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Cote’s Colorado: Selling to the other 90 percent

Wal-Mart has stopped at nothing to drive down the cost of the merchandise it sells. Paul Polak would argue even that model is not enough for long-term success in the global market.

While millions of people shop at Wal-Mart every day, billions will never set foot in the store. These are people for whom electricity, adequate shelter and clean water are anomalies.

Mega-corporations like Wal-Mart, Coca-Cola and Microsoft don't know how to operate in emerging economies, Polak told 1,500 people gathered at the Ellie Caulkins Opera House in April for the inaugural TEDxMileHigh gathering.

"I'm going to spend the rest of my life trying to foment that revolution," said the 77-year-old founder of International Development Enterprises, a Colorado nonprofit that aims to address poverty. Among the innovations Polak has championed: a $25 foot-operated "treadle" pump designed to irrigate small plots of land and drip-irrigation systems that costs as little as $3.

Corporations don't see the potential for profit in emerging markets and don't know how to design radically affordable products, Polak said. Businesses that want to succeed in countries where people live on less than $2 a day need to embrace high-volume, low-margin products and find ways to run profitable "last mile" supply chains, the key to bringing products to people where they live.

One of Polak's latest ventures, the for-profit Windhorse International, sells treated drinking water in India. Video footage he played for the audience depicted villagers filling jugs from a small community storage tank and workers on bicycles delivering 1-liter plastic containers of water to homes.
Three billion people are bypassed by current markets; meeting their needs will require a revolution in business practices, Polak said. "The revolution will create millions of new jobs. It will help move a billion people out of poverty."

The speakers and musicians appearing at the one-day conference, billed as "inspired citizenship," offered diverse perspectives on addressing global problems. But Polak easily could have been paired as a tag team with Bernard Amadei, a professor of civil engineering at the University of Colorado and founding president of Engineers Without Borders-USA.

Indeed, a document Amadei prepared for the Mortenson Center in Engineering for Developing Communities at CU prominently featured this quote from Polak: "The majority of the world's designers focus all their efforts on developing products and services exclusively for the richest 10 percent of the world's customers. Nothing less than a revolution in design is needed to reach the other 90 percent."

Among the projects under way by Engineers Without Borders: using compressed earth blocks - interlocking construction material made of soil and a stabilizing agent - to build affordable housing on the Crow Indian Reservation in southeastern Montana for a population that has long suffered high unemployment and poverty levels.

Compassion needs to be a primary component of education, Amadei said, calling on the largely young professional audience to push for social change.
"As long as we don't address internal poverty, we will always have external poverty," he said. "A sustainable planet is a compassionate planet, or it will not be."

Amadei rattled off troubling statistics: that 1.2 billion people in the world lack access to clean water, that 1.6 billion do not have access to energy. "Do you know what you get when you do not have electricity? You get more babies, lots of them!" Amadei said, eliciting laughter from the crowd.

Our attitudes about both poverty and the ability of those facing it to help themselves diminishes our efforts, he said, suggesting we talk about "wealth enhancement" rather than "poverty reduction" and reconsider casting the poor in Africa, for example, as simply victims who need assistance.
"There are talented people everywhere on this planet," he said. "Let's stop fooling ourselves."

For a better grasp of what TED does, visit TED.com, which archives its short, eclectic talks, including "The Best Gift I Ever Survived," an inspiring tale by Boulder branding consultant Stacey Kramer that was screened for the Denver audience. Visit TEDxMileHigh.com for information about the local effort.
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Mike Cote

Mike Cote is the former editor of ColoradoBiz. E-mail him at mcote@cobizmag.com.

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