Monday, January 16, 2006
Six social entrepreneurs bear witness to the fact that profit is not the only driver of innovation.
In writing about the technology business, Red Herring urges its reporters to ?follow the money,? and track the investors, sellers, and buyers of products and services. While the confluence of innovation and financing has been the key ingredient in creating centers of technology like Silicon Valley, money is not the only reason that people invest years and thousands of dollars to create innovative products and services.
For the second year in a row, this magazine is highlighting several ?do-gooders? who have harnessed their technological skills to their compassion to address some of the world?s most pressing problems. They aren?t household names like U2 singer Bono, a highly visible proponent of the campaign to eradicate poverty, or Microsoft chairman Bill Gates, who has endowed the Bill and Melinda Gates Foundation to the tune of $29 billion and tackled issues like AIDs in Africa and sudden infant death syndrome.
Instead, our do-gooders fit into less flashy categories: a veteran soldier, two technologists who rose from poverty, a professor of medicine, a military doctor, and the owner of a small business.
Lee Thorn helped bomb Laos during the Vietnam War and now works to improve living conditions there?most notably with a rugged, inexpensive personal computer he helped create.
Orlando Rinc?n Bonilla of Columbia and Kenyan Robert Maranga both grew up poor, but now use their success in the tech industry to help children out of poverty and to create software to help institutions that aid the poor.
Hamish Fraser, a medical professor at Harvard University, created a web-based record system that looks after chronically ill patients in Peru and Haiti?and that may be adopted in other developing countries.
Another doctor, Oviemo Ovadje of Nigeria, invented a device that recycles patients? blood so they don?t need expensive, and sometimes dangerous, transfusions?though he?s struggled to make it available to the wider world.
And self-proclaimed ?redneck? Mac Dearman did right by his Christian faith, using his small ISP business to help hurricane victims in Louisiana contact their loved ones.
Philanthropy That?s Profitable
These tales are admittedly heartwarming, but that doesn?t preclude their creators from seeking a profit. After all, they understand that a steady source of revenue is the best guarantee that their inventions will be self-sustaining.
There are examples of social entrepreneurs who have managed to eke out a profit. David Green?s Aurolab in India, for instance, sells intraocular lenses?a treatment for cataracts?at $4 a pop in India, compared to the $100 price tag for such lenses in the United States. Yet the nonprofit company boasts 52 percent profit margins, with sales of 600,000 units in 86 countries, and 7.5 percent of the sector?s global market share. ?Profit and production capacity are utilized to fulfill social mission, which is making medical technology affordable and available to all,? says Mr. Green.
He also created Catalytic Health, a for-profit company that still focuses on social responsibility. Ben Cohen of Ben & Jerry?s ice cream, an informal advisor to Catalytic Health, says, ?The key to sustainable capitalism is reasonable profits as opposed to maximizing profits?. What you need to do is combine the sensibility of the social enterprise with the form of a for-profit business.?
And social entrepreneurship can save money. ?One hospitalized case of dengue fever costs one-fifth of Malaysia?s per capita gross national product,? says Donald Shepard, a health economist at Brandeis University?s Heller School for Social Policy and Management. Mr. Shepard, pleading for the development of a dengue vaccine, notes that such a vaccination would offset 87 percent of treatment costs in Southeast Asia and reduce the amount of money spent on insecticides to kill dengue-carrying mosquitoes.
Even C. Montgomery Burns, the millionaire villain of TV?s The Simpsons, has to face the fact that the poor represent ?the fortune at the bottom of the pyramid.? The phrase coined by University of Michigan professor C.K. Prahalad says that the 4 billion people who live on less than $2 a day comprise the world?s biggest untapped pool of consumers and entrepreneurs.
Examining Things Holistically
And the poor can be muses for technology and business experts who want to serve them at modest profits. ?When people get behind innovators, they will help bring about change? that will forever affect the world, says Michael MacHarge, the associate director of development and partnerships at One World Health, which takes to market drugs geared toward limited sales in developing countries?drugs deemed by other companies to lack great earnings potential.
Some of those who back social innovators could be doing so for the bragging rights and the possibility of leaving a legacy. To actually be a social entrepreneur is harder. ?It takes a long time to cultivate people. If you?re extremely passionate, you still have to give people time to get their heads around it,? says Mr. MacHarge. He adds that in many cases, social entrepreneurs can only address a small piece of a much larger problem. ?You have to look at it holistically,? he says. For example, people in Nairobi aren?t going to achieve the same degree of Internet connectivity overnight since infrastructure there isn?t solid. ?But with ingenuity, you find resources do exist,? he says?whether it is running electricity only two hours a day or skipping land lines and going to wireless telephone services.
Meighan Stone, the communications director for ONE, the organization founded by Bono, is adamant that those who join the organization?which has worked to erase African debt, world hunger, and AIDS?do so purely out of good intentions. ?Americans are very compassionate. When you talk to people, most of them say, ?How can I help??? says Ms. Stone. She points to the half-million people who signed ONE?s email urging U.S. President George W. Bush to champion debt relief for African nations, as well as a $1-per-day treatment for AIDS patients in poor countries that, she says, resulted in part from partnerships encouraged by ONE participants.
In the case of our do-gooders, they have taken their technological prowess, applied it to urgent problems, and made the world a slightly better place.