Doing Good by Doing Business

This blog entry is pretty interesting, when we are talking about the developing world.
http://bigthink.com/design-for-good/should-businesses-make-money-from-poor-people

Don't let the title throw you off. It makes perfect sense to try to make money from and with the people of developing countries, instead of just giving them things.  The author cites a number of fine examples.

Make Money WITH People
If you think about it, any good business makes money WITH its customers, not at their expense. Selling something is not a one way street. The buyer clearly expects to gain some advantage from the purchase. It is also much more difficult to make money with people in developing countries, rather than to just GIVE them things. Most foundations and enterprises trying to be of assistance do not have the time and resources and talent to actually help people create a market or an economy.

For example, there is a local organization that assisted people in Haiti for years by drilling wells, and importing and installing the equipment needed to operate those wells. This article describes an alternative way to help people do their own wells, creating a whole industry that is self perpetuating, and benefits a lot more people. There is some appropriate technology involved, but the method of going about it is also creative.

Share The Wealth
When I visit Teustepe, Nicaragua, I am always struck by how much the people in this small town gain from just trading with each other. One person makes tortillas, another freezes popsicles, another bakes cakes, one runs a bakery, and another operates the grinding mill for corn. The town is really an agricultural center, and the real wealth created there comes from the produce of the area's farmers. But it is spread around by the industriousness and trade among the population. Our economic life is just like that. I spent years as a manager of information systems for a large insurance company. I told myself that insurance enabled commerce and home ownership, so it was a beneficial service. BUT - it did NOT actually generate wealth. The vast majority of us are just greasing the wheels of wealth creation - doctors, lawyers, teachers, retail, etc. The wealth creation comes from farming, mining, timber, energy production. Those are facilitated by manufacturing, transportation, clothing, distribution, etc. All of us used to farm, now less than 1% actually create that wealth, but we all benefit from it. We are all in this together.

In the article cited, the farmer is the basic wealth creator in the well situation. If the farmer can grow more crop more easily and more cheaply, then every one benefits. The people who manufacture the well mechanism, the ones who train people how to install it,and the ones who actually put them in the ground, are all benefitting from the increased product of the farmer. And the thing is pretty self perpetuating. They will be selling these until every small farmer on the planet has access to one. A similar argument can be built around fertilizer and mechanical aids to farming. Don't give them away - help people figure out how to make them and sell them more cheaply. Grow the market.