PerpetualPlanet

The Light Up the World Foundation is making promising progress towards their goal of providing solid state lighting for two billion people. With the simple guiding principle that “light encourages human development and facilitates peace”, the foundation’s mission is to put affordable LED lights in the hands of families in the developing worlds for night time reading and study. Many of their users depend on kerosene for lighting. Replacing lanterns in areas without affordable electricity with the new devices will save fuel and avoid the toxins and fire danger.

Students at Stanford University’s Graduate School of Business helped design several alternative products that cost $8-10 each and in some cases can be manufactured locally. A power source, such as a photovoltaic panel, adds $90 to the system cost. A villager using 1 liter of kerosene per week ($0.5 - $1) pays approximately $52 a year. In two years the same villager can pay off the cost of an LED lighting system that has a life span of 10-20 years. With some micro-lending solid state lighting appears to be a profitable opportunity. In fact, several of the designers from the Stanford project have formed Ignite Innovations, to pursue solid-state lighting commercially.

If you have the opportunity to hear William McDonough speak, take it. He visited our city last night to discuss intentional design for society and to share some of the projects his architectural firm has created. The man is somewhat a modern DaVinci, though he stresses he always works with a huge multi-discipline team. Whether designing carpet, the Ford Model U, Nike European Headquarters or fighting diabetes, his designs adhere to this goal:

“We hope for a delightful, safe and healthy world, with clean water and renewable power, economically, equitably, ecologically and elegantly enjoyed.”

It’s not enough to recycle something after use if it or the process to create it is toxic or depends on unfair treatment of people. While at first it seems overly idealistic, the logic of the goal is inescapable. Skepticism lessens when you see in practice - actual products sold at a profit and buildings that save their owners money.

McDonough contends that we are on the cusp of another industrial revolution in which companies and countries that become eco-effective will thrive while others wither. If a $170 billion a year company like Ford is buying in, it can’t be too hippie-dippie.

A good book for finding out more is Cradle to Cradle (printed on plastic!) by McDonough and his chemist partner, Dr. Michael Braungart.

About 4 billion people on the planet are ignored by most marketers.  Making less than $1500 per year, puts them off the radar for most multinationals.  However, this market, coined as the bottom of the pyramid, may be more fertile than most b-schoolers first think.  Corporations like HP, Citicorp,  Honeywell and Starbucks are currently experimenting with products made by and sold to people who possess almost nothing.

Many of the efforts focus on meeting basic needs such as food and clothing.  One company in India, for example, sells jeans making kits for $6 each to entrepreneurs who assemble and sell them at a profit.

However, high tech companies are watching HP’s e-Inclusion program on project of which aims to create digtal town centers with affordable shared internet access.  Pilot sites already  exist in Central America, Asia, Africa and Central Europe.  Banks look to assist by creating microcredit operations in the same areas, accepting very small deposits and making very small loans.

Success is not guaranteed, but the prospect of such an enormous number of new customers apparently makes efforts to create the required purchasing power an attractive investment.

Authors C.K. Prahalad and Stuart L. Hart explore The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits in a short paper and in their book by the same title.  Prahalad is a professor at Michigan Business School nad Hart teaches at UNC Business School.  The subheading of the book is synomous with doing well by doing good: “Eradicating Poverty Through Profits”.