Grassroot Innovation in Peru

Currently changes happen quite fast and a new innovation appears almost every day for example "D.light Design" with his LED solar lamp oriented to poor families in developing countries and "Embrace" with the design of a low-cost infant warmer for the base of the pyramid. All the above-mentioned innovations have been created in the developed world but there are many examples of innovations created in the developing world. However they are not world-known and invisible for international media. Maybe the most known case is: William Kamkwamba. A grassroot inventor from Africa, he built a windmill to power electrical appliances in his house from materials collected in a local scrapyard. His case is not the only one. There are many William's in the developing world.

In this article, I will share with you, the case of grassroot innovators from Peru. The barriers and problems that they face are world-wide spread and specifically often in developing countries. But problems have also solutions and thank to a network of international NGOs, which are supporting these initiatives, positive changes are happening. I would like to mention the story of the Yachachiqs (Yachachiq is the quechua name for people who pass on knowledge). It is based on the fusion of native knowledge and modern knowledge in order to develop appropriate technologies. Finally, I would like to propose some alternatives to motivate the creation of self- sustainable communities and ecosystems for grassroot innovation in developing countries.

Microscope extension for cameraphones

This low-cost solution is used for telemedicine applications in developing worlds, where access to cellphone networks are more prevalent.

D.N. Breslauer, R.N. Maamari, N.A. Switz, W.A. Lam, D.A. Fletcher, "Mobile Phone Based Clinical Microscopy for Global Health Applications", PLoS ONE 4(7): e6320, 2009. [Article]

Light microscopy provides a simple, cost-effective, and vital method for the diagnosis and screening of hematologic and infectious diseases. In many regions of the world, however, the required equipment is either unavailable or insufficiently portable, and operators may not possess adequate training to make full use of the images obtained. Counterintuitively, these same regions are often well served by mobile phone networks, suggesting the possibility of leveraging portable, camera-enabled mobile phones for diagnostic imaging and telemedicine. Toward this end we have built a mobile phone-mounted light microscope and demonstrated its potential for clinical use by imaging P. falciparum-infected and sickle red blood cells in brightfield and M. tuberculosis-infected sputum samples in fluorescence with LED excitation.

Appropriate technology as a business opportunity IV

Community development activity has a strong tradition based on philanthropy and has often been the starting point for business sustainability in emerging markets. Companies have for some time recognized the need to ensure surrounding communities develop as a result of setting up a company’s operation, for example by the building of schools, hospitals, roads or water facilities.

On the other hand, environmental products & services are often part of a new business model, with the entire strategy based on environmental superiority going beyond just technology and encompassing the whole life cycle of the product (from raw material to disposal).There is a growing market for products and services that provide environmental benefits. It includes niche markets for environmental infrastructure and pollution abatement technologies, such as water supply, waste management, soil remediation, air and water pollution control, and other established environmental technologies. A distinct niche focuses on the growing demand for eco-efficiency, including industrial products and know-how which reduce the use of energy, water and other resources in production processes. There are also green niches of established industries that provide alternative ways of meeting market needs, such as renewable energy, sustainable agriculture, forestry and fisheries, and eco-tourism.

Analyzing environmental impacts throughout the life of products and services is recognized as increasingly important. Though much focus is placed on production processes, impacts that take place during the “use” and “disposal” phase can be very significant. Product stewardship, or embedding environmental principles in its products and/or services, can help reduce the overall impact of a product.

The focus of sustainability has shifted slowly from process improvements to products and services and this is likely to sharpen further as international efforts intensify to combat climate change and improve the impact of business on society. The development of environmental products and services by new businesses will present competition to existing suppliers which will also intensify activity in this area. Emerging markets are likely to continue to play an important role in the development of these markets.

Emerging markets have specific advantages over developed countries in building alternative product and service markets. For example, countries can leapfrog stages of technology in power, moving straight to off-grid renewable energy without ever having polluting power generation plants. Vast forests and concentrations of biodiversity represent natural capital not available in most developed countries, which may become valuable as carbon sinks or watershed protectors.

Cases described below presents the appropriate technology promotes the development of communities as well as provides benefits for business. Specific trends as environmental products and services are financially successful and even with a positive impact on image brand and reputation.

Natura, formed in 1969, sells cosmetics, personal hygiene products, perfumes and nutritional supplements throughout Latin America. Sales in 2001 were $630 million, an increase of 14% over the previous year. At the beginning of 2002 Natura employed 3,100 people directly, and had 286,000 sales consultants in Brazil.

The Natura Ekos line of hygiene and beauty products was launched in 2000, based on natural Brazilian flora extracted in a sustainable manner by local people. In partnership with Imaflora, a NGO which operates on FSC principles, Natura has also certified floral assets to guarantee that they are extracted in a sustainable manner.

Other environmental initiatives include supporting environmental restoration projects in the 650 hectare Fazenda Bulcão and of the Pomar project which promotes restoration of polluted areas on the banks of the Pinheiros River. Natura also partners with TV Culture, the public broadcasting station of São Paulo, on the Biodiversity Brazil project which includes production of documentaries and other programs about biodiversity in Brazil.

Solar Technologies in Nicaragua is a project lead by UNIDO (United Nations Industrial Development Organization). The project in Nicaragua includes the following components:
• Training of local experts for the design of solar panel projects
• Transfer of technologies and installation of the solar panels in service and industrial facilities
• Development of local capacity for the construction and assembling of solar panels for industrial applications

For example, a solar panel system was designed to respond to 77% of the hot water demand of a hotel in Nicaragua. (Total hotel demand: 30 MWh/year, it required 2x16 m2 collectors area). Another example is a solar panel system designed to respond to the heat requirement of a local industry from the food sector: used to heat several food products to a temperature up to 80°C (32 m2 collectors area for a capacity of 22.4 kWh).

New water pumps for farmers can play an important role in local or even international food value chains. The NGO “IDE” has developed a family of step-action foot pumps fro agricultural use, all can be manufactured locally from locally available metal and wood materials. Since 1985, 2 million have been installed worldwide. Different designs allow the use of different sources of water as rivers and groundwater. Another NGO “KickStart” has focused on developing appropriate technologies for African entrepreneurs that can be fully market driven, creating enterprises at every level of the value chain from manufacture to distribution, retailing and end use by farmers. Their line of pumps from treadle pump to more complex suction-pressure pumps are in wide use, mostly in East Africa.

The Yachachiqs

Yachachiq is the person who know how to do something. Rural communities where the Yachachiqs system exists are small towns, with 10-15 families, and the average family farm size is around 0.1 hectar (100m2), some have local farm animals as llamas. In the traditional culture of the Andes there is not difference between arts and technics, a Yachachiq could be a master artisan or the local inventor. Yachachiq is not a name is a tittle, the community gives the title of Yachachiq to people from their community who has extraordinary habilities and leadership skills. It is similar to famous inventors or artist in the occidental culture, by example the american inventor Ray Kurzweil could be a Yachachiq.

They already have such incredible technical habilities and creativity. They can even decide whether some information, knowledge or tools would be useful if they could adapt it to serve their needs. When provided with that they can achieve wonders without any outside interference or advice. A Yachachiq could use modificated mechanical pieces from a motor to do pieces for agriculture or toys for their children, with the time and access to microfinances their could scale up and start their own factories and sell their services to near towns and cities.



New local initiatives emphasize participation of local people. In addition to appropriate technologies the new approach includes education on entrepreneurship. They are more applicable to Peru, due to understanding of budget, government, and cultural constraints. By Example, The Lemelson RAMP project in Peru, from 20 grassroot inventors, only 6 are based in urban zones, the other 14 are from rural zones of Cajamarca, Cusco and Puno.

Non-governmental organizations in Peru have many years of experience working successfully with the model of Yachachiqs. The public sector has started to establish a system of community promoters affiliated with the public sector (JUNTOS, CRECER, SIERRA PRODUCTIVA) who would have direct contact with local communities.

Rural development means developing the capacity of rural people. It means developing their skills so they become competent with the confidence to act on their choices. Importing technology from USA or China and sell these in Peru is not the right option. It creates disempowerment, leaving them dependent. But there is another way to empower the people. They must have access to information, knowledge, tools and the right to decide whether they want to do, independent of outsiders.

Technology is designed by engineers outside of the country and is in need of a redesign by Yachachiqs (local inventors). There is a need for developing appropriate technologies mainly irrigation technologies (drip and aspersion irrigation), food preservation, water and sanitation, soil regeration and others. It would allow rural farmers to generate additional income and should be designed so that they are affordable and available to rural farmers.

The purpose of our project is to review various technologies, configurations, identify locally available materials and components, perform usability tests, make recommendations for improvements and then create construction manuals for inexpensive DIY technologies to make components for agriculture, energy, health and environment preservation.

Yachachiq are DIY people, they dont buy things, they do their own things from available materials and they could learn about mechanics, electronics, software and manufacturing. We are not planing to use modern technology with Yachachiq, we are going to do a research about DIY projects and learn how to design an "appropriate technology" to be builded by Yachachiqs, they could make any changes and create their own machines and of course they will use their own ideas.

Strategies to develop sustainable innovations in Andean countries

In Andean countries, around 121 million people are the BoP with a combined purchasing power of $169 billion (World Resources Institute for IDB, 2006). Strategies are essential to integrate sustainability considerations (environmental issues, economic growth and social welfare) through public policies and private organizations to reduce poverty and inequity in theses countries. Clearly, much work needs to be done to develop better analytical tools, empirical research and operational models to understand who is doing what, where, how, why, and with whom and then to evaluate what is working and what is not.

Currently, a number of organizations provide services and goods for the BoP. For example, microfinances in Peru (including programs focus on women entrepreneurs and indigenous people), telecommunications and ICT technologies for urban poor and rural communities and development of appropriate technologies (RAMP-Peru Project sponsored by the Lemelson Foundation). However, the lack of systematic research on profitable ways to engage the BoP into a company’s business operations in a way that benefits the low-income communities (environmental, social, financial aspects) and the stakeholder impact on the business case have been one of the greatest obstacles to those dedicated to the promotion of sustainable competitiveness. In other words, how to empower individuals at the BoP to develop their own industries to serve their own people.



The purpose of the research project is to understand deeply how to foster the development of sustainable innovations addressing environmental, economic, social and ethical dimensions. These innovations are not just about new concepts but are about commercialization of technologies, products and services and about entrepreneurship. It can also be about the adoption of new processes and systems at societal level. Moreover, they should aim at meeting the needs of the BoP and introduce this segment into a business environment as their incorporation in the value chain as providers, employees, distributors, clients or partners.

The research will include analyzing the problems, barriers and obstacles to sustainable innovation associated with existing social, legislative, economic and management systems. This will highlight the drivers, new businesses, organizational and product development models and opportunities. Additionally, the research will emphasize better mechanisms to stimulate sustainable innovation in the process or cycle. For example, at the creativity stage of product development (company); and early in innovation/technology cycles (government). It may also provide tools to help managers assess and construct their own case. At the same time, how to nurture the process of sustainable innovation: within large and medium sized companies; between large and medium-sized companies; within entrepreneurial “start-ups”; between entrepreneurial “start-ups”; within governments; and between governments and so on. This research will contribute towards further scholarly debate on learning the preconditions and processes that have enabled sustainable innovations to arise in certain sectors and companies; and potential transferability to other sectors and companies.

The research will provide empirical evidence with a focus on agricultural-food value chains. Considering that this sector plays a key role in GDP, employment and, in particular, exports. It involves exploring the spectrum of services needed to nurture grassroots entrepreneurs towards creating enterprises that meet basic human needs in a sustainable way, including commodity chain development, agribusiness cluster formation, and facilitation of enabling institutional environments.

We believe that findings will trigger action and result in making companies in Andean countries more sustainable and more competitive and help business people to identify BoP opportunities to increase profits, distribution channels and market base. For governments, the research intends to elaborate a multidimensional evaluation framework for regional development policies and strategies in terms of sustainable innovation, identifying key factors at the regional level and the range of suitable policy options. It could improve distribution of wealth, increase income and opportunities for tax revenue and social investment. The viewpoint and concerns of others key players as NGOs, international organizations, local communities, and investors will be incorporated. This will strengthen the sustainable business case, work out a set of most suitable and effective policy instruments and provide recommendations to regional policy makers.

The study will be in three phases (1) to collect empirical data based on in-depth case studies from Chile, Argentina, Peru, Bolivia, Colombia, Venezuela and Ecuador. The business cases vary by country and company size (SMEs, export-oriented companies, national companies and multinational corporations) The case studies will be selected from publicly available information and reports that highlight best practice, directory of Public agencies, and conversations with experts and company managers in Andean countries. (2) to examine what key players could do and are doing based on the cases, as well as interviews with experts from companies, business associations, public agencies for development, NGOs and academia. My goal is to sketch out some of the important issues, drivers, barriers and key players which are relevant to the business case in these countries. (3) to explore the main strategies which could strengthen the business case by providing companies with the right incentives and frameworks in order to achieve sustainable innovations.

Sustainable innovation is a new and developing field with new concepts and emerging techniques. We believe that to create more sustainable innovation will require more education and training in developing countries. We would like to work with researchers who did or is doing research on sustainability considerations, including social and ethical issues which are especially relevant to the base of the pyramid (BoP).

We would have experience doing research with a positivist approach. However, because of the nature of the challenge posed by sustainability, we are able to move beyond traditional disciplinary thinking, and even beyond interdisciplinarity, towards intercultural and transdisciplinary exchanges. In consequence, to be able to identify the opportunities to use inputs from other forms of knowledge using the expertise that is available and incorporating the perspectives and concerns of the major stakeholders involved.

Regarding the research methodology, we propose to implement a mixed research method approach involving multi-industry surveys, interviews and case studies to collect empirical data. This seeks to identify patterns and regularities among these initiatives. Mixed methods are likely to produce some concepts that do not fit into existing theories or models or previous understanding but which in fact provide new complex and less evident explanations of the research questions. Case study method and survey research are a systematic way of looking at what is happening, collecting data, analyzing information, and reporting the results. The product is a sharpened understanding of why the instance happened as it did, and what might be important to look at more extensively in future research. Thus, they are especially well suited because this research project is a hypothesis-generating rather than a hypothesis-testing approach to a complex and not yet well-understood topic. In the analysis of the data, we will compare and identify patterns across cases by using tables and matrices, a tool used extensively in multiple case analyses.

Appropriate technology as a business opportunity III

Brand value & reputation can be significantly enhanced by action which improves a company’s environmental and social performance. A company’s reputation is intangible but it helps to build sales, attract capital and business partners, and recruit and retain workers. It can be separate from, but related to, brand image. And in emerging markets, where brands tend to be fairly weak, the brand owner’s reputation can be a significant competitive factor. There are many components of reputation but sustainability is an increasingly significant factor for governments, NGOs, customers and investors.

Girsa a Mexican chemical company, has invested more than $20 million in environmental efficiency improvements, including the capture and use of energy generated in the carbon black process, which yielded $30 million in savings and has substantially reduced emissions and waste. The investment program was designed to improve GIRSA's overall competitiveness by expanding capacity, increasing energy efficiency, developing new products, promoting joint-ventures, and enhancing safety, environment and health standards. From 1991 to 1998, carbon dioxide emissions and wastewater per ton of production were cut by more than 80%, and solid waste per ton of production reduced by more than 90%. The net income as a percentage of sales was improved drastically. The plant has gone from being a major source of controversy in the community to a model corporate citizen that locals are proud of. It has won numerous accolades for its performance at national and international levels, including the Mexican Environment Ministry’s National Quality Award in 1997 and the National Award for Ecological Merit in 1999.

Jolyka Bolivia is the first South American producer of laminate and other tropical hardwood flooring products to be certified by FSC . It sells to the US and Europe, where consumers are increasingly concerned about the sustainability of tropical wood. In 2000, Jolyka was one of the winners of the business plan competition for promising enterprises that incorporate social and environmental benefits held by New Ventures, a World Resources Institute program. This brought direct reputational benefits, including coverage in the media as a viable, dependable and “green” company. It also helped to raise new capital as in the following six months Jolyka was visited by four investors and has renegotiated $2 million in long-term debt finance. JOLYKA ® Bolivia specializes in the production of quality hardwood flooring and accessories. All products are manufactured in accordance with US and European specifications and pass through rigorous quality control inspections. It is the company’s policy to give priority to quality production and punctuality in product delivery.

The company adheres to a policy of environmental protection in the selection and harvest of tropical woods and promotes production techniques that comply with standards established by international certifying agencies. JOLYKA ® uses only alternative wood species and does not offer any products manufactured from traditional or endangered species. JOLYKA ® attempts to limit its purchases of raw materials to wood certified under FSC criteria. The company encourages non-certified providers to acquire the voluntary forestry certification under FSC criteria.

Cembrit is a relatively small company, employing fewer than 400 people in two factories. But with the aid of external finance and expertise from IFC and its new owner it has penetrated new markets in Europe, as well as helped to clean up the local neighborhoods.

In the early 1990s the Czech government announced it would prohibit the use of asbestos materials in line with the trend throughout the European Union. Such legislation would have shut down the formerly state-owned plant. But Cembrit began to address the regulatory requirements including those of the EU.

The focus of the project was switching from a hazardous, asbestos based production process for making roofing materials to an environmentally sound cellulose-based process. The project also facilitated an extensive environmental clean-up, including the safe and proper decommissioning of the asbestos cement operations. The asbestos ban had taken place there, and the new technology was the only possibility of exploiting these markets. Sales in 2000 were $17 million, a 22% increase over the previous year and more than double what they were in 1996.

In addition, the modernization resulted in many benefits to human health and environmental quality. The immediate benefit has been the removal of hazardous asbestos, which has enhanced life expectancy and reduced negative health impacts on workers and the local population. By converting from coal to gas-oil fuel, the plant reduced air emissions almost 100% and made a cleaner source of energy available to local neighborhoods. By constructing a pretreatment facility and connecting to the municipal sewage system, the project stopped the discharge of untreated liquid effluent into the Berounka River.

These cases reveal that a company not only may benefit from the use of appropriate technology in a financial way but also improve its brand image and reputation.

Entrepreneurship Research

Virtually all literature on entrepreneurship and on different policies to promote the creation of enterprises comes from Europe and the United States. Research on entrepreneurship in Latin America; in particular, in Peru, is at an early stage of development. There is a profound lack of data regarding many aspects related to the creation process; life cycle of firms and the key factors that influence competitiveness. The weakness and even absence of public strategies for entrepreneurial development is due, at least in part, to this lack of knowledge. Not only is our interest focused on Entrepreneurship, but also on Management of Technology and Social Responsibility.

Regarding the research methodology we propose to implement a mixed research method approach involving multi-industry surveys, interviews and case studies to collect empirical data. This seeks to identify patterns and regularities among these initiatives. Mixed methods are likely to produce some concepts that do not fit into existing theories or models or previous understanding but which in fact provide new complex and less evident explanations of the research questions. Case study method and survey research are a systematic way of looking at what is happening, collecting data, analyzing information, and reporting the results. The product is a sharpened understanding of why the instance happened as it did, and what might be important to look at more extensively in future research. Thus, they are especially well suited because this research project is a hypothesis-generating rather than a hypothesis-testing approach to a complex and not yet well-understood topic. In the analysis of the data, we will compare and identify patterns across cases by using tables and matrices, a tool used extensively in multiple case analyses.

Appropriate technology as a business opportunity II

There are many opportunities to increase sales by improving the environmental impact of production processes and by taking action which helps local economies. Successful approaches have been to innovate and develop new products, and to view “wastes” as potentially saleable by-products. Improved processes can also make existing products more attractive to concerned customers. Recognition as a responsible producer (informally or through formal certification) can also open the door to some markets in developed countries.

Perion is a medium sized company based in Budapest, Hungary, which makes batteries. It has created a new business line reprocessing car batteries, based on its own patented technology which has significant environmental benefits compared with the traditional process. This market opportunity developed from the company’s efforts to improve its health, safety and environmental performance and avoid heavy fines for hazardous discharges and waste. Perion then saw the opportunity to collect used batteries through its store network. The business is sufficiently profitable to pay $1 for each used battery. It brings in an extra 30 million forints per annum ($110,000) for the company.

Hindustan Lever is the Indian subsidiary of the Unilever Group. In the early 1970s its dairy factory in the Etah district was operating at only 50% capacity and incurring significant losses because of inadequate milk supplies. In 1976 Hindustan Lever established an Integrated Rural Development Program. The program set out to help farmers increase milk production, by addressing a range of farming practices that could be improved. The company sponsored education and training in animal husbandry, the development of basic infrastructure and the establishment of village development committees. Beginning in six villages, the project area expanded to more than 400. Milk supplies to the factory increased significantly to meet its capacity and the dairy is now one of the company’s most profitable units.

Temasol (Total EDF Maroc Solaire), a joint venture between EDF, Tenesol and Total, specializes in solar electrification. Its innovative project in Morocco will provide solar power to more than 58,500 rural households across 24 provinces. In the first phase (2002 to 2005), Temasol supplied electricity to 16,000 customers across four provinces. In 2005, the company commenced a second phase to install solar power for 37,000 families in 20 regions. A further stage is planned to supply an additional 5,500 households.

Through this project, each house is fitted with a solar home system comprising a solar panel, a battery and a controller. The solar panel converts the sun’s rays into electricity then stored in a battery. Electricity is available night and day to run household appliances, up to four lamps, and a socket for a television, a radio or a mobile phone charger. An electronic controller regulates the battery, storing enough power to last up to five days, allowing the equipment to run year round, even when weather is bad.

The equipment cost was partially covered by a grant to ensure affordability. Some 66% of this project is financed directly through Morocco’s Office National d’Electricité (ONE) with support from bilateral aid agencies (German bank KfW, French development agency AFD and the Fonds Français pour l’Environnement Mondial). Temasol contributes 24% of the costs and the customer provides the remaining 10% of a total investment of $35.5 million. By subsidizing the significant upfront capital investment, this financing package enables the consortium to overcome the high installation and maintenance costs of solar systems. In addition, Moroccan consumers already connected to the grid pay a tax of 2% of their monthly bill to help remote regions get access to solar power. This is one of the few solar projects worldwide based on a sustainable model and being progressively scaled up.

This innovative program not only provides solar equipment but also ensures a sustainable local service. System maintenance costs (Temasol undertakes to maintain the panels for ten years after purchase) are built into the initial connection fees. This is particularly valuable, as a traditional aid program would often fail to incorporate post installation maintenance. Once the program is completed, some 58,000 households will have access to electricity affecting the lives of 370,000 people. Bringing electricity to rural populations improves local living conditions, with light available at night safety is enhanced and youngsters can do their homework in the evenings. It allows family members to use a mobile phone to keep in touch with relatives or run a small business. These improved conditions also encourage local farmers and livestock breeders to remain on their land, rather than moving to the small towns that are connected to the grid.

Without the use of appropriate technology in these cases, a number of beneficiaries do not have access to electricity, smokeless indoor cooking devices, better incomes or a safe workplace. These cases demonstrate the owner of the company as well as the users (and communities) received benefits from the use of appropriate technology.

Appropriate technology as a business opportunity I

Appropriate technology is appreciated as a business opportunity, in consequence, there would be linkages among the development of appropriate technology, sustainability and business performance.

In 2008, some 1.2 billion people survive on an income of less than one dollar each day. Progress toward reducing this extreme poverty has been uneven and achieving the Millennium Development Goal to halve the proportion of people in extreme poverty by 2015 remains a major global challenge.

The great majority of extremely poor people lives in rural areas and depends, in whole or in part, on agriculture for their income. The rural poor (whether farmers, laborers, or sellers of non-farm commodities) will not prosper without farm income growth.

Yet small farms in the developing world face serious obstacles to improved productivity. Most smallholders do not control the water supply so crucial for enabling the use of productivity-enhancing inputs and they typically have poor access to input supplies, credit, and output markets.

Despite the challenges, there are reasons for hope. A number of global trends create new opportunities for smallholders in developing countries (see Annex 2). For them to take advantage of these opportunities and for their incomes to grow significantly, they must overcome three key constraints: (a) water control, (b) reliable supply of affordable high-productivity inputs, and (c) access to the increasingly concentrated supply chains that now serve the largest and most rapidly growing output markets.

The unique characteristics of poor (low capital availability, small fragmented land holdings, low risk tolerance and low opportunity cost for family labor) require unique solutions:

• Low investment and operating cost
• High rate of return
• Rapid return on investment
• Optimal use of family labor
• Appropriately sized
• Simple maintenance
• Scalability

This exploratory research helps to clarify the nature of the problem showing how the development of appropriate technology could have significant impact on sustainability and, in consequence, in business success.

In our opinion, it is important to highlight that appropriate technology may become a solution for most of problems addressed by the Millennium Development Goals. Moreover, appropriate technology can be a practical example of “how to” reach sustainability in emerging markets. The business perspective helps appropriate technology to be self-sustainable, involve more beneficiaries and create value and job opportunities.

The objective is to conduct an analysis of business cases for low-income markets in emerging economies that would help to generate new ideas on how entrepreneurs, grassroots inventors and business managers successfully develop appropriate technology-based business and to develop constructs that would facilitate future hypothesis testing.

Businesses with appropriate technology can reduce costs by making environmental improvements which deliver an immediate impact on the financial aspect.

Also termed “eco-efficiency”, environmental process improvement involves producing the same level of output with fewer resources, emissions and less waste. Eco-efficiency can be increased by using alternative raw materials, redesigning equipment or techniques, using more efficient technologies, reorganizing the supply chain and/or sitting production processes in a manner that reduces overall environmental impacts.

Reducing the use of energy and raw materials and limiting emissions and waste from production processes are key contributions that appropriate technology can make to tackle the environmental challenges facing the world. Emissions from industrial activity can have serious impacts on human health and the natural environment. They also contribute to climate change, ozone depletion, acid rain and contamination of surface and ground water and soils. Maintaining finite resources is essential for future growth and development.

Most of the cases demonstrated cost savings from environmental improvements. Some savings flow directly from using less energy and materials. Others come from lower pollution costs, in the form of charges for waste handling and disposal, fees, licenses and fines for breaking environmental regulations. The evidence comes from many sectors, all types of company and all regions.

Shivji and Sons, in Dar es Salaam, Tanzania, has just 45 permanent employees, making laundry soap through a process which uses steam from a diesel-powered boiler. The company replaced leaking steam valves and taps, halved the time required for heating the fat storage tank through efficiency improvements and minimized steam consumption during the cooling stage. These measures cut diesel use by more than 50% and have resulted in annual savings of $188,000 a year from an initial investment of $830. This represents a payback period of just 1.6 days.

Grupo Nueva works in the area of sustainable forest products, water systems and light construction materials. Amanco, a Grupo Nueva subsidiary, specializes in water management systems. Agriculture is the main source of income for 87% of Guatemala’s rural population, yet only 3% of farmers receive the technical assistance that would enable them to improve productivity and raise living standards. In 2004, Amanco started looking for innovative ways to make its products available to lower-income farming communities and decided to provide small drip irrigation systems and latrines for local growers. These irrigation systems help reduce farmers’ costs and ensure highly efficient year-round water availability.

Amanco created a system geared to the specific needs of poor farmers, the .4X4 all terrain Irrigation Model: 4 Seasons, 4 Harvests per year. It also designed a new process to bring this product to a new market. Given that at the outset, Amanco’s potential customers had very little disposable income and a highly unstable income stream, finding innovative mechanisms to help them finance the small investment needed to buy pumps was crucial.

Amanco’s system improves water use through saving up to 50% during irrigation. Soil quality also benefits as these drip irrigation techniques help prevent soil erosion. Farmers are now seeing a 22% rise in production, coupled with a major improvement in produce quality. On the back of this, they have been awarded an international certification of environmentally and socially-responsible crop cultivation. Farmers are achieving 33% savings in labor costs and have significantly improved their standard of living, with incomes doubling to around $1,950 a year. This is enabling farmers to integrate into the formal economy and to pay for their children’s schooling. These new technologies and technical assistance boost rural competitiveness; improve produce quality and supply stability and help secure long-term contracts with overseas purchasers in the United States and Europe.

Procter & Gamble markets almost 300 household products to over five billion people in 140 countries. In 2000, P&G launched PUR®. This technology is essentially a water treatment system for households not served by a safe drinking water supply, or for use in disaster relief. Since its introduction, PUR® has provided 260 million liters of clean drinking water. It has been successfully used in many countries including Bangladesh, Zimbabwe, Sudan, Ethiopia, Iraq and in the tsunami ravaged region of South East Asia, where 15 million sachets were delivered (enough to treat 150 million liters).

The product consists of a sachet of ingredients commonly used in conventional municipal water treatment, reverse engineered to effectively act as a mini-water treatment plant. Each sachet is effective in removing bacteria, viruses, parasites and some heavy metals from contaminated water. It works through a process of precipitation, coagulation, flocculation and disinfection. Each small sachet costs around $0.10 and can provide 10 liters of clean drinking water (enough for an average family for two days). Sachets dramatically improve the microbial quality of stored water and reduce diarrheal illness.

The PUR® approach is complementary to the development of piped water infrastructure. Sachets are robust and compact, making them easy to transport and store; a design particularly suited to natural disaster and other emergency relief. In addition, they are simple to use.

When tested in 514 households in 14 villages in Guatemala, where diarrhea is a leading cause of death, families who used the product to treat their drinking water had in addition to cleaner water, 40% less diarrhea than households that used standard handling practices. These households also had 50% fewer prolonged episodes of diarrhea in children under two. The World Health Organization (WHO) says the provision of safe water alone will reduce diarrheal disease and other enteric diseases by 6% to 50% even in absence of improved sanitation and other hygiene measures.

PUR® sachets provided almost 10 million liters of safe drinking water to Haiti, where in 2004, civil unrest, severe flooding and heavy damage from hurricanes meant that clean drinking water was particularly hard to obtain.

Poor distribution networks and inadequate health education are major obstacles to extending the use of PUR®. Distributing low-cost health products to rural areas represents a significant challenge, especially where roads are non-existent or in poor condition. Similarly, health education and an understanding of the importance of clean water are prerequisites for promoting use of a product such as PUR®.

P&G is currently pursuing two separate models to deliver clean water where it is most needed: social marketing and emergency relief. Social marketing aims to provide sustainable access to clean water. P&G sells PUR® to NGO partners in Pakistan, Haiti, Kenya and Uganda who have their own local distribution networks. PUR® is then sold by local distributors, the profits providing a source of revenue for these low-income families. P&G also provides PUR® at cost to international relief agencies for use in natural disasters and humanitarian crises. The company is developing many other partnerships. In Uganda, P&G promotes health education with the ICN and its Ugandan affiliate. P&G has also helped found the International Network to Promote Household Water Treatment and Safe Storage, a WHO-backed network. P&G’s work has been supported by the United States Agency for International Development’s Global Development Alliance (USAID GDA), and the UK Department for International Development (DFID).

The development of appropriate technology in Emerging Markets

Distinct challenges face developing countries, both rapidly industrializing large nations and the more slowly developing nations burdened by persistent poverty. In places where the institutions that enable an entrepreneurial society are weak or absent, the priorities for innovation measurement are not on science-based innovation but rather on such fundamentals as the time and cost required to start a business.

In many developing countries, starting a business is fraught with expensive and time-consuming red tape. While all the paperwork for starting a corporation in the United States can be complete in a day, according to the World Bank it takes 153 days in Mozambique to incorporate and register a firm, 151 days in Indonesia, and 40 days in El Salvador. That must change. Understanding and, importantly, measuring the challenges that face entrepreneurs in different parts of the world is a start.

Emerging Markets are very different from other developed markets in the diversity of the user needs, motivations and the business environment dynamics. A strong understanding of user needs (social, cultural, economic) and the business ecologies along with powerful technical insights is essential for success in these markets.

Net private capital flows to the major emerging markets fell from $169 billion in 2000 to $132 billion in 2001 .The growth of trade slowed and the trend in real commodity prices relative to manufactured goods prices shows no sign of improving. As a result, growth of real gross domestic product (GDP) in developing countries was forecast to increase by 1.3% in 2001, down from 3.8% growth in 2000 . Poverty remains endemic, almost a quarter of the population in emerging markets lived on less than $1 per day in 1999, while 28% of the world’s children under five years of age are malnourished. HIV/AIDS incidence is increasing 36 million people were affected around the world in 2000, with the majority living in Southern Africa and South and East Asia. Over 1 billion people worldwide do not have access to safe water sources.

However, there are some encouraging statistics. The economies of Central and Eastern Europe were spared most of the upheaval of 2001’s global slowdown, with GDP growth rates averaging 5%. Further, the situation for emerging markets as a whole improved in 2002, with private capital flows expected to recover rising to $160 billion. Many developing countries are on track to achieve one of the Millennium Development Goals: universal primary education by 2015 and some are significantly reducing infant and under-five mortality.

Moreover, the needs of a world which will soon have to accommodate 8 billion people, where environmental resources will be under greater stress, while new health and security risks emerge, and issues of equity and access to resources, technology and markets will grow in importance.

In this emerging market context, the development of appropriate technology points out a unique business opportunity to provide a technological solution to daily challenges. According to Paul Polak , a billion poor people need:

• A $2 pair of eyeglasses.
• A $5 household water filter
• A $15 computer for people who can’t read
• A $100 house with real market value
• A $10 solar lantern

The role of grassroots inventors, entrepreneurs and business managers is essential. Not only developing appropriate technology but also creating business which satisfies the needs of world’s poor.

Every entrepreneur knows that a great idea does not guarantee success, it must be sold. Similarly, appropriate, pro-poor technologies will have only limited impact unless they are effectively marketed.

The practical problem is to understand how to market appropriate technologies that enhance smallholder productivity and mainly improve the livelihoods of poor (in a global vision: profits, people and planet). Usually, it is not sufficient to merely scale down technologies that are suitable for more well-off consumers. Technologies must be rethought and reengineered from a poor perspective. It includes that these technologies should be accepted by society.

Sustainable innovation

The term “emerging market” was originally coined by IFC (International Finance Corporation, World Bank Group) to describe a fairly narrow list of middle-to-higher income economies among the developing countries, with stock markets in which foreigners could buy securities. The term’s meaning has since been expanded to include more or less all developing countries. Developing countries are those with a Gross National Income (GNI) per capita of $9,265 or less

There are several definitions of sustainability and sustainable development, but the best known is that of the World Commission on Environment and Development. This suggests that development is sustainable where “it meets the needs of the present without compromising the ability of future generations to meet their own needs”.

Sustainability is about ensuring long-term business success while contributing towards economic and social development, a healthy environment and a stable society. There are three broad components of sustainability. They are sometimes described as “people, planet and profits”, or the “social, economic and environmental” dimensions. Sustainability is sometimes known as “corporate social responsibility” or “corporate citizenship”. I accept that in many respects the terms are synonymous. They cover the same broad aspects of the business: good governance, treatment of employees, impact on the environment, impact on local communities and business relationships with suppliers and customers.

Eco-efficiency involves the delivery of competitively priced goods and services that satisfy human needs and bring quality of life, while progressively reducing ecological impacts and resource intensity throughout the life cycle. The term eco-efficiency was coined by the World Business Council for Sustainable Development (WBCSD) in its 1992 publication "Changing Course". It is based on the concept of creating more goods and services while using fewer resources and creating less waste and pollution.

According to the WBCSD, critical aspects of eco-efficiency are:
• A reduction in the material intensity of goods or services;
• A reduction in the energy intensity of goods or services;
• Reduced dispersion of toxic materials;
• Improved recyclability;
• Maximum use of renewable resources;
• Greater durability of products;
• Increased service intensity of goods and services.

There is no precise or established definition for sustainable innovation. Arthur D. Little (2004) defined “sustainability-driven” innovation as “the creation of new market space, products and services or processes driven by social, environmental or sustainability issues.” Sustainable innovation is a process where sustainability considerations (environmental, social, and financial) are integrated into company systems from idea generation through to research and development (R&D) and commercialization. This applies to products, services and technologies, as well as new business and organization models (Charter, 2007).

An alternative term is eco-innovation which has been described as: “the process of developing new products, processes or services which provide customer and business value but significantly decrease environmental impact” (James, 1997).Eco-innovation is any form of innovation aiming at significant and demonstrable progress towards the goal of sustainable development, through reducing impacts on the environment or achieving a more efficient and responsible use of natural resources.

Although the two terms are often used interchangeably, eco-innovation only addresses environmental and economic dimensions while sustainable innovation embraces these as well as the broader social and ethical dimensions. Social and ethical issues are especially relevant to sustainable product design and development in the areas of outsourcing and in specific “bottom of the pyramid ” products aimed at meeting the needs of the world’s poor. In general, however, these issues are not easy to apply directly in the fields of product/service design and innovation. Finding solutions to environmental problems through eco-innovation has been, and is likely to remain, the primary focus for sustainable innovation while aiming to achieve social benefits.

What is the impact of appropriate technology in emerging markets

It is well-known that the development of appropriate technology in developing nations is becoming a crucial factor to reduce poverty and inequalities. At the same time, the eco-efficiency principles are perfectly highlighted in the design of appropriate technology.

The research problem is to understand and explore the impact of developing appropriate technology on businesses according to sustainability considerations (economical, social, environmental and ethical issues) through real cases in emerging markets as Latin America and the Caribbean, Africa and Asia. For example, appropriate technology in Latin America is at an early stage of development and the lack of systematic research and data produces the loss of business opportunities. On the other hand, India is using appropriate technology to improve the standard of living of rural communities with significant success.

How to make a multidimensional analysis (economical, social, environmental and ethical aspects) to understand the lessons learned in case studies around the world and identify what is working and not working in emerging markets. We will try to answer the following questions:
- What is the impact of using appropriate technology on people’s live in emerging markets?
- How to analyze this impact? Are sustainability considerations good tools?
- Are the current business models working for appropriate technology in emerging markets?
- Is there a friendly environment to do business with appropriate technology?
- How is appropriate technology affecting the design process and the life cycle of products/services?

When was the Wealth of Nations Determined

Was the Wealth of Nations Determined in 1000 B.C.?
Published: November 20, 2008
Paper Released: October 2008
Authors: Diego A. Comin, William Easterly, and Erick Gong

We assemble a dataset on technology adoption in 1000 B.C., 0 A.D., and 1500 A.D. for the predecessors to today's nation states. We find that this very old history of technology adoption is surprisingly significant for today's national development outcomes. Our strong and robust results are for 1500 A.D. determining per capita income today. We find technological persistence across long epochs: from 1000 B.C. to 0 A.D., from 0 A.D. to 1500 A.D., and from 1500 A.D. to the present. Although the data allow only some suggestive tests of rival hypotheses to explain long-run technological persistence, we find the evidence to be most consistent with a model of endogenous technology adoption where the cost of adopting new technologies declines sufficiently with the current level of adoption. The evidence is less consistent with a dominant role for population as predicted by the semi-endogenous growth models or for country-level factors like culture, genes or institutions.

The Agglomeration of U.S. Ethnic Inventors

The Agglomeration of U.S. Ethnic Inventors
Working Paper Publication Date: July 2008
HBS Working Paper Number: 09-003

The ethnic composition of US inventors is undergoing a significant transformation—with deep impacts for the overall agglomeration of US innovation. This study applies an ethnic-name database to individual US patent records to explore these trends with greater detail. The contributions of Chinese and Indian scientists and engineers to US technology formation increase dramatically in the 1990s. At the same time, these ethnic inventors became more spatially concentrated across US cities. The combination of these two factors helps stop and reverse long-term declines in overall inventor agglomeration evident in the 1970s and 1980s. The heightened ethnic agglomeration is particularly evident in industry patents for high-tech sectors, and similar trends are not found in institutions constrained from agglomerating (e.g., universities, government).

The Moral Sentiments

Policies Designed for Self-Interested Citizens May Undermine "The Moral Sentiments": Evidence from Economic Experiments. Samuel Bowles.

Science 20 June 2008:
Vol. 320. no. 5883, pp. 1605 - 1609
DOI: 10.1126/science.1152110

High-performance organizations and economies work on the basis not only of material interests but also of Adam Smith's "moral sentiments." Well-designed laws and public policies can harness self-interest for the common good. However, incentives that appeal to self-interest may fail when they undermine the moral values that lead people to act altruistically or in other public-spirited ways.

Regenerative Medicine

The capacity of most tissues to regenerate derives from stem cells, but there are many barriers to the use of stem-cell-based therapies in the clinic. More in Regenerative Medicine from the Nature.

Evaluating the Impact of SA 8000 Certification

SA 8000, along with other types of certification standards and corporate codes of conduct, represents a new form of private governance of working conditions, initiated and implemented by companies, labor unions, and non-governmental activist groups. Whether these codes represents a substantive or merely symbolic approach to governing working conditions is the subject of an ongoing debate, which to date has been dominated by philosophical and political discourse due to a lack of systematic evaluation.

Download the paper: http://www.hbs.edu/research/pdf/08-097.pdf

Global Challenges

This Nature web focus explores a range of areas in which genetics can be put to use in tackling global challenges face the human race in the 21st century: environmental change, population growth and a rapid decline in fossil fuel reserves. Topics include: crop genetic manipulation to improve yields and provide resistance to environmental stress; approaches in plant genetics to allow economical biofuel production; and the genetic monitoring of effects of environmental change on the world’s biodiversity.

Tracing information flow on a global scale using Internet chain-letter data

Tracing information flow on a global scale using Internet chain-letter data
March 19, 2008, 10.1073/pnas.0708471105

Although information, news, and opinions continuously circulate in the worldwide social network, the actual mechanics of how any single piece of information spreads on a global scale have been a mystery. Here, we trace such information-spreading processes at a person-by-person level using methods to reconstruct the propagation of massively circulated Internet chain letters.

The Roots of Morality

The Right and the Good: Distributive Justice and Neural Encoding of Equity and Efficiency.
Published Online May 8, 2008
Science DOI: 10.1126/science.1153651

Distributive justice concerns how individuals and societies distribute benefits and burdens in a just or moral manner. Combining distribution choices with functional magnetic resonance imaging (fMRI), we investigate the central problem of distributive justice: the tradeoff between equity and efficiency.