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Innovative solutions

Max Zander / db
March 28, 2013

Eradicating extreme poverty is one of the UN Millennium Development Goals established in 2000. Social entrepreneurs can help realize the ambitious goal ahead of the 2015 deadline.

Two hands clasped Symbolbild Entwicklungshelfer, Entwicklungshilfe,
Image: Andreas Wolf/Fotolia

"We want to prevent people from going unnecessarily blind because of cataracts," said Javier Oykhusen. Two years ago, the former investment banker returned to his native Mexico City, where he and a friend founded the Sala Uno health center. Many people still unnecessarily lose their eyesight in the Mexican capital as a result of inadequate information and a lack of medical care.

Oykhusen, 32, and his partner developed a business model that drastically reduces costs for surgery. In the two years since the Sala Uno center opened, doctors have restored 4,000 patients' vision. The team of doctors and engineers is not only a blessing for people in danger of going blind, Oykhusen said, but for their families, too, "Many patients are a burden on their families and not able to contribute much to the country's development."

Alternative models

Paul Collier, a professor of economics at Oxford University, researches mass poverty: why almost a quarter of the world's population lives in extreme poverty and how to help them. Collier is convinced social entrepreneurship could turn out to be the best solution in the fight against global poverty.

Paul Collier Copyright: imago/Stephan Görlich
Social entrepreneurs could be key to eradicating extreme poverty, Collier saidImage: imago stock&people

The economic expert, however, is also critical of aid organizations' approach. Collier said the danger is that the countries in question will not learn to handle their problems independently. Collier said aid organizations usually provide financial support and reconstruction for a limited time only.

"Once the organization leaves the country, it might quickly revert to the exact same situation that existed before the mission," he said.

During his years as director of the development research group at the World Bank, he learned to be especially cautious where financial aid for developing countries was concerned. If you "simply shovel money into a system, you may be encouraging the leaders of a failing state," he said, adding that in some cases, such aid might serve to legitimize questionable action by a political elite not at all interested in change.

Motivation and growth

In contrast to NGOs, social businesses like Sala Uno give poor societies in developing countries the opportunity to care for themselves over the long term. Financially, social entrepreneurs are on their own. As well-intended as their missions may be, they can only function if they can secure the existence of the organization and its employees.

Motivation, revenue, jobs and growth are significant factors on the road to success. Growth is particularly important, Collier said. "Many NGOs only provide assistance on a small scale in crisis areas," he added, suggesting that large organizations in a position to help many people are needed.

Kenyan example

Kenya is an example for a country in need of change. The East African country's economy is weak and, apart from the coffee industry, Kenyan agricultural products are not competitive on international markets. The many small farmers mainly grow produce for their own needs.

Africa, people carrying huge sacks Copyright WFP/Marcus Prior
Some fear aid makes countries dependent on foreign supportImage: WFP/Marcus Prior

Haron Wachira's company Akili analyzed difficulties among rural populations in an effort to make farms more profitable. Many small farmers use 19th century technology to work small parcels of land and the crops they harvest often are not enough to survive on.

An IT specialist, Wachira developed strategies to fight poverty, including the installation of agriculture cooperatives. When villagers pool their fields and work together, they can sell their goods at a profit. As many as 500 farmers work in one agricultural area, concentrating on one single product. The size of the venture makes the difference between profit and loss, Wachira said.

The UN will likely miss most of the Millennium Goals it set to achieve by 2015. Progress has been slow in the fight against poverty, in particular in African countries; hunger, education and medical care are closely linked to poverty. Entrepreneurs with an eye on profits, growth and social progress could prove to be in a position to provide a step in the right direction.