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Thursday
Feb182016

Mutuality lecture, Q&A at Oxford's Saïd Business School

Members of the Catalyst team spent an hour and a half with students at the Saïd Business School at Oxford, presenting some of our work on the Economics of Mutuality and taking questions.

 

Tuesday
Feb092016

Economics of mutuality briefly explained

For most of its history, the foundation of Mars operations and culture has been the Five Principles of Quality, Responsibility, Mutuality, Efficiency and Freedom. It is these principles -- particularly Mutuality -- that has driven our work in the economics of mutuality.

But how to explain our research and how it fits into past and present economic and business theory?  We have produced two videos to introduce our work -- a short version (above), and a ten-minute one that goes into slightly greater depth, which you can watch here.

 

Friday
Feb052016

Mutuality reading recommendations

Mutuality is a concept that many are exploring, from various angles and under diverse names. We are interested in exploring the work of those outside of Catalyst who are applying their knowledge and efforts to develop these ideas.  Two authors have recently been recommended to us:

  1. Peter J. Boettke  is the Deputy Director of the James M. Buchanan Center for Political Economy, a Senior Research Fellow at the Mercatus Center, and a professor in the economics department at George Mason University.  Boettke is particularly interested in interdisciplinary work integrating politics, philosophy and economics.  He is associated with the Global Prosperity Initiative (GPI), which was founded to explore through ethnography and economic theory why some nations prosper while others are poor.  In addition to his published books and articles, his commentary can also be found here.
  2. Harry Barkema is a professor of management at the London School of Economics. Professor Barkema is also the founding Director of the Innovation Co-Creation Lab (ICCL) where currently 20 people work on fundamental research and teaching (MSc, PhD, Executive education). This research includes; how to design innovative teams, innovation communities around websites, innovative science parks & corporate campuses, and successful business model innovation in close cooperation with companies. One set of new initiatives focuses on business model innovation at the base of the pyramid (BOP), in cooperation with multinational corporations, NGOs, and local businesses in South East Asia, Sub-Saharan Africa, and South America.

-- Bruno Roche

Thursday
Jan282016

Gates on communication, technology and the future of smallholder farming

Bill Gates is best known for his role in founding Microsoft, but his interests -- and the interests of the Gates Foundation -- include the search for ways to improve the lives of poor, smallholder farmers in Africa. He blogged this month about ways in which he sees technology enabling a better future for agriculture on that continent.

Noting that the rapid spread of mobile technology is revolutionizing financial services for those with smaller incomes, Gates suggests that the same infrastructure can change the face of farming as well.

The key issue is the farmers' lack of ability to communicate with the broader agricultural markets. Without this stream of information, farmers can’t grow crops based on the market’s requirements because they don’t know the specifications.

Further, without a more direct and rapid channel of communication, farmers have no way to learn the agricultural practices that could allow them to vastly improve yields. Instead, they grow mostly what they can eat or trade locally, the way they’ve always grown it.

Gates is hopeful that, with time and effort, mobile technology can bridge the communication gap and transform the African agricultural landscape.

When information can flow easily, when data is democratized, the cost of doing business in agriculture goes way down, just as transaction costs go way down when financial transactions are digital."

I encourage you to read the blog, and check out the associated video.

-- Yan Toh

 

 

Thursday
Jan142016

No compromises: profitable business model, while serving the poor?

As part of the Economics of Mutuality, we are very interested in business models that do well by doing good. In a recent article in Bloomberg Business, M-Kopa Solar's founders outline their "no trade-offs" approach to social business and profitability.

M-Kopa sells solar lighting and battery charging systems to rural African customers, most of whom rely on ancient, expensive, and "dirty" sources for their light and power. The company’s power system includes a solar panel, two LED bulbs, an LED flashlight, a rechargeable radio, and adaptors for charging a phone. In addition to the environmental benefits, M-Kopa estimates that it's customers can save about $750 over four years by switching to solar.

Company founders Nick Hughes and Jesse Moore envisioned building a company based on three conditions:

  • It had to involve mobile technology, an area in which they both had experience;
  • It had to solve a significant pain point for the very poor; and
  • It had to have the potential to become a billion-dollar business.

We think it’s possible to build a business with no trade-offs. We can benefit the environment. Our customers will be better off. And we’ll get richer. We all can win.” -- Jesse Moore

Because the company only requires a small down payment on their systems, collecting a $0.45 daily payment for one year to make up the difference, M-Kopa operates much like a finance business. Counterintuitively, the company has found that its poorest customers—those who rely on the system as their only source of electricity—make the best credit risks. “If you take the long-term view and if you treat low-income people as customers, not charity cases, you can change the world,” Moore says.

-- Yan Toh

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