Blueprint for Sustainable Social Enterprise in Developing Countries …

Book: Mobilizing Science-Based Enterprises for Energy, Water, and Medicines in Nigeria

Mobilizing Science-Based Enterprises for Energy, Water, and Medicines in Nigeria
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To the social entrepreneurs out there interested in effecting changes in Africa, there is a recently released report (business models / case studies) demonstrating it is possible to sustain social business ventures that provide basic services like electric power, safe water, and access to effective medicines for infectious diseases. Although the case studies are conducted within a Nigerian framework, but it can be easily tweaked to work anywhere in Africa.

The cases study, as conducted by the U.S. National Academies (the National Academies of Sciences and Engineering and the Institute of Medicine), demonstrate that it should be possible to make a profit providing solar electric power, safe household water, and effective malaria therapy, without direct government support.

The study argues that a country like Nigeria, with about two thirds of the population lacking basic services like electric power, safe water, and access to effective medicines for infectious diseases, can encourage private companies to provide these services in a sustainable way. The report comes with sample business plans, including cost estimates, adapted to the Nigerian market.

The introduction is excerpted below:

This report is the product of collaboration between the U.S. National Academies and the Nigerian Academy of Science. The subject of the collaboration was a study of the ways in which science-based private enterprises might be created and promoted in Nigeria and other developing countries in order to provide science-based products and services that government is unable to supply in a timely and sustainable manner. Examples of these services are electric power and safe household water in rural areas. In other developing countries, lack of safe water and lack of home or small business electric lighting are problems that have generated entrepreneurial solutions through readily accessible technologies. But in Nigeria private companies have generally not been viewed as an instrument of government policy to extend basic services to the underserved.

Malaria presents a similar situation. This devastating disease, which kills one million people worldwide every year, must be tackled with new drug treatments to replace those that have lost their effectiveness both to cure the disease in individuals and to reduce its spread. The local private sector may be able to join government and donors in seeking a solution.

The following statement of task was presented to the committee:

In collaboration with the Nigerian Academy of Science, an ad hoc committee will (1) develop a model for dissemination of technologies of social benefit and creation of science-based enterprises in Nigeria; (2) select three technologies related to health, agriculture, and small-scale industry with potential for commercialization in Nigeria and Africa; and (3) carry out a Knowledge Assessment of the selected technologies to identify opportunities and barriers to creating the science-based enterprises in Nigeria. This approach involves active participation by the local business community, local and national commercial banks, producers, and scientists and engineers, interacting with international experts, to explore the prospects for enterprises based on the selected technologies. The report will recommend actions by government, the private sector, and the national academies of Nigeria and the United States to encourage science-based enterprises.

The three technologies chosen by the committee were solar photovoltaics, water purification, and malaria therapy. The methodology selected, a knowledge assessment (described in Chapter 2), was used by the committee to illustrate ways in which the technologies could be profitably applied in Nigeria. The committee proposed a development model in which the private sector would be able to provide the technology-based products and services at a profit. Such a model offers the possibility that, after a period of incentive and encouragement, government or donor support would not be required in the future, thereby satisfying most definitions of economic sustainability.

Nigeria is an appropriate test bed for an approach that combines government and donor support and resources to enable the private sector to manufacture and provide science-based solutions to basic needs problems. As an oil exporter with a positive foreign exchange balance, Nigeria has a source of funds that could be employed to test the hypothesis. Nigeria also has several excellent universities, and the Nigerian Academy of Science is populated by many world-class scientists. In fact, Nigeria is famous worldwide for its entrepreneurial class, which includes modern manufacturing and extractive industries.

And yet despite these and other assets, Nigeria remains in the World Bank’s low-income category, and 60 percent of the population lives below the poverty line; life expectancy is 46 years.1 About two-thirds of Nigerians have no access to the electricity grid or safe water. A similar proportion of the people are at risk of malaria, which is a major cause of child mortality and loss of economic productivity. In Africa, the malaria parasite is becoming resistant to most low-cost and readily available drugs, and a newer effective treatment is currently too expensive for the majority of patients.

For each of these fundamental problems holding Nigeria back and imposing suffering on its people and economy, the technology that could solve the problem is available for transfer and incorporation into the private sector. The technologies for water purification and solar electric lighting have been applied successfully elsewhere in the developing world, including in Africa, and the current most effective malaria drug treatment, artemisinin combination therapy (ACT), could be produced by the Nigerian private sector.

These three technologies explored in the study—solar photovoltaics, water purification, and effective malaria therapy—and the associated business models were selected by the two science academies to serve as case studies in order to demonstrate how the government-sponsored participation of private sector enterprises might be used to provide basic services. A workshop was conducted for each technology. At each workshop, several foreign businesspeople who had successfully exploited the particular technology to create profitable enterprises in other developing countries were brought together to collaborate with a diverse group of Nigerian businesspeople, scientists, financial experts, and others. Together, they designed a business plan for a hypothetical Nigerian enterprise to produce the technology, drawing on the foreign experience while taking into account the social, economic, and cultural environments of Nigeria. The workshop reports produced, one for each technology, appear in the appendixes to this volume. They constitute the “data” used to evaluate the hypothesis that such enterprises could be successful and effective in Nigeria, and the workshop results underlie the steps recommended in Chapter 5 for exploiting these technologies for providing basic basic services.