A significant difference between those of us fortunate to be living above the poverty line and those unfortunate enough to be at the “bottom of the pyramid” is that the ‘wealthy’ can afford to consume. Being a “useful” member of a consumer society requires the consumption of products and services not directly necessary to survival. The very poor do not generally have that choice.
I never really appreciated that distinction until I began to understand what was so powerful about the concept behind organizations like Kickstart.
Founded by Martin Fisher and Nick Moon, Kickstart designs and distributes hand and foot-operated water pumps in West Africa. Unlike many organizations dedicated to alleviating poverty in struggling areas, Kickstart does not give the pumps away: it sells them.
Fisher believes that farmers who pay for pumps will have a far greater commitment and will devote a far greater effort to making their fields produce than those who might have received one as a donation. Kickstart’s numbers are amazing. The return on investment for a smallholder farmer can be hundreds or even thousands of dollars in one year–enough to put children through school or build a house. Kickstart has created more than 80,000 new businesses and creates $88M a year in profits for African farmers.
What if every transaction was like that for rich and poor alike? What if we could measure profit across several dimensions, and we engaged in transactions or interactions that clearly provided a profit on one or more? For the poor, those profits are likely to remain in the realm of economic value or the satisfaction of basic needs. For the rest of us, those profits might more appropriately be measured along the dimensions I discussed in my last post: Creating a Post-Crisis Economy: Learning to Measure Participation
In the West we tend to make a strong distinction between consumption and investing. Consumption only creates value for the minority, while theoretically investing can create value for every investor. If we thought of every interaction as an investment with measurable returns, might we think and act very differently? For example I may pay to subscribe to a community that gave me access to a network of like-minded creative business executives if it meant I could have high quality conversations with that community. There are lots of examples of people doing this already such as the World Economic Forum.
I may take what I learn from my new- found network of creative business executives and develop it into a point of view that I can sell as part of a consulting offering to my clients. I am trading on my knowledge-based capital.
Of course if we think about it, these kinds of transactions and exchanges are going on all the time, except that we don’t keep very good track of them. As I argued in my last post, I think that in an information society we can keep track of them and hence measure the returns we get.
This has some interesting implications. First, we need better tools for keeping track of various kinds of value at an individual, organizational and societal level. This seems like an interesting opportunity for new kinds of products and services–a kind of economic dashboard. Second, this all relies on information transparency. If you can’t see the data, then you can’t measure the returns. We might ask our governments to focus less on information privacy, which seems like a lost cause to me, and more on information access. Why should a corporation know things about me that I don’t know about myself? I wonder whether we would have gotten into such deep trouble in the current recession if we had done a better job of information transparency?
Ultimately managing our own social networks, our reputations, and our influence, and leveraging our ideas won’t just be a cool pastime carried out by the technorati. It will be essential to survival in a participation economy.
Editor’s note: Tim Brown is the CEO and president of IDEO, and a thought leader on the subject of design thinking. He’s also an industrial designer himself, and has exhibited at the Museum of Modern Art in New York, and the Design Museum in London. He’s particularly interested in the convergence of technology and the arts, and how design can have a social impact, particularly in emerging economies.