Social Entrepreneurship Building Economies in the Developing World

Social entrepreneurship is about making money, though not at the cost of the community or planet. Paul Polak, a social entrepreneur believes this is the way forward for the developing world as opposed to the charity model used by Non-Government-Organisations (NGOs), which he says does not work, irrespective of the good intentions. Paul says, "Many NGOs say it's making money on the back of the poor, but I love to make money on the back of the poor. You can feel really good about yourself giving stuff away, but if you are going to sell things to people, you need to have respect for them because no one is going to buy something if you have contempt for them."

Social entrepreneurs believe the best way to help people is to treat them as consumers and if you can sell to them, you help them. Paul Polak has worked in the developing world for 30 years and wrote the book, 'Out of Poverty'. He believes conventional development aid has failed because it does not understand what people really need in their own communities. It has taken their power away of making decisions for themselves. Instead Polak thinks people in the developing world should be allowed to care for themselves and their communities, because they know best. He describes people in the developing world as 'creative survival entrepreneurs' who make crucial decisions daily and social entrepreneurship is what is needed.

**** cites the Play Pumps to make his point. The Play Pump is a children's merry-go-round that operates as a water pump. As children play on it; it pumps water into a tank. In 2006, the US invested more than $16 million to install the pumps across sub-Saharan Africa and by 2010, 4,000 pumps were installed. However, according to UNICEF these pumps have failed and at $14,000 each they are an expensive mistake. The children grew bored of the hard work of playing on the merry-go-rounds and the pumps were unreliable; when they break down they need expert technicians to fix them. Polak says this was the wrong approach; the people were not given an opportunity to choose whether these pumps would work in their communities. They would not have spent their money on it, if it did not make sense.

Based on his social entrepreneurship thinking Polak established the International Development Enterprises in 1981; a company that uses capitalist principles to help people in the developing world. This company sells a pump of its own. It costs $8 to make and sells for $25. Polak says a small farmer who buys a pump can increase his annual income by $100. They have sold 1.5 million pumps in Bangladesh alone and have also helped to create jobs at the same time. The ethos of social entrepreneurship is about creating jobs, networks of dealers and distributors that can then be used to sell more products and eventually build a stronger economy in the developing world.

Photo Credit: Paul Polak's Website