I'm hungry, and it's getting late; I'm worried about missing my train.  The potluck table full of food isn't helping my growling stomach, especially as more and more dishes arrive.  A fellow bystander casually offers play-by-play commentary: "India's represented.  Now Ireland.  Ghana's here; so is Peru.  Where are the Hondurans?  And the Zambians!  They always hold things up…"

This scene took place yesterday, in the courtyard of a 1970s-era dorm at MIT, outside of Boston.  Along with 60 others, I was waiting for the Hondurans and Zambians so we could begin the International Development Design Summit's (IDDS) around the world potluck dinner.  IDDS is a two week workshop/seminar/collaboratorium organized by MIT's appropriate design guru, Amy Smith.  A MacArthur Genius Award winner, Smith is renowned for her passionate, down-to-earth approach to design for base of the pyramid markets. (I wrote about her back in 2006.)

According to the IDDS web site, the goal of the program is to develop simple, inexpensive devices that can be produced locally and make a real difference for people and communities.  This year's participants hail from 23 countries and include mechanics, social workers, doctors, carpenters, farmers, students, faculty and professors.

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I believe that the dialogue on philantrocapitalism featured in NextBillion is actually rooted in a question of semantics. As Edwards points out in his book, the whole conversation surrounding NextBillion.net has coined a number of terms (Social Enterprise/Entrepreneurship, patient/creative capital/capitalism, blended value, double/triple bottom line, B, M and ToP, inclusive business, and the list goes on...) that can create confusion and may pose a risk overheating for the sector. Even SMEs are now being called Small and Growing Businesses. Not that I disagree; we want them to grow and become the next microfinance, but agreeing on a nomenclature wouldn't hurt. By the way, stay tuned next week for a wrap-up of the ANDE conference.     

Anyway, I guess this is the case for any growing sector and challenges like Edwards' are necessary for the it to gain maturity and continue its consolidation. Skoll Foundation has previously tackled the question of definition, and two recent papers continue the conversation around key issues for the sector's maturity: the first, by CGAP, discusses the (some may argue) blurring line between the for- and non-profit models, analyzing ownership and governance challenges faced by MFIs as they leave the NGO model and transform into commercial institutions.  Also, Harvard Business School discusses the future of social enterprise, as part of its year-long 100^th birthday celebrations.

On another note, just a couple of links to remain current on the latest water debate: Scientific American offers a very informative piece on the coming water crisis, possible courses of action and how it will affect everyone at the base and elsewhere in the economic pyramid. This week's Economist also goes into water shortages focusing on the markets and pricing issues, as does Aguanomics' David Zetland in a recent Forbes article.  All pieces seem to agree at least on one point: sooner than later, prices will keep us from taking water for granted.

This is the fifth and final installment of our series reviewing Michael Edwards' Just Another Emperor and the concept of 'philanthrocapitalism'. Follow the links to read part 1, part 2, part 3 and part 4.

By Rob Katz and Francisco Noguera

Philanthrocapitalism – harnessing business and the market to the goals of social change – is a controversial term. First introduced by The Economist's Matthew Bishop, then expounded upon by the Ford Foundation's Michael Edwards, philanthrocapitalism has been the subject of no fewer than four major online discussions and debates. Here at NextBillion.net, we have dedicated five blog posts to the topic, offering a range of opinions on Edwards' new book, Just Another Emperor: The Myths and Realities of Philanthrocapitalism.

Derek, Moses, Manuel and Nitin – who authored the first four entries in this series – offer a range of viewpoints, mostly critical of Edwards' argument that market strategies are inappropriate tools for driving social change. Edwards, of course, makes many salient points, and is not to be criticized as a hack. (Over at the Global Philanthropy Forum blog, Benetech's Jim Fruchterman deconstructs Michael Edwards in no uncertain terms, and comes close to making this very criticism. Edwards responds.)

As I read through the NextBillion.net posts and comments, the Global Philanthropy Forum debate, the OpenDemocracy forum and other discussions on philanthrocapitalism, I wonder if we aren't talking past each other at least a little bit.

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I visited the slums of Nairobi in the summer of 2002. I remember being completely overwhelmed by the poor living conditions: large families cramped into little rooms, putrid refuse scattered throughout the neighborhood, young children left seemingly hopeless. I remember thinking to myself, what can possibly be done?

That summer, upon graduating from the BBA program at the University of Michigan's Business School, I was in Kenya on a service project with a small group from my local church.  For six weeks, a dozen of us taught English, science, and math in schools throughout Kenya.  But it was while visiting the slums that something in my heart and mind shifted.   It was an epiphany of sorts – similar to another epiphany I'd had the summer before, which led me to Nairobi in the first place.

Just twelve months beforehand, I was in a posh tower in Manhattan, working as an investment banker for the largest financial services company in the world.  A brief snapshot of what my life looked like:

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Our regular NextBillion readers will already know that the MIT is one of the most important universities in the base of the pyramid arena. Some of their most important initiatives are the Legatum Center for Development and Entrepreneurship, stimulating bottom-up entrepreneurship fueled by innovations, and the Lemelson-MIT Awards, recognizing the impact that inventors can have on economic and social well-being.

In these and other cases, MIT's strategy has been to apply its engineering prowess to try to solve BoP problems in the shape of technologically-adapted inventions.

Now, MIT has launched a Next Billion Network to deploy innovative mobile technologies that can help people reduce friction in their local markets from the bottom up. This approach is based upon the belief (which I share) that mobile phones, by enabling increased connectivity, can offer new opportunities for low-cost, sustainable solutions in the BoP.

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I recently had the pleasure of attending a presentation by Al Hammond which detailed his plans for revolutionizing rural medicine and access to telecommunications in developing nations. Here is a condensed rendition of the picture he painted: The majority of rural communities in developing nations have no access to telecommunication systems, and this is a problem considering that telecommunications are an essential tool for offering the poor services and possibilities that they would otherwise not have access to. The communications gap can be bridged by installing wireless access hubs in remote communities and the hand of wireless technology could leapfrog reaching almost any community at a cheap price.

This innovation opens a whole new market for cell phone companies and offers yet another excellent pipeline for BoP development and for getting a share of the fortune at the base of the pyramid. This is what we in the BoP community would call a double bottom-line profit model because the business plan is not only economically profitable, but also reaps social benefits by providing the services of telecommunications to poor rural communities. In this model, social justice meets capitalism. They shake hands, and build a better tomorrow.

Like many bad things, the concept sounded fantastic at first. But then, I found myself stopped in my thinking's tracks when the presenter remarked that the natural progression of services provided by this newfound rural telecommunications industry would be as follows: First there would be mobile banking. Then, education services. Lastly, entertainment would inevitably enter the market. This progression, if we can all it "progress" invokes Henry D. Thoreau's critique of the technology boom that took place during the industrial revolution in US America.

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Like any business, base/bottom of the pyramid ventures fail - often. I have neither the space nor the inclination to list those I know of - besides, writers from Erik Simanis to Aneel Karnani to Anand K. Jaiswal have done some of the heavy lifting for me.

We don't talk enough about failed bottom of the pyramid ventures. After all, what CEO wants to risk his company by talking about all the things they did wrong?

Answer: Matt Flannery. The Kiva CEO is incredibly forthright when discussing what they've done well and what they haven't. His latest blog post is practically a how-to guide for talking about failure inside a BoP venture.

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Position: Investment Officer(s), Opportunities for the Majority Initiative

Location: Washington, DC

Organization: The Inter-American Development Bank is the leading source of financing for regional development in Latin America and the Caribbean.  The Opportunities for the Majority initiative (OMJ) applies sustainable, market-based strategies to bring the benefits of economic and social development to the poor and low income majority population of Latin America and the Caribbean.

Description: OMJ seeks to grow its team of professionals in Washington with the objective of generating high quality, creditworthy, sustainable and demonstrative projects that can be replicated and scaled up to result in significant development impact.

Investment Officers will be responsible for helping OMJ source deals.  For more information - including the full job description and instructions on how to apply - please see the IDB job posting web site.

Application deadline: August 1.

After a few weeks of non-blogging, I'm happy to write my first post on NextBillion. I've spent some time over the last few weeks updating the Resources section of the site, complete with additions to the case study, reports, books and articles sections. A couple of highlights are summarized below, but we'd love to hear your thoughts and comments on what's particularly valuable and what you think we're still missing in our virtual library. The entire list of resources can be accessed here.

Happy base of the pyramid reading!

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Guest blogger Karen Bennett is a Research Program Coordinator at the World Resources Institute. Her current work focuses on mainstreaming an ecosystem services approach to assure ecosystems' capacity to provide humans with needed goods and services. She also provides support to projects in the People and Ecosystems Program.

In Central America, the Maya Nut is making it clear that trees are worth more standing than cut down. Trees are critical to the well being of forest inhabitants in Central America. Ironically though, many forest dependent communities find it pays more to cut trees down than to keep them standing. That's because timber can be used for firewood, building material, or sold internationally, and cleared land can generate income from agricultural products. Unfortunately, deforestation eliminates other ecosystem services that forests provide, such as climate regulation, soil retention, and water regulation. As current deforestation rates attest, many of these forest benefits have received little recognition.

That is starting to change, however, as local communities discover the financial potential of the forest's often overlooked services. For the past few years, 56 women in Ixlu, Guatemala, which is located on the border of the Maya Biosphere Reserve, have operated a business to market the Maya Nut, also known as the Breadnut or Ramón. Dried and roasted, the Maya Nut can taste like chocolate or coffee and can be used to make cereal, cookies, cakes and other foods.

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Guest bloggers Shaila Parikh and Biju Mohandas work for Acumen Fund, based out of Hyderabad. Shaila is a Summer Associate and a Master of International Affairs candidate at Columbia University's School of International and Public Affairs. Biju is Acumen Fund's India Business Manager. Before joining Acumen Fund, he served for five years in the Indian Army's Medical and Dental Corps. Later, Biju completed his Post Graduate Program in Management with a dual major in analytical finance and strategic marketing from the Indian School of Business.

By Shaila Parikh and Biju Mohandas

In the middle of June, Acumen investee LifeSpring opened its second low-cost maternity hospital in a peri-urban area near Hyderabad. They plan to have six hospitals opened by the end of 2008, and by the time this post goes live, they will have launched their third hospital in Nellore, a small town in southern Andhra Pradesh.

As LifeSpring and other Acumen Fund investees slowly and steadily gain scale, we have started asking broader questions about healthcare for the low-income market. Mainly, we want to understand the major gaps and bottlenecks to providing healthcare to the low-income market in India and how these issues can be overcome. The India office is presently working on a status report of the healthcare sector in which we are trying to understand the challenges of the industry for our target market. What follows is a brief summary of our understanding thus far. Your feedback through questions, comments, nudges, pointers and criticism are appreciated.

Simply put, healthcare for the poor seems to have three central challenges: affordability, availability and quality. Effective, viable solutions will need to address all three issues.

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This is part 4 of our series reviewing Michael Edwards' Just Another Emperor and the concept of 'philanthrocapitalism', which will conclude next week with remarks from other members of the NextBillion.net team. Follow the links to read part 1, part 2 and part 3.

The close-knit community of development-through-enterprise professionals in Hyderabad woke up a couple of weeks ago to a series of e-mail forwards of an interesting article in the Financial Times. Michael Edwards, author of "Just Another Emperor", had raised a series of points that the development sector was driven by misguided calls for business thinking, leaving this community with hard questions: Were they working passionately, but in the wrong direction?

The crux of Edwards' argument is that the development sector should follow a different logic from business thinking and be driven by its unique values of compassion and collaboration.

He writes:

The reason is that business and non-profits operate on different logics - competition and co-operation, individualism and collective action, market share and sacrifice or service. You wouldn't use a typewriter to plough a field or a tractor to write a book, so why use business thinking in areas where different instruments are needed.

It is certainly true that the development sector is unique in many ways, but this does not mean that its values are opposed to sustainable business or, as Edwards suggests, that it should be protected from measures of profit.

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This is part 3 of our series reviewing Michael Edwards' Just Another Emperor and the concept of 'philanthrocapitalism'. Follow the links to read part 1 and part 2.

Recently, there has been some debate surrounding business involvement in philanthropy and its usefulness after the publishing of “Just Another Emperor?” last March by Michael Edwards. Michael Edwards, Director of Governance and Civil Society at the Ford Foundation takes a critical look for the first time at a relatively new phenomenon: using sustainable business tools and models to solve poverty problems. NextBillion.net’s core content (and passion!) deals exactly with these issues.

Constructive criticism is always welcome, especially if it is from someone who has worked at Oxfam, Save the Children and the World Bank. In the fight against poverty, Edwards makes a distinction between government, civil society and what he calls, philanthrocapitalists. According to him this last group is made of market agents that claim to be able to solve social problems through business approaches alone. Edwards states that, although these approaches are important, they are very difficult to operate successfully at scale and that they usually experience some trade-offs between their social and financial goals. Furthermore, he argues that civil society might be being damaged by these trends.

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This is part 2 of our series reviewing Michael Edwards' Just Another Emperor and the concept of 'philanthrocapitalism'.  Read part 1 here.

Michael Edwards' recent book on "philanthrocapitalism" reminds me of a recent conversation I had with my sister, a social worker. Over dinner one day, she started going off on business types:

Why is it that business people think they are the answer to all the world's problems? You guys come off so arrogant! Somehow, we, who have been working in the civil sector for centuries, struggling to solve social issues, are completely inept, and you guys, who have all the money, are going to solve all the problems.

I think many people have a similar perspective. And perhaps rightly so.

Maybe we business folks didn't enter into the public/non-profit sector scene in the smoothest way. We in the BoP world know that when entering into a developing country, we can't just tell locals what to do and what they need. But perhaps we didn't follow our own advice when we entered into the world of foundations and NGOs. Instead of partnering with and listening to those who have gone before us, we just set up shop and announced to the world, "times are changing -- a new and better way has arrived!" Therefore, I can understand the push back and why Edwards wrote his book, Just Another Emperor?

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Every good story begins with a witty insight, a forceful statement - something to grab the attention of the reader.  This one, unfortunately, begins with shrimp.  Before I visited Northeastern Brazil, I had only known the tasty kind - the ones that are served on small platters or served over pasta, that are fantastic with a little butter and lemon. 

A year ago, on a trip to the town of Tibau do Sul to research the aquaculture industry in the region, I encountered the much less pleasant type of shrimp - the alive kind that swim up and thrash you furiously with their little legs as you nervously wade through murky shrimp ponds.  Some days the only sound that would penetrate the heat-induced silence of the farms I visited was the occasional shriek from another victim of an unexpected shrimp attack. 

As I look back on my time with NextBillion.net and prepare for a career in anthropology where I may find myself wading through many more such ponds, I have to reflect on what it is that compels me to return to places like the shrimp farm in Tibau. 

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