NGOs and governments oftentimes are misused for fishing, or even as wedding dresses.  But individuals selling these products to groups of other individuals (as opposed to organizations dropping them off en masse in a village) would have to demonstrate how the product is used and how it is effective to make the sale.

I’m feeling pretty good about this model.  I think we could leave the pyramid out of this and still get pretty good results.  There are other ways the model used by MK would need to be tweaked, but that’s enough for now.

THOUGHTS???