Can sustainable business really fix the problem of poverty?

Stephen Spiers, co-founder of sustainable development company Studio 2080, explains the concept behind sustainable business and how it can positively impact poor communities.

Global media has been buzzing over the last week with news of President Barack Obama’s visit to Kenya.  Whilst there, he spoke to key international business figures at the Global Entrepreneurship Summit in Nairobi.  There is a running theme amongst global leaders and the world’s second most populous continent – the provision of international aid.  However, Obama, whose own father was a goat herder in Kenya before moving to the U.S. to become a student, took a very different approach and instead focused on trade.  He delivered an inspiring message stating “this continent needs to be a future hub of global growth, not just African growth.”

Kenya, which boasts the largest economy in East Africa, was recognised as a hotbed for innovation.  Obama highlighted the progress it had made since he last visited Nairobi ten years ago.  Nevertheless, Africa is still the continent with the highest concentration of least economically developed countries in the world.  There must also be international focus on how business activity can empower Africa’s poorest communities to lift themselves out of poverty.

Obama’s focus on young entrepreneurs, scalable businesses and innovation-led enterprises chimed towards the opportunities that will enable Africa’s poorest countries to thrive.  For communities with little resources, a different type of business model is required to produce a visibly positive impact – a sustainable business model.

Traditional business models are focused around a single bottom line – a company’s success and its ability to grow are determined by its profits.  Sustainable models recognise a business’ success can be measured in more ways than just money.  They incorporate social and ecological impact too, considering how businesses affect the people they work with and the environment they operate within. This creates a triple-bottom-line, commonly referred to as ‘People, Planet & Profit’.

Even if we look past a lack of resources, there are other reasons why the continent’s emerging businesses should use a sustainable model.  Issues affecting poverty go far beyond money.  Two major factors include a lack of education and disease.  Education is one of the most powerful tools for reducing poverty and provides a strong foundation for sustained economic growth.  It has a basic requirement of providing people with skills that can help them build creativity and develop careers.  A good education also decreases levels of disease by increasing awareness of things such as STDs and sanitation.  Increasing access to high-quality water and food reduces disease too.

Studio 2080 Ltd is built upon this model. We are based in the Strathclyde University Incubator and have received funding through Enterprise Campus.  We engage with rural African communities to develop solutions that alleviate extreme poverty focusing on four areas of product and service design - energy, education, agriculture and healthcare.  We empower local people with solutions that help them improve their own economic situations through an approach of trade, not aid.

Co-founder Jeremie Warner, and I have spent 100 days in rural West Africa to get a real understanding of our customers’ needs.  Working closely with communities we have generated two pilot revenue streams: Power A Life, which focuses on the supply of portable electricity and lighting to children in African schools; and Micro-Drip, an agriculture irrigation project that uses low-cost, efficient watering systems to tackle the issue of crop growth in areas with little available water.  These products help communities overcome the issues blocking their progress.

Perceptions of Africa are changing.  No longer is it looked upon as a continent in need of handouts but a hub of entrepreneurial activity where people can be empowered with technology and skills to positively impact the countries they live in.  By extending business focus past profits and working closely with communities to develop sustainable solutions, a positive economic outlook might not be too far away.

Do you think the shift from aid to trade with Africa will have a long-lasting positive economic impact? Share your comments below.