GHIC 2018: Global Health & Innovation Conference
April 14-15, 2018
Yale University, New Haven, CT

Unite For Sight's 2011 Global Health & Innovation Conference

Blog Report by Catherine Thomas, Unite For Sight Global Health Leadership Intern

Enterprise Solutions Session

During this session, I was able to learn about the principles and promising examples of social enterprise from four exceptional leaders in the field.  Based on the presentations, it seems that some of the most important guiding principles of social enterprise include:

Ted London

Ted London has been studying Base of the Pyramid (BoP) markets since the idea entered the business vernacular in the late 1990s.  In his presentation, London discussed the potential of the BoP and the best approach to developing and utilizing the BoP markets.  He first explained that expansion into these markets would not only benefit the BoP but also businesses, including multi-national corporations.  He noted that in the increasingly competitive marketplace of the industrialized world, businesses are in need of new customers in order to grow and expand.  In the field of development and in the developing world, there are too many customers and too few market opportunities.  To remedy these two situations, London proposed the idea of “mutual value creation,” in which both the for-profit sector and the BoP customers benefit from expanded economic opportunities.

Then, London described how interest in the BoP market has grown significantly over the past decade and, consequently, how our perspectives about the market must change with it.  For example, businesses need to approach those included in the BoP not as dependent beneficiaries, but as partners and advisors in business development.  When seeking to work directly with individuals of the BoP, business people must abandon any assumptions they hold and instead approach them with respect and an open mind.  In this way, businesses can better serve their customers and therefore be more successful.  London focused on how we can create fortune with the BoP and not just for them.  He urged businesses to enable the BoP to help solve problems.  Moreover, the impact of social enterprises on poverty alleviation must not only be monitored, but also maximized. In order to accomplish this, the businesses must be integrated with investments in the creation of market opportunities for the BoP.  London noted that just as subsidies are used in industrialized countries for various industries, so too must subsidies be used for investment in BoP enterprise development. Foreign aid could certainly be more effective as investments rather than handouts.  Many social enterprises, such as Acumen Fund, are now taking this approach to development.

Michael Fairbanks

Michael Fairbanks delivered one of the most insightful, enlightening presentations I saw at this year’s conference.  Co-Founder of SEVEN and Senior Advisor to Rwandan President Paul Kagame for economic development, Fairbanks gave a superb overview of the factors that underlie a nation’s economic development.  He began his presentation by asking the audience to delineate the different types of capital: basic factors (e.g., location, environment), financial, human, intellectual, institutional, infrastructural, and cultural.  Next, Fairbanks said that he could determine the future economic success of a country by asking, “Do you believe in competition?”  If the country does, it is likely to be (or become) wealthy because, Fairbanks asserted, competition evokes human initiative and innovation. Competition also invites failure, which Fairbanks believes is necessary for innovation.  [On a side note, he even condemned the way that higher institutions such as Harvard, MIT, and Yale discourage and reject failure.]  Competition guides the economic progress of a country depending specifically on what types of capital is it affects.  In developing countries, Fairbanks explained, only the first three forms of capital—basic, infrastructural, and financial—are utilized; these forms are measurable yet do not lead to innovation.  Competing on these lower forms of capital means competing on price, which can only be lowered in this context by lowering wages and, thus, propagating poverty. On the other hand, developed countries operate on the four more advanced forms of capital—institutional, intellectual, human, and cultural—which are impossible to measure but are highly correlated with innovation. These forms of capital allow the country to also be more productive.

In order to reach this level of economic operation, business models that are based upon “informed choice and timely action” must be developed.  Fairbanks stated that non-profits should operate more like businesses.  In contrast to businesses, Fairbanks noted that non-profits are often based on great ideas, but they are not scaled up, which limits their impact.  And, as London stated, outcomes of businesses and non-profits need to be maximized, not just measured.  In order to determine the quality of a business (or a non-profit) and its impact, Fairbanks uses the following criteria: its ability to create a unique and valuable product or service for a consumer, to increase the rate of return to shareholders, to increase both the wages and the capacities of its employees, and to produce positive long-term effects on the environment, national prosperity, and, more broadly, on future generations.  On a hopeful final note, Fairbanks discussed how, with globalization, people now have the chance to change their socioeconomic status and their fate through informed decision-making and enhanced capacities.  All of the criteria for organizations listed above help to inform choices of the BoP and to strengthen the agency of individuals. 

Ron Bills

Ron Bills discussed the work of Envirofit International and its mission to reduce indoor air pollution (IAP) worldwide using the power of social enterprise.  First, Bills taught the audience about the health, economic, and environmental burdens of indoor air pollution. He informed us that half of the world uses some sort of biomass to cook meals every day. Economically, this means that many people must spend significant amount of money on wood, coal, etc.  In fact, in some areas of the world, families use 40% of their income for firewood. As a health and equality issue, women must often walk miles to get wood, and in some areas of the world they are putting themselves at greater risk for getting raped or murdered during this lengthy walk.  Most gravely, open fires within houses cause IAP, exposure to which is equivalent to smoking 2-3 packs of cigarettes per day.  In fact, IAP is the 4th most lethal killer worldwide, causing the deaths of over 2 million people per year (80% of whom are women and children under 5).  In terms of environmental damage, wood combustion adds 600 million tons of greenhouse gases into the atmosphere per year and destroys forests.  

Fortunately, Bills presented us with a solution to, at the very least, reduce the breadth of these problems and that is cleaner, more efficient stoves.  Most wood-burning stoves waste half of wood’s energy, but Envirofit stoves are built with combustion chambers, which increase efficiency and lower firewood consumption by 60%.  Since less firewood is needed, there is less forest damage, less money spent on firewood, and less time spent gathering wood.  The opportunity cost of gathering firewood is often that children—especially girls—may not be sent to school and women have less time to generate income or to educate themselves.  Reducing the need for firewood could, therefore, lead to even greater strides in a community’s development and productivity by increasing time available for education and income-generating activities.  Moreover, the stoves produce less polluted air and less greenhouse gases, and in fact, rocket stoves produce 80% cleaner emissions.  Lastly, using local sales and distribution personnel provides jobs. The Envirofit stoves could provide innumerable benefits for low-resource areas.

While Envirofit has clearly developed a wonderful new technology, the challenge is in distribution and sales.  Bills stated that the product must be attractive and consumer-friendly—durable, high-quality, etc.  Envirofit has made a diverse set of stoves for different consumer preferences. Some are wood-burning and others use charcoal; some are built-in and others are self-assemble.  As Design Thinking dictates, the product design and distribution must be consumer-focused. This can be aided by hiring local community members to manage distribution as Envirofit does.  With this model, Envirofit has been fairly successful and is growing.  At the end of his presentation, Bills presented some valuable lessons learned, many of which coincide with Fairbanks’ comments. First, Bills noted that those at Envirofit have made many stoves which have failed. As Fairbanks noted, failure is necessary for innovation. Secondly, Bills aptly asserted that competition is necessary not only because it fuels innovation but also because it “validates the value proposition” of the stove to the consumer.  Lastly, timely action is necessary.  Bills remarked that the time is right for this product since philanthropy is moving toward social enterprise and IAP is finally coming into the limelight as a significant (and solvable) global problem.  Based on this session of speakers, these lessons seem to reflect the foundations upon which the idea of social enterprise is built.

Paul Hudnut

A professor, an entrepreneur, and a BOP blogger, Paul Hudnut helped launch Envirofit International.  Hudnut delivered a didactic presentation on how to develop innovative business models for health, specifically ones that promote prevention over cure.  He began his presentation by expressing his distress over society’s relentless production of material goods and, consequently, of waste that results in environmental damage as well as adverse health effects.  Hudnut seeks not to cure these consequential health problems, but to promote their prevention, as this focus would be more efficient. He said that if Ben Franklin’s statement—“An ounce of prevention is worth a pound of cure”—is true, then why are more businesses not focused on prevention rather than cure?  Hudnut’s aim during the presentation was then to influence and aid the audience in developing business models that are based in prevention. I especially enjoyed this presentation because while most speakers focus on what the global challenges are and what their organizations are doing, Hudnut focused on what we the audience could do by explaining tools that could be used to build or improve a business model.

Before going into further detail about the tools, Hudnut put in context the idea of innovation to solve global problems.  He noted that in the past, innovation has been focused on technology and process, whereas now it is increasingly focused on business models and entrepreneurship. For example, social enterprises such as that of Aravind, are becoming the success stories which others in the field of development are increasingly trying to model.  To create a “good” business model, Hudnut stated that one must focus most on building a network which will tie into the existing one.  He, as many others have, cited Apple as an excellent example of this approach, and for guidance in business model design he asks, “What would Apple do?”  Other guiding principles are that a model should aim to accomplish the “3 S’s:” significant impact, financial sustainability, and scale; it should also meet the “triple bottom line” by ensuring the generation of financial, environmental, and social returns.  Some businesses that utilize these approaches are Design That Matters, Envirofit, and X out TB.  Finally, Hudnut described tools for business model design, including prototyping, customer development, and the business model canvas.  Going the extra mile, Hudnut even offered at the end of his presentation one hour of free business consulting for those wanting to (re)design their business models for global health services and products.  In this presentation, Hudnut proved himself to be not only an engaging and inspiring speaker, but also a professional committed to the benevolence that underlies the field of global health and social entrepreneurship.