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Economic Development

Product Paternalism

Women’s empowerment means voter choice, partner choice, healthcare choice, reproductive choice, career choice, and consumer choice.

Who would argue that a shovel, seeds, and a watering can are not useful and important products to sell in impoverished communities? Or school supplies, study aids, pens, and paper? Or a mattress to lift children off a dirt floor? Or sturdy shoes to walk to work? Or cleaning supplies? Or solar lights, anti-malaria bed nets, and irrigation pumps? At the base of the economic pyramid (BoP), they all matter.

Common sense tells us that all of these products are life-enhancing, but our inner policy wonk says something different. The Western proclivity leans toward categorizing products for the poor—to rank them from desirable (efficient cookstoves) to destructive (tobacco).

Product paternalism is the economic development practice of determining which consumer products are “good for people”—that is, worthy of our impact investments, charitable donations, and active support—and which are not.

Thankfully, economic development professionals, social entrepreneurs, and community activists are beginning to realize that programs designed for the poor, but without the involvement of the poor, are doomed to underperform, if not fail entirely. Every smart, sophisticated, and caring social entrepreneur knows that good listening is axiomatic.

Listening means honoring voices polled at the ballot box and trusting the village consensus to set community priorities. It means empowering people to speak for themselves about all the things that affect their lives. If we can rely on people to elect wise governmental leaders, surely we can rely on them to make wise shopping decisions.

As John Anner, president of the East Meets West Foundation pointed out to me, “Listening is tricky. Without multiple ways to verify what people really want, it can be hard to cross the barriers of language and culture to truly understand what people need and want (good or bad). This is why the best way to figure it out is to provide a range of options and let people vote with their own money.”

Not all consumer purchases at the BoP will be particularly smart, healthful, prudent, or virtuous. Inevitably, human beings—regardless of income status—make mistakes. Intrinsically, choice empowers you, me, and the poor to make mistakes.

No question, but that it's easier on the soul to point to a carefully culled selection of obviously beneficial products. We might sleep better selling a screened product selection to the poor (that, hypocritically, we would never accept for ourselves), but it ignores the inconvenient fact that in a real world of real people leading real lives, it makes not one whit of sense.

Product taxonomies require a flat, static, and crimped view of the actual economic lives of the impoverished. Product classifications depend on overly simplistic understandings of how products enrich, empower, and liberate.

In the developing world, as in industrialized markets, consumer purchases are multi-purpose:

  • A hammer and nails will build a chicken coop, fix a broken window to keep out malaria-carrying mosquitoes, or repair a leaky roof to keep children dry in the winter. They might hang an election poster, a school notice, or a reminder on when to immunize your children.
  • Sanitary pads are a basic health product for women, an essential educational supplement to keep menstruating girls in school, or perhaps a tool of women's dignity and respect.
  • Childrens’ diapers reduce the spread of disease, make a cramped home more livable, or allow a mother the freedom to attend a village meeting with baby in tow.

In any event, a handy classification system is right in front us: Let the consumer—most probably a female making family purchasing decisions—choose.

What is normal to have in countries with robust product distribution systems (malls, bodegas, catalogs, and online shopping) can be hard to get in communities with lousy retail options. The result is long walks to monopolistic stores, time inefficiently spent, children left untended, and delays in buying critical items.

Coca-Cola distributes and sells 78 million servings of Coke per day in Africa. African consumer demand drives distribution, justifies investment in production, shapes marketing, plus makes the Coca-Cola company Africa's largest private sector employer (it employs 60,000 people directly and 600,000 indirectly). Clearly, Coke is not a water purifier or a clean-burning stove, but we can study Coke’s distribution model.

One practical lesson to consider is that the socially minded products standing alone in the marketplace—even though cost-effective, life-improving, and absolutely important—may not be strong enough financially to support distribution at scale. Even Coke needs multi-beverage vending machines and multi-item markets to reach consumers.

We know that a myriad of market imperfections terrorize people at the bottom of the economic ladder. We know scarcity and monopoly inflict shoddy products and predatory pricing on captive consumers. We know that—no matter how useful a product's life-enhancing attributes—without financially sustainable distribution, the poor will not benefit from it.

Good people in worthy organizations are working hard to deliver socially important products to the poor. Nonetheless, product distribution at the BoP remains a daunting economic development challenge. As summed up in the report “Marketing Innovative Devices for the Base of the Pyramid”: “Progress in marketing these [traditional social products] has been frustratingly slow…”

Modeling multi-product catalogs (think Sears catalog or Amazon) and multi-product department stores, Copia Global (an organization I co-founded) is rolling out a distribution system that utilizes existing shopkeepers, armed with a catalog, to sell both pro-poor social products and more traditional merchandise at the BoP. The catalog (in its third edition after eight months of operations) pragmatically measures BoP consumer preferences as they vote with their purchasing dollars.

Yes, the Copia catalog sells solar lights, school supplies, and farm implements. It also sells nail polish, paper towels, diapers, detergent, and toys. The consumer, not Copia, decides.

Copia_customer_choice_empowerment

Choice in the marketplace is part and parcel of her empowerment. (Photo by Jonathan Lewis)

On a recent visit to Nairobi, I found myself standing in a tiny shop on a scrappy, no-sidewalk dirt street, surrounded by food stalls and untethered goats. The shop is a one-woman enterprise. Every customer means a big difference in her daily average net income of $1 to $2.

The shop sells cheap cotton dresses and bits of costume jewelry. Once a week, the owner travels to the nearest large market to obtain what she hopes her customers will buy. As with all retailers, her livelihood requires that she understand her customers and do a bit of risk-taking guesswork on what might sell.

On the same trip, I stopped over in Rome and found myself window-shopping in the trendy dress shops near the Spanish steps. Both the Nairobi and Rome shopkeepers, albeit in very different economic markets, are in the fashion business—they sell what local women want to wear.

Female consumers, businesswomen, mothers, daughters, sisters, and wives in the developing world don't need a stack of smartass Westerners—most probably men like me—deciding what they should buy. They can handle that without our brilliance.

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COMMENTS

  • BY Peter Frykman

    ON June 10, 2013 10:42 AM

    Good points on respecting the poor by treating them as customers who “vote” with their dollars.  We should also remember that they deserve the same right for how they “vote” to spend their own time. 

    Early on at my social enterprise, Driptech, we saw that BoP farmers were saving time and labor with our affordable drip irrigation.  People were shocked when we told them that some farmers were using the extra time to rest, relax, and hang out more with their friends.  They were actually offended that these poor farmers weren’t using the extra time and energy to somehow generate more income.  This goes beyond Product Paternalism to “Productivity Paternalism.”

    While we are happy that many of our customers use the extra time and income productively, it’s important to remember that we are empowering them with a personal choice of how to spend this time.

  • Haydee Moreno's avatar

    BY Haydee Moreno

    ON June 11, 2013 02:50 PM

    Agree with Peter’s comment. There is also “Spending Paternalism”, which is when non-profits cast judgment on how people choose to spend the extra money they now have due to a product / service provided by said non-profit.

    I led the launch of the check-cashing / credit union hybrid Community Trust Prospera (profiled by SSIR) and we received ambivalent reactions (both internal & external) when we shared that our consumers were successfully saving by using their “Piggy Bank” accounts and deciding to use that extra money to buy themselves new clothes or to dine out with friends.

  • Jackie VanderBrug's avatar

    BY Jackie VanderBrug

    ON June 11, 2013 07:59 PM

    Thanks Jonathan for this reminder of the wisdom of women - and how outsiders often fail to trust it.  I have seen many occasions where well meaning donors / investors looking to target their (understandably) limited financial resources end up with little impact (or worse - unintended impact). 

    We all would do well to 1) Trust the women 2) Realize that often we only see part of the story - seemingly “unwise” economic decisions are often quite wise when you have the full picture 3) respect individual values (to the wise points of the previous two comments).

    I look forward to what is learned from Copia!

  • Tamba K's avatar

    BY Tamba K

    ON June 13, 2013 08:51 AM

    Thank you J for sharing this peace. I wish Lighting Africa can read this and maybe learn something from this analytic, rational consideration, and respect for the African right to choose. Lighting Africa deliberately refuse to give me (MaFisco Solar Mining) an Opportunity to put our systems in the African Solar emerging marking just because according to them “they do not meet the Lighting Africa BOP standards”. That choked my passion, dream, efforts, and consideration for my people who go everyday without electricity, travel miles to go charge a cell phone, and cannot find cost effective environmental friendly way to irrigate their vegetable gardens and crops.

    Yes! Yes! J I agreed with you with a fifty million tons heart that Product paternalism is wrong and the organizations like lighting Africa that sustain such policies enshrouded in mere lack of holding the real people with real solutions back. MaFisco Solar Mining have design Solar Clean energy home lighting and cellphone charging systems that ranged from 350 watts to 950 watts but the so call Lighting Africa will not share the wealth entrusted to them to help Entrepreneurs like me. I am an African and citizen of the world. I have lived the experience and exchanges that I want to make better for my people. That is why I design those systems to meet the needs of my people and who is Lighting Africa to me the opposite. Africans and poor peoples of the world are rational people. Some are poor and some are rich. Some walk on foot, bicycle, drive toyotas, Land Rovers, Mercedes, Ford, and the list goes on and on. Product paternalism limit African and the poor on their right to choose. Once again Thank J and that is why your voice will always feed and raise the voiceless like me living in the shadows of progress because I am poor, African and citizen of the world.

  • BY Franklin Mora

    ON June 21, 2013 06:29 PM

    Thank you John for sharing your story of what Copia is doing, and for talking about the subjects that sometimes as practitioners we so often know but are limited to change at a policy level. “Human Choice” undoubtedly is sometimes not accounted for in the equations of problems we care to solve, such as provided in this example: http://www.wnyc.org/npr_articles/2013/jun/20/a-surprising-barrier-to-clean-water-human-nature/ .

    On a different note, I would like to add that working in domestic (US) economic development, by empowering people through entrepreneurship could really learn from the developing world and emerging market approaches to solving problems and fulfilling needs. So much of the work I do is trying to 1) communicate with immigrant entrepreneurs on their level using culture sensitivity, and 2) focus on delivering primary basic service using for-profit models that don’t always meet the criteria of government and philanthropic funders.

    As I read your article, I imagined walking up Roosevelt Avenue in Jackson Heights, Queens (New York), where a diaspora of different immigrant groups have created a piece of their native country in the neighborhood. A place that could benefit from people block walking selling not from a catalog, but through tablets to purchase wholesale products at a lower cost to grow profit margins for their business.

    Here and everywhere, we need to give low income individuals access. Access to tools, products, and services, with the same branding and packaging,  that most of us take for granted. That too could mean valuing commodity services that are sometimes ignored simply because its human nature to do so.

  • BY Suzanne Biegel

    ON October 29, 2013 03:35 PM

    Jonathan I neglected to comment on this the first time around. But I just re-read it and I am so glad for your post. We need product innovation, business model innovation, distribution innovation, and the ecosystem of support for ventures that address these issues - all of which take into account realities on the ground in whatever local context you’re talking about - from London to Liberia, and we need investors to understand what is needed and what works in a local, cultural context. We need to be sharing what we’re learning so that investors (and philanthropists) can make smart decisions about what to support and how to best support it. Those taking risks to try to get it right need the financing to get it right, and for products and services helping women and girls - we need empowered women investors to play a role.  I cant wait to hear more about what you’re learning from Copia and others.

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