Solutions to Help Millions of People Escape Poverty
Paul Polak, founder of International Development Enterprises (IDE) and author of Out of Poverty, spoke at the University of Waterloo on Thursday night where he discussed solutions to help millions of people escape poverty.
Paul, along with Gerry Dyck, IDE's first staff member, told the story of the organization, that has grown over the course of 28 years, to impact the lives of over 17 million people who live on less than a dollar a day. IDE was founded as a non profit organization, on the premise that the world's poor were customers and needed to be treated as such:
From a BusinessWeek article on Paul Polak and IDE:
Founded by Polak in 1981, IDE is based on the belief that there are simple solutions to the seemingly complex problem of poverty, and that those solutions are based on enabling the entrepreneurial spirit of the poor. The logic of IDE's approach is so simple it seems ridiculously obvious: Poor people are poor because they don't have enough money; 800 million of the world's poorest earn their living from one-acre farms; those people could earn more if they knew how to grow high-value crops; to do that, the poor need access to very cheap tools—seeds, fertilizer, irrigation—and to markets where they can sell their goods.
Given this, IDE's focused mission has been to develop radically low-cost tools that will help subsistence farmers become small-scale commercial farmers. For instance, IDE's $25 treadle pump (a foot-powered suction pump) enables a family working two to six hours a day to irrigate a half-acre of vegetables during the dry season and earn an average of at least $100 a year after expenses. Other products include a $40 water storage tank and a drip irrigation system that costs roughly $200 an acre, four-fifths the cost of a conventional system.
IDE therefore operates much like a business, a 'multinational for international development' as Paul put it on Thursday night. On top of IDE, Paul is keeping himself busy with two relatively new organizations: D-REV, a non-profit fostering a revolution in design for the other 90%, as well as Windhorse International, a for-profit company fostering a revolution in how big business designs, prices and markets its products.
Impacting the lives of 17 million people, or the equivalent of 3.5 million families thus far, IDE has been able to achieve:
- Total of $78 million in grants and research funding received from foundations and government agencies
- Total of $139 million invested in their products by people living on less than a dollar a day
- Total of $288 million increase in Net Annual Income for Dollar-A-Day farmers
One of the major takeaways that I took from the lecture has to do with the opportunities that exist in the global marketplace: how we know everything there is to know about targeting affluent customers in the developed world, and yet, know nothing of how to target the other 90% of customers in the rest of the world.
Paul made it clear that there are certainly opportunities that exist out there, and you can find them if you go out there with an open mind and an interest in seeking out them out. As with any entrepreneurial venture, it takes courage and guts as well. More importantly, it takes knowing your customers well, and this takes a commitment to go where the action is, and to talk to people and listen to them, learning about their lives, seeing and observing.
If you are interested in learning more about market-based solutions to the challenges of global poverty, I would recommend reading Emerging Markets, Emerging Models published by the Monitor Group in March 2009.
