One of the greatest challenges our rural folk face is a lack of access to information about markets – not just distant markets but neighbouring markets as well. Few of them read and our research has shown that they don’t tend to travel beyond a few kms for commerce (see my earlier post Do not disturb). When they do travel longer distances it’s primarily to visit temples on pilgrimage. Consequently, many of them claim that they don’t need a phone because everyone they know and interact with lives close by. I was lamenting the difficulty of getting new product information to people who live in these circumstances and my husband very helpfully offered up that it sounds like we need to have heralds or messengers and town criers like they did in medieval Europe. That got me thinking and I … Read More »
We just sponsored Sociopreneurship 2010, an event that brought together social investors, industry experts and the media for panel discussions and also recognised and showcased social innovations and entrepreneurs. This event is timely in a country like India and is a mark of the shift in thinking away from non-profit models to market based solutions that can operate at large scale and therefore create social value more systemically.
When we begin to talk specifically about ‘social’ entrepreneurship though, it really begs the question: What does it mean to create social value? I think we all have a notion of what it means but when you try to define it and measure it, it gets quite murky and difficult. One fundamental implicit assumption of social value is social equity or equality of opportunity and access. In this … Read More »
It’s been a bit of a busy month for me and I haven’t had time to post. After years now of reading, surveying, observing and thinking, we (meaning Madura) are finally putting together the pieces of our socioeconomic transformation strategy. We’re taking quite a leap from the run-of-the-mill microfinance, so we’re operating like a start-up again, which is fun. But, with profits to take some chances with, so that’s even more fun. We’re looking at a massive, for profit experiment in reengineering the socioeconomic system dynamics of our members – about half a million poor women in rural Tamil Nadu, moving rapidly to a million. This involves putting in place a large scale smart phone driven data collection system, a mobile phone rollout for our members that will support a host of applications in the future, and development of a … Read More »
I’m betting heavily on the value of information. From everything I know in theory and intuitively, without timely access to information, not much can get done, and certainly very little can get done well. This is true for societal progress in general and for organizations. Without information there would be a lot of resources wasted reinventing the wheel and we would lose the benefit of access to the collective ideas around us. Still, this value seems sort of intangible. How do you put a number on it? Some folks in Boston from MIT and BU have tried to do just that.
In a study titled Productivity Effects of Information Diffusion in Networks Sinan Aral, , Erik Brynjolfsson and Marshall W. Van Alstyne asked the question:
Does better access to information predict an individual’s ability to complete projects or generate revenue?
They … Read More »
Today there are many development economists that focus on social impact evaluation studies. These studies typically compare groups receiving an intervention to groups that did not. For example, did the group that received microfinance do better than the group that did not? Although they attempt to ‘control’ for variability between groups, I see some fundamental flaws in this approach. First, to be meaningful comparison, a ‘control’ group must be independent of the intervention group. In society, which by definition is an interconnected system, this is virtually impossible and you can never control this way for network effects.
For example, lets say the people who received microfinance in the village used the money to buy goods from the people who didn’t. Its not impossible that this could result in the ‘control group’ getting richer because they could sell more. Compared to them, … Read More »
Here is an interesting post that I came across.
Exploring Different Perspectives of Poverty Through Photography
by Duncan McNicholl
Many people only experience sub-Saharan Africa through photographs. The teary-eyed child in rags is familiar to all of us as the portrait of poverty charities use to communicate a hopelessness in need of our pity and charity. I reacted very strongly to these images when I returned from Africa in 2008 after a 4 month volunteer placement in Malawi, working with Engineers Without Borders Canada. I compared the images I saw to my Malawian friends – people who embodied intelligence, resilience, and compassion – and I felt lied to.
It seemed that these photos presented by development organizations and the media were deliberately providing only one perspective of rural Africans like my friends in Malawi, which was despair.
…..This photo project, which I am dubbing … Read More »
Tongue-in-cheek as it may be, The Onion always has some hidden truths. Here’s what they have to say about poverty.
For a more PC point of view, here is a nice piece by David Appasamy (Executive Director at Madura).
I’ve posted before thoughts on why the poor tend to be fragmented in their economic activity rather than organized into groups and it sparked some discussion (see Driving socioeconomic change by making women more dependent). I’ve been thinking now about the ability to organize in general. Our microeducation team at Madura just got back from the first pilot testing of our digital ‘mini MBA’ program. This is a video based training program that brings business education to the poor that has been developed in collaboration with Dr. Madhu Viswanathan at University of Illinois at Urbana Champagne and his Marketplace Literacy initiative. They tested with two different groups – one that was reasonably educated (10th or 12th grade) and one that was largely illiterate, and came back with some very interesting learnings. Here’s one: There are a couple places where the … Read More »
Apparently not too many people.
First I’ll come out and admit that I’m addicted to playing with Google trends. I find it a fascinating commentary on our collective consciousness and weirdly entertaining. So, I was looking at search trends on ‘poverty’ across the world and there are two things that I find intriguing. First, there seems to be decreasing search volumes over the past several years although there are increasing news references.This is puzzling. But more interesting was that it was oddly seasonal, dipping twice a year. Check it out:
A country by country view was revealing. The decreasing interest over time cannot be attributed to the USA but the seasonal trend is more apparent, dipping during the summertime and then again over Christmas.
I then checked out other English speaking countries. UK and Australia both had some seasonality, less apparent in the … Read More »
When you phrase a problem in terms of variables x and y and not real world quantities it allows you to solve it objectively without bringing in preconceived notions about the variables. For this same reason it is also helpful to look analogies. So here is one:
Lets say there is a pond into which water is poured from x different sources at various rates and leaves from y different sources at various rates. How does the water level change over time? To solve the problem you need to know the rates at which water enters and leaves the pond at different places relative to one another and the initial water level. Maybe valve two shuts off when valve one opens etc.
Now instead of a pond, lets say its a village. And instead of water, lets say its money coming in … Read More »
We (Madura) recently launched a classified ad newspaper that reaches 400,000 poor rural households in Tamil Nadu. Our women borrowers can advertise their products, services and things they want to buy and sell free of charge while companies must pay. This is a hard to reach demographic that does not generally interact with print. One of our office locations used a women’s day event that gathered 700 of our women borrowers to launch the paper in their area. I didn’t attend this launch but our CEO reported to me that a very large number of women took the paper that was handed out and immediately used it to wrap up the snacks that were served to them.
(One useful statistic to put this in context is that about a third of our borrowers cannot read. Still….)
I am increasingly convinced that poverty is a network problem. Poor people are less connected and linked in to the rest of the world on various dimensions. The resulting information poverty results in a poverty of opportunity and therefore economic poverty and the cycle goes on. I recently did a small survey for fun where I asked about 20 women from our self help group member base that are between 5th and 8th grade educated what the following four words meant to them:
The majority were flumoxed by Google. No idea they said. Microsoft is a computer and Obama, is it something to do with computers? Manmohan Singh was correctly answered by a handful (6 to be exact). Others asked: Is he a Hindi film actor? cricketer?
Facebook? YouTube? I didn’t bother to ask.
We don’t live in the same world.
Thought this would be interesting to all of you folks who are interested in making sense of the recent financial crisis (and/or trying to figure out if there is a microfinance investing bubble in India). Physicists Didier Sornette, Ryan Woodard and some others have been working to create predictive ‘bubble diagnostics’. These diagnostics are based on non linear positive feedback models that have their basis in imitative human behavior. They are running The Financial Crisis Observatory which they describe as “a scientific platform aimed at testing and quantifying rigorously, in a systematic way and on a large scale the hypothesis that financial markets exhibit a degree of inefficiency and a potential for predictability, especially during regimes when bubbles develop”.
Last year they published a paper called Financial Bubbles, Real Estate bubbles, Derivative Bubbles, and the Financial and Economic Crisis in … Read More »
Here is a definition of entrepreneurship that I came across in another one of Mark Granovetter‘s articles called The Impact of Social Structure on Economic Outcomes. He writes:
Schumpeter defined entrepreneurship as the creation of new opportunities by pulling together previously unconnected resources for a new economic purpose.
Granovetter goes on to say:
One reason resources may be unconnected is that they reside in separated networks of individuals or transactions. Thus, the actor who sits astride structural holes in networks (as described in Burt, 1992) is well placed to innovate. The Norwegian anthropologist Fredrik Barth (1967) paid special attention to situations where goods traded against one another only in restricted circuits of exchange. He defined “entrepreneurship” as the ability to derive profit from breaching such previously separated spheres of exchange.
Schumpeter’s is an interesting definition and now ranks as the one I like best. … Read More »
I have been thinking a lot about how to understand poverty from the point of view of the properties of the social network. In this context, I thought I would share with you a very important paper by sociologist Mark Granovetter written in 1973 called ‘The Strength of Weak Ties’ which he has more recently revisited in a new paper called ‘The Strength of Weak Ties: A Network Theory Revisited’. Here is an excerpt:
…..individuals with few weak ties will be deprived of information from distant parts of the social system and will be confined to the provincial news and views of their close friends. This deprivation will not only insulate them from the latest ideas and fashions but may put them in a disadvantaged position in the labor market, where advancement can depend, as I have documented elsewhere (1974), on … Read More »