The technology already exists to provide renewable energy and electricity to all the world’s poor. The trick is finding a way to pay for it and to make it sustainable. Many innovators are experimenting with business models to reach the so-called Bottom of the Pyramid (BOP) cohort, and the 1.2 billion poorest people in the world who do not have access to electricity (World Bank) (http://tinyurl.com/n9p3f5x). A further 2.8 billion have to rely on wood or other biomass materials to cook and heat their homes.
The International Energy Agency (iea.org) believes US $48 trillion of investment will be needed between now and 2035 to make sure energy capacity matches rapid population growth.
In the influential book The Fortune at the Bottom of the Pyramid (http://www.amazon.co.uk/Fortune-Bottom-Pyramid-Eradicating-Poverty/dp/8177587765), the late professor C.K. Prahalad (http://en.wikipedia.org/wiki/C._K._Prahalad) advocated seeing the poor as people with needs and assets: consumers who just need the right goods and services designed for them. It was a change from thinking only of the world’s wealthier populations as consumers, and revealed a market worth billions waiting to be tapped.
Energy is key to development and improvements to living standards. Yet energy poverty plagues much of the global South, especially in Africa and particularly in rural areas.
The World Bank has identified 20 countries in developing Asia and sub-Saharan Africa which will require a massive effort to expand access to electricity and safe cooking methods for poor households.
Around 80 per cent of the people without modern energy live in rural areas. While progress has been made since 1990 in expanding access to energy, it has failed to keep pace with population growth. According to the World Bank, the pace of expansion will have to double to meet the 100 percent access target set for 2030.
To avoid increasing global carbon emissions while achieving this goal, many are looking to renewable energy sources and technologies to reach these last groups of people.
As pointed out by the Institute of Development Studies (http://www.ids.ac.uk/news/can-renewable-electricity-reduce-poverty), “The global threat posed by climate change means that we also face the pressing need to use less carbon in existing energy systems. Making progress on both energy poverty and decarbonization requires a sharp increase in renewable electricity production, both on and off-grid.”
The institute identified four necessary factors for access to renewable energy to benefit poor people.
1. Once electricity is generated, it needs to be reliably fed into the system. 2. This additional supply must be made accessible, and affordable, for poor people. 3. Increased electricity consumption then needs to translate into poverty reduction. 4. Increased electricity supply can indirectly reduce poverty by boosting economic growth.
India’s Simpa Networks (simpanetworks.com), started in 2011, has a business model it believes will do the trick. Simpa has developed a clever way to increase access to home solar power systems for the poor, by allowing customers to purchase the system in gradual “rental” payments over time. The customers eventually come to own the power system outright, and from then on to generate electricity for free. Since the payments are small and incremental, it suddenly becomes within the realm of poor households to afford modern solar energy systems.
This is called the “Progressive Purchase Pricing Model” – similar to “prepaid”, “pay as you go” and “installment plan” models. Under this model, customers make a 10 percent down payment and receive the home solar system. The customer then buys a time-specific amount of energy for between US $1 and US $10 with their mobile phone. The orange lock box on the power system has a keypad on the front. When a code is punched in, it releases electricity (http://simpanetworks.com/our-solution/).
In increments, while the customer purchases energy for home use they also eat away at the cost of the system, until eventually it is paid off, usually at a total of US $300. Systems have an expected life span of 10 years.
With few cash resources, poor households usually are not capable of saving enough cash to purchase a full energy system for their home. Instead, they rely on buying kerosene for lamps or using battery-powered torches and lamps when they can afford it.
In 2012, Simpa teamed up with SELCO India (http://www.selco-india.com/) – a social enterprise providing sustainable energy solutions and services to households – to sell 1,000 home solar power systems, expanding to 5,000 systems in 2013, according to a case study from not-for-profit Synergie pour l’Echange et la Valorisation des Entrepreneurs d’Avenir (SEVEA) (sevea-asso.org). The goal is to reach 25,000 units sold by the end of 2014, proving this business model can scale. Ultimately, Simpa wishes to mega-scale its approach and reach 1 million households over the next five years.
Simpa believes take-up will be quick because this model reduces risk, both for the seller and for the bank that may loan the cash for the 10 per cent down payment. Simpa acts as a go-between for the system sellers such as SELCO and the banks. Simpa believe this business model reduces the risk of non-payment or loan default and has the right incentives in place to encourage the customer to hang in and keep making payments until they own the system outright. Customers enjoy the benefits of clean energy 24/7 from day one and can see clearly the connection between the energy they receive and the small payments they make. For those who default from paying, the system is taken from their home.
When the system was piloted in Karnataka, India, all loans were successfully repaid.
Simpa Networks is a venture capital-backed technology company. It hopes its approach will attract investors, particularly social investors, seeking a low-risk investment in helping expand energy access.
Published: June 2014
Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP’s South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South’s innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.
One Indonesian industrial designer has pioneered an innovative business that has rejuvenated the economy of a farming village and improved the sustainability of local forests – and he’s doing it all with wood.
A range of wooden radios (wooden-radio.com) hold pride of place for the Magno brand (http://www.magno-design.com/?id=wr01a), which has carved out a niche as a maker of high-quality, crafted products that marry traditional skills with modern design. Magno is creating jobs and skills while also creating a unique, exportable product that commands a good price.
Indonesian designer Singgih Susilo Kartono developed the radio design concepts while at the Faculty of Fine Art and Design in Bandung, Java, Indonesia in the 1990s.
He takes an organic approach to designing, enjoying the journey and not necessarily being sure where he is going.
“I never start my design according to the market research or demand. I design by absorbing events, global or local events and even mundane daily life things that happen around me. Consequently, I start to think what will be good and better for these people,” he explains in his brochure.
The workshop in which the radios are made is a handsome wooden-roofed building and craftspeople sit at long wooden tables to assemble the models.
Each radio is made from a single piece of wood and takes a craftsperson 16 hours to construct, drawing on traditional woodworking skills. The radios are made from Indian rosewood, which is often used to manufacture many musical instruments because of its excellent sound resonance.
The radios are made in stages, with more than 20 steps involved in assembling each one. The individual parts are precision cut by machines before being assembled using a tongue and groove (http://en.wikipedia.org/wiki/Tongue_and_groove) construction technique.
Some radio models have a chunky, retro appearance and mix dark and light wood to give an eye-pleasing contrast. Others are more modern designs with a sleek profile. There is a large version, a ‘Mini’, a sleek modern Cube’ version and a rectangular version. There is also a round clock and a wooden desktop office set with various essentials like a wooden stapler.
The radios sell for between Euros 99 (US $124) and Euros 220 (US $276), and are shipped to Europe via Singapore to Hamburg in Germany.
“To me, wood is somewhat a perfect material – especially if I compare it to synthetic ones,” Kartono said. “In wood we could find strength and weakness, advantages and disadvantages or roughness and also softness. Wood is hard and solid but yet it is 100 per cent eco-friendly as it is degradable and leaves no waste materials on the earth.”
Great care is taken in selecting the wood and ensuring it is from local, sustainable plantation sources. According to its website, Magno used 80 trees in 2010 for its radios but in turn planted 8,000 trees around the village. This regeneration has become part of the process of creating the radios.
Magno has won numerous awards, including the Brit Design Award (UK), Design Plus Award (Germany), Good Design Award/G-Mark (Japan) and the Indonesia Good Design Selection Awards.
“The wood I use for the manufacturing process may need as long as 50 years to reach maturity,” Kartono said. “I want people not only to think about exotic or precious woods but likewise about the fact that good things require time. All objects that surround us should be thought-provoking. Craftsmanship originally was the art of dealing with raw materials in a sensible and economical way.”
As Kartono tells it, he faced the typical university graduate’s dilemma about his career path. Should he work as an in-house designer in a city or return to his home village of Kandangan and start a business? His choice was unusual. Once somebody with a university education leaves a small village, it is rare they return. And at first, Kartono did not.
But he was drawn back by the dire situation in the village, and decided to apply his knowledge of product design to revive its economic fortunes. He started by visiting just twice a year because that was all he could afford. This had the advantage of giving him perspective on the situation in the village.
“At first glance, these changes (happening to the village) were seen as a ‘progress,’” he said. “But when I looked more closely I concluded that it was only the ‘surface’ which experienced change. The basic structure of the village did not undergo any changes; moreover, some was actually deteriorating.”
He concluded that the village was being damaged by various government attempts to modernize agricultural practices. The debt problems this caused meant many farmers lost their farms and were forced to seek work in the city or look for another way to make money.
Craft work seemed to be the answer to this problem. It has many advantages, as Kartono sees it. It is something that can grow and fits well with village lifestyles. It is labour intensive, doesn’t need sophisticated technology and can use already existing local resources.
Kartono was inspired by one of his teachers at university, an advocate of the ‘New Craft’ approach, which applies modern management techniques to traditional craftsmanship. The idea is simple but very effective. It begins with making sure every step of the manufacturing process is standardized to ensure consistent quality and materials. A new product or design is first broken down into steps and a product manual is put together. Only then is the manufacturing process carried out.
While the New Craft method sounds simple and obvious, many craft makers do not take this approach. By following this methodology, it is possible to quickly train new craft workers and start up manufacturing in a new village or community. Craft is increasingly being seen as a good way to re-employ people who formerly worked in farming. The New Craft approach can create high-quality products that would sell well in the export market. A common problem with crafts is either poor quality control or inconsistent manufacturing methods. This can feed stereotypes of craft products and make them look second-rate in comparison to machine-manufactured products in the marketplace.
“Design for us is more than just creating a well-designed product that is produced and consumed in colossal amount,” Kartono said. “Design must be a way to solve and minimize problems.”
Published: June 2012
Resources
1) Cradle to Cradle: Remaking the Way We Make Things by William McDonough and Michael Braungart. It is a manifesto calling for the transformation of human industry through ecologically intelligent design. Website: http://www.mcdonough.com/cradle_to_cradle.htm
2) Rio+20: At the Rio+20 Conference, world leaders, along with thousands of participants from governments, the private sector, NGOs and other groups, will come together to shape how we can reduce poverty, advance social equity and ensure environmental protection on an ever more crowded planet to get to the future we want. Website: http://www.uncsd2012.org/
Sharp design throughout is key to this radio’s success. It confirms gaining the edge with a new product in the marketplace is achieved when the maker has considered aesthetics, quality assembly and clear, eye-catching graphics. Make sure to budget for the services of a good product designer and graphic designer to stand out from the crowd. Don’t let your source of income and profit fail to excite a potential customer.
Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP’s South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South’s innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.
Southern Innovator was initially launched in 2011 with the goal of – hopefully – inspiring others (just as we had been so inspired by the innovators we contacted and met). The magazine seeks to profile stories, trends, ideas, innovations and innovators overlooked by other media. The magazine grew from the monthly e-newsletter Development Challenges, South-South Solutions published by the United Nations Office for South-South Cooperation (UNOSSC) since 2006. A selection of books and papers citing stories from the magazine are featured below to aid researchers, in particular those interested in health and human development and the role of innovators in international development.
The first five issues of Southern Innovator from 2011 to 2014. Called a “Beautiful, inspiring magazine from UNDP on South-South innovation.”
“Innovation is critical to growth and development in Africa. In the context of a continent characterized by fast growing economies as well as an array of socioeconomic challenges, such as high levels of poverty and inequality, innovation in Africa must be understood in an encompassing manner. Africa needs to support the emergence of its own Silicon Valleys, but it must also foster the invention and adoption of cleaner technologies that limit respiratory illnesses, deforestation and combat climate change. This book contains a number of analytical case studies that examine the nature and origins of emerging high-end innovation hubs in Africa. These “hubs” or ecosystems are both understudied and little known inside and outside the continent. With this analysis, the book highlights and draws lessons from some of the most promising and successful innovation cases in Africa today, exploring the key factors driving their successful emergence, growth and future prospects. Relevant for scholars, policymakers, and business leaders, the book provides both inspiration and useful policy advice that can inform strategies and concrete measures to speed up the pace of innovation in Africa today.”
“Research on gated communities is moving away from the hard concept of a ‘gated community’ to the more fluid one of urban gating. The latter allows communities to be viewed through a new lens of soft boundaries, modern communication and networks of influence.
The book, written by an international team of experts, builds on the research of Bagaeen and Uduku’s previous edited publication, Gated Communities (Routledge 2010) and relates recent events to trends in urban research, showing how the discussion has moved from privatised to newly collectivised spaces, which have been the focal point for events such as the Occupy London movement and the Arab Spring.
Communities are now more mobilised and connected than ever, and Beyond Gated Communities shows how neighbourhoods can become part of a global network beyond their own gates. With chapters on Australia, Canada, Europe, South America, Asia, Africa and the Middle East, this is a truly international resource for scholars and students of urban studies interested in this dynamic, growing area of research.”
“The economic, political and social situation in Chile shows a country in transition. Some observers anticipate a broad “reboot” of the nation. While Chile is still seen by many as an example of progress in South America and of developmental potential in the global South, it faces a complex political constellation, particularly in the aftermath of the re-election of Michelle Bachelet. Many wonder how social and institutional innovations can be incepted without interrupting the country’s remarkable success over the past decades.
This book provides an interdisciplinary analysis of Chile’s situation and perspectives. In particular, it addresses the questions:
What is Chile’s real socio-political situation behind the curtains, irrespective of simplifications?
What are the nation’s main opportunities and problems?
What future strategies will be concretely applicable to improve social balance and mitigate ideological divisions?
The result is a provocative examination of a nation in search of identity and its role on the global stage.
Roland Benedikter, Dr., is Research Scholar at the Orfalea Center for Global and International Studies, University of California, Santa Barbara, Senior Research Scholar of the Council on Hemispheric Affairs Washington D.C., Trustee of the Toynbee Prize Foundation Boston and Full Member of the Club of Rome.
Katja Siepmann, MA, is Senior Research Fellow of the Council on Hemispheric Affairs Washington D.C., Member of the German Council on Foreign Relations, and Lecturer at the Faculty of Interdisciplinary Cultural Sciences of the European University Frankfurt/Oder.
The volume features a Foreword by Ned Strong, Executive Director of the David Rockefeller Center for Latin American Studies, Harvard University, and a Preface by Larry Birns, Director of the Council on Hemispheric Affairs, Washington D.C., and Former Senior Public Affairs Officer of the United Nations’ Economic Commission for Latin America (Santiago, Chile).”
“A Sociological Approach to Health Determinants investigates how the social works in determining health and health inequity. Taking a global perspective, the book shines a light on how experiences of health, illness and health care are shaped by a variety of complex social dynamics. Informed primarily by sociology, the book engages with the WHO’s social determinants of health approach and draws on contributions from history, political economy and policy analysis to examine issues such as class, gender, ethnicity and indigeneity, and the impact they have on health. A Sociological Approach to Health Determinants is a comprehensive resource that provides a new perspective on the influence of social structures on health, and how our understanding of the social can ensure improved health outcomes for people all over the globe. Toni Schofield is Associate Professor at the University of Sydney. She specialises in research and teaching in sociology, and public policy and administration.”
New Directions in Children’s and Adolescents’ Information Behavior Research edited by Dania Bilal and Jamshid Beheshti (Emerald Group Publishing: 2014)”This book comprises innovative research on the information behavior of various age groups. It also looks at special populations such as ethnic minorities, indigenous peoples, and users with disabilities. The book presents research and reflections on designing systems that help the new generation cope with a complex knowledge society.
Economy Reports for APEC Economies on demographics, policies & ICT applications for people with Special Needs (Seniors and People with Disabilities), Asia-Pacific Economic Cooperation, APEC Telecommunications and Information Working Group, January 2013
Taming the Tide: Stories from India by Claire Bentley, Vanessa Brombosz, Sofianne Gabrielli, Ga Eun Lee, Vaidehi Nafade, Lindsay Steele and Muhammad Wali, Global Health Case Studies: A Compilation from PPHS 511 Fundamentals of Global Health, McGill Global Health Programs, Case studies – Fall 2015, pages 23 to 32
If you would like to either sponsor an issue of Southern Innovator or place an advertisement in the magazine, then please contact southerninnovator@yahoo.co.uk.
The global carbon credit trading schemes emanating from the Kyoto Protocol have created a multi-billion dollar market – the global carbon market was worth US $30 billion in 2007 (World Bank) – and represents one of the fastest growing business opportunities in the world. The bulk of this trading is with the European Union’s emissions trading scheme, some US $25 billion. But the big problem to date has been most of this investment is enriching stock brokers, and not the poor.
And this is a huge opportunity missed, as some point out: “These numbers are relevant because they demonstrate that the carbon market has become a valuable catalyst for leveraging substantial financial flows for clean energy in developing countries,” according to Warren Evans, the World Bank’s director of environment.
And the way to do this is through the Clean Development Mechanism (CDM) – where wealthy countries can meet their greenhouse gas targets by investing in clean energy projects in the South. But so far, it has been criticised for spending 4.6 billion Euros on projects that would have cost just 100 million Euros if implemented by development agencies.
But if done right, the CDM could become directly beneficial to the so-called Bottom of the Pyramid (BOP) – the four billion who live on less than US $2 a day. The CDM allows developed countries to offset their greenhouse gas emissions by paying projects targeting the poor to develop clean energy, or to create what are called carbon sinks (planting trees for example), to cut global emissions.
One mechanism to make all of this work is the CDM Bazaar: officially launched in September 2007, it is about linking together buyers and sellers. This is a place where people with business ideas or projects can go for start-up funding. It is also a place to share information, contacts and learn about how to tap the market.
And two Southern innovators are showing what can be achieved by tapping the power of the sun to help the poor.
One such initiative In India, owned by Mr. Deepak Gadhia and Dr Mrs. Shirin Gadhia, is targeting the 63 per cent of the BOP market that is with rural populations. All of these people need affordable and clean energy if their lives are to improve: most currently use firewood and kerosene for cooking and heating. The company Gadhia Solar is building and selling solar steam cook stoves in rural villages. The giant solar dishes which resemble satellite TV dishes, can fry and roast using the sun and come in Do-it-Yourself kits. The enormous silver dishes beam concentrated sunlight on to a black plate on the oven, reaching temperatures of over 450 Celsius.
In Morocco, the company Tenesol, an electric supply co-operative society, is using solar power to bring electricity to 60,000 poor households in 29 provinces. And it is making Morocco a world leader in the use of solar for rural electricity.
Each house is equipped with a solar home system comprising a solar panel, battery and controller. It is powerful enough to light four to eight lamps, and support a television, radio or mobile phone charger.
Customers pay a connection fee of US $80, and then a monthly service fee of between US $7.50 and US $17.50. The fee competes well with what rural households were spending on candles and batteries.
The initial outlay for equipment is mostly paid for by investors, with the hope that the money will be made back on the service fees.
Tenesol hopes to bring electricity to 101,500 households, and also wire them up and provide light bulbs.
UNDP has produced a free users guide introduction to the Clean Development Mechanism. Website: http://www.undp.org/
South South North has also produced a Practitioners’ Practical Toolkit. Website: http://www.cdmguide.com/
Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP’s South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South’s innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.
David South Consulting 
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