The Business of Development

I was mulling over microcredit with a colleague when he said "That's the beauty of the global microcredit vehicle--it recognizes that international development needs to treated more--if not entirely--like a business, and not like charity." I reeled. But "business" is my own prescription for the production and use of sustainable technologies on a level that imparts an impact. And charity smacks of noblesse oblige, the perceived obligation of the rich to help the poor in the narrow purview of what "help" means to the privileged. The devil is in the details.

It is not "business" per se that is so bad, but the assumption that it is business as usual, with the rich getting richer and the poor getting poorer, that is the culprit. Thorstein Veblen, turn of the century writer and critic of neoclassical economics, made a distinction between what he called "business" and "industry." Within that distinction, he identified workers -- groups that have to work to earn a living -- and owners, investors, managers and their agents as two distinct groups. Profit-making, or business, he believed, was removed from and opposed to the interests of industry and workmanship. The wing of the development sector most interested in "business" should examine very closely what it is they are after. Supporting and improving productive capacity among workers, or those without work, and product development (read appropriate technologies, low entropy systems, sustainable living) should be at the top of the list. Profit, or the lack thereof, will ultimately determine success or failure. Who profits is the real question.

Treating development like a business would be the fait accompli of the commodity-pushers. One world beating a path to the Walmart in every village; where all needs are commodity defined and all commodities have a price. Yet, I have come to think over the past couple of years that the best vehicle for getting low entropy technologies available and in use in poor and not so poor communities across the globe is with, broadly speaking, entrepreneurship. Methods used by for-profits would address some of the failures of non-profits in, at least, the practice of technology transfer. Attention to cost, consumer preferences, distribution channels, and maintenance are old hat to successful entrepreneurs. We, in the non-profit sector, write and talk about these issues like they just plopped off the tree. We take them one at a time and hold them up like glass balls, each holding the promise of success.

The sanitation world is a good place to start implementing creative entrepreneurial approaches. It has a complex mix of needs, environmental conditions, social considerations, technologies, incomes, and preferences. Though water and sanitation have not lost their public character; they are fast being pushed out of the realm of public finance and stewardship in the Third World. There are sound economic reasons to make utilities publicly owned and tightly regulated. Private sector involvement should by no means replace public investment and oversight, but more of it in the sanitation sector could help bring us out from the shadow of sewers and into the light of innovative environmental technologies. It is one path to waste management systems that can be delivered on demand with beneficial "externalities" like water conservation, nutrient recycling, coverage to the poor, and local control.

Developing the hybrid industries that will bring environmental technologies and fair employment practices to the forefront is not out of reach. It is being done; but often on a boutique level or in a manner in which it is tough to replicate. Bringing Veblen's "industry" to the global economic table will take a better understanding of business by those that aim to craft these hybrids, much the way a potter understands his clay and the fire that bakes it. We need more people working in the non-profit sector that have the values and experience of the non-profit world and the tools learned from the lecterns of traditional business schools. At the end of the day we might find a way to create companies that are able to look beyond net present values and rates of return; get the composting toilet out the door and put bread on the builder's table.

Laura Orlando

ReSource Musings Archive