Feb 26 2014, 7:25pm CST | by Forbes
Find an innovative way to serve the average person in a low-income country. Develop your own business plan. Convince investors. Make a healthy profit for yourself and your investors by providing economically viable solutions. These are the expectations for the students, called Fellows, at the Legatum Center at the Massachusetts Institute of Technology.
Iqbal Z. Quadir is the Founder and Director of the Legatum Center for Development and Entrepreneurship at MIT where he also holds the title of Professor of Practice. He brings meaning to that title through his current involvement in ventures in cellular phone-based money transfers and distributed power generation in Bangladesh. Mr. Quadir’s story has been captured many times over by Harvard Business School journals and case studies, The Economist, The New York Times and others. The short version is that he was the first member of his family to leave Bangladesh for an education in the United States; he worked his way through Swarthmore and graduate studies at Wharton; after working at the World Bank he landed a job on Wall Street as an investment banker; and then he left that job for an idea that nearly rendered him broke. The idea he had in 1992 that would bring him to the brink of bankruptcy by 1995 was that “connectivity is productivity.”
If he could bring cell phones to Bangladesh’s rural poor he believed he could help people in Bangladesh be more productive and that he could do so profitably as well. The cell phone company, Grameenphone, launched in 1997 and has over 50 million subscribers today. In 2004 he sold his meager stake in the company that was formed from his initial idea. His career would then migrate toward being a professor of practice, first at Harvard, then at MIT To understand the boldness of Mr. Quadir’s first entrepreneurial idea, one merely needs to look up “1992 cellular phone” on Google images (the author’s family had the white brick-sized model). While Mr. Quadir has other projects in Bangladesh today, it is his passion to find and encourage others with bold entrepreneurial ideas to foster prosperity in low-income countries.
The Legatum Center was established through a gift to MIT by Christopher Chandler’s Legatum Foundation. Legatum means legacy in Latin. Mr. Chandler, the quieter of the two Chandler brothers, supports of the Legatum Center and its mission to bring prosperity to the developing world through entrepreneurship. The Center also enjoys support from the MasterCard Foundation, with an eye toward projects in Africa.
Mr. Quadir points out that when he first had the idea to bring the cell phone to Bangladesh, the argument against it was that the population’s GDP per capita could not shoulder the cost of cell phones. He explains that with innovations from the sewing machine to the cell phone, when people understand these as tools that increase productivity, the utility of the items is enhanced. Thus, the utility of the item outweighs the possible limitations of low per capita GDP; people will pay up for the opportunity to be more productive, and when they are more productive their income, and per capita GDP, will both rise. This is why, as Quadir notes, productivity tools such as bicycles and sewing machines spread throughout the developing world long before cell phones.
The goal of the Legatum Center is to support Fellows who bring elements of Mr. Quadir’s quadruple win style of entrepreneurship to low-income countries.
The Fellows of MIT’s Legatum Center are on their way to having launched enterprises in 20 industries across 40 countries on five continents. One Fellow’s venture uses mobile phones and predictive analytics to track patients’ symptoms for better care and has regularly been cited as one of the most exciting mHealth companies. In Africa alone, two Fellows are improving sanitation by converting waste to fertilizer in Kenya; one has developed a leasing model for tractors in Tanzania; another is innovating in the apparel sector in Senegal; and still another two are pursuing a plastic recycling business in Nigeria.
Mr. Quadir notes the program is still young while highlighting one of its most successful Fellows, Javier Lozano. A graduate from MIT’s Sloan School of Management in 2010, he founded Clinicas del Azúcar in Mexico. He identified that 90% of Mexicans with diabetes were underserviced and decided to start a chain of low-cost diabetes clinics that “use innovative, evidence-based algorithms for diagnostics and care.” By reducing the cost of care, he has found a successful business model that meets a need. Diabetes is currently an all too frequent cause of death in Mexico that he is helping to mitigate. After launching a pilot clinic in his native Monterrey, Mexico and then opening a second clinic in 2013, he now plans to open a new clinic every three months.
The Legatum Center’s focus on entrepreneurship to foster prosperity in low-income countries can alter thinking commonly applied to developing countries. Mr. Quadir is the first one to admit that using business to improve lives, as opposed to aid to central governments, is not a new idea. Instead, he insists that people in high-income countries have long known that good businesses practices create new products, services, opportunities and possibilities.
In Mr. Quadir’s course, Entrepreneurship in Large Markets with Low Income, he discusses cases on successful entrepreneurs in low-income countries, as well as examples of how entrepreneurs contributed to prosperity in what are now high-income countries. By radically reducing costs and thereby improving access to goods and services, Henry Ford took cars to the average person, Isaac Singer empowered women, and Ray Kroc’s franchisees served hamburgers to millions. Mr. Quadir believes that what low-income countries need today are their own Singers, Fords and Krocs.
Source: Forbes Business
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