Tuesday, July 29, 2008

H&M: Design for the Poor

H&M is a global fashion brand, with 1600 stores around the world, known for "fashion and quality at the best price." Last week, IDDS had its version of H&M... Hande and Mufute, who came to talk about their work in technology dissemination for the poor in India and Africa. I have a few highlights from my notes below.

Harish Hande is founder and CEO of SELCO, and a widely acclaimed social entrepreneur for his work in bringing solar lights to poor people in India (see my post from Oct 10, 2006). He is also a provocative speaker! His only slide was a picture of rural India: in the foreground is a primative cow shed with one of SELCO's solar collectors on the roof; passing overhead is a government transmission line, connecting to a water pump that has an outdoor light that burns all day and night. This illustrates India's energy problems... and perhaps its solutions. The problems are access, intermittent supply (power outages in Bangalore have already started due to low monsoon rains this year) and waste. As Harish points out, this is supposed to be the IT capital of the world, and it doesn't have reliable electricity.

Harish has used these problems as opportunities, setting up a business that has wired over 100,000 poor households and small businesses over the past 15 years. Children are now graduating from high school who have only known solar electricity! In building SELCO's business, Harish stressed how important it was to come to the poor with a good product, but also "doorstep service" and "doorstep finance". His clients want to know who will install and service the system...and how they will afford it. He also discussed how their financing "piggybacks on the client's cash flow," not an arbitrary payment schedule.

Harish questionned the concept of "design for extreme affordability" that the IDDS participants had heard from Paul Polak, because it “challenges the intelligence of the poor people”. "When it comes to the poor, we always try to standardize it and take away a choice. You can standardize to a “want”, but when it is a “need” you need to customize it." He was also critical of the solar business in the developed world, pointing out that subsidies of solar panels in Germany and California have increased costs and hurt affordability for the poor. "How much help are hybrids and solar panels in California, if millions of people are still cutting down trees for firewood, and burning kerosene for light?" he asked. He also was critical of traditional aid-based international development community, pointing out that they take little risk, but are quick with suggestions for companies like his. "NGOs are always successful, only companies are failures." (I am definitely going to use this quote again!) [for video clip, click here]

Ruth Mufute has had many years of helping implement technologies in Africa, primarily in Zimbabwe and Zambia. She emphasized how technology can empower women and bring more income to communities and families. "Women bear the burden of rural economy," and technologies can make them more productive and reduce their drudgery. But an existing technology/machine is just the start. Ruth helps build the community/economic infrastructure as well. Businesses, bank accounts, cooperatives, etc. For instance, a Ram press can produce cooking oil, which is "gold" in many rural communities. It produced 4x more oil from sunflower seeds compared to traditional methods. At first, Africare gave away the machines, but they weren't used, and collected dust. Ruth convinced her bosses to let her sell the machines... and the results were "astounding." As she said, you must start businesses, not social clubs.

Ruth sees her organization as providing a fire, and allowing others to light their torches from their work. She estimates they have benefitted 20,000 rural households. Ruth also told an interesting story about how technology and culture interact, and how she, as a woman, has a deep respect for tradition. But when she started, women could not get loans. This had to change and other barriers to women are falling. But she emphasized that "nothing is taken from me" by respecting traditions and told how she moves to a very traditional role when she visits her family.

I do see Africare working in a hybrid space. They are donor supported, and choose their markets based on donor interest and support. This (perhaps unintentionally) limits the scale of their impact.

So that is IDDS's version of H&M. But instead of "fashion and quality at the best price," our H&M helped IDDS participants think about designing products which incorporate "function and quality at an affordable price" and to understand ways to disemminate technologies to achieve impact.

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