December 24, 2010

The Makings of a Responsible Business

During a recent trip to Washington, DC, I had the pleasure of serving as a panelist at the Global Social Entrepreneurship Forum hosted by the Carey International Business Career Club at Johns Hopkins University. Moderated by James Calvin, Ph.D., Associate Professor at the Johns Hopkins Carey Business School, my fellow panelists included Drew Durban, Co-Founder of Anza Technologies, Neelima Grover, Founder and Chairman of The QED Group, and Barbara Moller, President and Founder of Paper to Pearls. I enjoyed the conversation with the attendees and my fellow panelists and while several good points were made during the course of the forum, there are a few worth mentioning in this blog.

As a result of the difficult economic climate, many business students are considering starting their own business ventures upon graduation. While it may be obvious to most people, it is important to focus a business on an area where the entrepreneur is passionate and finds motivating. Many people have the misconception that business is not personal. They are grossly incorrect. When you immerse yourself in your venture by working 16 hours a day, seven days a week and sacrifice your time with your friends and family, business IS personal. An entrepreneur will fail if they cannot find the passion and motivation to sustain their energy, efforts, and carry themselves through the tough times (and there will be a lot of rough spots where you question the reasons for starting your venture, finding value in your efforts or managing the stress caused by unforeseen viability and success of the venture).

Since the focus of the forum was on social entrepreneurship (I prefer the term “responsible business”), the panelists were asked about the challenges of doing business in developing nations, some of which have serious corruption problems and lack of governance or physical infrastructure. The panel uniformly replied the importance of a vast knowledge of the local culture and unique nuances. I have conducted business worldwide and I learned early in my career that every country possesses an uniqueness about it. As an entrepreneur, my operational strategy, product or service and value proposition must take the unique cultural nuances into consideration.

The financial bottom line is not always the primary focus of doing business in developing markets; social return on investment (SROI) often takes an essential role in defining the value of a business venture. The Wikipedia definition of SROI “is a principles-based method for measuring extra-financial value (i.e., environmental and social value not currently reflected in conventional financial accounts) relative to resources invested. It can be used by any entity to evaluate impact on stakeholders, identify ways to improve performance, and enhance the performance of investments.” While businesses adhering to responsible practices are mindful of the SROI, they tend to neglect the financial ROI. In other words, businesses, for-profit and nonprofits alike, must establish a revenue model that will produce a steady stream of cash flow to sustain operations and promote business growth.

A key mistake many businesses make is their failure to differentiate themselves from the competition or invest in a comprehensive branding and marketing strategy. I am in the early stages of launching a business venture where there currently exists little competition. However, I have to assume the marketplace will see an influx of competitors and I will need to convince my customer that my service is superior. This cannot be done through innovation alone. It is essential to create brand value and effectively market this brand to current and potential customers alike.

Lastly, it takes a highly motivated and well-organized team for any venture to succeed. From my experiences with for-profit and nonprofit ventures, I learned the importance of having the right people involved who believes in the business mission, supports the objectives, assists in the creation of the product or service, and understands the value proposition. In addition to leading the right team, it is essential to have good mentors and advisors whom an entrepreneur can receive feedback to their ideas or provide objective advice that will help the entrepreneur succeed. Furthermore, in my ventures, not only have I learned to utilize my strengths, it is equally important to realize my weaknesses and find people (mentors, managers or support staff) that will provide a unique value to the business team.

I invite you to contribute your own ideas or share your experiences in the comment section below.

December 13, 2010

Haïti’s First Mobile Money Service

Approximately 85 percent of Haïtians households own a mobile phone, but very few have access to banking or lending services. On December 3, 2010, wireless operator Voilà, a subsidiary of Bellevue, Washington-based Trilogy International Partners, and Haïti-based Unibank has launched T-Cash, Haïti’s first mobile money solution. The press release says that this service is a “first-of-its-kind service in Haiti” serving hundreds of thousands of the unbanked Haïtians in regions unreached by traditional financial service providers. Accessible through their Voilà mobile phone, Haïtians will now have access to a full suite of banking and m-commerce services. “By leveraging Unibank’s nationwide network of merchants and tapping into Voilà’s base of over 1 million subscribers, this partnership creates a valuable financial ecosystem with the potential to impact millions of Haitians throughout the country. In partnership with applications service provider MoreMagic, Voilà and Unibank have delivered their mobile payment solutions in a secure, hosted, and fully managed environment.”

With T-Cash, Voilà subscribers throughout Haïti now have the ability to complete domestic peer-to-peer money transfers, bill pay, payroll services, and expanded mobile commerce capabilities. An initial and unique feature of the T-Cash service will be a ‘mini wallet.’ The mini wallet allows Voilà subscribers to immediately activate the T-Cash service and store up to 2500HTG (US$62.50) by entering a code on their Voilà mobile phone. This easy to use, mini wallet feature will allow for rapid, widespread adoption and access nationwide. By January 2011, Voilà and Unibank are preparing to establish over a thousand affiliated merchants and cash in/cash out locations throughout the country.

In a country that has been ravaged by natural disasters such as hurricanes and flooding, and the devastating earthquake on January 12, 2010, I am very encouraged to see the private sector implement a solution to provide banking services for Haïtians through mobile technology. Households with access to savings accounts are more likely to invest in education, increase productivity and income, and reduce vulnerability to illness and other unexpected events. Through a mini wallet and other m-commerce services, Haïtians have access to safe and affordable savings accounts, credit facilities, and the ability to conduct commercial transactions, which are necessary to achieving sustainable development.

Aaron Rose is an advisor to talented entrepreneurs and co-founder of great companies. He also serves as the editor of Solutions for a Sustainable World.

November 23, 2010

Global Savings Forum Outlines Sustainable Solutions to Financial Inclusion

My previous entry presented various statistics explaining that while very few poor people have access to savings accounts, there is a strong desire to utilize such financial schemes. It is estimated that 3 out of 4 adults in developing and middle income countries do not have bank accounts and worldwide, it is the poor, women, and rural residents who are the least banked. Only about 10 percent of the 2.5 billion people living on less than $2 per day have access to a bank account. Rather than illustrating a dire picture, these statistics demonstrate the opportunity that exist in broadening savings services to a large segment of the most underserved people worldwide; otherwise known as financial inclusion. (Photo: Bill & Melinda Gates Foundation)

At the Global Savings Forum in Seattle, the first global gathering focused on the role of savings in the developing world, the Bill & Melinda Gates Foundation pledged $500 million over the next five years to expand savings. Foundation co-chair Melinda French Gates noted that a package of six new grants totaling $40 million are part of the $500 million pledge. The grants support projects and partnerships to improve access to savings and other financial services, including:
  • Expansion of bank and microfinance services to include savings accounts;
  • Implementation of new approaches to reach the poor with savings, such as branchless banking and mobile money; and
  • Research to identify how people use formal and informal financial tools, including savings, credit, insurance, and payment services, and to analyze the impact of financial services on the lives of the poor.
“Savings doesn’t just help people mitigate the risks posed by a medical emergency or a bad crop,” said Mrs. Gates. “It also gives them the ability to marshal their resources to build something better for themselves and their children. It allows them to fund their own businesses, to look ahead with confidence. Savings helps families to take the giant leap from reacting to events to planning for a healthier, happier future.”

Explained by a Gates Foundation press release, “Technologies such as mobile phones are already providing safe, reliable, and easy options for people to access financial services. Sixty-nine percent of the developing world already has a mobile connection, and this number is expected to climb to 98 percent within five years.”

Emerging technologies such as mobile phones and innovations that enable banking services to be provided in post offices, neighborhood shops, and other convenient locations are creating a historic opportunity to deliver affordable, quality financial services to the doorsteps of the world’s poor. In Kenya, a service called M-PESA allows nearly 12 million people to transfer money and link to bank accounts using mobile phones. In Mexico, a network of government-operated convenience stores is serving as a platform to offer banking services to the rural poor. In Malawi, a bank is reaching thousands of first-time banking customers by mounting mobile banks on the back of pickup trucks. Here is a video detailing the Foundation’s program of promoting financial inclusion in Mexico:

November 17, 2010

Savings Accounts are in High Demand by People in Poverty

From November 16-17, 2010, the Seattle, Washington-based Bill and Melinda Gates Foundation hosted the Global Savings Forum, the first global gathering focused on the role of savings in the developing world urging urged leaders in government, banking, mobile communications, and international development to work together to build a new kind of financial infrastructure to bring savings to the poor. The conference produced several interesting statistics about the unbanked—people who do not have access to a savings account.

It is estimated that 3 out of 4 adults in developing and middle income countries do not have bank accounts and worldwide, it is the poor, women, and rural residents who are the least banked. Only about 10 percent of the 2.5 billion people living on less than $2 per day have access to a bank account. Sub-Saharan Africa is the least banked region in the world with 80 percent of its population lacking access to a bank account. This is followed by the Middle East/North Africa and Latin America/Caribbean at 68 and 65 percent, respectively.

There is a misconception that poor people do not save. The truth is that poor people actively save in cash and through informal mechanisms, but these tools inadequately meet their specific needs. According to a series of studies, over the course of a year, a typical poor household in Bangladesh, India or South Africa uses no less than four and typically closer to ten types of financial instruments. Rotating Savings and Credit Association (ROSCA) membership rates among adults have been estimated at between 50 and 95 percent of adults in Cameroon, Côte d'Ivoire, Democratic Republic of Congo, Gambia, Liberia, Nigeria, and Togo and similar group savings schemes are widespread outside of Africa as well. (ROSCA is a group of individuals who agree to meet for a defined period of time in order to save and borrow together.) Furthermore, a study of 1,500 people in Uganda showed that 99 percent of respondents failed to reach their savings goals when using informal methods, either because the money was stolen or lost, or because they were too tempted to spend the money when it was stored as cash in their home.

The conference presented overwhelming evidence that savings accounts are in high demand by poor people. Interestingly, savings accounts are being engaged at rates up to 12:1 compared to loans, even when both services are available from the same institution. In Uganda, for example, 43 percent of people said a savings account is their greatest financial need compared to 31 percent who cited credit. A Consultative Group to Assist the Poor (CGAP) study of six microsavings-focused institutions also found rapid growth in savers. During a six-year time period, 20 million new accounts and $4.3 billion in savings volume were added, representing an increase of 87 percent and 71 percent respectively.

Several participants noted that safe savings options help people to manage risks, like illness, increase investment in livelihoods, and empower women. A study in the Philippines showed that access to certain savings products increased women’s economic empowerment, including decision-making power over purchases, family planning, and children’s education. Farmers who were given the option to put aside money toward the next planting season increased productivity, enhancing investments in farming inputs by 32-39 percent. A randomized control trial in Western Kenya found that women who had access to a formal savings account were able to save and invest 45 percent more in their businesses after six months, leading to increased purchasing power for food and personal expenditures. The same study revealed that women with formal savings accounts were better able to afford emergency health services without depleting the money invested in their businesses. For most poor households, using savings to pay for large expenditures is cheaper and more efficient than taking a loan. For instance, even microfinance institutions (MFIs) often charge over 50 percent annual interest on loans. Fees for small deposit accounts, however, often equate to zero or positive interest payments to savers.

Poor households with access to savings accounts are more likely to invest in education, increase productivity and income, and reduce vulnerability to illness and other unexpected events. The challenge remains that very few MFIs offer savings accounts, and more than 90 percent of the world’s poor still lack access to financial services and resort to risky, expensive, and inefficient ways to save. In my next blog entry, I will present a number of solutions discussed during the two-day forum that will increase savings mechanisms to a large underserved market.

October 20, 2010

Number of Internet Users to Surpass Two Billion by End of 2010


On October 19, 2010, the eve of World Statistics Day, the Geneva, Switzerland-based International Telecommunication Union (ITU) released a report, The World in 2010: ICT facts and figures, explaining the number of Internet users worldwide doubled in the past five years and will surpass the two billion mark in 2010. There will be an estimated 226 million new Internet users in 2010, with a majority, 126 million, coming from developing countries. China is the largest Internet market in the world with more than 420 million Internet users. 

Where people are accessing the Internet is different when comparing industrialized and developing countries. For example, the number of people with Internet access at their residence increased from to 1.6 billion this year from 1.4 billion in 2009, with 65 percent of these in developed countries and only 13.5 percent in developing countries where access to the Internet in schools, at work and public locations is crucial. By the end of 2010, 71 percent of the population in industrialized nations will be online, compared to 21 percent in developing countries. Regional differences are significant: 65 percent of Europeans are on the Internet compared to only 9.6 percent of Africans.

There is a growing demand for higher-speed broadband connections to access rapidly increasing high-bandwidth content and applications on the Internet. The press release explains that the ITU, the leading United Nations agency for information and communication technology issues, “considers broadband as a catalyst for growth. Recently, ITU and UNESCO launched the Broadband Commission for Digital Development that aims to promote the adoption of broadband-friendly practices and policies worldwide. ITU Secretary-General Hamadoun Touré says, ‘Broadband is the next tipping point, the next truly transformational technology. It can generate jobs, drive growth and productivity, and underpin long-term economic competitiveness. It is also the most powerful tool that we have at our disposal in our race to meet the Millennium Development Goals, the deadline for which is now just five years away.’”

Moreover, according to ITU, “Over the past year, there has been strong growth in fixed broadband subscriptions. By the end of 2010, fixed broadband penetration will reach 8 percent globally. But penetration levels in developing countries remain low: 4.4 subscriptions per 100 people compared to 24.6 in developed countries.”

While high-speed Internet is still out of reach for many people in low-income countries, mobile telephony is becoming ubiquitous, with access to mobile networks now available to over 90 percent of the global population. ITU’s new data indicate that among the estimated 5.3 billion mobile subscriptions by the end of 2010, 3.8 billion will be in the developing world. Furthermore, 940 million of the 5.3 billion subscriptions will be for 3G services.

Access to mobile networks is now available to 90 percent of the world population and 80 percent of the population living in rural areas and people are moving rapidly from 2G to 3G platforms, in both developed and developing countries. In 2010, 143 countries were offering 3G services commercially, compared to 95 in 2007.

The ITU report says mobile cellular growth is slowing worldwide. In developed countries, the mobile market is reaching saturation levels with on average 116 subscriptions per 100 inhabitants at the end of 2010 and a marginal growth of 1.6% from 2009-2010. At the same time, the developing world is increasing its share of mobile subscriptions from 53 percent of total mobile subscriptions at the end of 2005 to 73 percent at the end of 2010. In the developing world, mobile cellular penetration rates will reach 68 percent at the end of 2010 - mainly driven by the Asia and Pacific region. India and China alone are expected to add over 300 million mobile subscriptions in 2010. In the African region, penetration rates will reach an estimated 41 percent at the end of 2010 (compared to 76 percent globally) leaving a significant potential for growth.

September 25, 2010

An Ambitious New Initiative to Reduce Smoke Exposure in Developing Nations

According to the World Health Organization (WHO), nearly two million people die prematurely each year because of exposure to smoke from traditional cookstoves and open fires; that is nearly one death every 16 seconds. Furthermore, three billion people, nearly half of the world’s population, are affected by exposure to smoke from traditional cookstoves and open fires and WHO estimates that exposure to smoke from traditional cookstoves accounts as one of the top five worst overall health risk factors in developing countries. Given the adverse impact of cookstoves and open fires predominately on women and children, I am encouraged by the formation of the Global Alliance for Clean Cookstoves, a US$60 million dollar public-private partnership to save lives, improve livelihoods, empower women and combat climate change by creating a thriving global market for clean and efficient household cooking solutions.

The announcement of the Alliance’s formation was made by United States Secretary of State Hillary Rodham Clinton at the Clinton Global Initiative’s 2010 Annual Meeting. Outlining the problem, Secretary Clinton said, “As many as three billion people are gathering around open fires or old and inefficient stoves in small kitchens and poorly ventilated houses. Many of the women have labored over these hearths for hours, often with their infant babies strapped to their backs, and they have spent many more hours gathering the fuel. The food they prepare is different on every continent, but the air they breathe is shockingly similar: a toxic mix of chemicals released by burning wood or other solid fuel that can reach 200 times the amount that our EPA considers safe for breathing.” Moreover, explained Mrs. Clinton, “As the women cook, smoke fills their lungs and the toxins begin poisoning them and their children. The results of daily exposure can be devastating: Pneumonia, the number one killer of children worldwide, chronic respiratory diseases, lung cancer, and a range of other health problems are the consequence.”

The Alliance’s ‘100 by 20’ goal calls for 100 million homes to adopt clean and efficient stoves and fuels by 2020, which will be achieved by a collaborative effort among public, private, and non-profit partners to help overcome the market barriers that currently impede the production, deployment, and use of clean cookstoves in the developing world. Led by the United Nations Foundation, the Alliance will bring together leading foundations, non-profit organizations, academic institutions, corporate leaders, governments and UN agencies to help overcome current barriers and stimulate a thriving global market for clean cookstoves.

Why launch this initiative in 2010? The Alliance explains that several factors are aligning as never before to put the sector within reach of a “tipping point” for adopting clean cookstoves at scale. These factors include:
  • Recent advances in clean cookstove design, testing, and monitoring;
  • Compelling new research on the health and environmental benefits of clean cookstove;
  • Recent commercial success and development of a number of business models in the field;
  • The advent of national cookstove programs in India, Mexico, Peru and elsewhere;
  • The increasing need for effective near- and long-term action to address climate change at the local and regional level; and
  • The potential for carbon finance to fund stove initiatives at greater scale.

September 21, 2010

What can Governments and NGOs Learn from Coca-Cola?

The purpose of the TEDxChange forum was to promote public awareness of and support for the Millennium Development Goals (MDGs), which range from halving extreme poverty to halting the spread of HIV/AIDS and providing universal primary education, all by the target date of 2015. The MDGs are to be achieved by a collaboration of all the world’s governments and nongovernmental organizations (NGOs). The September 20, 2010 forum included a few speakers and a performance by Bajah + The Dry Eye Crew, a hip-hop group originally from Sierra Leone that is known for speaking out against political and social injustices. Melinda Gates, co-chair of the Seattle, Washington-based Bill and Melinda Gates Foundation, was one of the speakers and there are certain aspects of her speech worth discussing on this blog.

Mrs. Gates spoke about the worldwide presence of Atlanta, Georgia-based Coca-Cola Company, even in most underdeveloped regions of the world. This is in stark comparison to the items underserved populations are lacking such as condoms, vaccinations for curable diseases, and educational materials for malaria prevention and prenatal care. "Coke is everywhere," said Mrs. Gates. “In fact, when I travel in the developing work, Coke feels ubiquitous." Moreover, "Coke's success makes you wonder how they are able to get to these far-flung places." If Coke is so successful in delivering their product worldwide, "then why can't governments and NGOs do the same thing?”

Mrs. Gates explained that if the international development community wishes to achieve the Millennium Development Goals prescribed by the United States by 2015, “we need to learn from the innovators and those innovators come from every single sector. I feel that if we can understand what makes Coke ubiquitous, we can apply those lessons to the public good. Coke’s success is relevant because if we can analyze and learn from it, then we can save lives.” Mrs. Gates continued to explain that there are three things the international development community can learn from Coca-Cola: “Real-time data and immediate feed it back into the product, tap into local entrepreneurial talent, and they do incredible marketing.”

Coca-Cola takes immediate data to measure progress. This is different to development organizations where evaluation comes at the very end of the project and by then, it is too late to use the data. Mrs. Gates uses bowling in the dark as an example of the flawed system governments and NGOs use, “You roll the ball, you hear some pins go down, it’s dark and you cannot see which pins go down until the lights come on, then you see your impact. Real-time data turns on the lights.”

In order to reach distant markets in developing nations, Coca-Cola recognized that it had to change its distribution model that worked so effectively in industrialized nations. Observing that some people in Africa were buying Coca-Cola products in bulk and reselling it in rural villages, the beverage company created 3,000 created micro-distribution centers in Africa since 1990, which now employs 15,000 entrepreneurs. In Tanzania and Uganda, micro-distribution centers represent 90 percent of Coka-Cola sales.

How can governments and NGOs learn from Coca-Cola? "Governments and NGOs need to tap into that local entrepreneurial spirit as well because locals know how to reach the very hard to serve places and they also know their neighbors and what motivates them to make changes," remarked Mrs. Gates. She cites Ethiopia’s new health extension program as an example where the Ethiopian government noticed that so many people resided long distances from medical centers that prevented them from seeking immediate medical care. In 2003, using a similar model used in the Indian state of Kerala, the Ethiopian government trained 35,000 health extension workers to deliver medical care directly to the people in rural areas. In five years, this program increased the number of workers from one per 30,000 to one worker for every 2,500 Ethiopians.

Mrs. Gates continued to explain that "health extension workers can help with so many things whether it is family planning, prenatal care, immunizations for the children, or advising the woman to get to the facility on-time for an on-time delivery. That is having real impact in a country like Ethiopia and it's why you see their child mortality numbers coming down 25 percent from 2000 to 2008. In Ethiopia, there are hundreds of thousands of children living because of the health extension program."

With respect to marketing, Coca-Cola's successful strategy lies in localizing their brand and advertising on a country or region basis. I have witnessed this during my travels. Whether it is in Uganda, Brazil or China, Coca-Cola creates advertisements using local people and in the local language, which gives the impression that the beverage company is locally-based. Everyone knows that Coca-Cola is a large American conglomerate, but their marketing strategy reflects a localized feel to the product. Governments and NGOs need to incorporate similar marketing strategies whether it is condom distribution to eradicate AIDS/HIV or promoting sanitary behavior like washing hands after defecating or linking toilets to courtship like a northern India state did to save lives caused by dysentery. Mrs. Gates said that if governments and NGOs “begin to understand what people want in health and development, then we can change communities and whole nations.”

You can watch the Mrs. Gates' speech in its entirety in the video below or through this web link:

September 3, 2010

Observations from the 12th Annual Seattle University Business Plan Competition

This past spring, I observed the tradeshow and final round of the 12th Annual Harriet Stephenson Business Plan Competition hosted by my alma matter, Seattle University (SU). 23 teams competed for over $20,000 in prize money. I was very impressed by the broad spectrum of sectors represented and the creativity of the business strategies presented. There are certain observations from the presentations that are worth discussing.

I receive plans from businesses at different stages looking for funding and many of these plans lack a comprehensive competitive strategy. The contestants at this year’s competition are no exception. Too many businesses outlined competitive strategy by saying “there are no competitors.” As an entrepreneur and business advisor, I promise you that no matter how unique a business idea may be, someone out there in the world is thinking the same thing. I recall when Yahoo! Inc. launched its web portal in 1995 when very few competitors existed. When Yahoo became a publicly-traded company in 1996, the Sunnyvale, California-based company was in the position to be the market leader for years to come. Then a little unknown company called Google Inc. was launched in 1998 and within just a few years, Yahoo quickly lost its competitive advantage to the Mountain View, California-based company. Yahoo continues to struggle in finding its niche in the marketplace. (For disclosure purposes, I am a shareholder of Google.)

Another example I like to use in how a market leader can find itself in trouble by losing sight of its competitive advantage is Palm, Inc. While Palm was not the first to introduce touchscreen smartphones, it was the first to produce this innovative product at a competitive price. When I purchased my Palm Treo in 2005, there no product such as the Apple iPhone or Google Droid (Research in Motion’s BlackBerry was Palm’s primary competitor in the smartphone sector at the time). Fast forward five years and not only did Palm not stay ahead of the competition, but the Sunnyvale, California-based company was acquired by Hewlett-Packard on July 1, 2010.

The point here is that while an entrepreneur may think his or her business idea is truly unique, the reality is that a comparable service or product will enter the market sooner than most entrepreneurs realize or anticipate. How will your company remain a leader as competitors enter the market?

Another common mistake is that some competitors possessed gaps in their management team. I was mystified to see a few contestants lacking people in key roles such as Chief Executive Officer or General Manager. I understand that some people may be the creative leader of the company, how can they expect to receive financial support from an investor if there is no one to lead the company? I can attest that value of any company is not the service or product per se, but the people leading the day-to-day operations. One point I often stress in my entrepreneurship seminars is that investors invest in people more than they invest in ideas. Whether we realize it or not, each one of us has million (or billion) dollar ideas. However, very few people in the world have the ability (and a little luck) to implement their ideas.

Each team presenting at the tradeshow provided a one-page handout outlining the company’s mission, deliverable, value proposition, financial strategy including amount sought from investors, and other pertinent information. This is a small issue, but I am surprised by the number of competitors who failed to provide their contact information (phone number, email address or website) on their handout.

I am pleased to see Seattle University support entrepreneurs through this worthwhile competition. Information about the 2011 competition may be found here. Any enrolled SU students or alumni can participate in the competition and a team participating in the competition can consist of one or more contestants and include non-students. However, there must be at least one SU student or alumnus on each team. The winners of the 2010 competition are:
  • Grand prize ($10,000): Greenstone International (pictured above);
  • First runner-up ($2,500): Safety Innovation;
  • Second runner-up ($1,250): Sweet Stache Brewery & Alehouse;
  • Second runner-up ($1,250): Broadspeak;
  • Social Impact Award ($2,500): Authentic-i;
  • Small Business Award ($2,500): Past & Present; and
  • Community Choice Award ($250): Past & Present.

August 14, 2010

USAID-Funded Apparel Center to Provide Training to Thousands of Haïtians

The U.S. Agency for International Development (USAID) is an independent agency that provides economic, development and humanitarian assistance around the world in support of the foreign policy goals of the United States. The Washington, DC-based agency provides assistance in sub-Saharan Africa, Asia and the Near East, Latin America and the Caribbean, and Europe and Eurasia. Many people, for justifiable reasons, criticize the effectiveness of USAID’s programs and policies aimed at helping the world’s most underserved population. While I can write a book about many of USAID’s failures, and several have been written, I wish to discuss an initiative that has the potential of being one of USAID’s successes.

On August 11, 2010, USAID announced the opening of the Haïti Apparel Center (HAC). The new facility will help Haïti grow its private sector workforce by training more than 2,000 professionals per year to help meet the need for skilled workers in Haïti’s garment industry. In addition to providing vocational training, the center will further enable Haïti to maximize the benefits of the Haïtian Economic Lift Program (HELP) Act signed into law in May 2010, which improves U.S. market access for Haïtian apparel exports.

According to the USAID announcement, “In the 1980s there were about 150,000 garment workers in Haïti; now there are around 20,000. The value of Haïtian apparel exports to the United States in 2009 amounted to roughly $512 million, employing more than 25,000 Haïtians. The HELP Act, which has been widely supported by Congress, significantly expands Haïti’s trade preferences to the U.S. It also promotes investment in Haïti and supports the rebuilding of the garment sector which was significantly damaged over the years due to political unrest and more recently by the earthquake. According to a Congressional Research Service report issued in June, rebuilding costs for the industry are estimated at $38 million to refurbish damaged buildings, replace machinery and train new employees.”

The HAC is part of “Konbit Ak Tet Ansanm” (KATA), a four-year, $104.8 million USAID designed and financed job-creation initiative. In partnership with CHF International, it provides training and improves manufacturing skills of workers involved in the textile industry -- including sewing machine operators and mechanics and quality-control supervisors. The facility also offers executive seminars to senior managers, factory owners and leaders in the business community.

All applicants take a test on dexterity, color blindness, basic literacy and numeracy. Students who are accepted as sewing machine operators are then enrolled for a six-week course that includes training on how to work in a formal work environment and a curriculum developed by [TC]2, one of the leading associations that represents garment buyers. After graduating from the program, students will be highly sought after by employers. In advance of its formal opening, the HAC has trained more than 50 sewing machine operators, and 13 operator trainers have already graduated. All of these students are now employed -- and the operators now rank among the top performers in local garment assembly plants.

The more than 6,000-square-meter HAC facility was provided by the Government of Haïti and renovated and operated by USAID partner CHF International-Haïti. It is located in the SONAPI industrial park -- minutes from the garment factories in and around Haïti’s capital of Port-au-Prince and close to workers’ residential neighborhoods.

August 9, 2010

Eating a Balanced Meal on a Tight Budget

Having traveled to developing countries worldwide, I routinely see people of all ages malnourished as a result of a poor diet. Moreover, given the current economic climate, poor nutrition is a systematic problem in industrialized nations as well with the primary obstacle caused by the high cost of food. To help people overcome this obstacle, Gopal Kapur launched FamilyGreenSurvival™, which according to his website, “is designed to build a deep commitment to green living, develop knowledge and empathy for the world’s low income and poor population, deliver a program of healthy nutrition practices to combat obesity, and to provide education scholarships for students from low income families nationally and internationally.” The organization’s goals are:
  • Deliver a program of personal practices designed to develop deep commitment to ‘green living’ to save energy and reduce packaging waste;
  • To help develop knowledge and empathy for the world’s low income and poor population;
  • Deliver a program of nutrition education, smart food shopping, healthy cooking and eating skills to help combat obesity, diabetes, heart disease, and cancer;
  • Deliver a national and international program of school, college, and university scholarships for students from low-income families; and
  • Partner with local, national, and international organizations, communities, and government agencies in support of green living, nutrition education, healthy cooking and eating, and financial support for low-income families.
FamilyGreenSurvival offers a variety of programs for good nutrition at a very low cost. For example, the EatingGreen™ program is based on the adage: “Think Globally, Act Locally,” and asks people to pledge to eat only raw ‘green’ foods one day a month. ‘Raw’ foods such as vegetables, fruits, nuts, seeds, honey—all of which have been minimally processed after harvesting—and water from the tap. The guidelines for Eating Green include:
  1. All food is eaten raw, choose foods that have been minimal processed and shipped after harvesting; visit local or nearby farmer’s markets;
  2. No wood or charcoal fires, gas burners, or barbeques;
  3. No electrical appliances – micro wave oven, blender, juicer, coffee maker, stove, or oven. Use only mortar, pestle, and manually operated devices;
  4. No disposable plates, cups, napkins, paper towels, or plastic utensils;
  5. No bottled water, no soft drinks, no alcohol, no coffee or tea; this is the opportunity to drink just water or hand squeezed juices; and
  6. Minimal TV, telephone, and computer use; it’s a day to reflect, talk, walk, exercise, garden, sing, dance, relax, and frolic.
FamilyGreenSurvival’s EatingRightWhenOurBudget’sTight™ program consists of healthy, tasty, and easy to prepare breakfast, lunch, and dinner dishes where the cost of the daily menu averages around $6 per person. When this shopping and cooking program is followed diligently, it will go a long way in helping to reduce the obesity problem and related chronic diseases such as diabetes, heart disease, and cancer. The following program components are provided free of cost to program participants:
  1. Nutrition education, smart shopping, and recipe tasting sessions conducted through churches, food banks, and similar public service organizations;
  2. Selected recipe ingredients distributed to session participants;
  3. Recipes featuring breakfast, lunch, dinner, and snack dishes, with cost per serving and nutrition analysis information; and
  4. Nutrition education and cooking demonstration videos (DVD/CD).
Here is an interview of Mr. Kapur about the EatingRightWhenOurBudget’sTight™ Program on Sacramento, California’s KTXL-TV:

August 5, 2010

Center Opens to Help Develop Renewable Energy Solutions in West Africa

Photo of a wind farm
in Cape Verde:
Martin Lugmayr/UNIDO
Among the many challenges facing Africa is having regular access to electricity, which is necessary for commerce, education and general development purposes. While Africa possesses vast sources of renewable energy, the current sources of energy for millions of Africans stem from fossil fuels or large-scale hyrdo dams that dramatically disrupt fragile ecosystems. Therefore, I was pleased to read the United Nations Industrial Development Organization (UNIDO) announcement that a regional center to help develop the renewable energy potential for West Africa opened in Cape Verde.

Based in the Cape Verde capital of Praia and supported by UNIDO and the Government of Austria, Cape Verde and Spain, the Center for Renewable Energy and Energy Efficiency (ECREEE), a specialized agency of the Economic Community of West African States (ECOWAS) “will help develop renewable energy and energy efficiency markets in West Africa, in policy and capacity development and quality assurance, in designing financing mechanisms, and implementing demonstration projects with potential for regional scaling-up.”

“The current energy systems in the ECOWAS region are failing to support the growth prospects of the over 262 million inhabitants, especially the needs of the poor. The creation of ECREEE is a central milestone in efforts to accelerate the deployment of renewable energy and energy efficient technologies and services in the region,” said Yoshiteru Uramoto, Deputy to UNIDO’s Director-General. “Investing in renewable energy systems and introducing energy efficient technologies will contribute to the region’s economic and social development without harming the environment,” he added.

Photo of wind farm
in Andalucía, Spain:
Beatriz Feichtenberger/EXTENDA
I am familiar with Spain’s advances in renewable energy and it is encouraging to see countries like Austria and Spain provide financial and technical assistance to programs such as ECREEE, and their willingness to export technology to developing countries. Technology sharing from industrialize nations is vital to achieve sustainable development in the world’s most underserved countries.

UNIDO's July 6, 2010 announcement further explains, "Estimates suggest that a total of 23,000 MW of large and small hydroelectric potential is concentrated in five of the ECOWAS Member States, of which only 16 per cent has been exploited. There is good potential for all forms of bioenergy. Traditional biomass is already the main source of energy for the poor majority and accounts for 80 per cent of total energy consumed for domestic purposes. There are also considerable wind, tidal, ocean thermal and wave energy resources available. The region has vast solar energy potential. UNIDO has a number of projects in Africa where renewable energy sources like small hydro, biomass gasification, wind energy, solar thermal and photovoltaic, are used to promote the development of small industries, particularly in rural areas, that contribute to growth and poverty reduction."

Aaron Rose is an advisor to talented entrepreneurs and co-founder of great companies. He also serves as the editor of Solutions for a Sustainable World.

July 21, 2010

Google Makes Direct Purchase of Wind Energy in its Effort to Become Carbon Neutral

On July 20, 2010, through its official blog, Google announced it “just completed a substantial 20-year green Power Purchase Agreement that allows us to take responsibility for our footprint and foster true growth in the renewable energy sector. On July 30 we will begin purchasing the clean energy from 114 megawatts of wind generation at the NextEra Energy Resources Story County II facility in Iowa at a predetermined rate for 20 years.” This deal is the first by Google Energy LLC, an entity formed in December 2009 that allows Google to procure large volumes of renewable energy by participating in the wholesale market. This is a significant step in the Google’s effort to voluntarily become carbon neutral. (Photo: Google)

In explaining the complex deal, Google says, “Buying renewable energy directly from the developer impacts the development of renewable energy projects in ways that are more meaningful than the purchase of Renewable Energy Certificates (RECs) from third parties. RECs allow energy consumers to identify and track power made from eligible sources of renewable energy. They have value and are typically bought and sold independently of the electricity from which they are generated.”

Specifically to this deal, Google is purchasing renewable energy directly from the wind farm. Since they cannot use this energy directly, they will resell “it back to the grid in the regional spot market – but retiring the RECs associated with the power,” according to Mountain View, California-based company. “By obtaining RECs through the purchase of green power, our deal has a greater impact on the renewable industry than simply buying ‘naked’ RECs from third parties; our long-term commitment directly frees up capital for the developer to build more wind projects.” This deal will allow Google to obtain enough power to supply several data centers.

It will be interesting to see how successful Google will be in achieving their goal of becoming carbon neutral. This could be a model for other tech companies that use large amounts of power to run their data centers. Is this a sustainable model for Google? What methods are other companies using to reduce their carbon footprint?

July 14, 2010

Manufacturing Ethical Clothing in Africa

PRI’s “The World” produced a report about a fair-trade clothing factory is the West African country of Liberia, which is recovering from a 14 year civil war. With an estimated unemployment rate to be as high as 80 percent, there is a great for job growth should Liberia maintain peace in the long-term. The World’s Jason Margolis visited a sewing factory in Liberia’s capital of Monrovia that is making t-shirts bound for the United States. With a high unemployment rate, it is easy to take advantage of people by employing them in sweatshops with working hours beyond reasonable limits and paying low wages. (Photo: PRI)

Chid Liberty, who owns the t-shirt factory, was born in Liberia, but his family fled to the United States after a military coup in 1980. With Liberia’s civil war over, Mr. Liberty “decided he wanted to return to his native country and help it rebuild,” explains Mr. Margolis. “Two years ago, Mr. Liberty decided it was finally safe to return. And when he started his apparel company, he was determined to make it good for the workers. He says he’ll take no profits from the Monrovia sewing project. He earns his living through a trading business back in the States. Liberty says all future earnings in Monrovia will be put into a fund.” Mr. Liberty says that “these women actually decide where that money goes in terms of building schools, roads, health clinics in their communities.”

There is value in placing a fair trade label on these t-shirts, which makes good business sense. Most of the women being trained at the factory used to be tailors. “But like Eliza Jones, they left the freedom of their shops for the shackles of 9 to 5 employment,” Mr. Margolis reports. “Now she gets paid every month, $100. That’s $30 dollars more than an average civil servant makes in Liberia. The women also get medical insurance and a monthly bag of rice.”

In order for Mr. Liberty’s factory to have the “fair trade” designation, it must comply with 90 standards prescribed by TransFair USA, a 501(c)(3) nonprofit organization based in Oakland, California. TransFair USA’s standards address child labor, forced labor, health and safety, working hours, and wages. According to its website, TransFair USA is one of twenty members of Fairtrade Labelling Organizations International (FLO), and the only third-party certifier of Fair Trade products in the United States. They audit transactions between US companies offering Fair Trade Certified™ products and the international suppliers from whom they source, in order to guarantee that the farmers and farm workers behind Fair Trade Certified goods were paid a fair, above-market price. In addition, annual inspections conducted by FLO ensure that strict socioeconomic development criteria are being met using increased Fair Trade revenues. Regarding Mr. Liberty’s factory, a full West African supply chain is utilized where the cotton is grown in Mali and Burkina Faso, it is shipped to Morocco where it is spun into yarn and fabric, and then sewn in Liberia.

The challenge in manufacturing or growing fair trade products is that meeting the standards often translates to higher costs in producing the product. These costs are almost always passed along to consumers and while many consumers would pay more for a fair trade product, their purchasing habits may not represent their standards during tough economic times. TransFair USA’s founder and president Paul Rice says that people were skeptical when he began his organization a decade ago selling fair trade bananas and coffee. Mr. Rice notes that grocery stores like Whole Foods has created a niche providing fair trade products to their consumers who are willing to pay a higher price and this concept has expanded to other retailers not typically known for selling fair trade products. “But who thought that fair trade would work in Dunkin Donuts and Walmart? Well lo and behold, Dunkin Donuts, Walmart and bunch of others have put fair trade products out there. And they’re selling very, very well.”

I would like to hear from you: Are you willing to pay a high price for a fair trade product? Has the economic recession changed your purchasing habits for fair trade products?

July 6, 2010

Doing Business in a Poor South African Neighborhood

PBS Newshour aired a segment on July 5, 2010 about the efforts of a South African company, Dabba Telecom, which is selling mobile phone and Internet services in one of Johannesburg’s poor neighborhoods. Dabba’s Rael Lissoos says less than one percent of households in South Africa can afford landlines. Given the high cost, people are forced to use prepaid cell phones at rates three times what Americans pay for a similar service, even though South African earn significantly less. Moreover, as explained by Newshour’s Fred de Sam Lazaro, “Lissoos says the huge fees to connect or terminate calls to even local phone networks hurt South Africa’s competitiveness against countries with much lower telecom rates, like India and China.”

Beyond becoming more competitive with other emerging or developing nations, broadening access to cheaper mobile and Internet services helps bridge the digital divide that prevents people from gaining the skills required to compete in a global economy. In addition, companies are formed and jobs created that help stimulate the economy for individuals and entire communities including those living in poverty. The news segment highlights a South African entrepreneur, Collins Moyo, who owns two Internet cafes. Mr. Moyo claims that without Dabba’s lower connection rates, he would have no profit. “If, say, I can pay 10 rand to telecom, maybe Dabba, I can pay two rand, so I’m saving eight rands.” He says the 80 percent savings is allowing him to expand to a third store.

The most remarkable point of the story is the fact the private sector, not the government, is increasing the Internet footprint to an underserved population. For developing countries like South Africa, people must have regular access to modern information and communication technology devices and services. Efforts like Dabba Telecom should be replicated in other developing countries. You can watch the Newshour segment by clicking on the link below:

June 12, 2010

Post-Disaster Recovery through Art

When people ask me about Haïti, I often respond that the Caribbean country possesses a great uniqueness in its history (gained independence as a free slave nation in 1804), language (Creole) and culture (art, religion, fashion, etc.). While I can never claim to be an art critic, I certainly have an appreciation for the different art genres that make each country unique and the art I have seen during my visits to Haïti are some of the most unique pieces I have encountered during my travels around the world. (Photo: Maggie Steber for The New York Times)

Ms. Kate Taylor wrote an article for The New York Times about restoring murals in the Episcopal Holy Trinity Cathedral, which is located in Haïti’s capital of Port-au-Prince. “Haitian artists and cultural professionals have been conducting informal salvage operations for the past four months,” explains Ms. Taylor. “But the Americans are bringing conservation expertise — there are few if any professionally trained art conservators in Haiti — and special equipment, much of it paid for by private money.”

Conservators “visited the ruins of the Musée d’Art Nader, a private museum that before the earthquake housed 12,000 paintings and sculptures by 20th-century Haitian masters like Hector Hyppolite and Préfète Duffaut, thousands of which were either destroyed or badly damaged when the museum collapsed. They also saw what was left of the Centre d’Art, a workshop where many of those artists trained in the 1940s and 1950s, which also collapsed. In the weeks after the earthquake, volunteers pulled thousands of paintings from the wreckage, which were stashed inside two storage containers parked in the sun in front of the ruined building.”

A recent news-magazine program, “UN 21st Century,” also highlighted the earthquake’s impact on Haïtian artists. Not only did thousands of dollars worth of art get destroyed in the January earthquake, but the ability to export the art to global markets has greatly diminished. You can watch the episode in its entirety below:


However, all is not lost and there is an opportunity for you to help Haïtians by purchasing their unique artwork. My friend, Alyssa Johnson, wrote an entry on this blog about the uniqueness of Haïtian art and how artists are able to sell their work and generate income. Alyssa is owner of Splash of the Caribbean, a Seattle-based Caribbean art import company that purchases art directly from artists located in Haïti and throughout the Caribbean. (Photo: Alyssa Johnson)

June 3, 2010

Should I Buy a Drink or Send my Child to School?

“There’s an ugly secret of global poverty, one rarely acknowledged by aid groups or U.N. reports. It’s a blunt truth that is politically incorrect, heartbreaking, frustrating and ubiquitous: It’s that if the poorest families spent as much money educating their children as they do on wine, cigarettes and prostitutes, their children’s prospects would be transformed. Much suffering is caused not only by low incomes, but also by shortsighted private spending decisions by heads of households.” This comes from Nicholas D. Kristof’s op-ed in The New York Times on May 22, 2010.

Mr. Kristof cites examples of parents unable to pay their housing rent, mosquito nets that help combat malaria or school fees for their children, but they are spending scarce financial resources on alcohol, cigarettes, and prostitutes. His also op-ed refers to a study by two Massachusetts Institute of Technology economists, which claim that “the world’s poor typically spend about 2 percent of their income educating their children, and often larger percentages on alcohol and tobacco: 4 percent in rural Papua New Guinea, 6 percent in Indonesia, 8 percent in Mexico. The indigent also spend significant sums on soft drinks, prostitution and extravagant festivals.”

I know this issue extends beyond the developing world to industrialized nations. The global solution lies within financial education. Furthermore, social services must be offered for people to overcome their addictions to drugs and alcohol. With respect to financial education, there is evidence that women tend to be more responsible when it comes to money management and initiatives implemented by nongovernmental organizations, government agencies, and the private sector should be tailored to further support this trend.

Another solution lies within microsavings, which are small deposit accounts. Microsavings accounts operate similar to a conventional savings account, but the former are designed for smaller amounts of money. Pairing microsavings accounts with financial education programs will promote wiser spending decisions by parents, which will result in long-term sustainable development.

May 22, 2010

iGorilla: A Mobile App to Help Save African Gorillas

What if there was a way to help save the African gorillas with your mobile phone? iGorilla, available for the iPhone and iPad, allow users to follow the lives of gorilla families in Virunga National Park’s remote forests. Through the Apple App Store, iGorilla costs $4.00, with $2.80 going toward supporting the efforts of preserving the natural habitat of the park, which is located in the Democratic Republic of Congo and declared a UNESCO World Heritage Site in 1979. Upon downloading the app, users are able to choose a gorilla family, learn more about individual members and follow their lives through reports, photographs and videos. (Photo: gorillacd.org)

AppleiPhoneReview.com provides a thorough review of the iGorilla app. The review notes that a mobile device app is a great way for nonprofits to engage with their donors who are on the go. “Although not the first charity-based iPhone app, iGorilla is a good model for savvy organizations that see the increasing relevance of the mobile web.” In addition to engaging with donors, mobile apps provide an opportunity for nonprofits to tell their story and promote operational transparency and financial accountability.

The review also notes a few shortcomings of iGorilla. “What is sorely missing from this app is social media integration. The Gorilla.cd website gives visitors the opportunity to share blog posts, videos and pictures on Facebook and via email, but the iPhone app lacks this social sharing capability. It would also be great to see the park add features to give users more opportunities/reminders to donate. What if I was able to get a pop-up notification each time a post relating to my gorilla family was added? What if blog posts outlined the problem and exactly what materials are needed to fix it, then offered a chance to donate funds for these specific items. This would contribute to the transparency that the park has already cultivated on its website, where people can pitch in to specifically purchase petrol, sacks, and support for gorilla orphans as well as park rangers.” (Photo: Juan Pablo Moreiras/UNESCO)

I invite readers of this blog to share their ideas on how can a nonprofit organization broaden its footprint through mobile apps. What are some of the other organizations using mobile apps?

May 13, 2010

The Linkbook: South Africa's Latest Low-Cost Compact Computer

South Africa-based Vodacom announced the launch of the Linkbook, a low-cost compact computer designed specifically to provide users with simple and affordable Internet access. According to company’s press release, “The Linkbook’s operating system is geared primarily towards a user-friendly web experience; from email to social networking and browsing, as well as basic Open Office - everything a business entrepreneur, student or first-time PC user could need in a computer. Everything works off the desktop - including shortcuts to popular local online content and e-commerce websites - making it the most intuitive, simple to operate device of its kind available anywhere in the world.” (Photo: Vodacom)

The Linkbook, which has an embedded SIM card, as well as two USB ports, will be available on a 24-month contract at a subscription fee of R199 per month, including a monthly 300 MB data bundle, from participating Vodacom outlets, nationwide. The Linkbook website explains, “With an embedded HSDPA module for totally wireless internet connectivity, the attractively designed Linkbook is compact in size, has advanced design functionality, a user-friendly interface and the fact that everything works off the desktop - including easy-to-navigate shortcuts to popular online content and e-commerce web sites - makes it the most intuitive, simple to operate device of its kind.”

The Linkbook is targeted for markets where low PC penetration rates exist. While I have not tested the low-cost computer, I support any product that focuses on increasing Internet accessibility, thus closing the digital divide that exists in emerging and developing countries. In order to become a productive participant as an industrialized nation, low-cost computers and smartphones are essential for people to connect with a vital service, the Internet, which is used as an educational, economic, and health care tool to promotes sustainable development.