Etsy Recognized as Technology Pioneer by World Economic Forum

On December 4, 2008 The World Economic Forum in Generva announced 34 visionary companies selected as Technology Pioneers 2009 for their accomplishments as innovators of the highest calibre, and whose technologies will have a deep impact on business and society.

After working in social enterprise for 5 years prior to joining Etsy (official start is in January) I'm really pleased to see Etsy's vision to empower people to change the world’s economy, one person and one community at a time being recognized.

Selection is the result of a vigorous process, for which the Forum received more than 320 applications from around the world that were evaluated by 44 global technology experts. The entire list of Technology Pioneers, with profiles and executive interviews, can be found here.

When Aid Can Make You Foolish

I've commented before that I've seen the affects of a generation of Africans who have been weened on the bottle of too much foreign aid. It can alternatively make people feel that they need not work hard for results or that no amount of work will lead to change as the deck is already stacked for others. BBC news recently posted an article and video on just this topic called The pitfalls of Afirca's aid addition written by Sorious Samura a BBC reporter from West Africa.

I encourage you to click over and read/view the whole report which touches on corruption, rewarding failure, dysfunctional lifestyle and graduates lost. The main solution offered in the article is for regular citizens throughout Africa to start demanding more from their leaders. While this may seem a tall task, we in America seem to have done just that in our last election. Maybe this is some foreign aid we can export to more positive and lasting results?!

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Check Out Etsy

Big changes are coming my way in January 2009! For a sneak preview check out Etsy!

Innovation Born From Constraints

Ethan Zuckerman, a fellow at Harvard’s Berkman Center, and an expert on how technology impacts the developing world, recently spoke with Nii Simmonds whose blog Nubian Cheetah I read regularly. The topic of their discussion was how innovation can thrive even where constraints are quite significant—as they often are in Africa. He offered seven rules about how innovation in the developing world happens, and I found that they ring quite true, particularly #2. Note: Comments/examples in parentheses are from Nii.

1. Innovation (often) comes from constraint (If you’ve got very few resources, you’re forced to be very creative in using and reusing them.)

2. Don’t fight culture (If people cook by stirring their stews, they’re not going to use a solar oven, no matter what you do to market it. Make them a better stove instead.)

3. Embrace market mechanisms (Giving stuff away rarely works as well as selling it.)

4. Innovate on existing platforms (We’ve got bicycles and mobile phones in Africa, plus lots of metal to weld. Innovate using that stuff, rather than bringing in completely new tech.)

5. Problems are not always obvious from afar (You really have to live for a while in a society where no one has currency larger than a $1 bill to understand the importance of money via mobile phones.)

6. What you have matters more than what you lack (If you’ve got a bicycle, consider what you can build based on that, rather than worrying about not having a car, a truck, a metal shop.)

7. Infrastructure can beget infrastructure (By building mobile phone infrastructure, we may be building power infrastructure for Africa - see my writings on incremental infrastructure.)

Environmental Stewardship is Not a New Idea

One of my friends has the following Kenyan proverb below the signature line on her emails.

"The Earth was not given to you by your parents, it was loaned to you by your children."

It's a good reminder that environmental stewardship is something that has been around for a long time and does not only reside so-called developed West/North (though we get the "credit" for causing a hugely disproportionate share of the damage).

Ecuador Gets It (Inalienably) Right

The following is from Grist (slightly modified by me)

Ecuador approved a new constitution last weekend that grants inalienable rights to nature, the first such inclusion in a nation's constitution, according to Ecuadorian officials. "Nature ... where life is reproduced and exists, has the right to exist, persist, maintain, and regenerate its vital cycles, structure, functions, and its processes in evolution. Every person, people, community, or nationality will be able to demand the recognition of rights for nature before the public bodies..."

The specific mention of evolution isn't accidental; besides being an activity nature arguably likes to do anyway, evolution as we know it has close ties to Ecuador's territory of the Galapagos Islands, where Charles Darwin formed his famous theory. Ecuador's constitution grants nature the right to "integral restoration" and says that the state "will promote respect toward all the elements that form an ecosystem" and that the state "will apply precaution and restriction measures in all the activities that can lead to the extinction of species, the destruction of the ecosystems, or the permanent alteration of the natural cycles."

These Words Hold True

The following is excerpted from an email to students and alumnae from Drew Gilpin Faust, the current president of Harvard University.

One hundred years ago, Charles William Eliot, the nonpareil of Harvard presidents, began the last of his 40 academic years in office. He remarked that Harvard was a place "to observe keenly, to reason soundly, and to imagine vividly." In this time of financial, political and environmental turmoil these words are ones that should be embraced far beyond the banks of the Charles.

Something Great Is Happening in Rwanda

The dedicated members of the Business Council for Peace (BPeace) have undertaken a super new project in Rwanda to train hair salon professionals. As they state on their blog: "One of the first businesses to emerge when war ends is the business of beauty. Women return to the feminine community gathering in small salons to reconnect and feel good again. Rwanda has been no exception and four of Bpeace's Associates run bustling salons. So busy are these salons, and many others like them across the country, that supply cannot keep up with demand. Indeed despite high unemployment rates among Rwandans, salon workers are often not Rwandan. With no local training available owners must import skilled labor from nearby countries."

BPeace worked with two associates to help pursue their dream of launching The Beauty School of Rwanda, a first of its kind vocational school bringing a future to the youth of Rwanda. This is just the kind of business development that a country like Rwanda needs - it's self-sustaining, it meets a local need, and it is something that never really goes out of fashion even when the fashions change.

Kudos to BPeace for their efforts!

The Birth of Blue

I was sent a link to very interesting video of a speech given by Andrew Werbach at the Commonwealth Club in San Francisco. Andrew, for those who don't know him, was the youngest president ever of the Sierra Club (at 23!) and has been working in the "green" space throughout his entire life. Note: Paul Hawken gives a nice intro on Andrew at the beginning. He had given a very powerful speech a few years earlier called the "death of environmentalism" and this was in a sense his follow-up to that talk. (for more on this background see Joel Makower's blog)

What Andrew is best known for now, however, is his work at Wal-Mart where he is working with the biggest retailer on the planet to help them meet their vast sustainability goals such as producing zero waste. Many people have vilified Andrew for essentially sleeping with the enemy, and he has responded by saying that if he can work with 1.2 million employees at Wal-Mart who influence more than 200 million shoppers, then he can have a far greater influence on sustainability than in almost any other venue.

What I particularly liked though was that Andrew has moved beyond "green" which is focused on the environment which lives in the world of politics (e.g., laws and regulations) to what he calls "blue" -- a concept which most certainly includes the environment, but also considers the social, economic and cultural elements of sustainability. He sees this as a lifestyle movement that allows people from all different backgrounds to join it through multiple touch points. Rather than fight against companies like Wal-Mart, he wants to create a consumer revolution and use buying power and consumption habits as tools rather than as weapons that need to be fought against.

In his words "blue is a way to integrate your green ideals into your broader ideals. We still can't get where we need to go without political change, but it's time to get serious about bringing our ideals to the way we live and the way we shop." With 1 billion people on the planet consuming $1 trillion worth of products, moving the needle even a little can cause a true revolution.

Each Friday I get an email from the Development Executive Group called the Global Development Briefing. It gives a quick summary of what has happened in the developing world. Today's briefing has a section called 2008 State of the Future:

The future continues to get better for most of the world, but a series of tipping points could drastically alter global prospects, according to the latest State of the Future report by the Millennium Project. Half the world is vulnerable to social instability and violence due to rising food and energy prices, failing states, falling water tables, climate change, decreasing water-food-energy supply per person, desertification, and increasing migrations due to political, environmental, and economic conditions, it says. “With nearly 3 billion people making USD 2 or less per day, long-term global social conflict seems inevitable without more serious food policies, useful scientific breakthroughs, and dietary changes," the Millennium Project says. “However, advances in science, technology, education, economics, and management seem capable of making the world work far better than it does today."

I've highlighted the word "management" from this quote because it stood out to me. It's not often that you see management listed among disciplines such as science, technology and education. It's good to see that while applying macro-economic theory and improving telecommunications infrastructure, people are starting to realize that it will take skilled managers, likely from the private sector, along with government officials and NGOs to make development programs work. Let's hear it for the MBAs!

A Crazy Summer

I am just back from a two week trip to Morocco that was fantastic. The country was amazing, the people friendly and I was so checked out that I missed the vast majority of the stock market craziness that has everyone in a panic.

Coming back relaxed and refreshed I took a deep breath and entered my overflowing email in-box to catch up on the latest happenings in the world of technology and social entrepreneurship. Once of the many newsletters pointed me to a blog by sustainability consultant Andy Savitz, author of a book called the Triple Bottom Line. Though I have not yet read his book (it's summer which is not business book season!) I thought his recent blog about his family trip to the Mall of America (MOA) as a great metaphor for the struggles we're facing today in the US as we face the energy crisis, environmental degradation, the recession, etc. In a well written, humorous piece highlighting his visit to MOA, home of "America’s Biggest Indoor Water Park" Savitz clearly shows the tension between being completely blown away by the amazing (and really fun!) engineering feat that pumps a gazillion gallons of water through endless tubes, pools and slides to entertain us, and feeling a tidal wave of embarrassment about the energy use (waste?!) and consumption that MOA so proudly displays 24 hours a day, 365 days per year.

It's this struggle between what we want and enjoy in the short term vs. what we want for our future that is shaping our energy and other policies today. Let's hope that this summer's craziness makes a "big splash" of an impression on us as we consider our decisions on how we work, play and live.

Don't Forget Your Greenwash When Sporting Your Red, White & Blue

There's no doubt that people are really starting to pay attention to and in many cases really care about the environment - funny what $4/gallon gas can do to sway people! But among the real efforts to make positive change is a good bit of "greenwashing." I'm sure at some point this holiday weekend I'll hear about "natural" coals roasting organic vegetables and farm raised beef on the BBQ, while watching non-toxic fireworks explode in the sky. To this point, a very funny post was submitted to treehugger called "5 steps to effective greenwashing."

I wonder what this person will think of Waste Management's beta launch of "greenopolis.com" which they are calling "the first green, interactive, collaborative, educational website to bring together communities, environmental organizations, universities, foundations and corporations to reward individuals for making incremental positive environmental changes." I mean who better to build a site like this than the guys who collect your trash?! To their credit, they've partnered with several real environmental groups, but I have a hard time swallowing their claim that they an environmental company.

Who Says There's No Such Thing As A Free Lunch?

Since we're all about to focus more on fireworks and BBQs than work, here's something from the lighter side. Last week in Crain's New York I read about the new "loyalty" program put in place by famed restaurateur Danny Meyer of the Union Square Hospitality Group. Customers who shell out big bucks to throw a wedding, bar mitzvah, or corporate event through the catering company earn points which can be redeemed at places like The Modern (at the Museum of Modern Art aka MOMA) or Eleven Madison Park. Ok, let me get this straight, if I drop $25,000+ to make junior a man I get lunch for two at Gramercy Tavern?! This sure makes 50,000 miles on United to fly round trip NY/PDX look pretty reasonable--even with the $25 fuel surcharge!

Sustainable Profit and Social Returns Under "OneRoof"

I recently learned about a for-profit company called OneRoof that is building franchises (and company owned stores) throughout India with the goal of delivering "essential services" to the rural poor.

"We identify, train and provide ongoing business support to entrepreneurs who run their own OneRoof stores. A typical OneRoof franchisee builds his or her business around our central IT service—internet access, computer courses, printing, digital photography. The franchisee then provides valued-added services such as eLearning/distance learning, financial services, e-ticketing, and eventually employment generation that can allow talented young people the choice to stay in their rural communities."

This is a great idea that not only creates jobs in rural areas (where the are often few is any non-agricultural opportunities), but also educates people and provides a real opportunity to move a step up from the bottom of the pyramid - a kind of "micro-franchise" if you will. I hope their success in India will be a model for other developing communities around the world.

Web 2.0 vs. Web 3.0

There's quite a bit of talk about Web 2.0 and as a result there is of course now talk about Web 3.0. I recently came across a definition of the Web 2.0 platform on Gimme The Scoop that was pretty straightfoward: "Web 2.0 is a term describing the trend in the use of World Wide Web technology and web design to enhance creativity, information sharing, and, most notably, collaboration among users. These concepts have led to the development and evolution of web-based communities and hosted services, such as social-networking sites, wikis, blogs, and folksonomies." Ok, so "folksonomies" is a bit of a silly word but the basic idea of "collaboration and community" is well described and that's what makes Web 2.0 so much more interesting than 1.0.

The tricky part is trying to understand Web 3.0 because definitions like "an overlay of scalable vector graphics - everything rippling and folding and looking misty - on Web 2.0 and access to a semantic Web integrated across a huge space of data" just doesn't do it for me. Neither does this: Web 3.0 "is perceived as part of digital media contribution to the evolutionary path to artificial intelligence that can provide access to information driven by laws of mathematical probability." Once this moves beyond the domain of the tech-heads and the marketing and advertising folks better understand 3.0, I'm sure we'll all start to see the light as well. For those of you want a more detailed explanation you can read/view more of what some "digital ethnographers" are saying.

Suffice it to say it may be like other media we've encountered, we'll know it when we see it!

Obama Victory Celebrated in Africa

Global support for Barak Obama is starting to bubble up and this is clearly the case in Africa, particularly in Kenya, where Obama's grandmother was born. A CNN video shows people in Kibera slum celebrating (see an earlier blog post for a video clip that highlights life in Kibera) the presumptive nominee and I've heard from my friends in Rwanda that they too are thrilled to see an African American have the chance to be President of the United States.

It is indeed pretty amazing that despite plenty of evidence that the problems of racism in the US are a long way from being "solved," that millions of Americans can still come together behind the enthusiasm and energy of Barak Obama. We'll have to wait and see just how 'White" the House will be in November.

Sadly, another one bites the dust!

My last post was about knowing when to pull the plug - sometimes the plug is pulled for you. This seems to the case for the valiant outdoor apparel company, Nau, who according to a heartfelt post on Treehugger is forced to close their doors due to a lack of venture capital. This company tried to do it all in the sustainability space:

• Apparel that adhered to the credo of ‘Beauty, Performance and Sustainability’
• Multipurpose apparel equally suited to weekend in the hills or a night on the town
• No external logos or branding on apparel
• Impressive tailored designs and construction detailing
• No paper catalogues
• LEED Gold standard offices and retail shops
• Purchase of Forest Stewardship Council certified timber for fittings
• Third Party verification of workers rights and conditions through Verite
• Restricted Substance List of materials not to be used in products
• Over 30 custom designed fabrics, using only recycled polyester, certified organic cotton, PLA corn, lambswool or merino wool
• Purchase of equivalent yield conventional corn to offset any GMO corn that might be in their PLA
• Use of high grade componentry like RiRi zips and Prym fasteners
• 5% of purchase price donated to customer-directed not-for-profit organisations
• Webfront retail stores promoting direct-from-warehouse-to-customer shipping
• Recycled content flat pack shipping bags, instead of space wasting boxes
• Carbon offsets for shipping and corporate travel
• Renewable energy certificates (wind and solar) for office and shops
• Acting as an agent for change through their blog
• Sponorship of environmentally and socially oriented online videos.
• Customer prizes and Flickr postings for photos of the clothing in action.

They didn't compromise their values and as a result they engendered some great customer loyalty. They also ended up with pretty high prices for products that are "non-essential" in a market that is teetering on a recession. Does this mean they should have compromised? Maybe but then maybe they would have been like everyone else and their lack of differentiation would have taken them down. It's tough to know. Either way, retail is risky. "Sustainable" retail is really risky. Without high volume prices become prohibitive for most people and with the VC crowd being much more cautious with their pool of cash these days there was just no way to keep operations afloat. I have no doubt that the team involved go on to try something equally interesting, but it may be some time before another Nau gets off the ground. In the meantime, let's hope established players like Patagoina continue to have both financial and social & environmental successes.

If at first you don't succeed...pull the plug!

Yesterday the Wall Street Journal ran an article about not giving up when you believe you've got a talent that the rest of the world hasn't recognized yet. They gave some classic examples of people we'd consider at the top of their fields who faced loads of early rejection. Julie Andrews as told she wasn't photogenic enough, JK Rowling went to a dozen publishers before a small firm "took a chance" on Harry Potter, Walt Disney was fired from a newspaper for "a lack of imagination," Michael Jordan was cut from his high school basketball team, even the Beatles were turned down by Decca Records because they "didn't like the sound" of the group.

In America we're fortunate that a dominant cultural theme is "you can be what you want to be" and both girls and boys are encouraged to go after their dreams, to "try and try again" as necessary. This is of course a positive message and there's quite a bit to be learned from the fact that it took Thomas Edison more than 1000 tries to successfully develop the light bulb (he calls it 1000 improvements!). That said, there is also something important about knowing when to pull the plug and it is perhaps here that there is less guidance, particularly for women.

When I started EDImports in 2003 I didn't know if it would be successful in the traditional bottom line sense, though I was pretty sure I could make a positive impact on the lives of people living in developing countries. I had specific goals for both the financial returns and the other elements of the business. At the end of four years I looked at the numbers and made the rational (i.e., non-emotional) assessment that I could work for years with very little improvement in the numbers despite my best efforts. Without significant external capital I did not see a clear path to growth and I felt if the business was not financially sustainable for me, as well as for the women I was hoping to "aid through trade," then it was not what I would term a "success." I did not, however, feel like therefore I had "failed." On the contrary, I thought many things had gone very well and that making the decision to close the business and move on to something else--bringing with me all that I had learned--was in fact trying again and not quitting.

In business, and particularly entrepreneurship, there are many wins and many losses along the road. Too often, people don't realize that you can't get back the sunk costs and that these costs should not be factors in deciding to stick with what you started. I think this is more often the case for women, who often become more emotionally attached to their work, and who perhaps feel more pressure to not be seen as quitters. Perseverance is an important lesson to teach young people (and to remind us older folks) but rationally assessing your situation and making the decision to move on is also an important lesson that should not be forgotten. Often it is more about finding the right lessons in what you have done in the past and effectively using (and marketing!) that learning to make your future endeavors even more successful. For me that has meant closing EDImports and opening EDImpacts, a consultancy that leverages what I've learned for the past four years. So far, the strategy is working--even if the new website isn't up yet!

Does Anybody Know It's Earth Day?

With all the green marketing, CSR, "WE" campaign marketing going on you'd think that Earth Day 2008 would warrant at least a mention in the mainstream media. While there are some who think we've reached the proverbial tipping point in everything "green," others are just not buying that consumers care that much. If the Wall Street Journal, New York Times and CNN.com are any indications, these doubters may be right.

Earth Day may appear on the calendar but it didn't make a single headline in the three media outlets mentioned above (Intel ran an ad below the fold on the Journal next to an article on planting veggies in your yard instead of grass). This despite the Earth Day Network's claim that "Earth Day 2008 is expected to be the biggest yet! From Tokyo to Togo, to our flagship event on the National Mall in Washington, DC and 7 other U.S. cities, we will be galvanizing millions of people around the world behind a Call for Climate, our global warming action theme. Hundreds of events are popping up all over the globe and April 22 should be a most memorable Earth Day. We will be asking people to call their government and urge significant and equitable action on climate change."

I guess Primary Day in PA is a bigger story....

Who Knew Fair Trade Could Be Funny?

John Oliver the sometimes correspondent on The Daily Show (one of my favorites!) had a recent special on Comedy Central where he hilariously and appropriately called out what should be done about "Unfair Trade."

Check out the clip!

More Good News for Higher Education in Developing Countries

Plenty has been said and written about the importance of education--especially for women--in fighting poverty. In Africa politicians often tout that education is free and open to all. The truth is that while there may not be tuition charges to attend primary schools, there are often other fees like school uniforms and books that make it impossible for families to afford. After 8th grade things get even worse with few free secondary schools and very limited university options. As for post university education, most Africans lucky enough to access it must do so by earning scarce scholarships to come to the West. With the introduction of the Goldman Sachs 10,000 Women program however, things may be changing for the better.

The Goldman global initiative--to which they are committing $100MMM over the next 5 years--will provide 10,000 women, mainly in developing and emerging markets, with a business and management education, through shorter and more feasible certificate programs and in limited cases full MBA opportunities. "The initiative will invest in a largely untapped yet significant resource – the exponential power of women as entrepreneurs and managers around the world."

Importantly, 10,000 Women will incorporate business schools in Africa, India and South America as well as Europe and North America. They will also seek to better understand and improve local conditions that often inhibit women from pursuing business and entrepreneurial opportunities. To learn more about the program, check out the video of the launch event that took place at Columbia University earlier this year.

Theoretical Physicist Makes Very Real Wish For Africa

I've mentioned TED before - which in a nutshell a forum for bringing together an incredible group of thought leaders from all parts of the world and every imaginable discipline. Each year they have the TED Prize which "was created as a way of taking the inspiration, ideas and resources that are generated at TED and using them to make a difference. Although the winners receive a prize of $100,000 each, that's the least of what they get. The real prize is that they are granted a WISH. A wish to change the world."

This year the prize was awarded to theoretical physicist Neil Turok whose dream is to give smart, talented, young Africans starved of opportunity the chance to be "the next Einstein." He spearheaded the building of the African Institute for Mathematical Sciences (AIMS) and challenges the TED community with his "wish" to expand on this successful model by opening 15 new AIMS centers across Africa in five years.



Perhaps the next wish will be that once these centers are thriving and there are thousands of African scientists, they will be able to do their post educational work on the Continent itself.

Check out the "SoCap" Index

Recently launched by Xigi with support of Good Capital, is a tool they call the SoCap Index, or for those not so much in the know, Social Capital Index (SCI). SCI was launched to track all kinds of investments that are happening in the broadly defined social capital market. Within the Index, and of particular interest to companies looking for funding of this nature, or investors looking for somewhere "good" to put their money to work, is the DealSpace.

In their words, "the DealSpace portion of the SoCap Index is a timely tracking of investments in the social capital market, including social enterprise (health, education, and workforce development), fair trade, digital inclusion, and some clean tech and microfinance investments. It includes investments into social funds and syndicates as well as investments gathered from angel investors and relevant foundations by social entrepreneurs." It's a non-searchable PDF report at this point but they intent to make more interactive in the future. Regardless of format, they strive to become a reliable, objective third-party database of both money in and money out in the space and track both equity and non-equity (debt, grants, etc.) investments. In the future, they also hope to list companies who are seeking investment but who have not yet closed.

I for one am no only glad to find these tools but am also encouraged that more SoCap deals are actually getting done!

Good thing International Women's Day isn't March 20th!

International Women's Day is March 8 and countries around the world will be celebrating by honoring women in many different ways. In Turkmenistan, the president, Gurbanguly Berdymukhamedov, approved a measure to grant every woman in the country 200,000 manat ($10) as a "sign of respect." Women's Day had gone unrecognized under the former president because he saw it as a tie to the the old Soviet regime, so this new approach is definitely a step in the right direction. Concerning, however, is the second part of Berdymukhamedov's plan which rewards women who give birth to eight or more children! Eight seemed like a pretty random number so I am guessing it ties to the fact that Women's Day is the 8th - good thing it's not the 20th!

The so-called reward for having all these children is a one time $250 payment and lifetime access to free utilities, public transportation and dental care. Since most utilities are already subsidized and transportation is extremely inexpensive (gas is about $0.08/gallon), this pretty much equates to $250 and dental care. Given an overall population of about 5-6mm people, we can estimate about half are female. Assuming only a third come forward for their $10 and many fewer for the one time payment we can assume that about $1B will be spent on this plan. That's a lot of money that could be invested in education, women's health, micro businesses, and the like. From what I've seen from my short visit, that sort of investment would do a lot more for the development of the country and trying to spur a baby boom.

Carpets and Crafts

I was not in Turkmenistan for tourism but rather to help women (and a few men) artisans better understand Western markets so they could possibly sell their handmade goods to wholesale buyers in the US. I traveled through the country delivering a workshop called: “What US Buyers Look For” in products and in export partners, which covered Internal Business Issues: Product Development, Capacity Management / Quality Control, Pricing, Shipping; and External Business Issues: Marketing, Emphasis on Fair Trade, Communication. This is a workshop I’ve also given in Kyrgyzstan as well as countries in Africa, and while there’s definitely more information presented than can be reasonably absorbed in a day or two, it often plants seeds for what can be accomplished in the future.

Women with quite varied backgrounds and skills came together in the capital as well as small villages in the countryside to hear me talk about quality control, prices of competitive products and the critical importance of marketing their goods with a story that Western consumers can use to better understand Central Asian people and culture. This last point was one that was really resonated when I showed examples from India, Guatemala, Bolivia, Mali, Rwanda and other places around the world.

While much of the truly traditional clothes and cultural items are not easily translated to Western markets, by taking elements of these items there is certainly the opportunity to offer products that would be readily accepted. In particular, those artisans who incorporated old fabrics, patterns and embroidery with new styles and designs have a real opportunity. And if its carpets you’re after, Turkmenistan has some incredible choices – though they are not easy/inexpensive to export.

Unfortunately with the language barrier, a lack of regular and easy access to the Internet and a lack of clarity on the ability to ship commercially without hassle it will take a strong coordinator at the country level for most buyers to be able to access this market. The good news is that there is a regional Central Asian organization that is already in place and may be able to lend some more support to Turkmen artisans. It will require, however, that these artisans come together and cooperate more than they are currently used to doing. One big benefit of my workshops was that women started to realize that they can accomplish more by coming together than by worrying about competition with each other. This is not common for them as they are generally competing for scarce resources and thus don’t really have a culture of working together outside the family or perhaps neighborhood unit. The fact that an “expert” actually came to their market—and their villages—was also greatly appreciated as these sorts of activities are typically held in neighboring countries making it prohibitively expensive for artisans to attend.

Changes will not come overnight, but they will come and if I can have played a small role in helping this change come about then it will have been well worth the trip.

Two Weeks in Turkmenistan – Cold Place, Warm People

I’ve just finished a two week trip to this relatively unknown “stan.” In what can best be described as a country of contrasts I landed and deplaned on the tarmac at 3am and walked outside for several minutes in the freezing cold and finally entered the often unheated airport—despite the vast state controlled natural gas reserves. When the sun rose I saw the astonishingly large white marble capital city of Ashgabat that somehow recalled a weird combination of Washington DC and Las Vegas. The skyline is filled with huge white marble edifices adorned with enormous pictures of the Turkmenistan President (both current and past). The piece de resistance is the “neutrality arch” which one can enter and ride to the top (for 15 cents—note the largest banknote, 10,000 manat, is worth 50 cents!) via an elevator for an expansive view of the city. The top of the arch is adorned with a giant gold reproduction of the first President of the country and it literally spins with the rotation of the sun so that the leader is always being shined upon.

In addition to the myriad public buildings, palaces, libraries and even a “wheat museum” (a massive marble rotunda complete with a giant golden stalk of wheat on top) there are what seems like countless shining, new apartment buildings similar to what one might expect on Lakeshore Drive in Chicago or the Westside Highway in NYC. Unfortunately, hardly anyone can afford to live in them.

Once you realize that few people can take advantage of this fairytale city it quickly feels cold and deserted (it’s estimated that 600,000 of the 5MM country residents live in the capital) and yet the people of Turkmenistan could not be warmer or more welcoming.

Each time I visited someone in their humble yet warm and inviting homes I was showered with hospitality. I easily put on 5lbs eating endless plates of plov (rice with onions, carrots and meats that range from beef to turkey), countless loaves of the local round flat bread, and numerous bowls of candy—which is curiously put out before the main meal?! Though language was often a complete barrier, the locals always made me feel welcome and often showered me with handmade gifts along with the food, and of course a never ending cup of “chai” (local green tea) which is the staple beverage of young and old alike.

The good news is that as a whole Turkmenistan is slowly plodding toward a more open economy and perhaps someday these generous people will have a better chance to take advantage of the riches this “stan” offers. Regular citizens can now access the Internet, albeit in fairly controlled environments that are open only during business hours, have low connectivity, and in many cases require making an appointment. The Winrock offices (the organization that sponsored my trip), however, had recently installed wireless (!) and while it was not lightening fast, I’ve certainly experienced worse. The 11pm curfew I had read about has seemingly been lifted in the capital (at least around the pubs frequented by ex-pats) and I never felt as though I was being followed or monitored though I had been told that might be the case. My “private” hotel near the office was lovely though the state run places were pretty grim.

I don’t think Turkmenistan will top the backpacker list anytime soon (especially since a visa is still difficult to come by), but a trip here in spring or fall when the temperature is more agreeable can offer some very interesting sites, including the ancient city of Konye-Urgench which I had
the pleasure of visiting albeit on a cold and mostly gray day.

I understand a trip through the desert, on what I’ve been told are some of the best horses in the world, is also quite rewarding. My fantastic guide, host, translator and now friend, Mahri also tells me that the Balkan region along the Caspian Sea is quite lovely in the summer. The Turkmen Hamptons I’m sure!

Off to Turkmenistan

Equipped with a warm coat, my brand new passport and uncreased $100 bills, I'm off to Turkmenistan today! I'll also have a stopover in Turkey where I'll have the better part of a day to do some quick sight-seeing. For those of you who are not familiar with Turkmenistan, it became independent from the former Soviet Union in 1991 and is North of Iran and Afghanistan (the country in yellow below).

I'll be giving a marketing workshop to artisans interested in selling their wares to the US. Should be a fascinating trip and I hope to have ample Internet access and make a few posts.

Big Step for Small Country

Nestled among the negative headlines of Mauritanian suicide bombers and continued unrest in Kenya was a bright spot of news from the Continent as Rwanda announced the opening of its first stock market. As reported by the BBC:

The central bank of Rwanda has launched its own securities exchange in the country's capital, Kigali.

Initially it will deal in corporate and treasury bonds, but the Bank says it will include other products such as shares as the operation develops. Upon opening the Rwanda Capital Market, President Paul Kagame described it as a milestone for the nation. The hope is that the exchange will aid the economy, which has yet to bounce back after the 1994 genocide. "It's an important achievement which will provide the business community with a second option to financing that is long term and which will inevitably add great value to our economy," President Kagame said.

Earlier this evening I had the pleasure of hearing a talk given by Roben Farzad, the author of the December Business Week cover story 'Can Greed Save Africa' who noted that in the wake of what's happened in Kenya in the past few weeks, Africa needs a "shining example" of positive economic development based on investment. Perhaps the Rwandan stock exchange will be the economic spark of a growing financial bonfire in East Africa. Let's hope so!

Gates on Creative Capitalism

Bill Gates made a rousing and speech in Davos yesterday that called on companies and individuals to think more creatively about how to use capitalism to help the very poor. His core theme is that capitalism works because the potential for returns leads to innovative approaches to solving problems. The catch, however is that this system really only works for those people wealthy enough to access these innovations once they are created. Gates argues that we need to look at ways that capitalism can benefit the poorest people as well—we need to "refine the system."

As Gates sees it, "there are two great forces of human nature: self-interest, and caring for others. Capitalism harnesses self-interest in helpful and sustainable ways, but only on behalf of those who can pay. Philanthropy and government aid channel our caring for those who can't pay, but the resources run out before they meet the need. But to provide rapid improvement for the poor we need a system that draws in innovators and businesses in a far better way than we do today."

And to dissuade anyone from thinking that this is some kind of new age thinking, he invoked Adam Smith who wrote about the happiness that can be derived from helping others, and went on to point out that this sentiment was written before his famed Wealth of Nations.

While some take shots at Gates for only looking at "creative capitalism" after he had used "pure capitalism" to amass a fortune, shouldn't we be happy that a man with so much money and influence is so passionate about putting it to positive use?

FULL TEXT OF SPEECH BELOW

Thank you for that welcome and for the privilege of speaking at this forum.

This is the last time I will come to Davos as a full-time employee of Microsoft.

Some of us are lucky enough to arrive at moments in life where we can pause, reflect on our work, and say: "This is great. It's fun, exciting, and useful—I could do this forever."

But the passing of time forces each of us to take stock and ask: What have I accomplished so far? What do I still want to accomplish?

Thirty years, twenty years, ten years ago, my focus was totally on how the magic of software could change the world.

I believed that breakthroughs in technology could solve the key problems. And they do—increasingly—for billions of people.

But breakthroughs change lives only where people can afford to buy them—only where there is economic demand.

And economic demand is not the same as economic need.

There are billions of people who need the great inventions of the computer age, and many more basic needs as well. But they have no way of expressing their needs in ways that matter to markets. So they go without.

If we are going to have a serious chance of changing their lives, we will need another level of innovation. Not just technology innovation—we need system innovation.
That's what I want to discuss with you here in Davos today.

Let me begin by expressing a view that might not be widely shared.

The world is getting better.

In significant and far-reaching ways, the world is a better place to live than it has ever been.

Consider the status of women and minorities in society—virtually any society—compared to any time in the past.

Consider that life expectancy has nearly doubled in the past 100 years.

Consider governance—the number of people today who vote in elections, express their views, and enjoy economic freedom compared to any time in the past.

In these crucial areas, the world is getting better.

These improvements have been matched, and in some cases triggered, by advances in science, technology, and medicine. They have brought us to a high point in human welfare. We are at the start of a technology-driven revolution in what people will be able to do for one another. In the coming decades, we will have astonishing new abilities to diagnose illness, heal disease, educate the world's children, create opportunities for the poor, and harness the world's brightest minds to solve our most difficult problems.

This is how I see the world, and it should make one thing clear: I am an optimist.

But I am an impatient optimist.

The world is getting better, but it’s not getting better fast enough, and it's not getting better for everyone.

The great advances in the world have often aggravated the inequities in the world. The least needy see the most improvement, and the most needy see the least—in particular the billion people who live on less than a dollar a day.

There are roughly a billion people in the world who don't get enough food, who don't have clean drinking water, who don't have electricity, the things that we take for granted.

Diseases like malaria that kill over a million people a year get far less attention than drugs to help with baldness.

Not only do these people miss the benefits of the global economy – they will suffer from the negative effects of economic growth they missed out on. Climate change will have the biggest effect on people who have done the least to cause it.

Why do people benefit in inverse proportion to their need?

Market incentives make that happen.

In a system of pure capitalism, as people's wealth rises, the financial incentive to serve them rises. As their wealth falls, the financial incentive to serve them falls—until it becomes zero. We have to find a way to make the aspects of capitalism that serve wealthier people serve poorer people as well.

The genius of capitalism lies in its ability to make self-interest serve the wider interest. The potential of a big financial return for innovation unleashes a broad set of talented people in pursuit of many different discoveries. This system driven by self-interest is responsible for the great innovations that have improved the lives of billions.

But to harness this power so it benefits everyone—we need to refine the system.

As I see it, there are two great forces of human nature: self-interest, and caring for others. Capitalism harnesses self-interest in helpful and sustainable ways, but only on behalf of those who can pay. Philanthropy and government aid channel our caring for those who can't pay, but the resources run out before they meet the need. But to provide rapid improvement for the poor we need a system that draws in innovators and businesses in a far better way than we do today.

Such a system would have a twin mission: making profits and also improving lives for those who don't fully benefit from market forces. To make the system sustainable, we need to use profit incentives whenever we can.

At the same time, profits are not always possible when business tries to serve the very poor. In such cases, there needs to be another market-based incentive—and that incentive is recognition. Recognition enhances a company's reputation and appeals to customers; above all, it attracts good people to the organization. As such, recognition triggers a market-based reward for good behavior. In markets where profits are not possible, recognition is a proxy; where profits are possible, recognition is an added incentive.

The challenge is to design a system where market incentives, including profits and recognition, drive the change.

I like to call this new system creative capitalism—an approach where governments, businesses, and nonprofits work together to stretch the reach of market forces so that more people can make a profit, or gain recognition, doing work that eases the world's inequities.

Some people might object to this kind of "market-based social change"—arguing that if we combine sentiment with self-interest, we will not expand the reach of the market, but reduce it. Yet Adam Smith—the father of capitalism and the author of Wealth of Nations, who believed strongly in the value of self-interest for society—opened his first book with the following lines:

"How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortunes of others, and render their happiness necessary to him, though he derives nothing from it, except the pleasure of seeing it."

Creative capitalism takes this interest in the fortunes of others and ties it to our interest in our own fortunes—in ways that help advance both. This hybrid engine of self-interest and concern for others serves a much wider circle of people than can be reached by self-interest or caring alone.

My thinking on this subject has been influenced by many different experiences, including our work at Microsoft to address inequity.

For the past 20 years, Microsoft has used corporate philanthropy as a way to bring technology to people who don't have access. We've donated more than $3 billion in cash and software to try to bridge the digital divide, and that will continue.

But our greatest impact is not just free or inexpensive software by itself, but rather when we show how to use technology to create solutions. And we're committed to bring more of that expertise to the table. Our product and business groups throughout the world, and some of our very best minds at our research lab in India, are working on new products, technologies, and business models that can make computing more accessible and more affordable. In one case, we're developing a text-free interface that will enable illiterate or semi-literate people to use a PC instantly, with minimal training or assistance. In another we're looking at how wireless technology, together with software, can avoid the expensive connectivity costs that stand in the way of computing access in rural areas. We're thinking in a much more focused way about the problems that the poorest people face, and giving our most innovative thinkers the time and resources to come up with solutions.

This kind of creative capitalism matches business expertise with needs in the developing world to find markets that are already there, but are untapped. Sometimes market forces fail to make an impact in developing countries not because there's no demand, or because money is lacking, but because we don’t spend enough time studying the needs and limits of that market.

This point was made eloquently in C.K. Prahalad's book The Fortune at the Bottom of the Pyramid, and that's had a huge influence on companies in terms of stretching the profit motive through special innovation.

When the World Health Organization tried to expand vaccination for meningitis in Africa, it didn't go straight to a vaccine manufacturer. It first went to Africa to learn what people could pay. They found out that if they wanted mothers to get this vaccine for their babies, it had to be priced under 50 cents a dose. Then they challenged the partners to meet this price, and, in fact, Serum Institute in India found a new way to make the vaccine for 40 cents each. They company agreed to supply 250 million doses to distribute through public health systems over the next decade, and they are free to sell it directly to the private sector too.

In another case, a Dutch company, which holds the rights to a cholera vaccine, retains the rights in the developed world, but shares those rights with manufacturers in developing countries. The result is a cholera vaccine made in Vietnam that costs less than $1 a dose—and that includes delivery and the costs of an immunization campaign. There are a number of industries that can take advantage of this kind of tiered pricing to offer valuable medicine and technology to low-income people.

These projects are just a hint of what we could accomplish if people who are experts on the needs in the developing world would meet several times a year with scientists at software or drug companies and help them try to find poor world applications for their best ideas.

Another approach to creative capitalism includes a direct role for governments. Of course, governments do a great deal to help the poor in ways that go far beyond nurturing markets: they fund research, subsidize health care, build schools and hospitals. But some of the highest-leverage work that government can do is to set policy and disburse funds in ways that create market incentives for business activity that improves the lives of the poor.

Under a law signed by President Bush last year, any drug company that develops a new treatment for a neglected disease like malaria or TB can get priority review from the Food and Drug Administration for another product they've made. If you develop a new drug for malaria, your profitable cholesterol-lowering drug could go on the market a year earlier. This priority review could be worth hundreds of millions of dollars.

Another approach to creative capitalism is simply to help businesses in the poor world reach markets in the rich world. Tomorrow morning I will announce a partnership that gives African farmers access to the premium coffee market, with the goal of doubling their income from their coffee crops. This project will help African farmers produce high-quality coffee and connect them to companies that want to buy it. That will help lift them, their families, and their communities out of poverty.

Finally, one of the most inventive forms of creative capitalism involves someone we all know very well.

A few years ago, I was sitting in a bar here in Davos with Bono. After Asia and most of Europe and Africa had gone to bed, he was on fire, talking about how we could get a percentage of each purchase from civic-minded companies to help change the world. He kept calling people, waking them up, and handing me the phone. His projections were a little enthusiastic at first—but his principle was right. If you give people a chance to associate themselves with a cause they care about—they will pay more, and that premium can make an impact. That was how the RED Campaign was born, here in Davos.

RED products are available from companies like Gap, Motorola, and Armani. Just this week, Dell and Microsoft joined the cause. Over the last year and a half, RED has generated $50 million for the Global Fund to Fight AIDS, TB, and Malaria. As a result, nearly 2 million people in Africa are receiving life-saving drugs today.

What unifies all forms of creative capitalism is that they’re market-driven efforts to bring solutions we take for granted to people who can't get them. As we refine and improve this approach, there is every reason to believe these engines of change will become larger, stronger, and more efficient.

There is a growing understanding around the world that when change is driven by market-based incentives, you have a sustainable plan for change—because profits and recognition are renewable resources. Klaus Schwab runs a foundation that assists social entrepreneurs around the world, men and women who turn their ideas for improving lives into affordable goods or services. President Clinton demonstrates the unique role that a non-profit can play as a deal-maker between rich world producers and poor world consumers. The magazine Fast Company gives awards for what they call Social Capitalism.

These are not a few isolated stories; this is a world-wide movement, and we all have the ability and the responsibility to accelerate it.

I'd like to ask everyone here—whether you're in business, government or the non-profit world—to take on a project of creative capitalism in the coming year. It doesn't have to be a new project; you could take an existing project, and see where you might stretch the reach of market forces to help push things forward. When you award foreign aid, when you make charitable gifts, when you try to change the world—can you also find ways to put the power of market forces behind the effort to help the poor?

I hope corporations will consider dedicating a percentage of your top innovators' time to issues that could help people left out of the global economy. This kind of contribution is much more powerful than simply giving away cash, or offering your employees time off to volunteer. It is a focused use of what your company does best. It is a great form of creative capitalism, because it takes the brainpower that makes life better for the richest, and dedicates it to improving the lives of everyone else.

There are a number of pharmaceutical companies—GlaxoSmithKline in particular—that are putting their top innovators to work on new approaches to help the poor. Other companies are doing the same—in food, technology, cell phones. If we could take the leaders in these areas as models, and get the rest to match them, we could make a dramatic impact against the world's inequities.

Finally, I hope that the great thinkers here will dedicate some time to finding ways for businesses, governments, NGOs, and the media to create measures of what companies are doing to use their power and intelligence to serve a wider circle of people. This kind of information is an important element of creative capitalism. It can turn good works into recognition, and ensure that recognition brings market-based rewards to businesses that do the most work to serve the most people.

We are living in a phenomenal age. If we can spend the early decades of the 21st century finding approaches that meet the needs of the poor in ways that generate profits and recognition for business, we will have found a sustainable way to reduce poverty in the world. This task is open-ended. It can never be finished. But a passionate effort to answer this challenge will help change the world.