Muhammad Yunus on Tech, Profit and the Poor

Thursday, April 3, 2008

The Bangladeshi Nobel laureate wins yet another award – this time for contributions to technology. He talks to Fortune about where tech might take the poor.

NEW YORK (Fortune) — “Technology is making more changes in our way of life than ever in human history,” says Muhammad Yunus. “The way the Internet and the mobile phone are spreading, you cannot compare with any technology of the past.” Yunus is known for his visionary leadership in microfinance and helping the poor. He and the Grameen Bank he founded won the Nobel Peace Prize in 2006. Now he wants to see the tech industry work more explicitly to empower the poor.

Yunus has just been awarded the James C. Morgan Global Humanitarian Award by the Tech Museum of Innovation. The Tech Awards are to be presented in San Jose in November and are funded by chip-equipment maker Applied Materials (AMAT, Fortune 500). In addition to the Morgan Award, they annually recognize 25 people for visionary uses of technology to solve the world’s problems.

Yunus is an impatient man. Perhaps that’s why he has accomplished so much. In addition to the micro-lending bank, Yunos has created a variety of other businesses under the Grameen family of companies. It has helped create about 25 other companies or institutions in Bangladesh and around the world, including fish-farming and knitwear businesses and a provider of health-care services. But most of Grameen’s businesses have something to do with tech: Bangladesh’s largest cell phone company (which is also its largest private employer), an Internet service provider, an electronics manufacturer, a business IT consultant and a developer of high-tech office buildings.

Yet when he looks at the global IT industry, Yunus is deeply unsatisfied. “When we take tech that was designed for other people to the poor, it has impact,” he concedes, “but another way is to design it for the poor to begin with.” In our interview and in his recently-published book “Creating a World Without Poverty,” Yunus argues with passion for the invention of new tech tools, especially for poor women in the developing world. (Fortune’s Sheridan Prasso wrote about Yunus last year.)

You might think Yunus would be a big fan of the XO laptop from the One Laptop Per Child Initiative, designed for the children of the developing world. “It’s good. I’m not condemning it, ” he says. “But the most powerful thing would be to start from scratch. From the beginning they were trying to make a laptop, just one that was extremely cheap. I’m saying forget about the laptop. Just see what you will find.”

He explains his own vision for a “digital Aladdin’s lamp” – “a genie comes out of it and asks, ’What can I do for you, ma’am?’ And she says ’I make these baskets but nobody buys them.’ And the lamp says ’I will find somebody to buy it.’ And the lamp comes back with buyers. She doesn’t know about a keyboard or a computer. She just asks questions of the genie.”

While an actual genie is unlikely, Yunus’ vision is not otherwise unreasonable longterm. Perhaps he should talk to another Bangladeshi, Emdad Khan, who runs a small Silicon Valley company called InternetSpeech. Just last week Khan appeared on a panel I moderated at a UN tech and development conference. InternetSpeech has an early version of technology that might help operate such a “lamp.” (Last week this column examined the extraordinary pace of global growth in IT demand, especially in developing countries. The data I reported about was compiled by yet another Bangladeshi, Imran Khan of JPMorgan (JPM, Fortune 500).)

Yet when Yunus explains how he wants to get from here to there, he rejects conventional capitalism. His book is primarily devoted to promoting something he calls “social business,” in which investors seek no monetary profit, but rather get only their initial financial capital returned. They would thus “profit” more by getting the satisfaction of helping others.

It’s a noble vision, but I’m pretty sure that the reason all those cell phones are getting into the hands of the poor worldwide is because for-profit companies are working hard to put them there. And I’m a disciple of C.K. Prahalad. His book “The Fortune at the Bottom of the Pyramid” argues persuasively that companies can make healthy profits and also help the world’s poor.

Yunus rejects Prahalad’s argument outright. “No, the poor are not a tool to make money,” he snaps. “They are a market you need to help. Rich people should not make money out of the poor people.”

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Source: Fortune Magazine (link opens in a new window)