Around 1.5 billion people, or more than a fifth of the world’s population, have no access to electricity, and a billion more have only an unreliable and intermittent supply. Of the people without electricity, 85% live in rural areas or on the fringes of cities. Extending energy grids into these areas is expensive. But why wait for top-down solutions? Providing energy in a bottom-up way instead has a lot to recommend it. There is no need to wait for politicians or utilities to act. The technology in question, from solar panels to low-energy light-emitting diodes (LEDs), is rapidly falling in price. Local, bottom-up systems may be more sustainable and produce fewer carbon emissions than centralised schemes. In the rich world, in fact, the trend is towards a more flexible system of distributed, sustainable power sources. The developing world has an opportunity to leapfrog the centralised model, just as it leapfrogged fixed-line telecoms and went straight to mobile phones.
just as the spread of mobile phones was helped along by new business models, such as pre-paid airtime cards and village “telephone ladies”, new approaches are now needed. “We need to reinvent how energy is delivered,” says Simon Desjardins, who manages a programme at the Shell Foundation that invests in for-profit ways to deliver energy to the poor. “Companies need to come up with innovative business models and technology.” Fortunately, lots of people are doing just that.
Let there be light Start with lighting, which prompted the establishment of the first electrical utilities in the rich world. At the “Lighting Africa” conference in Nairobi in May, a World Bank project to encourage private-sector solutions for the poor, 50 lighting firms displayed their wares, up from just a handful last year. This illustrates both the growing interest in bottom-up solutions and falling prices. Prices of solar cells have also fallen, so that the cost per kilowatt is half what it was a decade ago. Solar cells can be used to power low-energy LEDs, which are both energy-efficient and cheap: the cost of a set of LEDs to light a home has fallen by half in the past decade, and is now below $25.
“This could eliminate kerosene lighting in the next ten years, the way cellphones took off in about 13 years,” says Richenda Van Leeuwen of the Energy Access Initiative at the UN Foundation in Washington, DC. That would have a number of benefits: families in the developing world may spend as much as 30% of their income on kerosene, and kerosene lighting causes indoor air pollution and fires.
But such systems are still beyond the reach of the very poorest. “There are hundreds of millions who can afford clean energy, but there is still a barrier for the billions who cannot,” says Sam Goldman, the chief executive of D.light. His firm has developed a range of solar-powered systems that can provide up to 12 hours of light after charging in sunlight for one day. D.light’s most basic solar lantern costs $10. But the price would have to fall below $5 to make it universally affordable, according to a study by the International Finance Corporation, an arm of the World Bank. So there is scope for further improvement.
It is not just new technology that is needed, but new models. Much of the ferment in bottom-up energy entrepreneurialism is focusing on South Asia, where 570m people in India, Pakistan and Bangladesh, mostly in rural areas, have no access to electricity, according to the International Energy Agency. One idea is to use locally available biomass as a feedstock to generate power for a village-level “micro-grid”. Husk Power Systems, an Indian firm, uses second-world-war-era diesel generators fitted with biomass gasifiers that can use rice husks, which are otherwise left to rot, as a feedstock. Wires are strung on cheap, easy-to-repair bamboo poles to provide power to around 600 families for each generator. Co-founded three years ago by a local electrical engineer, Gyanesh Pandey, Husk has established five mini-grids in Bihar, India’s poorest state, where rice is a staple crop. It hopes to extend its coverage to 50 mini-grids during 2010. Consumers pay door-to-door collectors upfront for power, and Husk collects a 30% government subsidy for construction costs. Its pilot plants were profitable within six months, so its model is sustainable.
Generating electricity from rice husksEmergence BioEnergy takes this approach a step farther. Its aim is to provide many entrepreneurial opportunities around energy production, says Iqbal Quadir, the firm’s founder, who is also director of the Legatum Centre for Development & Entrepreneurship at the Massachusetts Institute of Technology (MIT). A cattle farmer in a small village in Bangladesh might, for example, operate a one-kilowatt generator in his hut, powered by methane from cow manure stored in his basement. He can then sell surplus electricity to his neighbours and use the waste heat from the generator to run a refrigerator to chill milk. This preserves milk that otherwise might be spoilt, offers new sources of income to the farmer (selling power and other services, such as charging mobile phones or running an internet kiosk) and provides power to others in his village.
The farmer funds all this with a microfinance loan. It is no coincidence that this is a similar model to the “telephone lady” scheme, pioneered in Bangladesh a few years ago, in which women use microloans to buy mobile phones and then sell access, by the call, to other villagers; Mr Quadir helped establish Grameenphone, now the largest mobile operator in Bangladesh, and hopes to repeat its success in energy. After a pilot project in two villages, Emergence BioEnergy plans a broader roll-out in 2011 in conjunction with BRAC, a giant microfinance and development NGO.
Another project, in India, aims to convert women from gathering wood, which denudes forests, to using canisters of liquefied petroleum gas (LPG). India’s four state-owned regional power companies, including Bharat Petroleum Corporation, will build a national network of thousands of LPG-powered community kitchens. Local entrepreneurs will then provide the LPG and charge villagers to use the kitchens in 15-minute increments.
Harish Hande, managing director of Selco Solar, a social enterprise in India that promotes the adoption of new energy technologies, says the important thing is not so much to deliver energy to the poor, but to provide new ways to generate income. His firm has devised a solar-powered sewing machine, for example. Last year Mr Hande started an incubation lab in rural Karnataka, in southern India, to bring together local customers and engineering interns from MIT, Stanford and Imperial College, London. The lab is currently piloting a hybrid banana dryer that runs on biomass during wet spells and sunlight on dry days to make packets of dried banana—so that farmers no longer have to rely on selling their crop immediately.
Making it pay Even when new technology and models are available, the logistics of rolling them out can be daunting. The two big challenges are providing the upfront investment for energy schemes, and building and maintaining the necessary distribution systems to enable them to reach sufficient scale. At the moment, most schemes are funded by angel investors, foundations and social venture-capital funds. There is a vigorous debate about whether the private sector on its own can make these models work as technology improves, or whether non-profit groups are needed to fill the gaps in funding and distribution.
Microfinance institutions may seem the natural financial partners to help the poor pay for energy systems, since they are the only organisations with millions of poor customers. But teething problems are formidable and success stories are few, says Patrick Maloney of the Lemelson Foundation, which invests in clean-energy technologies for the poor. A telephone lady could buy a mobile phone for a relatively small sum, and would immediately have a source of income with which to repay the loan. Although a household that buys a solar lamp saves money on kerosene, the investment takes several months to pay for itself, and there is no actual income from the lamp. For bigger energy projects, such as micro-generators, the loan required is much larger, and therefore riskier, than the loan for a mobile phone.
Moreover, microfinance institutions may lack the funds to identify reliable energy suppliers, educate loan officers about clean-energy technologies and build a support network for energy schemes. One way to solve this problem, being pursued by MicroEnergy Credits, a social enterprise, is to plug microfinance institutions into carbon markets. Projects can then be funded by selling carbon credits when a microfinance customer switches from kerosene to solar lighting, for example.
Distribution is also a problem, particularly in Africa and South Asia, where the majority of the world’s energy-poor live. Infrastructure and supply chains are poor or non-existent, particularly in rural areas. Recruiting and training a sales force, and educating consumers of the benefits of switching away from wood or kerosene, must be paid for somehow. Social enterprises are innovating in this area, too. Solar Aid, a non-profit group, specialises in setting up microfranchises to identify and train entrepreneurs. The organisation works with local authorities to identify potential entrepreneurs, who must gather signatures from their local community—providing both the endorsement of their neighbours and a future customer base. They then undergo five days of training with an exam at the end. Solar Aid is also testing a kiosk-based system to help entrepreneurs distribute LED lighting in the Kibera district of the Kenyan capital, Nairobi.
Some hurdles to bottom-up energy projects are more easily addressed. In particular, high import duties on clean-energy products in many developing countries, notably in Africa, hamper their adoption by the poor. Ethiopia, for example, imposes a 100% duty on imports of solar products, while Malawi charges a 47.5% tax on LED lighting systems. Such taxes are sometimes defended on the basis that only the rich can afford fancy technology. But the same was said about mobile phones a decade ago—and look at them now.
The supply-side approach to innovation assumes that innovation emerges naturally from a corporate environment that encourages everyone to think big thoughts. Yet, Vijay Govinarajan and Chris Timble argue in their seminal book "the other side of innovation: Solving the execution challenge" that this approach is not delivering results because it spreads resources thinly and indiscriminately. Companies dissolve into a thousand small initiatives rather than focusing on a few big problems. It also produces far too many ideas: managers have to spend weeks sorting through the chaff to find a few grains of wheat.
The fashion these days is to focus on the supply side of innovation: for example, by encouraging everyone to think big thoughts. 3M, the maker of Post-it notes, expects its workers to spend 15% of their time on their own projects. Google expects them to spend 20%. This approach is attractively democratic: by giving everyone a chance to innovate, it makes everyone feel special. Or so the theory goes. G&T are ready with the cold water. The let-them-loose approach spreads resources thinly and indiscriminately. Companies dissolve into a thousand small initiatives rather than focusing on a few big problems. It also produces far too many ideas: managers have to spend weeks sorting through the chaff to find a few grains of wheat.
A second approach focuses on closing the loop between ideas and results. Nucor Corporation, a steelmaker, gives its workers bonuses if they can produce steel more efficiently. Deere & Company, a maker of farm machinery, has produced a detailed playbook on how to design new tractors. G&T concede that this approach is an excellent way of making incremental improvements to existing products and processes, but suggest that it has little chance of producing a big breakthrough.
G&T say that you need to start by recognising that innovation is unnatural. Established businesses are built for efficiency, which depends on predictability and repeatability—on breaking tasks down into their component parts and holding employees accountable for hitting their targets. But innovation is by definition unpredictable and uncertain. Bosses may sing a pretty song about innovation being the future. But in practice the heads of operational units will favour the known over the unknown.
Many would-be innovators deal with the trade-off between efficiency and innovation by rejecting traditional management entirely. They repeat mantras about “breaking all the rules” and “asking for forgiveness rather than permission”. They set up skunk works (small, autonomous units with a remit to innovate) and mock the boring corporate types who write their pay-cheques. But again this is counter-productive. Mocking the corporate establishment only encourages it to starve you of resources. And producing ideas in isolated skunk works ignores the basic reason for working for a big company in the first place—to use its superior resources to supercharge what you are doing.
G&T argue that companies need to build dedicated innovation machines. These machines need to be free to recruit people from outside (since big companies tend to attract company men rather than rule-breakers). They also need to be free from some of the measures that prevail in the rest of the company. But they must avoid becoming skunk works. They need to be integrated with the rest of the company—they must share some staff, for example, and they must tap into the wider company’s resources as they turn ideas into products. And they must be tightly managed according to customised rather than generic rules. For example, they should be held accountable for their ability to learn from mistakes rather than for their ability to hit their budgets.
Brake-out groups
G&T offer several examples of successful innovation machines. Harley-Davidson, a firm whose customers tend to be fiercely loyal, was struggling to woo new ones. So it created a group to come up with ideas for attracting beginner motorcyclists, such as safety courses and rental programmes. BMW, a carmaker, realised that its established system for producing brakes might be a hindrance when it came to designing brakes for hybrid vehicles (which benefit from capturing wasted energy and putting it back to work). So it set up an innovation team in which battery specialists regularly talked to brake specialists. Allstate, an American insurance company, noted that insurers had come to accept widespread customer dissatisfaction as a fact of life. So it asked marketers to help risk-adjustment specialists to design car insurance. They came up with industry-changing ideas such as accident forgiveness and cash rewards for good driving.
G&T undoubtedly get carried away with their model. Innovation machines come in many shapes and sizes. Sometimes it is wiser to buy something than to make it yourself. Unilever, for example, would not have invented “Chubby Hubby” ice-cream if it had not bought Ben & Jerry’s. But G&T are nonetheless right to argue that students of innovation must pay more attention to big companies. They have the muscle to chase big prizes, from alternative fuels to clean drinking water. But they need to learn how to conquer new territories while continuing to cultivate old ones.
Governments use industrial-policy tools only marginally more competently than in the past, says Christian Ketels of Harvard Business School. The most feared of all industrial strategies is China’s. China has pumped billions into “pillar” industries such as telecoms, information technology, car manufacturing and steel. The least feared is probably the industrial policy pursued by France because it is defensive rather than progressive and mostly politically driven.
The lessons of the past are clear. First, the more it is in step with a national or local economy’s comparative advantage, the more likely industrial policy is to succeed. Drives to spur high-tech entrepreneurship in areas of heavy manufacturing, for instance, face a struggle. According to Mr Lin of the World Bank, following comparative advantage has produced clear successes for some developing countries. Chile, for instance, moved from basic industries such as mining, forestry, fishing and agriculture to aluminium smelting, salmon farming and winemaking thanks to a number of government initiatives.
Second, policy is least prone to failure when it follows rather than tries to lead the market. Curiously, Sheffield Forgemasters might have been an example of the former: Westinghouse, an American company, had suggested to the Yorkshire firm that it should try to break Japan’s monopoly on ultra-large nuclear steel forgings.
Third, industrial policy works best when a government is dealing with areas where it has natural interest and competence, such as military technology or energy supply. The worst problems unfold when politicians intervene in purely private domains with short-term goals, bailing out old firms to save jobs or spending lavishly on white elephants. The present round of industrial policy will no doubt produce some modest successes—and a crop of whopping failures.
Bob Geldof, the singer and campaigner for aid to Africa, is seeking to raise $1bn from institutional investors for a private equity venture on the continent. Among other pledges towards the fund, the African Development Bank has earmarked $50m. The International Finance Corporation, the World Bank’s private sector arm, has offered a similar amount. Mr Geldof also committed an undisclosed amount of his own money. The fund, called 8 Miles, would be run by Mark Florman, a former executive at UK buy-out house Doughty Hanson, who has recruited experienced Africans to work on the venture. It intends to make about 20 investments of between $15m and $80m in agribusinesses, financial services and telecommunications. Mr Geldof hoped to launch the venture as early as two years ago but plans have been delayed by the global financial crisis and the fund has yet to hold a first close, which would secure money to start investing. Among others that Mr Geldof has approached for advice on the venture are Mo Ibrahim, the Sudanese-born telecoms tycoon turned philanthropist, and Arki Busson, the founder of hedge fund EIM. He has also discussed his plans with Tony Blair, the former British prime minister who sits with Mr Geldof on the Africa Progress Panel, monitoring donor commitments towards increased aid to Africa. .Copyright The Financial Times Limited 2010. You may share using our article tools.
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Accra, Ghana, 4 September 2010 – A group of senior African parliamentarians has supported former UN Secretary-General Kofi Annan’s call to action at the African Green Revolution Forum (AGRF).
“The AGRF is the most bold and holistic approach to getting Africa’s agriculture really on course,” said Dr Alhassan Ahmed Yakubu, Chair of the Committee on Agriculture, Food and Cocoa Affairs, in the Parliament of Ghana.
“It has identified all stakeholders without exception to come on board to share their experiences,” said Dr Yakubu.
H.E. Tumusiime Rhoda Peace, Commissioner for Rural Economy and Agriculture at the African Union Commission, echoed the sentiment in a speech summarising the second day at the AGRF: “Parliaments must lead the way and help spearhead the achievement of the green revolution at country levels.”
Mr Annan challenged the group: “if politicians don’t lead, the people will make them lead.”
He heard views from influential parliamentary committee chairs, including the Hon. John M. Mututho, Chair of the Committee on Agriculture, Livestock and Cooperatives, Parliament of Kenya.
The Hon. Ms. Wonekha Oliver, Chair of the Committee on Agriculture, Livestock Industries and Fisheries, Parliament of Uganda and Patricia Hajabakiga, Member of the East African Legislative Assembly, and a former Environment Minister in Rwanda, were also at the panel session.
The parliamentarians lauded the efforts of the Alliance for a Green Revolution in Africa (AGRA) and the Association of European Parliamentarians for Africa (AWEPA) to launch a capacity building initiative in support of agricultural parliamentary committees in Africa.
“African governments must see agriculture at the top of their development agenda,” added Kanayo F. Nwanze, President of the International Fund for Agricultural Development (IFAD).
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Addis Ababa, 22 June 2010 (ECA) - The United Nations Economic Commission for Africa (ECA) has launched a network of community of experts and institutions involved in technology development and transfer in Africa, composed of leading African agencies responsible for technology development, adaptation, diffusion and transfer.
African Technology Development and Transfer Network, as the initiative is called, aims to “generate economic and social value” from Research and Development (R&D) outputs; facilitate technology adaptation, diffusion and commercialization; and encourage investment in R&D.
Its core function will be to provide a platform, supported by ECA, where small and medium-sized enterprises (SMEs) and institutions in Africa can have their technological and non-technological challenges solved by the collective power of the skills within its membership. Dubbed the “Innovation Workshop”, the platform will combine the advantage of open innovation with those of physical centres of excellence to offer virtual and on-site solutions.
The Network will promote learning, exchange of experiences and collaboration across countries and institutions. It is also expected to facilitate cross-border coaching and mentoring of emerging techno-entrepreneurs on the continent – opening up new frontiers and opportunities in science-based businesses.
Among its key activities, the Network will embark on training programmes and awareness workshops on intellectual property protection and management, as well as technology commercialization and exhibitions. In addition, it will offer online platforms, databases and knowledge resources for managers and technology transfer officers, as well as support technology transfer initiatives within firms and SMEs.
For further information click here or contact: UNECA, Addis Ababa, Ethiopia, Telephone: 251-11 5511167, Email: aopoku-mensah@uneca.org
The conference will explore policies, measures and mechanisms to meet Africa’s development goals and aspirations by harnessing the potential of entrepreneurship and innovation to transform ideas and technologies into new or improved products, processes and business.
The main objective of the conference is to promote innovation and entrepreneurships to meet development challenge. Specifically, the conference seeks to:
1. Improve linkages between scientific and business communities;
2. Promote private sector investment in science, innovation and enterprise development;
3. Strengthen STI policy-making and the legal and regulatory frameworks;
4. Encourage SMEs and scientists to exploit global knowledge resources and,
5. Increase innovation financing mechanisms.
For this reason, the conference will pay special attention to the development of innovative policy tools and measures to build the necessary human capital, STI infrastructure and financial instruments, strategies that target underrepresented groups (e.g. youth women) and create international collaborations.
The conference will offer:
1. Patent Fair where individual researchers and inventors will get tips and advice on and, if needed, simulation of the various stages of obtaining a patent or a utility model. This is co-organized with the African Regional Intellectual Property Rights Organisation (ARIPO).
2. STI Investment Forum will involve a brainstorming session with international venture capitalists and African bankers to discuss the key criteria for funding STI and preparation of projects for funding.
3. Technology transfer and Intellectual Property Rights Clinic will address preparation, structure and assessment of technology transfer agreements, and assessment of the value of intellectual property rights and selection process of the best way to commercialize technological assets.
4. S&T Exhibition
5. Product lunches will include the following:
a. The African Science, Technology and Innovation Framework
b. The Network of Technology Development and Transfer
Voir en ligne : Science with Africa conference on Innovation and Entrepreneurship
Africa as a whole has been the fastest growing market in the world over the past decade. Between 2002 and 2007, the mobile phone market in Africa grew by 49.3 per cent. By comparison, Asia grew at 27.4 per cent.
Analysts from HSBC wrote in January that "with competition increasing in most sub-Saharan African markets, operators will see market shares, average revenues per user and margins come under pressure in their traditional voice market". Providers will seek to burnish returns by pushing mobile broadband and mobile payments services, the bank predicted.
Voir en ligne : http://www.ft.com/cms/s/0/0b6904b6-...
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