Wednesday, April 28, 2010

Poor Countries Teaching Rich Ones

At first glance, it is hard to imagine how innovations from poor countries could provide much help in solving the cost and quality problems plaguing health-care delivery in rich countries like the United States. While it is easy to understand why a poor man would want what a rich man has, why would a rich man benefit from a solution created originally for a poor man? India's Aravind Eye Care System demonstrates why rich countries should take such reverse innovation seriously.


Aravind's operations include a chain of five eye hospitals, a manufacturing facility for producing intraocular lenses and other consumables needed for cataract and other eye surgeries, a training center for imparting training to other eye hospitals in India and other countries, and a network of outreach centers. Aravind hospitals conducted 269,577 eye surgeries in 2008-09, of which nearly 50% were performed for free for poor patients. The charges for the remaining 50% were at or below market rates i.e. there were no cross subsidies.

Of the facilities' 2.46 million outpatients during that time, 50% were treated for free, and the fee for most of the others was a nominal $0.50. Aravind takes no donations or charity and yet not only makes a profit but enough to fund a new hospital every three years! All these new hospitals and expansions have been internally funded. Aravind has been doing this for more than two decades. The $64,000 question is: How? The answer lies in the elements that make up Aravind:

1. Extraordinary productivity. Aravind doctors average about 25 cataract surgeries per day (actually, over six hours), whereas other eye-care hospitals do six to eight surgeries per doctor. Aravind achieves this by having a highly streamlined, innovative, and efficient system and a highly trained paramedical staff.

2. Exploiting economies of scale. This allows its in-house manufacturing facility, Aurolab, to produce intraocular lenses (IOLs) at $5; global prices are about $80. Aravind is the lowest-cost producer of IOLs in the world. Its scale of production enables, or rather, compels it to export almost 50% of its production to other eye-care hospitals, both in India and abroad.

3. Borrowing best practices from other sectors. Aravind has borrowed concepts like economies of scale and assembly lines from the industrial sector and applied them in health care to bring down costs without sacrificing quality. Volume is critical to this mode of operation. Aravind generates volume through its outreach programs and eye camps, which are even conducted in interior villages.

4. Investing in critical activities but saving on frills. Aravind lowers its cost position by reducing bells and whistles without compromising on the quality of its equipment or medicines or the competence of doctors and nurses.

5. Aravind's ideological foundations. Its founder, the late Dr. Govindappa Venkataswamy ("Dr. V"), stated his mission simply as "eradication of needless blindness" when he founded the hospital in 1976. This mission has continued to this day. All staffers — from doctors and nurses right down to attendants and sweepers — are imbued with this mission. Every patient, however poor he or she may be, must be treated with respect. Commitment is vital. Every action Aravind undertakes is tested against the criterion of whether it will help achieve this mission.

There is nothing in this model that cannot be replicated in any country — developing or developed. The keys are simple: pay close attention to operational efficiency, work on separating the core from the frills, maximize the productivity of the costliest resources (doctors and equipment), and utilize the sheer power of volume.

Aravind is a perfect example of how astonishing the results can be when produced through a congruence of vision, values, purposeful implementation and a high degree of efficiency. Its mission and vision statements are not pieces of paper on display; they come alive in each of the organization's activities.

Sunday, April 11, 2010

Milking Africa

The Guardian newspaper reports that, more than £1 trillion may have flowed out of Africa illegally over the last four decades, most of it to western financial institutions. Even using conservative estimates, the continent lost about $1.8tn (£1.18tn) – meaning Africans living at the end of 2008 had each been deprived of an average of $989 (£649) since 1970, according to the US-based research body Global Financial Integrity (GFI).

The report says globally in recent years much attention has been focused on corruption – the proceeds of bribery and theft by government officials – and this only makes up about 3% of the cross-border flow of illicit money around the world. The proceeds of commercial tax evasion, mainly through trade mis-pricing, contribute 60% to 65% of the global total, while drug trafficking, racketeering and counterfeiting make up 30% to 35%. The report says Africa's percentages are likely to be roughly the same.

The scourge eats into Africa's total GDP, says the report, Illicit Financial Flows from Africa: Hidden Resource for Development. Losses rose from around 2% of GDP in 1970 to a peak of 11% in 1987, then dropped below 4% for much of the Nineties, only to increase again to 8% of GDP in 2007 and 7% in 2008. The GFI says that existing research shows that most flows to western financial institutions, and calls on G20 members to crack down on international banks and offshore financial centres.

Illicit outflows from Africa grew at an average 11.9% a year over the four decades. Some of this is attributed to oil price rises and increased transfer pricing practice. "It is not unreasonable to estimate total illicit outflows from the continent across the 39 years at some $1.8tn," writes Raymond Baker, director of the GFI.

"This massive flow of illicit money out of Africa is facilitated by a global shadow financial system comprising tax havens, secrecy jurisdictions, disguised corporations, anonymous trust accounts, fake foundations, trade mis-pricing and money laundering techniques."

This capital loss has a devastating effect on development and attempts to alleviate poverty, the report says. Even by a more conservative estimate, using accepted economic models from the World Bank and the IMF, Africa has lost $854bn in cumulative capital flight between 1970 and 2008 the report notes. This would be enough to not only wipe out its 2008 external debt of $250bn but potentially leave $600bn for poverty alleviation and economic growth.

Africa lost around $29bn a year between 1970 and 2008, of which the Sub-Saharan region accounted for $22bn. On average, fuel exporters including Nigeria lost capital at the rate of nearly $10bn a year. "The impact of this structure and the funds it shifts out of Africa is staggering. It drains hard currency reserves, heightens inflation, reduces tax collection, cancels investment, and undermines free trade. It has its greatest impact on those at the bottom of income scales in their countries, removing resources that could otherwise be used for poverty alleviation and economic growth."

It says that the huge outflow explains why aid efforts to reduce poverty have underachieved in Africa. According to recent studies by GFI and other researchers; "developing countries lose at least $10 through illegal flight capital for every $1 they receive in external assistance."

Sunday, April 4, 2010

The Hive Mind

The proliferation of online communities, within the Social Movement; has so far been a process fraught with confrontation, but propelled by enthusiasm. The essential problem that's been identified was that Internet users lacked a secure, centralized place to hold their identity. The way the Net is now organized, we carom between different "walled silos" that take our data and make use of it or sell it, without our knowledge. Recent opinion proposes the need for a new layer of the Internet, where personal identity information and transactions would be stored in one place, for the user's benefit. The user would then choose what parts of their profile to reveal to any group or organization they visited.

This would also allow for different organizations or companies to collaborate effectively, as their users could let them know how they were connected with other groups. Today, different NGOs reduplicate effort and even compete against each other for the same members and sponsors, with little coordination, fighting for scarce resources. It sounds quite dry at first, but if we spend time studying the issue, we will find that the lack of a way for people to maintain their own identity and control their own data is a massive problem, one that thwarts the healthy development of civil society.

The opportunity exists to implement a new vision, through a model of building a membership card program for the 'cultural creatives', the most progressive and ecologically aware subset of consumers. Most community incubators intend to build user-centered profile systems that integrate the latest aspects of this development protocol. Judging by the impassioned personal and philosophical exchanges on these forums; there is a vast amount of extraordinary material, important ideas and visionary testimonies, that need a professional media presence to reach beyond a small group and influence the broader cultural debate.

Recognizing demand, early adopters actively build social networks to bring together growing communities. This is mostly done on modest investments, often using Drupal, an open-source publishing platform. The shift from simply running another social network in virtual space to using face-to-face meetups, as a hub for organizing off-line real-world communities, also happens organically; driven by members with strong backgrounds in community organizing. They guide groups coming together in cities all over the world; realizing that, developing these nascent connections into vibrant communities, is the central mission of the project.

Even in this early and challenging stage communities have learned that, the merging of professional on-line media with a social network, which supports the growth of off-line communities - moving from virtual to visceral - is an extremely powerful innovation. As a new form of 'interdependent media', they can continually offer new tools and ideas for any growing community to explore, then report on their discoveries through articles and videos. All of this is happening at a time when the financial system and other forms of social infrastructure are breaking down and the future looks increasingly uncertain for many.

As a recent issue of Time magazine predicts, the new ten-year trend is "The Dropout Economy", where young people are forced to explore radical alternatives as work disappears and the financial burden becomes intolerable: "As conventional high schools and colleges prepare the next generation for jobs that won't exist, we're on the cusp of a dropout revolution, one that will spark an era of experimentation in new ways to learn and new ways to live."

Time's forecast could be read as a desperate plea that young people, instead of rising up in fury against the older generation that depleted the planet’s resources at their expense, will make virtue out of necessity: "Faced with the burden of financing the decades-long retirement of aging boomers, many of the young embrace a new underground economy, a largely untaxed archipelago of communes, co-ops, and kibbutzim that passively resist the power of the granny state while building their own little utopias." Ahead of the curve, activists are developing communities to serve and support these emergent, now inevitable, circumstances.

Friday, April 2, 2010

Third Industrial Revolution

Jeremy Rifkin, one of the most popular social thinkers of our time and author of The Empathic Civilization; explores how empathetic consciousness restructures the ways we organize our personal lives, approach knowledge, pursue science and technology, conduct commerce and governance as well as orchestrate civil society. The development of this empathetic consciousness is essential to creating a future where we think and behave like the whole world matters.

Religion Versus Morality

The details surrounding the emergence and evolution of religion have not been clearly established and remain a source of much debate among scholars. In view of the Vatican's current clergy crisis, a new understanding is required to this long-standing discussion; and there's no better place to start than by exploring the fascinating link between morality and religion.

There is no doubt that spiritual experiences and religion, which are ubiquitous across cultures and time and associated exclusively with humans, are ultimately based in the brain. However, there are many unanswered questions about how and why these behaviors originated and how they may have been shaped during evolution.

Some scholars claim that religion evolved as an adaptation to solve the problem of cooperation among genetically unrelated individuals, while others propose that religion emerged as a by-product of pre-existing cognitive capacities. Although there is some support for both, these alternative proposals have proven difficult to investigate. For some, there is no morality without religion, while others see religion as merely one way of expressing one's moral intuitions.

Despite differences in, or even an absence of, religious backgrounds; most surveyed individuals show no difference in moral judgments for unfamiliar moral dilemmas. The research suggests that intuitive judgments of right and wrong seem to operate independently of explicit religious commitments.

This supports the theory that religion did not originally emerge as a biological adaptation for cooperation, but evolved as a separate by-product of pre-existing cognitive functions that evolved from non-religious functions. However, although it appears as if cooperation is made possible by mental mechanisms that are not specific to religion; religion can play a role in facilitating and stabilizing cooperation between groups.

Perhaps this may help to explain the complex association between morality and religion. It seems that in many cultures religious concepts and beliefs have become the standard way of conceptualizing moral intuitions. Although this link is not a necessary one, many people have become so accustomed to using it; that criticism targeted at religion is experienced as a fundamental threat to our moral existence.