Bottom-Up Entrepreneurship Professor Iqbal Z. Quadir Founder and - - PowerPoint PPT Presentation

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Bottom-Up Entrepreneurship Professor Iqbal Z. Quadir Founder and - - PowerPoint PPT Presentation

Oct 14, 2023 162 likes •669 views

Bottom-Up Entrepreneurship Professor Iqbal Z. Quadir Founder and Director Legatum Center for Development & Entrepreneurship at MIT Institute of International and European Affairs (IIEA) Dublin May 23, 2012 HTTP :// LEGATUM . MIT . EDU

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Bottom-Up Entrepreneurship

Professor Iqbal Z. Quadir

Institute of International and European Affairs (IIEA) Dublin May 23, 2012

Founder and Director Legatum Center for Development & Entrepreneurship at MIT

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Developing countries are the 75% world:

  • 75% of the world population is in developing

countries

  • 75% of the world’s growth over last decade is in

developing countries

  • 75% of the flow of funds (remittances + aid) is

remittances

  • 75% of the world’s mobile phones are in

developing countries

  • 75% of the world’s GDP could be in

developing countries by 2050

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1B mobiles 0.6B mobiles 0.6B mobiles

Distribution of powerful, connected computers in low-income regions

85% of the world’s youth (10-25 years old) live in developing countries

…we have to see the world in a new way

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Promoting the creation of technology- based, for-profit enterprises in low-income countries

Legatum Center at MIT

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Legatum Fellows

  • MIT students launching innovative, for-profit

enterprises in low-income countries

  • 90 Fellows since 2008
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The Legatum Fellowship

  • Financial support
  • Entrepreneurship ecology
  • LCDE network, speakers

(conferences/lectures/seminars), staff, alumni, current Fellows

  • Investors, entrepreneurs, potential

partners, new technologies

  • Help students overcome their

individual inventory of needs

  • Academic course: Entrepreneurship

and Prosperity in Low-income Countries

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Bilikiss Adebiyi

Legatum Fellow 2010-2011 2012 MBA, MIT Sloan School of Management Founder and CEO, Delman Recycling Solutions

  • Scrap recycling startup in Nigeria
  • Reclaims scrap metal marring the

landscape while strengthening Nigeria’s steel industry

  • Nigeria imported $2.4B iron/steel

in 2009

  • Plans to set up scrap processing

plant in 2012

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Javier Lozano

Legatum Fellow 2009-2010 2010 MBA, MIT Sloan School of Management Founder and CEO, Clinicas del Azúcar

  • Low-cost diabetes clinic chain in

Mexico

  • Innovative, evidence-based, low-cost

diagnostics technology

  • Unlimited consultations for annual

fixed fee

  • Addressing the problem of >10 million

diabetes patients in Mexico, 90% with poor or no healthcare

  • Returned to Mexico post-graduation

and received financing

  • Opened first clinic in September 2011
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Karan Singh

Legatum Fellow 2010-2011 2011 MBA, MIT Sloan School of Management Co-Founder, Ginger.io

  • Mobile phone-based platform for

patients, health care providers researchers

  • Tracks behavior to gain health

insights

  • Closed successful first round of

financing

  • Novel idea capitalizing on India’s

large market

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My own entrepreneurial experience helps explain the work of the Center.

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Photo by Christopher Harting

I went to the U.S. from Bangladesh in 1976 and realized…

…good U.S. universities are not concentrated in Washington, D.C.

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Mainframe computer Personal computers

1980s-90s:

Dispersion was happening in front of my eyes

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1971 1993

Connectivity Is Productivity

… and phones would follow Moore’s Law

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Cascading prices of digital technologies allowed further dispersion

Moore’s Law:

  • Processing power per $ doubles

every 18 months & quadruples every 3 years.

  • Price of computers falls more than

10,000x in a single generation

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  • 1 phone for 500 people
  • Virtually no phones in rural areas where 100

million people lived

Bangladesh in 1993

70%

20%

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Misconception #1

Poor countries are under-resourced › Poor countries are extremely wasteful

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Misconception #2

Poor people lack buying power › Productivity tools create buying power

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Misconception #3

You need to start with money to make money › Shared-access breaks that vicious cycle

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Misconception #4

Inability to meet primary needs › Income is the ability

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Demand side Supply side Connectivity is productivity; productivity translates to purchasing power Prices cascading down

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Problem: Lack of Other Infrastructures

  • No credit checks
  • A few bank branches to collect bills
  • Contact points for customer service
  • Branches/offices throughout the rural areas
  • Each has 2-3 million borrowers
  • Excellent repayment records
  • About 95% borrowers are women

Concentration of resources stood in my way

Solution: Partner with Microcredit

Grameen Bank

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Milk Money Money Money

The microcredit model

Grameen Bank

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Service Money Money Money

The Grameenphone model

Grameen Bank

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March 1994 Encouragement from Grameen Bank, but no funding commitment May 1994 With angel funding, created Gonofone (“phones for the

masses”)

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Telenor: know-how Grameen: distribution

Creation of Grameenphone

$120 million Total Initial Funding:

2 / 93: Connectivity is Productivity 5 / 93: Met with Muhammad Yunus 5 / 94: Gonofone established 9 / 95: Telenor shows interest 11/95: Telenor and Grameen Bank make commitment 11/ 96: Grameenphone receives cellular license 3 / 97: Grameenphone services launched 12 / 99: IFC funding 12 / 00: Move to Harvard to teach 2 / 94: Cellphone is a cow 3 / 94: Grameen Bank encouraged 12 / 04: Gonofone exits

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Grameenphone success in Bangladesh

  • 300,000 retail entrepreneurs, giving access to 100

million(at one time)

  • 35 million subscribers
  • 80 million cell phones in Bangladesh

(including phones from other providers)

  • 1 of 2 people have a phone
  • Over $4 billion in revenues for industry
  • Over $1 billion in profits
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Productivity tool Company profits $ billions in infrastructure

Mobile phone success is a global phenomenon

Countries’ GDP People’s ability to pay People’s productivity

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This success can be generalized to other technologies

Company profits $ billions in infrastructure Countries’ GDP People’s ability to pay People’s productivity Productivity tool

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A win-win-win paradigm

Tools make people more productive, then:

  • Businesses win by selling tools
  • People win by earning more
  • Countries win when citizens have

more earnings

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What are the tailwinds for this kind of progress?

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1

Western technologies can empower individuals

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2

Adam Smith 1723-1790

Western thinkers can help us understand how economies develop

David Ricardo 1772-1823 Friedrich Hayek 1899-1992 Ronald Coase 1910- Joseph Schumpeter 1883-1950

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3

Angel funding/VC funding

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4

Their knowledge of their native countries gave them “home field advantage”

Azim Premji, founded Wipro Mo Ibrahim, founded Celtel Miko Rwayitare, founded Telecel Ayisi Makatiani, founded Africa Online Robin Li, founded Baidu

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These entrepreneurs were trained in Western universities

Azim Premji, founded Wipro Mo Ibrahim, founded Celtel Miko Rwayitare, founded Telecel Ayisi Makatiani, founded Africa Online Robin Li, founded Baidu

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5

Western universities can train developing country entrepreneurs

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What are the headwinds?

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What are the headwinds? A lack of good governance

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Government Neglects People Impoverishe d People

Externally- empowered governments may not take care of people

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Economically- empowered people create checks and balances

Government Addresses Needs

  • f People

Empowerme nt of People

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Emergence BioEnergy

(or, More on Cows)

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A New Approach to Rural Electrification

 Tens of millions of small dairy farms exist across South Asia and Africa producing milk  What if with some additional capital investment, you could triple the economic returns on cattle and provide reliable access to electricity?

Milk Cattle Revenues

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Emergence BioEnergy Utility Station

  • Generate reliable electricity and create new

economic value from cattle

  • Additional revenues keep the price of electricity

reasonable despite small-scale generation

Refrigeration Cattle Revenues

EBUS

Electricity Fertilizer Methane Credits Milk Commercial Space

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Core Technology

  • Micro-Combined-Heat-and-Power

(micro-CHP) Cogeneration System

  • External combustion

– Can run off biogas / natural gas

  • Continuous Operation
  • 70,000 hour lifetime (compared to

5,000 hours for diesel generator)

  • No noise
  • Low Maintenance
  • 3 kW electric + 6 kW heat

– Heat can be used for cooling

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micro-CHP

Mini Dairy Farm Biodigester Ground Level Underground Top Floor Electrified Commercial Space Fertilizer Pit Biogas

Manure

Commercial Space

1 2 3 4 5 6

Milk Refrigeration Electricity Fertilizer Carbon Credits

Refrigerator

EBUS

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Heat

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EBUS Model

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Electrified second level can be used as retail space Cold storage reduces milk spoilage Passive cooling shed design improves milk production

2 1 3 4

Run-off from manure can be sold as organic fertilizer

5 6

Potential for carbon credits Sale of electricity; potentially produce up to 72 kWh per day

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Triples Economic Productivity of Cattle

  • Cold storage reduces 20-

30% milk loss due to spoilage

  • Processed manure can be

sold as high-value organic fertilizer

  • Electricity can be retailed to

local consumers / businesses

  • Potential for methane credits
  • Electrified commercial space

can receive premium rents

Electrified village from initial experiment

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Renewable Alternatives

  • 1 kW installation of solar PV currently costs more than a

1 kw micro-CHP engine

  • Solar can produce electricity for no more than 6-7 hours

per day

  • Micro-CHP can produce electricity 24/7

– No additional capital cost to produce power all day long

  • Value of fertilizer makes cost of fuel free, similar to solar

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Market Potential

  • South Asia - Total population of 1.5 billion

people, 80% without reliable access to electricity

  • Rural Areas:

– 600+ million people with no access to electricity, those with access suffer from unreliable service

  • Urban Areas:

– 9 to 12 hours of load shedding every day in major urban areas of 7+ million residents, growing middle class

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Key Partners

  • Infinia Corporation: Exclusive

distribution relationship for micro- CHP technology in South Asia and Africa

  • BRAC : Signed MOU to support

deployment of initial prototypes and scale project across country. BRAC is the largest NGO in Bangladesh

  • EBI will establish similar

partnerships in India / Pakistan

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