01 February 2016

Advice to private sector companies trying "solve poverty" - from an International Development Practitioner

This was cross-posted on Medium, here.

 In the past few years, the start-up culture in the States and parts of Europe has exploded. Along with the explosion have come a record number of companies that aim to do a “social good” by providing products and services for the world’s poor. While the Global North’s[1] private sector (GNPS) wages its debate on what type of solution is needed – from social enterprises, to (lean) start-ups, to venture capital funds, to philanthropy to corporate social responsibility (CSR) initiatives of major companies – I want to offer some thoughts from an international development prospective, regardless of which private sector solution you favor. After all, the areas these GNPS “social good” initiatives are aiming to reach come on the heels of decades of international development work. Both sides stand to learn a lot.

Ceremony with the Burundian Ministry of Health and the vaccination alliance, GAVI - October 2014

How International Development Thinking Differs

Level of Accountability

By far, the concept in international development (ID) work the GNPS seems to understand the least is level of accountability. In ID, our ultimate goals are to lessen poverty and better economic empowerment in a given context, such as a community, a city or even an entire country. If a GNPS company offers a product or service to a client that fails to meet their needs, there is no punitive recourse so long as legal obligations are met. If I go to the drugstore and buy paper towels that are not strong enough to handle and actually create more of a mess in my kitchen, the company that made the paper towels may choose to better their product to stay competitive, but there is no inherent obligation on their part to ensure my particular needs are met with their product. So long as the company sold what they advertised – paper towels – they have met their requirements.

On the other hand, one of the first things we learn in ID is that we must ensure stakeholder participation does not lead to a worse situation than before. Fulfilling this obligation is incredibly hard in places with weak governments, infrastructure, social benefits and a dearth of employment opportunities, because if our work fails the stakeholder, we have wasted their limited assets, time or trust. If we advise an impoverished person to participate in a training program that doesn’t yield better employment opportunities, we have asked them to spend time and money to commute to the training program, to forgo their normal daily work wages, and to raise their expectations for no benefit. If we advise a farmer to purchase an individual insurance policy to protect against failed crops, and then her crops fail but not to the extent to receive compensation, we have asked for money she could have used to better her yields or purchase food for her family. Even seemingly benign methods of participation have a trade-off, and it is up to us to determine what that means.

Because of this higher standard of accountability, ID organizations have robust monitoring and evaluation (M&E) mechanisms. The main purposes of M&E are to define what constitutes “success” and “failure”, how to prevent unintended harmful consequences, how to improve, and to document what went wrong. M&E is a huge chunk of any given ID project because it is central to protecting our stakeholders and to how ID organizations fulfill donor requirements. The idea of accountability is thus present from start to end of the ID work lifecycle.

Understanding a context

Being a minority (South Asian) in America, I can speak from lived experience that many companies poorly understand segments of the population in the Global North. However, there are commonly used methods to get around this poor comprehension; as we move toward the Internet of Things, more and more of these methods will involve passively generated data. Other common data examples include analyzing purchase patterns and Internet analytics, or conducting focus groups or surveys.

Data certainly exists in the Global South. A large part of what the United Nations (UN) does is collect and analyze data on everything from populations to health centers to crop yields. Data in Global South often does not, however, paint as complete a picture because there are so many more unknowns about a society. That’s why building relationships on the ground is invaluable to contextualizing our work. In fact, these relationships are one set of critical advantages proper ID organizations, particularly the UN, have. Without these relationships, we do not understand why a community does what it does, where a community gets its information, what values are held in high regard, and what we can do to better the situation.

Similarly, understanding a country’s current landscape requires historical, political, and economic knowledge. I once attended an event hosted by a private sector firm that proclaims itself as a “leader in international development consulting”. As I got into the elevator to leave the event, I overheard one of the firm’s associates say that tonight she needs to, “Put together a presentation on Ethiopian food security”. The Ethiopia country office of the UN World Food Programme (WFP) is a massive operation, serving 8 million+ people. The time, money, and resources that go into WFP Ethiopia cannot be boiled down into a few PowerPoint slides, and neither can the entire food security landscape of the country.

One running joke I have is that ID is all think and no action, while the private sector is no think and all action. Of course the truth for both sides is somewhere in between. It should go without saying that if an issue is central to a company’s work the company needs to have a thorough understanding of the landscape beyond just market competitors.

Recommendations for GNPS companies trying to “solve poverty”

Define “poor”

Whether someone makes 2 USD a day or 10 USD a day makes a big difference. Anyone who wants to work with the “poor” should define what they actually mean by "poor". We have numerous indexes in ID to define and contextualize poverty – use them! Common indexes include GDP per capita, the Human Development Index and the Gini coefficient.

Do not push products and services unnecessarily

Along with understanding what “poor” actually means, a company trying “solve poverty” should understand their job is not simply to push products and services. Every company thinks they have stumbled onto something truly innovative, and while some products and services could do a lot of good in a particular context, to truly alleviate poverty and better economic empowerment, the humility to differentiate between a market opportunity and a value-add is critical.

Do not be afraid of the government

As an ID practitioner, it is truly painful to watch current US politics because the Republican party seems convinced that the government fundamentally has no place in helping people. For those of us who have worked intimately with governments that have little capacity, we know nothing could be further from the truth. The reality is that the poorest of the poor will not be captured by the private sector (Global North or Global South). Further, certain needed services, like public transportation and healthcare, have to work at scale (and often at a loss) to stay viable, and therefore cannot be privately run.

ID work is not competing with the government. More often than not, we are working directly with the government to strengthen systems and services. Likewise, a GNPS company should not compete with or circumvent the government. Undoubtedly working with governments can be expensive and time-consuming, but even if direct collaboration with a government is not possible, a GNPS company should at least be aware of how the government operates, what they do, and who should be providing what.

Learn international development language

Like every industry or sector, ID practitioners use a set of terms and phrases – we have our own language. For the reasons listed above, ID work is important to a GNPS company trying to “solve poverty”. Some of the most brilliant colleagues with whom I have ever worked have been based in sub-Saharan Africa, rural South Asia and Latin America for years. They will not learn GNPS lingo, nor should they be expected to. If you want to work with them, learn how to communicate with them, even if that means finding someone like me who straddles the two worlds to translate.

Good luck, do well at doing good and get used to using a lot of acronyms.

[1] I am not a fan of this term but am using it for simplicity’s sake.