Innovating for the developing world.

Peter H. Loescher — Private sector innovation has the potential to change the development of any country. But this does not mean profitability and meeting the needs of the developing world are mutually exclusive.

In many cases, just the opposite is true. In fact, Siemens started business in the developing world over 160 years ago with projects such as the first telegraph system connecting London to Calcutta. Indeed, the reality is more complex and a balance needs to be struck.

Today, Siemens does business in 190 countries around the world-in the developed, emerging, and developing worlds. The common denominator in each case is innovation. It gives us our market advantage and it advances the development of each country where we do business.

In developed countries like the United States, for example, we're helping rebuild ageing infrastructure in energy, buildings, transportation, etc., as well as helping the country to enter new sectors like renewable wind energy, for example.

In developing and emerging markets, we are often helping to build modern infrastructure there for the first time. In some cases, it means helping with the basics: water, power generation, lighting, transportation solutions, and healthcare. In other cases, our innovations are helping these countries leapfrog into the sustainable sectors that will drive the twenty-first century.

For example, we are today part of a consortium of companies called Desertec, an ambitious banner project that promises to meet some 15 percent of European and also a major bulk of African energy needs by 2050, using solar-thermal plants in Africa's Sahara desert. Not only will this create jobs in northern Africa, it can help solve a large share of that region's local problems.

Desertec is a future vision which can be realised in some major parts by Siemens. But today, we are also active. In Kenya and Uganda, our lighting division, Osram, is working with local partners in setting up off-grid energy hubs. Using roof-mounted solar cells, these hubs are able to charge batteries for lighting as well as for purifying safe, clean drinking water daily.

In Bangalore, India, we are developing localised power plants that combust coconut shells to provide enough electricity for a typical Indian village. The plants are already operating so efficiently that they actually exceed U.S. emissions requirements.

Some of these products were developed in emerging markets themselves with those countries' specific needs in mind. In some cases, they have even been exported to developed nations proving that innovation is no longer only a one-way street. It can flow both ways.

We do not believe that innovations are unique to the developed world. In addition to our numerous research centres in Europe and the U.S., we have five major R&D centres in China as well as three in India - where many new innovations and patents are registered every day.

And this is the key: In all the locations where we conduct R&D, protecting our intellectual property is at the heart of being able to innovate further. Without patent protection, private sector innovation would dry up. Unfortunately, this very point proved to be a sticking point in one of the greatest challenges facing all nations today: climate change.

When I attended the United Nations climate conference a few months ago in Copenhagen, I was hopeful for an overall agreement that ultimately proved elusive. A major point of contention came down to intellectual property rights protection. On one side was most of the developed world with many technologies to help improve the environment. On the other side were several key developing world players wanting greater access to these technologies through mechanisms such as compulsory licences - measures that would discourage further innovation.

Thankfully, what sounded like an insoluble impasse actually sparked a creative idea. A win-win solution has been suggested by the Alliance for Clean Technology Innovation (A.C.T.I.), a trade group including Siemens and other E.U- and U.S.-based multinationals. The group has proposed building "Technology Centres" around the globe that would help identify technology and management options that make the most sense on the ground. A recent A.C.T.I. report explained that "by providing solutions to the real problems developing, and particularly least developed countries face (financing, enabling environments, regulatory and capacity challenges), Technology Centres would help facilitate technology transfer in the most directed, usable, and efficient manner possible."

Instead of calls for weakening intellectual property rights or imposing compulsory licences for technology transfer, Technology Centres would play a positive role in speeding the deployment of key technologies in developing countries. Driven by market principles as well as orientated towards greater capacity building, they would build more trust between donor and recipient nations and ensure that resources are more efficiently and effectively deployed.

We already do business in the developing world and we're benefiting from innovative ideas coming from these countries. For some countries, Technology Centres could also be an important step forward for their sustainable development. Innovative ideas, like innovative technology, can move us all forward.

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Heather Fleming — A typical morning for Ngarambe starts with tin snips, a makeshift hammer, scrap metal, and discarded soda cans. A local shopkeeper in Kenya, Ngarambe is also a craftsman.

Slicing a soda can in half, he rolls a second smaller diameter cylinder out of a scrap of aluminium to create a top. He solders this piece to an aluminium disc that fits on top of the can. He then coils a wick through the can and threads it through the disc. Finally, he solders the top to the can and fills it with kerosene. In just a few minutes, he's created a kerosene "lamp" that will last his buyers a few days. Each lamp is sold for a few cents, generating enough profit to provide a viable living for his family. His day ends with a visit to the scrap bins to seek new materials for the next day's lamps.

In communities like these that exist outside the electrical grid, individuals like Ngarambe create their own tools, their own light, and their own power with resources at their disposal. Their innovative solutions are not necessarily driven by a desire for profit, but to improve their daily lives or just to make ends meet. Some of these solutions have the potential for mass appeal. For example, you can find these makeshift kerosene lamps - a cheap source of light - in nearly every corner of the world. Unfortunately, the inhalation of smoke produced by these lamps causes respiratory disease, the leading cause of death of children under the age of five in developing countries. On top of that, the fuel for these lamps is often expensive, and their open flames dangerous. The demand for lighting is clear, but the current solution is flawed. That's where Catapult comes in.

Catapult Design is a nonprofit design firm that harnesses and builds upon local innovation with holistic design at its core. In 2009, Catapult worked with a social enterprise to pilot a programme in Tanzania to evaluate new lighting concepts. They took human health, affordability, broader accessibility, environmental impact, and alternative power sources into account. The programme's goal was to provide local businesses with an alternative lighting solution that eliminates health and environmental risk, and increases shopkeepers' financial stability. We support all of our clients through a development process that incorporates market assessment, product design and development, implementation and distribution, and impact evaluation. We're an accessible resource for any organization that wants to overcome the hurdles that hinder economic development in developing countries.

Catapult works with numerous organisations around the world, big and small, non-profit and for-profit. All of our clients' goals align with our mission to bring transformative solutions to communities in need. The benefit we see is the cross-pollination of ideas and methodologies from around the world, as well as an increased transfer of knowledge. For example, a small-scale, low-cost wind turbine designed by Catapult as a source of electricity for rural Guatemalans could find a new home on the eastern shores of Kenya or the desert plains of Ethiopia.

Catapult's business model has a human-centreed approach with a focus on financial and environmental sustainability. We bridge the gap between business and philanthropy, with the goal of building the local capacity for innovation, and igniting a viable marketplace comprised of billions of people.

By applying the shared principles of business and design to the creation of affordable, accessible and sustainable solutions, we can realise the untapped potential of the developing world and break the cycle of global poverty forever.

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Bill Drayton — Until recently, business could usually safely ignore the citizen sector. It was small-scale, backward, disorganized - and therefore hard and unrewarding to engage. Moreover, people from business and those from the social arena not only wore different clothes and had very different income levels, but they did not really very much like one another.

Although these attitudes linger in many places, the reality has changed radically. In five years, failure to look closely for business/social joint venture opportunities when an organisation in any sector sits down to map its future will constitute strategy malpractice.

Ashoka is a collaboration of almost 3,000 very leading (over half have changed national policy within five years of Ashoka's helping them launch) social entrepreneurs from every continent plus equally select business entrepreneurs. Roughly 500 focus on ensuring that every human can be a full economic player. By mapping the principles underpinning their successes, a truly giant global productivity deal becomes apparent. True to form, the entrepreneurs were the first to recognise the new reality.

Business shifted to entrepreneurial, competitive architecture around 1700, but the citizen sector only made this jump around 1980. Since then it has been catching up fast in productivity, scale, and now globalisation - with the result that it is growing jobs almost three times faster than the rest of the society.

Suddenly, almost everywhere, there are large, competent, highly competitive citizen groups - from rural Mexico to Germany's schools and Thailand's forests. Their costs are lower than business, and they understand and are trusted by their clients. They are, in other words, feasible and very attractive new partners for business.

For centuries, almost every human need, be it housing or health care, has been served by two parallel production and distribution systems, business and social, that did not talk. They were divided by architecture, competency, scale, and mutual disdain. Now the only real divider remaining is attitudinal inertia. Everyone - business, the citizen organisations, and the ultimate clients - wins big when the differing strengths of business (e.g., manufacturing) and the citizen sector (e.g., selling and servicing) are brought together in one joint venture business system.

To help everyone see the opportunity - and that it probably applies everywhere - Ashoka is bringing together business and social partners on four continents in three very different sectors. They are small farmer irrigation, slum construction, and health care.

Consider the case of irrigation. Until now, most small farmers in Mexico have been unable to get drip irrigation - even though it commonly could double or triple their income and make it more secure by allowing several crops over the year and ending their reliance on uncertain rains. The companies found the work unprofitable and poor rural people too unfamiliar.

However, over the last 15 years large (serving 50,000 to 200,000 small farmers), competent citizen groups have sprung up all over the Mexican countryside. Their cost structure is far lower than that of the companies, and they not only know the farmers and their environment but they have their trust. These groups are no good at manufacturing metal or plastic pipes, but they can market, organize, provide technical assistance, and service the farmers far better than the companies.

That, exactly, is the deal. Alone both have proven they cannot succeed. Together they can: (1) Transform small farm economies; (2) enable the citizen groups to serve their clients and earn a very substantial and growing new income from their markup on the sales, which within several years will make many independent of government and foundations; and (3) open a giant new market for companies - roughly half the country's arable land area.

These new business/social collaborations will also generate huge new financing opportunities. Helping those small farmers multiply their income with irrigation loans will be a many tens of billion dollars a year global business, and it will be a safe business because the farmers' new income almost guarantees repayment.

Moreover, each such collaboration will drive the sectors together. The two groups really want the deal - and their people therefore will learn how to go bowling together. Such an everyone-wins-big productivity deal is waiting in every sector. The entrepreneurs (and consultants) who seize their opportunity early will gain key long-term advantage, and those that lag will lose.

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Professor Thomas L. Magnanti — Universities are powerful engines of innovation for the developing world. They are a hot bed of ideas and impact the world through the knowledge they develop and disseminate, technologies and services they bring to the marketplace, and the human capital they nurture and develop.

Innovation and design for the developing world (see the examples below) has one special characteristic: it is a topic that is very motivating to students, well suited for student engagement in the early stages of their studies, and not as daunting as designing a sustainable city or other large scale projects that require years of education and experience and an enormous team of professionals. Universities such as MIT, Stanford, Berkeley, and Colorado State become leaders in this area by creating ecosystems - not only courses on design and innovation (addressing the full value chain: users needs and markets, financing, political and social environments), but also laboratories and facilities, seed funding, site visits for students and faculty to understand local community needs, conditions and resources, entrepreneurial and faculty mentors, clubs, design and business planning competitions and other activities that foster and support the innovation process.

The following examples, drawn from numerous others, illustrate what these ecosystems can achieve.

• Born in an MIT D-Lab Design class and refined by a team of undergraduate women mechanical engineers from MIT and participating MBA's who won the MIT $100K Development Track, Global Cycle Solutions uses bicycle parts to develop low cost technologies for food processing and energy generation such as a mobile phone chargers or an acorn shredder that shells corn 40times faster than by hand.
• An outgrowth of Stanford University's extreme affordability class, D-light uses cutting edge solar and LED technology to provide lanterns for the developing world that are four times brighter than a kerosene lantern. The company aims to improve the quality of life of ten million people by the end of 2010.
• Born in an MIT Development Ventures class as a joint Harvard-MIT team and also winner of the MIT $100K Development Track competition, ClickDiagnostics provides affordable and sustainable health care using mobile-phone based tele-consultation services in Africa, South Asia, and the Americas, enabling patients to access quality medical treatment in areas where there is little or no access to doctors.
• A finalist in MIT $100K Development Track, Ghonsla provides affordable insulation made from renewable and waste materials to underserved markets in Pakistan and beyond that is suitable for the roughly one billion mostly rural dwellers who need building insulation but yet don't have it.

By unleashing student potential, energy, drive and passion, and providing supportive environments, universities can foster remarkable achievements like these. But reaching their full and scalable potential requires the private and public sectors to see sufficient social and economic value to provide support and financial investments. The Singapore Government, for example, sees the potential benefits through its Bottom of the Pyramid initiative. At the new Singapore University of Technology and Design, we aim to do our part by nurturing technology-grounded leaders, focusing on "Big D" design, and conducting research on such topics as engineering for the developing world and information and communications enabled devices for better living. Through these efforts and those of other universities, governments, and the private sector, we can fashion many more success stories like those indicated above and can really make a difference, creating a better world. What else could we ask?

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