A Neighborhood in Los Tangeles

In the past several days, we’ve been learning about one of the most challenging topics: poverty. There’s no easy and fast solution to it, and every country, every city in the world tries to find their own way of dealing with it. It’s a part of our society, it needs definition, and it needs to be addressed. Another topic in the readings – social entrepreneurship – comes in handy when discussing the topic of poverty and homelessness.

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Ten years ago a group of scientists were coming back from a big conference about Social Entrepreneurship and Poverty in the city of Los Tangeles. Very famous people happened to be in the same bus: C. K. Prahalad, Christopher A. Le Dantec, W. Keith Edwards, Dean Spears, Roger L. Martin and Muhammad Yunus.

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They were on their way to the airport to fly home when their bus got broken. It stalled and wouldn’t start. The battery seems to be dead!

Scientists tried to use their phones to ask for help, but there was no connection.

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“How is it possible? We are within the city limits – and no connection?” – they asked the only local person there – the driver.

He answered: “Oh, yes, this is the poorest part of the town. 2 years ago the only wireless network operator left this area – because nobody could afford to pay phone bills, and this is not the area other people can happened to be on purpose. Nobody comes here, because everybody is scared of poor and homeless. But we need to find a way to fix our bus, so we have to ask for their help.”

Scientists looked around them. It was clear that the area is very poor and nearly abandoned.

Christopher A. Le Dantec, W. Keith Edwards didn’t want to go and talk with the people directly, they offered to try to find some kind of social organization to talk through them, but nobody listened to them, everybody wanted to just catch their flights and get home.

They were walking around for 15 minutes trying to find people to ask for help, and finally came to the local market with lots of people. Right, it’s Sunday – the market day. Everybody was looking at them, because they looked very different from locals.

It was clear that people here are actually hard workers, but are still were very poor. In the group, there was the scientist who did research on this interesting phenomenon. His name was Dean Spears. He shared his insights with everybody:

Can you imagine how many hard decisions people have to do here, shopping on this market? They don’t have much money, but they need to feed their families.

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Poverty appears to have made economic decision-making more consuming of cognitive control for poorer people than for richer people. Poverty causes difficult decisions, which deplete behavioral control.

Poverty is depleting because it changes the consequences of decision-making. The theory of ego depletion proposes that willpower is limited, and is consumed by resisting temptation or inhibiting behavior.

Economic decision-making had negative effects on performance or behavior when participants were poorer. This may be because for poorer participants, decisions required more difficult trade-offs, and were more depleting of cognitive resources.

If, as the lab experiment suggests, even routine food decisions are costly and difficult for the very poor, then their depleting effect is more inescapable.

“Bad” decision-making by poor people may undermine support for anti-poverty programs and policies for two reasons: deservingness and effectiveness. Understanding how poverty influences decision-making and behavior is important for both of these reasons.

Many offers of tempting purchases that are easily affordable for richer people require a poorer person to use willpower and save their money instead. If willpower is limited, and if a poorer person can afford less indulgence, then poverty will deplete self-control when the poor face expensive temptation.

Even a poorer person with the same amount of willpower as a richer person must resist temptation more often.

it is cognitive control — which is the process producing both inhibitory willpower and attention — that is the key limiting constraint.

Everybody agreed that this theory sounded right.

Right in the moment Mr. Spears finished his story they had reached the table where the owner of the Market sat. Scientists introduced themselves and asked for help. The owner made a sign to everybody. The whole market stopped doing what they were doing and agreed to help.

They came back to the bus and pushed it, and so the driver was able to start the bus and get everybody in.

Scientists thanked the local people and jumped into the bus. All the way back home they thought about this accident, and they were very grateful to the people from this very poor neighborhood. Soon after getting back home, they jumped on an online call to discuss how they could help those people get out of poverty.

Christopher A. Le Dantec started:

Thanks everybody for sharing the desire to help those people with us. I am sure that it all needs to start with research. We have already done the research of the role of technologies in homeless people’s lives, and it’s huge and more important than one could imagine! Poor and homeless often struggle with technology, but they really need it.

Let me tell you a bit about our research. We were performing research on homeless population, but it still can be very insightful even if we don’t talk about homelessness exclusively.

We discovered a social phenomenon of information poverty — a dearth of access to useful information resources. But at the same time there is another problem – overwhelming by information.

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One of the main goals of using technology is staying connected to family members and friends. And mobile phone is the best way to do it. The cell phone is also a valuable identity management tool for the social value it provided. They talked about the desire to not appear homeless, about access to information, social networks. Can you imagine their lives without mobile connection?

We believe that thoughtful technological interventions can be deployed as a part of the larger effort to reduce homelessness and help the most at-risk members of our society.

However, every area, every community is very unique, and we can’t just extrapolate our knowledge. Let’s go there and see whether they’re having these struggles!

Keith Edwards continued the conversation:

We believe that co-design is the method we should use in this case as well. We also believe that we should bring interactive experience and technologies to a wider public for participation, expanding the boundaries of inclusion, and answering the siren song of technology as instigator and mediator of social and political revolution. Democratizing technology however, goes beyond simply increasing the role of technology users and involves bringing different social groups into discourse about technology, its place in society, and its potential for enabling actions, facilitating connection, and providing access to information. We believe that they need technology – but we need to think carefully how to create something they can easily integrate in their lives. To do that we need to design “with” them not “for” them.

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We should create for small homeless or poor communities and not for all the homeless in the world. Homeless DO understand mobile phones as a technology!

For example, one we have created a product for a homeless shelter – CRM (Community Resource Messenger) for better communication between 2 groups of people – homeless and care providers – and it was a great success.

Everybody supported the idea. Christopher A. Le Dantec, W. Keith Edwards and a group of other scientists came back to that same neighborhood in the city of Los Tangeles. They spent 2 months ideating and co-creating with the people of the neighborhood, and came back with the insights that they were able to confirm:

Yes, that’s true, they haven’t had cellular connection for more than 2 years! However, almost everybody has a phone there, even if it’s very old, but you can’t really do anything with it. They are familiar with the technology! It’s the wireless network operator who left; they were very traditional and couldn’t figure out a way to make a profit in this area.

  • Sure! – said Mr. Prahalad, he was very excited. He continued:

Guys, I know you all are very charity-oriented here and my idea will not be popular, but I have to say: stop regarding the poor people as victims and start eyeing them as consumers. For decades, corporate executives at the world’s largest companies have thought of poor people as powerless and desperately in need of handouts. But turning the poor into customers and consumers is a far more effective way of reducing poverty.

There are 2000 people in that area, it’s incredibly hard for them to interact with the global economy without their phones being able to connect them with others.

Perhaps the greatest misperception of all is that selling to the poor is not profitable or, worse yet, exploitative. Selling to the world’s poorest people can be very lucrative and a key source of Growth for global companies,even while this interaction benefits and empowers poor consumers.

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We need a way to sell them mobile connection for an affordable price for them! It requires some work, but I’m sure there is a way to make it still profitable. B-Mobile will cry!

Mr. Muhammad Yunus, the most experienced person in social entrepreneurship had something to say here:

I do have another plan. I believe this is an amazing area for social entrepreneurship, not for typical entrepreneurship. Research has shown that, if managed strategically, CSR (corporate social responsibility) projects can indeed pay off, both socially and financially. And I think we can make it work in this case.

Think about the social business concept: a self-sustaining company that sells goods or services and repays its owners’ investments, but whose primary purpose is to serve society and improve the lot of the poor. In organizational structure, this new form of business is basically the same as profit-maximizing businesses: it is not a charity, but a business in every sense.

There are some similarities with conventional business model innovation:

  1. Challenging conventional wisdom and basic assumptions
  2. Finding complementary partners
  3. Undertaking a continuous experimentation process.

And some specificities of social business models:

  1. Favoring social profit-oriented shareholders
  2. Clearly specifying the social profit objective

I would not be so enthusiastic about possibility to hope on typical entrepreneurship in this strategical question. With our rich experience of social entrepreneurship we can do it by ourselves.

We should ask the opinion of our theoretical expert in entrepreneurship, social entrepreneurship and social activism, Mr. Roger L. Martin.

Mr. Roger L. Martin has shared his thoughts:

I agree with Mr. Muhammad Yunus, I think we should find a way for it to be social entrepreneurship. From 3 options we have: entrepreneurship, social entrepreneurship or social activism – this is the best one in this particular case. Where entrepreneurs have money and extra-profits as a goal, social entrepreneurs are driven by altruism, while still keeping it profitable.

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We define social entrepreneurship as having the following three components: (1) identifying a stable but inherently unjust equilibrium that causes the exclusion, marginalization, or suffering of a segment of humanity that lacks the financial means or political clout to achieve any transformative benefit on its own; (2) identifying an opportunity in this unjust equilibrium, developing a social value proposition, and bringing to bear inspiration, creativity, direct action, courage, and fortitude, thereby challenging the stable state’s hegemony; and (3) forging a new, stable equilibrium that releases trapped potential or alleviates the suffering of the targeted group, and through imitation and the creation of a stable ecosystem around the new equilibrium ensuring a better future for the targeted group and even society at large.

The social entrepreneur should be understood as someone who targets an unfortunate but stable equilibrium that causes the neglect, marginalization, or suffering of a segment of humanity; who brings to bear on this situation his or her inspiration, direct action, creativity, courage, and fortitude; and who aims for and ultimately affects the establishment of a new stable equilibrium that secures permanent benefit for the targeted group and society at large.

So we should find another, better way to bring the phone connection back to this area and make it in our unique way.

The scientists worked together and came up with an idea that had the poor population in the neighborhood in mind, but was still sustainable and didn’t need to rely on donations.

They used new technology – a self-sustainable hot air balloon that flows in the air and picks up the connection from the closest cellular tower, expanding the connection further, enough to cover the neighborhood.

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The hot air balloon didn’t cost too much and wasn’t hard to maintain, and the costs were easily covered by an extremely modest monthly payment that every person could easily afford.

They then tried this brilliant idea in other neighborhoods and towns that have little or no cellular connection, and it worked well! Then scaled it up to cover hundreds of cities, bringing this social entrepreneurship project to success.