15
03
2025

PAGES

15
03
2025

spot_img

PAGES

Home Blog Page 6545

What Africa Can Learn from Bayh-Dole Act

0

Last year, the Intellectual Property Rights from Publicly Financed Research and Development Act enacted by the government of South Africa, went into effect. The Act regulates how private institutions access university research when public funding is also involved.  It strives to eliminate perceived exploitation of public funded university research by making sure that taxpayers are adequately compensated. The implication is that companies must not just fund research, but also ensure that no public funding is used, if they intend to become sole beneficiaries.

The proponents of this legislation have argued that they are helping the citizens by safeguarding the public funds. And across the continent, other countries are likely to follow South Africa and enact similar legislations to forestall profit-seeking institutions from ‘exploiting’ taxpayers.  The Act is a welcome development in a continent where IPR remains weak and developing the structure will surely help in the long-term competitiveness of Africa. The nation has the right to seek for companies to properly license or pay for research.

Yet, the challenge in Africa is not necessarily university licensing of technology, but actually developing an environment that can sustain quality research. In this case, following South Africa that has the best university research network in Africa to enact a similar Act will be a misplaced priority for the other nations. Any sign that involvement of public funds in universities that are predominantly owned by the public will limit access to research outcomes could alienate the few companies that support the schools. The relationship between the university network and the industry is weak and increasingly schools still destroy research outcomes, simply to make space to store new ones. Products there were nurtured in the university labs are not common. So any more legislation that can scare companies could dampen any prospect to enliven the academic-industry partnership in the continent.

Indeed, Africa can learn from the Bayh-Dole Act especially now the nations are trying to emerge from the most devastating global recession since the Second World War, with policymakers, business communities, academia, and governments looking at ways to accelerate growth and competitiveness.  Governments matter and a single legislation could have impacts that can redesign a nation’s economic destiny. Globalization makes it necessary that nations must compete not just on technologies, but on policies upon which those technologies are developed and commercialized. It is the policy that makes it possible that two universities in two separate countries can develop similar technologies with one creating Fortune 500 companies within a decade and another having the idea locked up in a cabinet. So the policies or legislations made by our parliaments on what happens to inventions funded with public money matter.

In 1980, a United States legislation dealing with intellectual property emanating from federal government-funded research was implemented. The legislature called Bayh-Dole Act gave US universities, small businesses and non-profits intellectual property rights and control of their inventions, even though they were funded by government. Through this Act, these entities could pursue ownership of inventions in preference to the government. Though there are mixed records on the Act, at least, it provides clarity on many issues that could derail the process of taking ideas to market. Small businesses can nurture ideas and later get acquired by the big ones. Such ideas might have been overlooked by the MNCs.

Bayh-Dole Act is arguably the most important business legislation of the last few decades in the United States. It delivered through legislation and transformed the pace of innovation by providing a fluidic system that enhances U.S competitiveness.  Many entrepreneurial companies, such as Google and Akamai which licensed their technologies, respectively from Stanford University and MIT, might not have been possible without this Act.

The South African Act shows how the nation has progressed economically than most other African nations. Yet, the requirement that a company loses sole rights to research when public funding is included could be difficult to manage. For a nation of about 100 patent attorneys, having this Act could possibly slow the pace by which research goes to the market. Layers of bureaucracies have been created in the university technology transfer offices to isolate who funded what. If all the works end up in shelves than products, that will not serve the taxpayers. It is important to realize that citizens do not have to reap benefits of funding research by being paid money by companies, at least, at this stage of our development.

If firms develop good products and employ the citizens, they should be considered as paying the public. We cannot scare firms from visiting university labs. Governments must be ready to give, freely, university works to the few companies that can use them and create products, irrespective of the funding source. If they want sole rights and can justify why, despite partial public contribution, we need to give them.  Our governments do not instill confidence that they can do anything useful with these works if companies that want them are denied access to them. Africa needs more products than extra file cabinets to store university research.

Entrepreneurial Solutions for Prosperity in BoP Markets: Identifying the Problem and the Solution

4

This is a sample chapter from the book Entrepreneurial Solutions for Prosperity in BoP Markets: Strategies for Business and Economic Transformation [Hardcover]

Getting to the root cause of poverty requires moving beyond theory as we look at the problem from the perspective of typical individuals in Bottom of the Pyramid markets. In this chapter, Eric Kacou considers such individuals.


Every generation faces a challenge, the answer to which shapes how it is remembered in history. Poverty has emerged as the foremost challenge facing our generation. A great many approaches have been tried in the fight against poverty. Despite limited progress, most citizens in developing countries still live at the bottom of the economic pyramid (BoP).

In Fortune at the Bottom of the Pyramid, C. K. Prahalad makes a strong case that the vast majority of people living on under two dollars a day in the developing world represents an opportunity for businesses to make money while having a social impact. Finding ways to solve poverty while tapping into economic opportunity at the BoP requires that we discover why this challenge persists.

Whether in business, government, civil society, or just simple citizens, most individuals operating at the BoP face myriad challenges. These challenges not only affect productivity but also confuse attempts to unearth the root cause of poverty. Getting to the root cause requires moving beyond theory as we look at the problem from the perspective of typical individuals in BoP markets. Let us consider such individuals.

Pretoria, South Africa: Themba, CEO Who Can’t Collect

It is early Monday morning in Pretoria, South Africa. In the bustling capital city, workers head into their offices. It is the last week of the month. The excitement is tangible: It is month-end, with a coming three-day weekend. High spirits incite an eagerness to close deals, secure payments, and swiftly conclude the month’s business.

But the coming weekend is the least of Themba’s concerns.

When poverty led others to join gangs, Themba decided to start a business. The story of his firm, ITC Africa, started as the business equivalent of a fairy tale. Themba won a large multimillion rand contract to supply his national government with IT equipment and training. The deal made headlines. It was the first time a black-owned firm had won such a large tender.

Yet, nine months later, Themba feels as though he is standing in quicksand. Themba is exhausted. The government officer who is supposed to pay him hasn’t done so and has not returned his repeated telephone calls of late. Failure to make payroll would deal a devastating blow to employee morale.

To make matters worse, he has malaria and his fever is rising. As he walks out of his office, he prays that his illness doesn’t make a difficult situation impossible.

Kibera, Nairobi, Kenya: Mariam, Microentrepreneur Who Must Choose between Feeding Her Children and Feeding Her Business

Mariam is among millions of microentrepreneurs living hand-to-mouth. Stuck at what C. K. Prahalad called the Bottom of the Pyramid (BoP), these entrepreneurs struggle daily to create economic opportunities that enable them to escape crushing poverty.

The mother of three young children, Mariam faces a dilemma in Nairobi’s Kibera slum. “Cash or credit?” she thinks, taking out her last 5,000 shilling.

Cash will allow Mariam to return home a hero, with food for her children. Credit, in the form of cell phone airtime, or M-Pesa which doubles as local currency, will sustain her business.

Mariam takes a resolved step toward an airtime retailer, where she loads 5,000 shillings onto her phone. She elects to invest in her business. One thousand shillings in M-Pesa mobile money is one day of cash flow for her business.

Mariam takes the forward-looking view to increase her ability to earn a living: She’s investing in her future potential for commercial transactions, rather than the security of tangible goods in hand. Mariam sees opportunity over risk.

When asked about her decision, Mariam says she is opening her own doors. “Everyone keeps doors closed to businesspeople! That is unless you have a bribe. Otherwise, they force you to go under the door, around the door, or even create your own. Why have doors if we cannot go through them?”

One of a legion of struggling BoP entrepreneurs, Mariam’s frustration is palpable. Her only hope is that her children avoid her fate through the education and quality of life she strives to give them.

Santiago, Chile: Jaime, International Executive Who Has to Please Everyone

It is close to midnight in Santiago. Jaime sits alone in his office, finalizing the presentation for his meeting with the company’s CEO who is visiting Chile. The data tells a clear story, the graphics are compelling, and the actions are clear.

Yet, Jaime cannot help but feel something is missing. Last year, mineral giant MineGroup acquired a major minerals concession. Analysts applauded the firm for scooping a jewel. The company’s public relations team scored a coup by diffusing the good news represented by this acquisition.

A rising star at MineGroup, Jaime, a native of Bolivia, was overjoyed to lead the new entity: His international experience, managerial skills, and a Wharton MBA prepared him for this assignment.

After 100 days on the job, Jaime’s initial excitement is gradually turning into apprehension. MineGroup faces major union disputes. Protests from the community and environmental activists are multiplying.

The next morning, Jaime delivers his presentation to a full room including senior government officials, MineCorp’s CEO delegation, and the local management team. The CEO congratulates Jaime on his progress addressing strategic issues around community engagement, while ultimately stressing financial targets.

Despite a near-perfect performance in the boardroom, Jaime senses that something is still wrong. The demeanor of the Chilean counterparts tells Jaime he failed to convince them to buy into MineCorp’s vision. Jaime feels he won a small battle in a long and protracted war, but fears the situation will get much worse before it gets better. He only hopes his Latin American heritage will help him broker peace.

Kingston, Jamaica: Lisa, Business Leader Whose Industry Is Struggling

It has been a long time since Lisa had a good night’s sleep. Behind her poise, honed by a lifetime as a top hospitality entrepreneur, Lisa feels powerless to help most members in her industry association. She accepted the position of president of the hotel owners association because she believed another way was possible for Jamaica’s tourism industry. Today she is not so sure.

After studying English literature at Oxford, Lisa returned to her native Jamaica to support her parents in running their hotel. The family business has grown from a single property venture into one of the prominent chains on the island.

Over the past decade, Jamaica’s tourism industry has struggled. The island has become hostage to a cartel of large travel wholesalers selling sand and sun packages to low-paying tourists. Most hotel owners are now reduced to working to barely pay the mortgages on their properties. Larger international or regional chains with integrated distribution networks are taking over the industry.

The sector has reduced both the number and the quality of jobs, fuelling the unemployment crisis and increased violence on the island. This has resulted in the local tourism industry losing significant ground. With its limited resources, the government has not been able to offer any assistance to struggling properties. Relations across the industry have deteriorated as the pressure on stakeholders increases.

A recent hurricane damaged several properties on the Northern part of the island. A crisis meeting has been called with government. Lisa knows that several of her members will not fail to raise the unsustainable state of the industry and is not quite sure how to answer these valid concerns.

Abuja, Nigeria: Ijeoma, Government Leader Who Can’t Help Feeling Like a Beggar

After graduating top of her class at Princeton, Ijeoma had a distinguished career on Wall Street and followed by a stint in academia. Two years ago, Ijeoma agreed to serve in the government of her native state in Nigeria. Ijeoma knew she made the right decision when she visited her village and saw that people were living in worse conditions than those she experienced growing up there in the 1970s.

Ijeoma’s house was flooded by relatives begging for money to send their children to school, get medical treatments, and bury loved ones. While she understands that handouts are not the solution, she can’t just let her relatives fend for themselves.

As Minister of Finance and Economy in her state, Ijeoma is at a loss about what to do. As an economist, she believes her state needs a “big push” that would see billions of dollars invested in infrastructure, education, and private sector development.

For a variety of reasons, internal resources make up only 30 percent of her budget. Ijeoma is now reduced to begging from the central government, development partners, or anyone who will listen to get money.

Yet, Ijeoma feels stuck. She espouses the view that aid will not get African nations out of poverty. But she must alleviate the suffering of millions of her fellow citizens. From where she sits, aid seems the only pragmatic, and often possible, solution. As she sits on the plane for her ninth trip to Washington, DC, Ijeoma feels sick to her stomach. Unless she can find a solution out of her life as a beggar, she knows her personal sacrifice will have been in vain.

Washington, DC: Rob, Development Partner Can’t Work Self Out of Job

Rob has had the “development bug” for as long as he can remember. His dream has always been to work himself out of a job.

After a stint in government, Rob traveled the world as an economic development consultant. He fondly remembers traveling to remote parts of Africa, Southeast Asia, and Eastern Europe to talk about business strategy and entrepreneurship.

Thirty years later, when the new USAID administrator asked him to head its economic transformation department, Rob saw this as an opportunity to revolutionize the development conversation. At long last, he controlled the purse strings.

Rob has always believed that money was not the problem in development. Now, he knows. After injecting hundreds of millions of dollars into key initiatives over the past two years, the program review his team just completed suggests even more money is needed.

As he contemplates the next phase of his program, Rob knows something has to change. While he has some radical proposals such as enforcing a definite deadline for all his programs, he begins to wonder whether he will have the political know-how to maneuver his way out of this bind.

The Core Problem: Caught in The Survival Trap

Stories of individuals like Themba, Mariam, Jaime, Lisa, Ijeoma, and Rob play out daily in any of a hundred developing nations, from islands in the Caribbean to the landlocked heart of Africa. Entrepreneurs, managers, and leaders in BoP markets alike experience deep frustration.

It would be easy to look at these scenarios and put them into categories of common business or development issues, and prescribe “tried and true” approaches: cash flow management for Themba, access to a microfinance program for Mariam, a corporate social responsibility (CSR) strategy for Jaime, marketing efforts for Lisa, a resource mobilization drive for Ijeoma, and a new development strategy for Rob. This is exactly what development experts have done for decades.

There is real value in these initiatives. Cash flow management is critical for any business; microfinance creates opportunities to improve livelihoods at the bottom of the pyramid; and strategies matter both in business and development. But none of these initiatives are sufficient to succeed in the complex operating reality of developing nations. When we see scenarios such as the ones described above, we spring into action. These are important issues to tackle. However, all too often, the actions only offer temporary relief.

Three key gaps illustrate the unique nature of doing business in emerging markets. The first is the tension between meeting the vast unmet demands for basic services, while confronting the reality that existing businesses struggle for access to fundamentals such as educated staff and suitable infrastructure.

The second gap is the existence of The Survival Trap. The Survival Trap is a cycle that entraps those at the BoP. Its effects can be felt at all different levels throughout the nation, including the reality that the poorest nations face complete bankruptcy in their inability to meet their operating and investments needs.

Finally, conditions are such that a high proportion of potentially productive pockets of society, especially women and youth, are underutilized at significant costs to society. Acknowledging these realities is fundamental to defining a new approach to doing business and creating prosperity in BoP markets.

The question becomes, why do we keep using the “tried and true” approaches? Have we become so accustomed to them that we automatically reach to these solutions, knowing they will at least produce some results, rather than breaking with convention and stepping out into the unknown?

As Albert Einstein allegedly remarked once, “the definition of insanity is to do the same thing over and over again and expect a different result.” While “tried and true” approaches are important and can yield results in some instances, there is an even bigger problem than knowing what approach to apply. The bigger problem is this: People become stuck in a Survival Trap.

The Survival Trap is a vicious cycle that keeps individuals, businesspeople, and leaders in the developing world pursuing the same strategies in the face of chronic problems. This habitual process robs them of the power to solve their problems and catalyze significant change.

In his Action Science theory, Chris Argyris gives us a key to understanding The Survival Trap.1 The breakthrough in Argyris’ model is the recognition that operating reality (or context) and mindset matter dramatically in achieving results.

As illustrated in Figure 1.1, stakeholders stuck in The Survival Trap become overwhelmed by their operating reality and its difficulties. As a result, they develop reactive mindsets that fail to imagine solutions beyond their immediate challenges. These mindsets inform reactive actions which provide short-term relief but fail to address the real problems. When things fail to change, they repeat the same actions only with redoubled efforts.

 Figure 1.1 Stuck in The Survival Trap

Leaders, whether business, national, or development, are increasingly recognizing the success of individual firms as key to economic growth. However, when faced with a challenge, leaders often apply outdated thinking, or “winning formulas” that worked in the past. As a result, each time people fail to obtain a desired outcome, they implement the same strategy: “doing the same thing, only harder.”

Firms fail to thrive, governments continue to rely on aid, and poverty is perpetuated. Results don’t change given that the actions are fundamentally the same, and informed by previous mindsets, mental models, or beliefs. These mindsets are further shaped by the operating reality, or business environment, in which these stakeholders operate.

This situation erodes trust while increasing dependence. Trust erodes because stakeholders compete against each other to access limited and unreliable sources of aid. As a result, dependence increases, as individuals rely on somebody else to solve their problems. With effort, an expectation is created, and with each repeated failure, disappointment grows. Continuous disappointment eventually leads to distrust, resentment, and allocation of blame.

As this approach fails to generate results, ownership slips away, and the locus of responsibility shifts, breeding a culture of dependency and mistrust. This eventually evolves into endemic problems with direct implications for business. Eventually, all stakeholders operating in developing countries come to the conclusion that the “context” is to blame. Massive efforts such as the World Bank’s Doing Business Survey and the World Economic Forum’s Global Competitiveness Index are undertaken to evaluate change in the operating reality or context of countries.

Yet focusing exclusively on myriad challenges present in the operating reality often clouds the judgment of stakeholders. Instead of looking for sustainable solutions, massive, urgent action is taken that ultimately fails to deliver real solutions. Again, this approach means that a lot of work is wasted on efforts that only solve part of the problem and leaves out some of the essence.

Getting at the Essence of The Survival Trap from a Stakeholder’s Perspective

Themba, Mariam, Jaime, Lisa, Ijeoma, and Rob profiled at the beginning of this chapter illustrate the pervasiveness of The Survival Trap, which draws its power from its intangible impact on leaders operating in the developing world. No one is immune to the impacts of The Survival Trap. While the stakeholders introduced at the beginning of the chapter each come from different sectors, they are all facing the impacts of operating in The Survival Trap. In the following sections we look at specific characteristics influencing each of the five stakeholder groups introduced at the beginning of the chapter.

Mariam and Other Bottom of the Pyramid Citizens

The vast majority of citizens in the developing world are stuck in The Survival Trap on a daily basis. To fully understand their predicament, one has to have an authentic and strong sense of their daily experience:

  • Living hand-to-mouth with no savings or assets
  • Powerlessness to realize their ambitions and make their plans work
  • Lack of input in the policies and decisions that affect them the most
  • Struggling to survive today and simultaneously worrying about the future

Formidable Challenge for Themba and Other Entrepreneurs

Developing world entrepreneurs have a strong ability to overcome difficult conditions. Nonetheless, The Survival Trap is a formidable challenge even for these achievers. For instance, a relationship with government requires translating business needs into political lingo, something that is hard for entrepreneurs to grasp given their level of stress. For entrepreneurs, The Survival Trap robs them of their power to excel in the following ways:

  • Status quo merely maintained while great energy is expanded to survive in what seems like quicksand
  • Have trouble delegating right now
  • Meet closed doors everywhere to expand their businesses
  • Do not feel understood by other stakeholders, especially government

Jaime and Managers

Managers, especially international executives, come with talents and brains as well economic might. Yet, even for these stakeholders, The Survival Trap is a force to be reckoned with. Their experience is analogous with being stuck between the hammer and the anvil:

  • Sense of not being focused where they could have maximum impact
  • Growing pressure to meet the needs of an ever-expanding list of stakeholders
  • Frustrated at not being able to control or understand forces at play
  • Feel like an outsider that is not trusted by key stakeholders

Lisa and Industry or Cluster Leaders

Industry or cluster leaders have vast real-life experience and relationship networks. However, The Survival Trap compounded by globalization makes several fear for the future of their business in particular and their industries in general. Industry or cluster leaders have lost control of the key drivers in their fields:

  • Growing conflicts within the industry that fail to solve the real problem
  • Sense of loose financial control with dwindling profit margins
  • Customers, competitors, and suppliers that are outside one’s circle of influence
  • Constant need to innovate without resources and knowledge to do so

Ijeoma and Government Leaders

Beyond the appearance and trappings of power, most government leaders feel immobilized by The Survival Trap. This vicious cycle curtails their power. In hindsight, leaders point to the Trap as a major limitation to their impact:

  • Lack of focus on the “real mission” dealing instead with problems without solutions
  • Inordinate amounts of energy and time dispensed to make things happen
  • Persistent feeling of being assailed with innumerable urgent and important issues
  • Experience being at the mercy of outside forces

Rob and the Development Community

Most development workers truly want to make a difference. The Survival Trap makes this righteous objective untenable by becoming frustrated by government. And government blames business for being overly demanding and greedy.

  • The BoP point fingers to the elite, who in turn blame the international community.
  • The international community decries the irresponsibility of local leaders.
  • Blame escalates, communication breaks down, and the status quo persists.
  • Everyone feels a certain level of powerlessness and frustration.

Everyone experiences their own version of The Survival Trap. As a business leader once said, “the truth is that we are stuck in a situation where the elite sees its asset base deplete while the rest of the population lives in utmost misery. The situation is getting worse for all of us.”

His insight points to a good metaphor to illustrate The Survival Trap, that of the Greek’s mythical Sisyphus who is compelled to roll a huge rock up a steep hill. But before he can reach the top of the hill, it always rolls back down, forcing him to begin again. The gods thought that there was no greater punishment than futile work that ultimately did not change the final result. Many stuck in The Survival Trap would agree.

BoP Markets as the Biggest Untapped Business Opportunity

As illustrated by the case of Mariam, most people living at the bottom of the pyramid are in The Survival Trap and forced to make difficult choices.

While awareness of opportunities in BoP markets has increased following C. K. Prahalad’s work, these opportunities remain unclear to the majority of business executives and leaders.

It is therefore important to revisit the global importance of BoP markets. Those most affected by The Survival Trap are those at the BoP, those that Prahalad has characterized as an untapped and potentially highly profitable market segment.

The base of the pyramid has productive and entrepreneurial capabilities, as well as representing a massive purchasing force with significant unmet needs for goods and services. If the productivity of this group is harnessed, the impact could be the game changer needed to once and for all alter the dynamic whereby the majority of humanity remains poor.

Characterized by income below $3,000 per annum, BoP citizens number four billion people throughout the world. The four billion people who live in relative poverty have purchasing power representing a $5 trillion market, according to a report by the IFC, the private sector arm of the World Bank Group, and World Resources Institute (WRI).2 Figure 1.2 offers a breakdown of this market across regions.

 Figure 1.2 BoP income by region

The second thing to consider is that the BoP has spending preferences reflected in how it allocates its budget on different services. While food comes on top with almost $3 trillion or 60 percent of all spending, energy ($433 billion), housing ($332 billion), and transportation ($179 billion) represent big opportunities.3

The Case of Africa: Islands of Opportunity in a Sea of Challenges

“Africa is humanity’s last frontier in the search for development,” President Jakaya Kikwete of Tanzania recently remarked.4 This last frontier mentality encapsulates the need for a catalyst, for fundamental change, to the manner in which business and development are approached in all BoP markets.

Understanding the unique nature of BoP markets, especially Africa, enables us to identify and address the barriers to transformative change. The important component is to see opportunities where others see the need to fix problems.

To understand the case of Africa, consider the empirical evidence. The economic and human indicators are dire. Over the past 42 years, $568 billion (in today’s dollars) has flowed into Africa, yet per capita growth of the median African nation has been close to zero.5 Despite massive efforts, the number of people living on less than one dollar a day barely changed between 1990 and 2005, declining just 5 percent to 41.1 percent. An important factor to consider is that economic flow is diluted by population growth. Further, the share of the poorest 20 percent has not increased over the 1990-2005 period.

Over the same 15-year period, mortality rates for children under five dropped by less than 3 percent, and only an additional 5 percent of the population have gained access to basic sanitation, leaving 37 percent of people without this necessity.6 One composite for general progress across all categories, the Human Development Index, placed sub-Saharan Africa’s rank in 2007 at 0.514, showing little improvement over the life of the index and ranking well below other regions.7

However, there is promise too. Africa is increasingly recognized for the breadth of commercial opportunities it provides. Its population numbers almost a billion with an estimated 42 percent under 18.8 The low level of development, combined with rapid population and economic growth, means opportunity for the taking.

The story of Africa’s cellular operators is one compelling example. Africa is the fastest growing mobile market in the world with mobile penetration in the region ranging from 30 percent to 100 percent and in most countries exceeding the fixed line penetration.9

In 2005, the $3.4 billion Zain’s acquisition of Celtel was one of the largest deals in emerging markets. In the process, African entrepreneurs like Mo Ibrahim have made fortunes. Similar opportunities exist in sectors such as financial services, healthcare, and infrastructure.

Africa’s opportunities are stifled by the continent’s performance as a business destination. African nations lag the rest of the world in economic competitiveness. Forty-eight out of the last fifty nations in the World Bank’s Doing Business survey hail from Africa.

The gloomy picture painted by these rankings reflects a daily struggle for businesses. Routine procedures, such as the time to file corporate tax returns, take on average three times longer in Africa than in the West. Most businesses cannot count on consistent and affordable supplies of power, water, and other basic infrastructure.

The Survival Trap has also had an impact on Africa’s standing in international trade. According to a recent World Bank study “Despite continued commitment to reduce tariff and non-tariff barriers to trade, Africa’s share of world exports is on a downward trend. African countries have been unable to gain strong presence in the global manufacturing market and thus remain highly dependent upon a narrow range of primary commodities for their export earnings, leaving them vulnerable to market shocks.”10

International aid strategy has failed to create sustainable prosperity, largely due to a failure to support business. A debate is currently raging between the proponents of more aid with Jeffrey Sachs as the lead spokesman and, on the other side, those who want Aid Dead, to borrow from the title of Dambisa Moyo’s book.

The Solution

Escaping The Survival Trap requires answering this question: What do we do when doing more of the same is not enough? When more ceases to be enough, a different approach is required.

Unlike Sisyphus’s predicament, the good news is that we have a say on whether we remain stuck in The Survival Trap. What if one solution—one issue—is the central concern in this trap, with many different manifestations?

What if we went beyond that and discovered not only that there is one solution, but a solution that affects not only economic implications of The Survival Trap but all other issues related to this vicious cycle? Is there one answer that can integrate all of that?

What is that one answer driving all of these other problems?

“Mindsets.”

Mindsets provide the key to escaping The Survival Trap.

In each one of these scenarios, there is one common issue—the stakeholders above harbor mindsets that impact their actions. We must start with mindsets and ask hard questions about the thinking underlying our actions. We are then able to engage in what Argyris and Schön call double-loop learning. In a nutshell, double-loop learning occurs when stakeholder or organizations correct errors by revisiting the underlying norms, policies and objectives.11 We expand this idea in our discussion of mindsets in Chapter 3, “Why Mindsets Matter.”

When we engage in double-loop learning, we are able to change our mindsets and as a result take new actions that go outside established patterns. Such double-loop learning is the key to escaping The Survival Trap.

Focusing solely on “operating reality” leads stakeholders to consider generic or massive solutions, to shift the locus of responsibility, and ultimately to reinforce feelings of powerlessness. Instead of confronting reality, one ends up shifting responsibility for the challenges one faces. Focusing on mindset, however, invites stakeholders to recognize the central role individuals play in bringing change to massive systems. That realization is powerful because it makes substantial change possible.

Figure 1.3 illustrates how stakeholders can lead the escape out of The Survival Trap by focusing on mindsets instead of being overly reactive to the context. It makes us question our assumptions about the situation we are facing while bringing forward hard questions about context, actions, and results that can help move us out of this vicious cycle.

 Figure 1.3 Escaping The Survival Trap

Why Business Must Lead BoP Nations out of The Survival Trap

So far, we have established that The Survival Trap is an experience shared by all stakeholders in the developing world. We have also discussed how escaping The Survival Trap requires mindset change.

The next step is to identify the stakeholders best positioned to lead the change process. Business, both entrepreneurs and managers, must be at the forefront of the struggle for prosperity in BoP. First, because the core of the challenge in these regions stuck in The Survival Trap is economic. Both individual experiences and empirical evidence highlight this challenge. When inspired by the right values, firms are better equipped to solve economic challenges. This is not to say that government and development partners have no role to play. Indeed, their foremost responsibility is in improving the operating reality for firms to compete.

Among businesspeople, entrepreneurs are prime candidates to serve as change agents and have a unique perspective. By definition, entrepreneurs are problem solvers. They also have an excellent track record of producing results in BoP markets.

Second, business has an incentive to solve the challenges in BoP markets. In Africa Rising, Dr. Vijay Mahajan redefines Africa from a collection of countries with varying agendas and conflicts, to a unified pan-African consumer base of one billion with tremendous purchasing power. Africa is awaiting its entrepreneurs to build fortunes while helping the continent escape The Survival Trap.

Finally, there is a strong moral imperative for businesspeople to transform their communities. While such successes are commendable and inspiring, they highlight the sharp contrasts that exist within BoP markets. To succeed in these environments, it is important that entrepreneurs realize that they cannot live in castles in the midst of slums without repercussions. The moral case for business to lead the escape out of The Survival Trap is compelling.

In leading BoP markets out of the Trap, it matters a great deal that businesses understand the value of collaboration. This is particularly important because the difficult context of BoP markets has taught businesses to be self-reliant. While this self-reliant mindset is critical to prevail over the tough challenges in BoP markets, business must understand that it is not enough to change the context alone.

When operating in BoP markets, most businesses are faced with a host of apparent problems: market inefficiencies, production difficulties, and global competition. Yet a sole focus on those can be misleading. The deepest challenge, mindset, is not apparent.

A distinguishing feature of most successful executives in BoP markets is their superior ability to go beyond the apparent and confront the reality of the mindsets that inform unproductive behavior. A key to prospering in BoP markets is the capacity to change these mindsets and foster new behavior. The business leaders discussed in this book are good illustrations.

The magnitude of the challenge requires that businesses come together if they are to succeed. Business must leverage partnerships, associations, and clusters to address their business challenges in a sustainable manner. Beyond cooperation with other businesses, firms must also collaborate with government and development partners to solve some of the structural issues in TST countries including infrastructure, rule of law, and so on.

Building Partnerships That Transcend The Survival Trap

Businesspeople are but one, albeit one of the most important, set of stakeholders that can help BoP nations prevail over The Survival Trap. Other change makers include political leaders and development financing institutions.

Political leaders often define the playing field where entrepreneurs operate. Through their vision (or lack thereof), political leaders perpetuate bad strategies that have kept developing countries poor. The fundamental mindset shift required here is the acceptance that business must drive prosperity creation, which runs opposite the classic development model.

While this model made tremendous sense when the elites needed to focus on politics to build new nations post-independence, new global conditions require a different approach. Instead, citizens living in countries characterized by The Survival Trap must be empowered to take responsibility and exercise self-determination at all levels.

Most BoP countries are emerging nations with young and growing populations that aspire to live a prosperous life according to their own definitions. These aspirations translate into business opportunities such as selling new products, which for-profit businesses are in the best position to provide.

One of the crucial mindsets to overcome is zero-sum thinking—a belief derived from economic theory and game theory that suggests that one’s neighbor and oneself cannot prosper at the same time. Such thinking makes public sector leaders and development partners loathe entrepreneurs.

As a result, these groups often assume that helping business executives is helping the rich instead of focusing on the poor. These groups need to acknowledge that their focus to help the poor has been misguided and needs to shift in order to get the sought-after results—alleviating poverty and creating prosperity.

Practical Solutions for Escaping The Survival Trap

As discussed above and further explored throughout this book, varied stakeholder groups have unique roles to play in the process of escaping The Survival Trap. Stakeholders must realize that business creates opportunities for all citizens as players, especially the poor. Business has the know-how to deploy capital effectively for all involved. Entrepreneurial Solutions for Prosperity frames the debate for each of the key players.

  • Business Businesspeople must equip themselves to “name the elephant in the room” in their businesses and at the national level. By identifying The Survival Trap and its characteristics, entrepreneurs are then able to identify practical actions within their control to address its pervasive effects. Managers must develop an improved understanding of the challenges of operating in BoP markets, in particular the unique challenges of an environment as nuanced as emerging nations especially Africa. All business leaders will learn how to leverage the Seven Opportunities to conduct “good” and profitable business in BoP markets.
  • Government Governments sometimes embrace “private sector led development” without the tools to effectively fuel this change. Failure comes from the lack of a structured approach linking mindset change to day-to-day actions. Entrepreneurial Solutions for Prosperity helps government leaders identify the mindsets and actions required to enable businesses operating in BoP markets to have a positive societal impact, while maintaining optimal profitability. Government further learns to foster an entrepreneurial mindset in their midst and break continuous dependence on development partners.
  • Development partners Development partners gain the tools to challenge both business and governments to play their respective roles in fostering prosperity in BoP countries. Partners also develop a better understanding of the systemic reasons BoP markets remain mired in poverty, and identify the mindsets and actions to enable businesses in BoP markets to operate effectively. Finally, development partners gain the resources necessary to challenge the existing entrepreneurship/private sector development model that puts the onus on development partners and government as opposed to the entrepreneur.

The Approach

This is primarily a book about prosperity creation in business and society. It is about your business, your institution, your nation, and your sense of control over your economic destiny. Hopefully, it will help you think and act differently so that we together can escape The Survival Trap.

The initial focus is on defining mindsets and their impact on business. Mental models are measurable and changeable. Good frameworks exist across disciplines to change mindsets. The next chapter addresses these issues.

Themba, Mariam, Jaime, Lisa, Ijeoma, and Rob consider this new perspective; they realize how uncomfortable they are with the idea of mindset. I explore a few underlying concepts to understand these mindsets and the implications on their lives.

Next, we move to identify and provide specific opportunities for entrepreneurs, managers, and leaders to not only change the mindsets that inform their economic strategies but also act differently. Throughout I offer case studies of businesspeople and leaders who have successfully confronted The Survival Trap in their lives, transforming their businesses, and in some cases their nations.

To order, visit Amazon.com

‘Entrepreneurial Solutions’ Transform BoP Markets for Prosperity

0

The quest for prosperity requires a radical shift in perspective. This book will equip entrepreneurs and other leaders with a roadmap for success.

New York, NY – Four billion people – more than half of the world’s population – lives on less than $2/day. A revolution is underway where these citizens refuse to be stuck in survival. Recent events in Egypt illustrate this cry for change.

Yet, leading business thinkers have identified this population – often called the “Base of the Pyramid” (BoP) – as one of the greatest opportunities of the 21st century.

Many business leaders have considered these markets “too difficult to crack” – or have failed trying to do so. Similarly, entrepreneurs operating in Base of the Pyramid markets struggle to realize the economic potential of the market.

Author Eric Kacou identifies the problem as the ‘survival trap’ a tendency for businesses and nations to focus on short-term crises at the expense of developing long-term strategies for prosperity.  This vicious cycle keeps individuals poor, businesses struggling, and nations under-developed.

This book is about prosperity creation in business and society.” states Kacou about his new book, Entrepreneurial Solutions for Prosperity in BoP Markets (Wharton School Publishing, ISBN-13: 9780137079261, 336 pages, $29.99, January 2011). After identifying outdated mindsets which have lead to mistrust, dependence, and failure, this book shares the secrets of entrepreneurs that have made it and are transforming the Base of the Pyramid markets where they operate.

What do the successes of these entrepreneurs and of nations like Rwanda teach us about fostering the entrepreneurial spirit at the Base of the Pyramid?  What practical techniques can business and government leaders use to unleash the untapped potential of this huge market?

Kacou identifies the breakthrough mindsets, business models and operational techniques for success. Drawing from research and experience in low-income nations, Kacou reveals seven opportunities for unleashing a virtuous cycle of prosperity. These seven opportunities equip readers with the tools to take their economic destiny in their own hands.

Rather than a call for outside help, Entrepreneurial Solutions for Prosperity in BoP Markets is a call to action for entrepreneurs and other leaders. It equips citizens at the BoP with the tools necessary to take control of their economic destiny. Specifically, readers will gain a better understanding of:

  • Why Mindsets Matter: mindsets drive actions and by extension results at base of the pyramid. Stakeholders have the power to improve their reality by adopting new mindsets. This book offers specific mindsets that can act as keys to escape the Survival Trap.
  • What are the Solutions for Escaping the Survival Trap: after offering a diagnostic tool of prevailing mindsets, this book proposes human-centric approaches for prosperity.  Rooted in the reality of BoP markets, these seven approaches align businesses to the specific challenges of operating in low-income nations.
  • How to deploy these solutions for business success and economic transformation: integration is required to move from individual success to broad based prosperity. Rwanda’s metamorphosis provides the capstone example of the power of collectively embracing entrepreneurial mindsets.

At a time of transformative choices, discerning leaders now have a blueprint for prosperity. By unleashing an entrepreneurial revolution, the energies of half of the world’s population will be leveraged as the base of the pyramid lifts itself out of poverty.

Check out an excerpt from the book by visiting www.entrepreneurialsolutionsforprosperity.com

If you are interested in receiving a copy of Entrepreneurial Solutions for Prosperity in BoP Markets (electronic format also available) or an interview with the author, please contact Charity Kabango at 647-833-7496 / ckabango@entrepreneurialsolutionsforprosperity.com

About the Author

A native of Cote d’Ivoire, Eric Kacou is co-founder and CEO of Entrepreneurial Solutions Partners (ESP), a firm providing entrepreneurs and leaders with the right mix of insight and capital needed to generate prosperity. Prior to starting this venture, this, he served as Managing Director of OTF Group, a competitiveness consultancy focused on emerging markets. An expert in business strategy and economic reconstruction, he led the Rwanda National Innovation and Competitiveness (RNIC) Program. Eric also served CEOs and leaders of over a dozen developing countries and international development partners. Eric started his career as a strategy consultant with Monitor Company advising Fortune 500 executives. A candidate Mason Fellowship in Public Policy at the Harvard Kennedy School, Eric earned his MBA at the Wharton School, and serves on the Wharton Executive Board for Europe, Africa and the Middle East. The World Economic Forum honored Eric Kacou as a Young Global Leader.

Integrated Circuit Design Flow

0

The process of chip design is very complex and its understating requires many years of study and practical experience. From a digital integrated circuit design perspective, it could be divided into different hierarchies or stages where the problems are examined at several different levels: system design, logic design, circuit design, layout design, fabrication and testing. These steps are not necessarily sequential; interactions are done in practice to get things right.

System Design: This stage provides the specifications and main operations of the chip. It examines such issues like chip area, power, functionality, speed, cost and other design factors while setting these specifications. Sometimes, the resources available to the designer could act as a constraint during this stage. For instance, a designer may like to design a chip to work at 1.2V, but available process technology can only support a voltage of 5V. In this situation, the designer has to adjust these specifications to satisfy the available tools. It is always a good habit to understand the process technology available before system design and specifications. Process technology is basically the specific foundry technology rules where the chip would be fabricated. Typical examples are AMI 0.5um, TSMC 0.35um and IBM 0.13um. A design based on one process technology is unique to that process and accordingly should be fabricated in a foundry that supports that process. At the system design level, the main sections of the system are illustrated with block diagrams, with no details on the contents of the blocks. Only the input and output characteristics of the sections are detailed.

Logic Design: At this stage, the designer implements the logic networks that would realize the input and output characteristics specified in the previous stage. This is generally made of logic gates with interconnecting wires that are used to realize the design.

Circuit Design: Circuit design involves the translation of the various logic networks into electronic circuitries using transistors. These transistors are switching devices whose combinations are used to realize different logic functions. The design is tested using computer aided design (CAD) tools and comparisons are made between the results and the chip specifications. Through these results, the designer could have an idea of the speed, power dissipation, and performance of the final chip. An idea of the size of the chip is also obtained at this stage since the number of transistors would determine the area of the chip. Experienced designers optimize many design variables like transistor sizes, transistor numbers, and circuit architecture to reduce delay, power consumption, and latency among others. The length and width of the transistors must obey the rules of the process technology.

Layout Design: This stage involves the translation of the circuit realized in the previous stage into silicon description through geometrical patterns aided by CAD tools. This translation process follows a process rule that specifies the spacing between transistors, wire, wire contacts, and so on. Violation of these rules results to malfunctioning chips after fabrication. Besides, the designer must ensure that the layout design accurately represents the circuit design and that the design is free of errors. CAD tools enable checks for errors and also incorporate ways of comparing layout and circuit designs provided in form of Layout Versus Schematic (LVS) checks. When errors are reported, the designer has to effect the corrections. A vital fundamental stage in layout design is Extraction, which involves the extraction of the circuit schematic from the layout drawings. The extracted circuit provides information on the circuit elements, wires, parasitic resistance and capacitance (a parasitic device is an unbudgeted device that inserts itself due to interaction between nearby components). With the aid of this extracted file, the electronic behavior of the silicon circuit is simulated and it is always a good habit to compare the results with the system specification since this is one of the final design stages before a chip is sent to the foundry.

Fabrication: Upon satisfactory verification of the design, the layout is sent to the foundry where it is fabricated. The process of chip fabrication is very complex. It involves many stages of oxidation, etching, photolithography, etc. Typically, the fabrication process translates the layout into silicon or any other semiconductor material that is used. The result is bonded with pins for external connections to circuit boards.

Fabrication process uses photolithographic masks, which define specific patterns that are transferred to silicon wafers (the initial substrate used to fabricate integrated circuits) through a number of steps based on the process technology. The starting material, the wafer, is oxidized to create insulation layer in the process. It is followed by photolithographic process, which involves deposition of photoresist on the oxidized wafer, exposure to ultra-violet rays to form patterns and etching for removal of materials not covered by photoresist. Ion implantation of the p+ or n+ source/drain region and metallization to form contacts follow afterwards. The next stage is cutting the individual chip from the die. For external pin connection, bonding is done. It is important to emphasize that this process steps could be altered in any order to achieve specific goals in the design process. In addition, many of these functions are done many times for very complex chips. Over the years, other methods have emerged. A notable one is the use of insulators (like sapphire) as starting materials instead of semiconductor substrate (the silicon on which active devices are implanted) to build the transistors. This method called Silicon on Insulator (SOI) minimizes parasitic in circuits and enable the realization of high speed and low power dissipation chips.

Testing: The final stage of the chip development is called testing. Electronic equipment like oscilloscopes, probes, pattern generators and logic analyzers are used to measure some parameters of the chip to verify its functionalities based on the stated specifications. It is always a good habit to test for various input patterns for a fairly long time in order to discover possible performance degradation, variability, or failures. Sometimes, fabricated chip test results deviate from simulated results. When that occurs, depending on application, the designer could re-engineer the circuit for improvement and error corrections. The new design should be fabricated and tested at the end.

The Design Paradigm Associated With Microelectronics

0
SUNY College of Nanoscale Science and Engineering's Michael Liehr, left, and IBM's Bala Haranand look at wafer comprised of 7nm chips on Thursday, July 2, 2015, in a NFX clean room Albany. Several 7nm chips at SUNY Poly CNSE on Thursday in Albany. (Darryl Bautista/Feature Photo Service for IBM)

Microelectronics products are ubiquitous. Simply, they are everywhere and the applications cut across industries. There seems to be no field where the technology has not transformed. In the pyramid of technology creation, microelectronics is positioned at the upstream level. Its advancements affect other technologies. It is safe to say that if there is no innovation in microelectronics, the ICT industry will stall and will eventually fade in style. The products come in various sizes and forms, the unnoticeable motor controller in the ‘toy train’ to the sophisticated microchips deployed in critical life saving tools used in hospital operating rooms.

Microelectronics industry (or better, electronics industry) has evolved over many decades. The era of vacuum tubes before Shockley invented the transistor at Bell Labs. The era of using discrete components-using (external) wires to join capacitors, resistors, diodes and other components together to form circuit. The problems and limitations of these ‘mouse-trap’ circuit boards were obvious. With those wires, the problems of noise (capacitive, inductive, etc) are exacerbated. The result was low performance electronic systems.

Around 1957, a Texas Instrument engineer, Jack Kilby, figured out how to make circuits without the need of using these external wires that degrade performance. He was able to help introduce a way to make all the components, resistors, transistors, capacitors, etc on the same die (substrates or simply a piece of processed silica where the circuit patterns are formed, cut them apart and you have chips). In other words, he integrated the processes of making all the components used in making circuits and eliminated the need of making them separately (as in discrete systems) and then having to solder them together with wires later. His idea, gave him a Nobel Prize, transformed the electronic industry. Not only did his idea help the improvement of performance, it also reduced the cost of making the systems. It makes sense since all the components could be fabricated virtually at the same ‘time’ with better control on process, technology and other issues which could deviate from time to time if all the units have to be made individually. Also, the products become more compact as all the components are ‘one’ and packaged alike. In most cases, the cost of developing one IC (integrated circuit) that contains 100 components could compete with the cost of developing one component. Before integration, that will be 100x cost.

Kilby’s invention helped advanced the field and gave us a new industry, microelectronics. The change from electronics to microelectronics has to do with the small dimensions of the components which are used in engineering the systems. Transistor dimensions are usually given in microns (10^-6). We are moving into the nanometer regime right now as in few years, the dimensions will be primarily dominated in the nanometer regime for state of the art designs. Nanoelectronics! Sounds familiar?

Nonetheless, let us not get carried away by history. With the advent of integrated circuits, and subsequent development of CMOS (complementary metal oxide semiconductor) technologies, there has been remarkable success in the number of application specific integrated chips (ASIC). (Let me explain in steps: CMOS is a type of transistor that works on filed effect dynamics (more on this later). ASIC is a type of chip or microchip that is designed with a specific function or application in mind; contracts with field programmable gate arrays (FPGA) which can be programmed for many different applications). Interestingly, FPGA or programmable controllers have integrated circuits that enable them to be used. The design of integrated circuit is exciting, but it is extremely knowledge-intensive. It requires mastery.

Integrated circuits are circuits that could contain millions of transistors and other circuit elements on a single die (a piece of silicon that contains active devices and input and output interfaces). They are made on special materials called semiconductors with silicon and gallium arsenide (GaAs) the most common. Its evolution is a major milestone in the history of modern industry as it has driven a revolution in computing capability due to a long trend in performance, density gains, and cost with scaling. Remarkably, these circuits could be made using different technologies. But over time, CMOS has become the industry de-facto and the most prevalent method of choice. Its major advantages over other technologies are its ease of integration of circuit components and low static power consumption. This is the main technology used to make analog-to-digital converters, micro-controllers, FPGA (an integrated circuit that contains an array of identical cells with programmable interconnections), microprocessors and host of others that are used while developing entertainment hardware. Its continuous improvements has driven reduction in size of game gadgets, better performance, more efficient battery management for battery operated devices, cost as well as hardware ergonomics.

Integrated circuit could be digital, analog or mixed signal (a combination of both analog and digital). While the digital chip involves designing at logic levels of 1 and 0, the analog is based on continuous signal. Besides, sequencing and communication synchronization on chip could be done by use of globally distributed clocks for synchronous designs or local handshaking variables for asynchronous designs. Between these two methods, the former is the more common method. However, issues like switching delay, complexity management and clock distributions, which may place limitation on synchronous chip performance with an acceptable level of reliability as technology is scaled down, had stimulated interests in the study of asynchronous systems. Asynchronous chips are known as self timed circuits since they do not use clocks but rather use local variables that perform the functions of handshaking requests and acknowledgements. Design of asynchronous digital system involves an entirely different concept when compared to synchronous design. The idea of clockless system introduces so many design parameters, which must be tracked as the requests, and acknowledgements signals are generated and routed. The initial stage of asynchronous system development would interest a computer scientist because of enormous digital “coding” that describes level of system abstraction.

In the next blog, we will examine a typical design flow for an integrated circuit.