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Entrepreneur

Paul Polak, The Social Enterprise Guru on a Mission to End Poverty

Team YS
14th Dec 2009
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“Unleash market forces to create a revolution to end poverty in India”

“One-acre farmers are survival entrepreneurs”

Paul Polak’s life changed from a physician to a social entrepreneur on a visit to Bangladesh. His website www.paulpolak.com best describes the social enterprise guru who was once a practicing psychiatrist.

Paul Polak—founder of Colorado-based non-profit International Development enterprises (IDE)—is dedicated to developing practical solutions that attack poverty at its roots. For the past 25 years, Paul has worked with thousands of farmers in countries around the world—including Bangladesh, India, Cambodia, Ethiopia, Myanmar, Nepal, Vietnam, Zambia and Zimbabwe–to help design and produce low-cost, income-generating products that have already moved 17 million people out of poverty.

Before establishing IDE, Paul practiced psychiatry for 23 years in Colorado. To better understand the environments influencing his patients, Paul would visit their homes and workplaces. After a trip he made to Bangladesh, he was inspired to use the skills he had honed while working with homeless veterans and mentally ill patients in Denver to serve the 800 million people living on a dollar a day around the world. Employing the same tactics he pioneered as a psychiatrist, Paul spent time “walking with farmers through their one-acre farms and enjoying a cup of tea with their families, sitting on a stool in front of their thatched-roof mud-and-wattle homes.”

Paul’s ability to respond with innovative solutions–such as the $25 treadle pump and small farm drip-irrigation systems starting at $3—helped IDE increase poor farmers’ net income by $288 million annually.

IDE received a $14 million grant from the Bill & Melinda Gates foundation in 2006. In 2004, Paul received Ernst & Young’s “Entrepreneur of the Year” award in the social responsibility category. And Paul was named one of the Scientific American “top 50” for his leadership in agriculture policy in 2003.

Paul Polak was in Chennai for UNCONVENTION organized by Villgro to celebrate and showcase social entrepreneurship. On the closing day after his final panel discussion, he spared his valuable time for YourStory.in with Venkatesh Krishnamoorthy (Chief Evangelist, YourStory.in) and lucidly provided valuable lessons from his life’s mission.


 

Perspective on social entrepreneurship: “End poverty”

Social enterprise offers the biggest hope to end poverty in the world and help restore balance on the environment on the planet. Social enterprise has not been successful at this point. A social enterprise is at a beginning of a movement that is possible.

I am a psychiatrist. I was treating people with major mental illnesses thirty years ago in the United States. What was influencing their recovery more than anything else was their poverty. I was devising various strategies to deal with their poverty, improve their housing, self-esteem, jobs and that was very powerful. People who were poor in the Denver, Colorado context were living on $600 a month, which made them wealthy in the world context.

Then I began interested in people in Bangladesh and rural India to know what their situation was. One thing led to another and I began working in this field and I am here now for 28 years.

International Development Enterprises: “20 million farmers are out of poverty”

In terms of work in the organization International Development Enterprises that I started, it has used business methods to bring 20 million people who live on a dollar a day out of poverty. This is a great accomplishment. Looking from the perspective of 850 million small farmers in the world, who live on a dollar a day, it is a drop in the bucket. What can be used to bring 20 million out of poverty can be used to bring 500 million out of poverty. That’s why I am involved in this movement.

Out of Poverty, my book: “Using market forces”

This book is a collection of stories. I have interviewed 3000 one-acre farmers for this book. It is a revolution in design. The book is focused on unleashing market forces on farmers who are survival entrepreneurs. Many of the people in the Villgro UNCONVENTION told me they found my book useful. [This could be used as a guide by social entrepreneurs who look for market models to fulfil a social need.] Another classic in this field is Small is Beautiful by Schumacher.

Essential things that a Social Entrepreneur should focus upon

  1. Depending on which problem you are working on, go to where the action is. Don’t sit in your office.
  2. Talk to people who have the problem and listen to what they have to say because listening is tougher than talking.
  3. Do everything to know about the context of the specific problem.

In any successful business, social or not, the people who are successful know their customers. So you have to know the customer and learn what their preferences are and this is involved in each of the three steps.


Unfilled needs of farmers in India that can be focused upon by social entrepreneurs: “Huge opportunities and thousands of unsolved problems”

There are thousands of unfilled gaps. You have to go to the villages and talk to the farmers. Many farmers told me their challenge is to look for affordable solutions to water irrigation during dry season because prices are three times high. This requires water lifting, water storage, and water distribution devices that are tailored for small plots of farm land.

A rural farmer in India who earns one dollar a day works with his family on his one-acre farm. But it is not one farm. But four or five quarter-acre plots. You have to device methods that fit this kind of an arrangement and that should be affordable to someone who earn a dollar a day. So there are thousands of such devices waiting to be developed.

IDE has worked on 13 of them—3 of them are important. One is treadle pump for shallow water irrigation. The other is drip-irrigation system. A kitchen garden drip-irrigation kit costs only $3, that is about Rs 150. Another is water storage device.

A small farmer needs reliable small pocket seeds, information on prices, income-generating information that allows them to improve their farming methods, access to markets, to shift from singular focus on subsistence crops like rice, wheat, and corn to growing market-disciplined high-value cash crops like off-season fruits and vegetables.

The needs are infinitive if you talk to a few farmers. There are huge opportunities in the agricultural field.

Technology: “Cannot solve small farmer problems”

Institutions like the World Bank have made habitually wrong assumptions about technology. Modern technology and appliance does not gel with poverty. We have hundreds of tractors idling in the African sun because large development organizations have imported them and they don’t fit.

A one-acre farmer in India on a quarter-acre plot does not have enough room to turn around for a combined harvest of a wheat crop.

All modern technology learnt in American and European universities are based on large farms, which are getting larger. You need technology for small farms that are getting smaller. You can’t get a PhD in a western university and learn how to raise ten chickens and a goat. No amount of technology will help you do that.

A small one-acre farmer does not read and write and so the question of him using a computer is far-fetched. You can’t use a computer. Try one penny comic book for communication. Don’t assume western modern technology can solve the problems of one-acre farmers in India.


Enterprising farmer: “All one-acre farmers are survival entrepreneurs”

Every single farmer is enterprising or he is dead. Farmers who own one-acre scattered as five quarter-acre plots are basically survival entrepreneurs. They have to make thousands of investment decisions each day. Are you going to invest in the seed crop for rice next season or are you going to take your wife to the doctor because she is suffering from pneumonia? If you invest in seed, your wife is likely to die and your family will be without a mother. If you attend to your wife, you are going to lose the next season’s harvest and your family is going to go hungry. So it is a life and death decision and you make hundreds of them each day. These people are already entrepreneurs. They are basically survival entrepreneurs. They lack resources, information and technology that fit their real space on their life.

Rural India: “Half of my time in villages”

Whenever I visit India, I make it a point to spend half of my time in villages.

India is registering 6% GDP growth every year. It has changed from control economy to a free economy. The economy is prospering. When I first visited India, there were 300 million people who were hungry. Still there are 300 million people who are hungry. Maybe I am overstating the problem. There are dramatic changes. But still people don’t do things that need to be done to end poverty in India.

Alleviating poverty: “Unleash market forces”

The most powerful force that I have experienced is unleashing market forces to serve poor customers. Not the government, not the big business houses, not the NGOs as they are now. It is creating new markets to serve poor customers. Governments can support this initiative as well as NGOs and businesses. There should be a revolution in the way we think about poverty in creating new markets for poor customers.

Paul Polak also talked about an inspiring story of a farmer Krishna Bahadur Tapar in the hills of Nepal. We are capturing that story as a capsule of inspiration in another post.

For every question we asked Paul Polak, his answers revolved around poor people and how poverty can be alleviated. For a nation of one billion people, this is the single daunting challenge—how to alleviate poverty. Paul Polak believes a revolution should happen by creating new markets for poor customers. This is in the same vein as bottom of the pyramid concept of Prof. C.K. Prahalad (The Fortune at the Bottom of the Pyramid: Eradicating Poverty through Profits). Social entrepreneurs can take a cue from Paul Polak’s advice and create a revolution.

We thank Paul Polak for his candid talk and for his valuable lessons. We sincerely hope someone picks the threads from his views and starts an initiative or creates a market for poor people.

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