Re: [GKD-DOTCOM] Is Profitability Essential for Sustainability?

2004-11-29 Thread Peter Burgess
Dear Colleagues,

I will not make this a long post. From what I learned as an engineer and
economics student, and then as an accountant and involved with business
management and consultancy, and then relief and development ... it is
absolutely clear that profitability is needed for sustainability. The
word for profitability can be changed to suit the not-for-profit world
or the public sector ... but nothing survives in the long run unless its
value creation is greater than its cost.

In my view there can be enormous value in using modern ICT to facilitate
productivity improvements ... but as private practitioners know,
governments and regulators and incumbent controllers of local monopolies
are not encouraging new innovations, but rather are discouraging
valuable innovation. Hopefully enlightened leadership will soon embrace
the great possibilities of modern ICT and make progress possible.

My favorite major development project ... one that resulted in enormous
improvement in US productivity was the US Interstate Highway System ...
initially promoted by President Eisenhower ... and eventually built at
tax-payer expense for the profit of almost everyone in the USA. The cost
was huge but the incremental economic value was many times as much. And
the capital markets encouraged the program. From the perspective of the
US economy as a whole this was a profitable investment, though costly
for the government.

In contrast the information highways in developing countries are not
getting built and the political and business leadership and the
financial community (capital markets) have not yet become committed
beyond the easy high profit elite (rather than universal) market.
Hopefully this is now changing and will soon change a lot more.

Some time ago I evaluated an FAO - UNDP project. It was an excellent
project that did not cost much, and made a huge difference to a quite
large rural community. The project was sustainable ... bit it did not
sustain because, in this case, the country itself could not sustain
anything beyond mere subsistance. The country had become totally
dependent on foreign donor funding  and then landed in the vicious
cycle of guns and diamonds and all that. Sad. But the lesson is that
both micro (the entity) and macro (the nation) need to be profitable to
be sustainable.

Sincerely,

Peter Burgess


Peter Burgess
in New York
Tel: 212 772 6918 
Email: mailto:[EMAIL PROTECTED]
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[GKD-DOTCOM] Is Profitability Essential for Sustainability?

2004-11-29 Thread Arrigo della Gherardesca
Dear GKD List Members, 

On Friday, November 26, 2004, Shahid Uddin Akbar wrote: 

 Still we didn't find any single project which can claim itself as
 Sustainable in terms of being financially viable and serving the local
 rural communities anywhere in the world.
..snip...
 Why are the organizations rushing for financial sustainability in the
 case of rural ICT projects? It also must have some donor driven ideology
 to make the development initiatives Commercially viable, which is not
 possible in a realistic approach.
..snip...
 So, can we put the idea aside to make all rural ICT for Development
 projects commercially viable?


I would say yes and no. We have developed a viable model for financing
the initial investment to set up rural TeleCenters/kiosks, with Donor
money, on a wide scale.

But thereafter, Telecenters HAVE to be able to pay for maintenance,
amortization of equipment and operating costs, by themselves! In fact,
a lot of Donor money DEPENDS on providing credible forecasts about
this.

One year's costs can be as much as the whole initial investment and the
Donors we work with don't want to have to come in year after year, or
see the projects fail.

Therefore, we have developed (and are close to marketing even in
Bangladesh) a system called VillagE-volution, a Knowledge,
Information, Commercial and Consultancy system, aimed at rural
communities wordwide, that should greatly help villagers in their
development process and therefore even in paying for the Telecenters.

We are even putting together a good, sustainable, Telecenter business
model, based on VillagE-volution and the best services that can be
provided with today's most up-to-date technology (VSAT, wireless and
all), to be presented very soon to the Donors and then implemented
locally, through NGOs and other entities with which we are connected.

Therefore, we are analyzing all the information that we can find on
rural Telecenter profitability (the main sources of revenue in the more
successful examples until today and the reasons for failure of the ones
that did not succeed).

From your first sentence, it looks like you have some knowledge on the
matter, or you may know someone that does. Or other List Members may.

If so, could you kindly provide us with such information?

Thanks for your support and the enlightening contributions that List
Members and the Organizers have provided us.


Arrigo della Gherardesca 
Managing Director 
ItAfrica - Italian African Alliance srl 
Milano, Italy




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Re: [GKD-DOTCOM] Is Profitability Essential for Sustainability?

2004-11-29 Thread Jeff Buderer
Dear Colleagues,

I am not sure if the time on this focused discussion is up, but it would
be too bad if it was, because I feel there is much to discuss and the
discussion here has been continual and robust. 

[***Moderator's Note: Although today is the last day of the focused
discussion, the GKD List is ongoing (and has been for over 7 years); we
will continue to post messages relating to the theme of Technology,
Globalization and the Poor after today, as well as more general
submissions.***]

When I fist read your article Shahid, I thought you were referring to
ecological sustainability. Reading it more carefully I now see you are
talking about financial sustainability. However many say the same truth
also applies to the development of ecologically and socially sustainable
projects. I know there are at least a few of us here who are concerned
with the social, ecological as well as financial issues of
sustainability. In America, we refer to this as the triple bottom line.

In terms of what we at OVF www.onevillagefoundation.org are shooting
for, we want an integrated model for rural or urban (what do we actually
mean by rural) development that is community oriented. There are several
missing gaps I have seen in these email exchanges that focus on these
two areas:

1. The important social and community aspects of sustainability
2. A whole systems approach to sustainability as mentioned below

Andrew Kean previously worked for a leading eco-think tank in America
called Rocky Mountain Institute. He explains the importance of whole
systems thinking, specially looking at the development of the Factor Ten
Engineering movement in the engineering field:
http://www.rmi.org/sitepages/pid1081.php

Factor 10X engineering is based on a proactive approach and optimistic
outlook despite the challenges. An influential book - Factor Four
http://www.ecouncil.ac.cr/rio/focus/report/english/wupprtal.htm
suggested that large productivity gains are possible, that it is
possible to double output while halving resource consumption. Factor Ten
is based on a revision of this by Friedrich Schmidt-Bleek of the
Wuppertal Institute http://www.wupperinst.org/ of Germany who
suggested that in developed countries factor four was unlikely to be
enough. Professionals from governmental, industrial and academic
institutions met in Carnoules, France
http://www.techfak.uni-bielefeld.de/~walter/f10/declaration94.html to
further define Factor Ten in 1994. This is known as the declaration of
the Factor 10 club.

The phrase factor ten, comes from the realization that globally, the
material turnover (per unit of production) needs to be drastically
reduced in order to ensure sustainable resources use and ultimately
survival of industrial society. They noted that to address adverse
ecological and the associated health and social affects of modernization
to sustainable levels, we would need to reduce the current human
footprint by around a factor of TEN.

Large gains in resource productivity are achieved by a shift in
thinking, by an integration of management, technological and process
improvements. Attention is directed not only to the manufacture of
products and delivery of services but to consideration of the way your
products and services are designed, produced, packaged, transported,
sold, used and disposed of http://www.factorten.co.uk/

While we at oneVillage Foundation are not engineers we feel that we have
a grasp on the necessary changes that need to take place to make human
systems sustainable over the next few years.

1. Introduce pedagogic tools on whole system design. The first stage of
our program is aimed at developing Community and Technology centers to
provide hands-on experiences in the design of sustainable systems for
the grassroots/bottom up economy starting with communities we have
identified in Africa to be the first sites for Unity Centers. Our
proposed Open and Distance Learning Program will teach Africans to
develop and evolve sustainability concepts based on their own local
perspectives and needs.

2. The next step involves exploring case studies/best practices on whole
systems design that are relevant to local needs. Sustainable systems
will be designed to boost resource productivity and replicate them at
the community level, first in the centers and then expanding to the
surrounding community or communities, using factor ten or similar
methodologies in all aspects of human design and development.

3. Develop financially profitable self-sustaining economies at the local
rural level to encourage local production empowering local economies and
mitigate unsustainable global trade flows of capital and resources.

All social initiatives do not need to be financially viable but they
have to be aligned with cross sector partners who will see a reason to
fund these projects indefinitely. I see a model that might fit your
needs and concerns.

It is not so much an issue of whether a project is of a purely business
nature so much as 

Re: [GKD-DOTCOM] Is Profitability Essential for Sustainability?

2004-11-29 Thread Peter Baldwin
Dear GKD Members,

I too will keep this short.  But first, per instructions, a brief
introduction:

I am currently in Mali working on sustainable (from a profit-seeking
standpoint) business models for Internet access in some of the poorest
regions of the world. Not only is the profit motive an essential
focusing element in the work I do, but it is a fun challenge. And, I am
happy to report, it is possible to make a profit providing Internet
access here. One List member quoted an email I had sent to him on a
different discussion thread, so I figured if I was going to be quoted
here, I might as well have some control over what was being quoted!
(humor implied, if not achieved)

Peter Burgess said essentially all that need be said with regard to the
need for profit as a necessary condition for sustainability: nothing
survives in the long run unless its value creation is greater than its
cost. If this isn't intuitively obvious, you need think only of the
opportunity cost of money-losing projects. If a project is not creating
value, then it is destroying value and resources that could be put to
better use elsewhere. Such a situation will not long endure; anyone
reading this has an interest in value-creation (or they wouldn't
subscribe to this List) and must surely take offense at the squandering
of finite resources.


Peter Baldwin
[EMAIL PROTECTED]
www.anapurnawebdesign.com




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[GKD-DOTCOM] A Closing Message from WRI

2004-11-29 Thread Al Hammond
Dear Colleagues,

This has been a powerful and rewarding discussion for me -- and I hope
for everyone else. On behalf of the World Resources Institute, I want to
thank all those who have participated and shared their insights and
experience. I have been particularly struck by the degree of consensus
that sustainability should be an integral part of the design of all ICT
for development projects, and that, with appropriate qualifications and
concerns, profitability is both necessary for private sector efforts and
can serve as a valuable incentive in support of development objectives.
Lots of interesting examples and discussion on social metrics or other
ways to measure profit in addition to dollars.

We will capture and summarize these discussions, along with other
materials, for a CD that will be provided to all registrants at the
Eradicating Poverty Through Profits conference next month in San
Francisco (details at http://povertyprofit.wri.org ). We will also
deliver many of the key messages we had heard to the conference
attendees through other means, and we will post the summaries on the
conference website for anyone to download. Much of the other materials
we are sharing are already posted there--we invite you to take a look
under the resources tab.

Again, many thanks.


Allen L. Hammond
Vice President for Innovation  Special Projects
World Resources Institute
10 G Street NE
Washington, DC 20002  USA
V (202) 729-
F (202) 729-7775
[EMAIL PROTECTED]
www.wri.org
www.digitaldividend.org




This DOT-COM Discussion is funded by USAID's dot-ORG Cooperative
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