Mobilizing Global Volunteers for Grassroots Innovations
International innovation networks preserve local know-how worldwide.
The streets of Africa are paved with new ideas. At least according to Haron Wachira, agricultural innovation consultant. He recommends beekeeping to prevent gorilla attacks, for example, and a shared brand to market the honey. Why we don't need umpteen Bill Gates in this world and would do well with just a few creative minds to develop business plans with village communities.
In Kenya it seems the telecommunications sector is bursting with business innovation right now while the agricultural sector is not. Why is there more innovation in telecommunications than in agriculture?
It's true that innovation is generally lacking in agriculture. Market failure is the reason. The logic of the free market is that good ideas result in profits. But in dysfunctional markets, even good ideas don't necessarily create profit, so people give up. Meanwhile, in the telecommunications sector the large mobile operator Safaricom Ltd. is operating in a well-structured market with scope for innovation and profit. Since they were established, people working from within Safaricom have found a very positive environment in which to grow innovation, such as for transferring money.
Definitely not! I see opportunities for innovation everywhere.
I'll give you an example: in Africa, almost every community eats yams, but almost nobody grows them – at least profitably. You can make flour or soup powder out of yams that keeps for a long time, you just need to know how to peel and dry them. So growing yams instead of the common maize would be highly profitable! This is a good example of a very simple business innovation. However, as soon as you increase your yam production, you are hit by a different problem: how to fund large-scale production and get the products into the market distribution chains.
You are the founder of Akili Holdings. According to its website, Akili promotes interventions along the entire value chain. Or to put it another way: it presents business ideas to rural communities. What was your inspiration for founding this very unique company?
I worked at PriceWaterhouseCoopers for more than 15 years, so I have had a lot of experience with business analysis. And I've always wondered why the rural population in Kenya generally operates at a loss. Akili Holdings is designed to tackle the problems of rural communities by taking a strictly business approach: we look at the problems in the value chain and come up with ideas for creating a sustainable business around them. If you address the failures, you increase the profitability of something that was initially unprofitable. Furthermore, I advocate using Africa's naturally available resources and finding ways to generate a profit from them.
"If you address the failures, you increase the profitability of something that was initially unprofitable."
Part of the problem is that they only sell raw materials. Value creation would be much greater if they could bring their products to the market directly. But this would require financing, a hard thing for poor people to get. We tried to tackle the problem of Kenyan leather, for instance, which is also exported raw. My colleagues and I developed a wet bluing process that converts raw leather into processed leather worth 20 times more – after just going through a few cycles of soaking and rubbing! I have examples of such simple but profitable propositions from almost every sector.
In Kenya, 80 % of all honey is imported, although we could raise bees in almost every part of the country. By raising bees you would increase the productivity of crops in an area by 30%. So investing in bees is potentially very profitable. In America they even pay farmers to raise bees to ensure that crops do well!
To use the example of the bees: first we got carpenters in the area involved in building beehives. Then we organised loans for the potential beekeepers, so they could buy the beehives. And then we developed Uki, a honey brand that we lend to our partner communities to channel their honey into the market. People love this honey because it comes directly from the farmers and has the specific taste of each community's natural environment. So what Akili did here was: enable community members to build their own beehives in order to raise bees, and then help them place the honey in the market through an already established brand.
... and sit down with communities...
Exactly! Every community has an asset that is currently unexploited.
It all sounds so simple. But the fact is that many people have tried and failed to boost East Africa's agricultural sector and to increase farmers' revenues. Why hasn't anyone else ever had these ideas?
We have had our share of failures, too. But giving up is not an option. That would play into the hands of those who believe Kenyan agriculture cannot succeed. Many people think that the farmer's work is the real problem, so they tend to address the production side only. But that's nonsense: as long as farmers' products don't generate profits, supporting their production won't help. It is important to first establish a profitable business strategy. Only then does expanding production make sense. Donors often come with ready-made hand-outs and teach people dependency instead of working with people to develop lasting solutions.
"As long as the farmers' products don't generate profits, supporting their production won't help. It is important to first establish a profitable business strategy."
That could be because development cooperation aims to do much more than just promote businesses – it is trying to alleviate the roots of poverty and improve social services.
But the economic development of a community is the key to tackling all their other problems! We also work in one of the poorest areas in Kenya, in Turkana. They have the best water in the country there, but nobody has ever thought about how to make this water available to the market. We designed a water packaging solution and are currently doing all the environmental testing needed so we can set up production plants. By the beginning of 2013 we should have our first bottles in the supermarkets. The revenues will then address all the community's other problems, such as nutrition and health. Donors are busy trying to minimise poverty instead of creating wealth with the available resources.
"Donors are busy trying to minimise poverty instead of creating wealth with the available resources."
Marketing and distribution are very important elements. That's why we have created several shared brands: one each for honey, yoghurt, milk, cheese, coffee and a very nutritional plant called Moringa oleifera. The communities can channel their products through these brands and don't have to worry about marketing and delivery anymore. That's one of our central pillars. The Akili e-Transact system is another. It tracks information on every producer, such as the value of their produce and their income history. A bank that has this information will be much more likely to give this farmer a loan. Once we successfully cooperate with a community, we partner with like-minded institutions to address issues such as drinking water supply or improving nutrition.
Of course it would. The strategy of consultancy works in any environment: first we carry out a market study and identify opportunities. And through these opportunities, we define a business model. That's the way business works. A community in Uganda once invited me to consult with them. People there were often attacked by gorillas that came in from the forest in search of food. My idea was to place beehives at the edge of the forest. Gorillas are afraid of bees, so they stay in the forest, and the community benefits from the honey. The community leaders have written up a proposal now and are waiting for funding.
"People there were often attacked by gorillas that came in from the forest in search of food. My idea was to place beehives at the edge of the forest. Gorillas are afraid of bees."
We want to scale our work by offering our consulting services to others. We have proven the efficiency of our models and we know that our strategy can be successful in any society. So we would like to continue to advise communities, but also bring in partners to provide the initial capital. This capital is needed to carry out studies, identify market failures, create models for streamlining those failures, and implement pilot programmes.
Money is important to fund defined businesses. But what Africa needs first is structural innovation in order to find business models that drive people out of poverty. Only then can capital find a platform from which to generate returns for investors.
Personally I am not on the lookout for a huge number of creators. Around the globe the number of people who generate innovations accounts for less than two percent of society. So we should not expect innovation from everybody; we should instead support the one or two creative people we do find. Often all they need is somebody to walk with them.
"You don't need a billion or a million Bill Gates. Sometimes one innovation is enough to help a lot of people."
You know, Bill Gates was a big innovator. But strictly, he didn't even invent DOS; he just bought it from somebody else. His innovation was the licensing model, which made it possible to sell software and make it available to other people. Then he used the money he earned to hire a lot of other bright people and together they changed the entire world of computing! You don't need a billion or a million Bill Gates. Sometimes one innovation is enough to help a lot of people. But it must be rolled out in a functional environment.