In recent years, investments in global public health have created opportunities for private innovators, technology developers, and business investors to join the fight against infectious diseases affecting people in developing countries. Such private entities are focusing their innovative platforms on developing technological breakthroughs for the most vulnerable people, often in the most extreme situations. As a result, a new business model, “humanitarian entrepreneurship,” is being shaped by innovators at all levels. Here, doing good is good for business.
The humanitarian entrepreneurship business model focuses on technology development for the poor. Opportunities within the humanitarian entrepreneurship business model are plenty. One of the best measures of human welfare is life expectancy. In the richest countries, average life expectancy is around 80 years, while in the poorest countries it’s about 40 years. That’s an intolerable gap, but it also represents a huge opportunity for private companies to get involved.
Companies following the humanitarian entrepreneurship model do not seek grants from foundations or other donors to develop products, technologies or concepts. The investments are all made by the companies themselves. The end users of the technologies are people in developing countries who receive technology and services free of charge. Payment comes from governments and donors like The Global Fund to Fight AIDS, Tuberculosis and Malaria, and, increasingly, faith-based organizations. Most of the products are given away for free to the end user.
My company, Swiss-based Vestergaard Frandsen–maker of mosquito nets and the LifeStraw–devotes its innovative platform to creating and deploying products for people in developing countries. But it wasn’t always the case. In Denmark, in the 1950s, the family trade was making work wear for hotel and restaurant workers. But even when I was a kid, I knew there was just no way that I was going to grow old selling shirts in Scandinavia.
I began a new division of the family business, supplying humanitarian operators like the Red Cross and UN relief agencies with blankets. The displacement caused by the 1994 Rwanda genocide had created a huge need for blankets for refugee camps, and later we started cutting plastic sheeting for use as temporary shelter in other crises.
My father wanted me to take over the entire company eventually, but I was having a brilliant time seeking thrills at the intersection of the private and public sectors. I only wanted to take over the business units I’d started myself–the humanitarian supply operations.
We started sourcing materials in India, but as the Internet expanded, Pakistani and Indian suppliers of blankets and tents were able to find tenders from the UN and NGOs online. This put a lot of pressure on our business. Rather than giving up, we decided to add value to textiles, and thereby create our own space. I had to rapidly retool what had been a mere sales organization to one with a team of innovative scientists.
Our first product in the public health space was a high-tech nylon filter that protects people whose water is contaminated with the guinea worm parasite. We developed it in league with the Carter Center, and it is still one of our company’s proudest accomplishments. Dracunculiasis, the terrible disease caused by the guinea worm, is now almost eradicated without the use of a vaccine, thanks in part to the millions of filters distributed in endemic areas. It will be the second disease, after small pox, to be wiped from the face of the earth.
The R&D behind those traps was invaluable to us as it led to the creation of a blockbuster product, PermaNet, in the late 1990s. PermaNet was the first long-lasting insecticidal bed net to be distributed in massive quantities. Making headway against malaria had been difficult up until then, because existing nets required regular retreatment in rural settings by dipping the nets in a liquid insecticide solution. We were the first to experiment with technology that impregnates fibers with insecticide and makes it wash-resistant, and we persisted and were successful. Applying insecticides safely to textiles was to become one of our fortes, and millions were saved the task of re-treating their nets.
It is the opportunity to invent the next life-changing health innovation that makes the humanitarian entrepreneurship model so important in our collective efforts to improve public health. An innovative needle developed by Wyeth leapfrogged smallpox eradication, and made smallpox the only disease ever eradicated to date. The Guinea worm filter developed by my company may enter the history books with equal importance, and perhaps so will our PermaNet long lasting insecticidal bed net.
There are three key issues that impact the effectiveness of the humanitarian entrepreneurship business model:
1. Integration: The main challenges involved in getting life saving tools out to the people who need them the most are (1) cost and (2) coverage, or reach. Integration can overcome these challenges. In the example of bed nets, a vertical distribution cost approximately $5 per bed net. Campaigns from 2002 to 2004 that integrated bed nets with measles vaccination, vitamin A and de-worming, distributed bed nets for less than $2 each.
From 2002 to 2005 we helped to marry malaria to measles, if you will. At that time there were existing measles vaccination campaigns, led by the Measles Initiative, the Centers for Disease Control, the UN Foundation, and the Red Cross. It seemed that if the “malaria people” (including our company) could just join forces with these campaigns, then the resulting coalition could reduce the cost of distributing a net. Once we did that, we saw that we had broken down the silos of the many actors who were seeking to improve the health of pregnant women and children under five, and had helped donors to save a lot of money.
These advances led to the ability to rapidly deploy bed nets to cover entire countries in a matter of weeks, which we did in Togo and Niger in 2005.
2. Promote Innovation: Many innovations that could be lifesaving are sitting on shelves, gathering dust, because regulatory and normative bodies are not equipped to evaluate and classify them fit for service, and that is something we must work to change.
Helping the international community, including the World Health Organization, to come up with standards and testing protocols for new categories can be challenging. It’s taken me a couple of years to learn how to approach the public sector and nonprofit institutions and speak to them in their terms. But I’ve learned the best results will come when you breed private sector ingenuity with public sector mandates, to produce durable and powerful partnerships.
3. Overcome Funding Challenges: Another challenge of the space is that traditional funding sources are limited and volatile. This may necessitate new approaches to financing ventures. Recently my company started looking beyond the public health space. We’re finding preliminary success with our Carbon For Water program, through which we’re earning carbon credits based on reductions in the demand for firewood in Kenya’s Western Province. We’ve given millions of Kenyans the ability to purify water without boiling it, by using free LifeStraw Family filters from our company. (Engineered to rid water of bacteria, viruses, and parasites, the filters are descendants of the Guinea worm pipe filters.)
Today, my company has competitors, but most of them are major multinational industrial giants, and the business of helping countries to reach the United Nations Millennium Development Goals is a very small slice of their financials. But that’s our sole aim as a company. And so we’ve been largely left all alone in a very big space, and the few who come in are not doing it seriously–for many, it’s to polish their social responsibility halos.
So, I’m begging for competition. There is a huge need for companies to assist and complement the public sector in achieving the Millennium Development Goals. They’re likely to find, as I have, that doing good can be very good for business.
Mikkel Vestergaard Frandsen is CEO and owner of Vestergaard Frandsen, a European company focused on achieving the United Nation’s Millennium Development Goals. The company operates under its own “humanitarian entrepreneurship” business model that has turned corporate social responsibility into its core business of creating life-saving products for the developing world.