Prosperity and Altruism

Stephen DeAngelis

November 21, 2007

Bill Gates and Warren Buffett are only the latest in a long line of individuals who have used their wealth for altruistic purposes. You don’t have to be super-rich, however, in order to be philanthropic. In his hierarchy of needs, Abraham Maslow theorized that once one’s basic needs were fulfilled he or she could (and more likely would) turn their thoughts and activities to higher purposes. That scenario is playing itself out in India according to New York Times’ reporter Anand Giridharadas [“In India, Poverty Inspires Technology Workers to Altruism,” 30 October 2007]. Had Maslow written that headline, it probably would have read “Prosperity Inspires Technology Workers to Altruism.” Giridharadas begins his article with the story of Indian laborer.

“Manohar Lakshmipathi does not own a computer. In fact, in India workmen like Mr. Manohar, a house painter, are usually forbidden to touch clients’ computers. So you can imagine Mr. Manohar’s wonder as he sat in a swiveling chair in front of a computer, dictating his date of birth, phone number and work history to a secretary. Afterward, a man took his photo. Then, with a click of a mouse, Mr. Manohar’s page popped onto the World Wide Web, the newest profile on an Indian Web site called Babajob seeks to bring the social-networking revolution popularized by Facebook and MySpace to people who do not even have computers — the world’s poor. And the start-up is just one example of an unanticipated byproduct of the outsourcing boom: many of the hundreds of multinationals and hundreds of thousands of technology workers who are working here are turning their talents to fighting the grinding poverty that surrounds them.”

While Giridharadas asserts that the tech worker contributions toward fighting poverty are motivated by altruism, he is not sure that corporate concern stems from the same moral imperative.

“Perhaps for less altruistic reasons, but often with positive results for the poor, corporations have made India a laboratory for extending modern technological conveniences to those long deprived. Nokia, for instance, develops many of its ultralow-cost cellphones here. Citibank first experimented here with a special A.T.M. that recognizes thumbprints — to help slum dwellers who struggle with PINs. And Microsoft has made India one of the major centers of its global research group studying technologies for the poor, like software that reads to illiterate computer users. Babajob is a quintessential example of how the back-office operations in India have spawned poverty-inspired innovation. The best-known networking sites in the industry connect computer-savvy elites to one another. Babajob, by contrast, connects India’s elites to the poor at their doorsteps, people who need jobs but lack the connections to find them. Job seekers advertise skills, employers advertise jobs and matches are made through social networks.”

I have noted before that corporations have finally discovered that money can be made at the bottom of the economic pyramid. When conducted properly and ethically, as Giridharadas notes, commercial ventures that  serve the poor are a good thing. Such ventures create jobs, make goods and services available, and point the way out of poverty. That brings us back to Maslow’s hierarchy and how prosperity can lead to altruism.

Sean Blagsvedt, Babajob’s founder, “now 31, joined Microsoft in Redmond in 1999. Three years ago he was sent to India to help build the local office of Microsoft Research, the company’s in-house policy research arm. The new team worked on many of the same complex problems as their peers in Redmond, but the employees here led very different lives outside the office than their counterparts in Redmond. They had servants and laborers. They read constant newspaper tales of undernourishment and illiteracy. The company’s Indian employees were not seeing poverty for the first time, but they were now equipped with first-rate computing skills, and many felt newly empowered to help their society. At the same time, Microsoft was plagued by widespread software piracy, which limited its revenue in India. Among other things, the company looked at low-income consumers as a vast and unexploited commercial opportunity, so it encouraged its engineers’ philanthropic urges. Poverty became a major focus in Mr. Blagsvedt’s research office. Anthropologists and sociologists were hired to explain things like the effect of the caste system on rural computer usage. In the course of that work, Mr. Blagsvedt stumbled upon an insight by a Duke University economist, Anirudh Krishna. Mr. Krishna found that many poor Indians in dead-end jobs remain in poverty not because there are no better jobs, but because they lack the connections to find them. Any Bangalorean could confirm the observation: the city teems with laborers desperate for work, and yet wealthy software tycoons complain endlessly about a shortage of maids and cooks. Mr. Blagsvedt’s epiphany? ‘We need village LinkedIn!’ he recalled saying, alluding to the professional networking site. He quit Microsoft and, with his stepfather, Ira Weise, and a former Microsoft colleague built a social-networking site to connect Bangalore’s yuppies with its laborers. (The site, which Mr. Blagsvedt started this summer and runs out of his home, focuses on Bangalore now, but he plans to spread it to other Indian cities and maybe globally.)”

The key for Blagsvedt was finding a business model that could help the more but still earn money — money from sources other than the poor people he was trying to help (i.e., money from people higher on the economic pyramid). There were other challenges as well.

“Building a site meant to reach laborers earning $2 to $3 a day presented special challenges. The workers would be unfamiliar with computers. The wealthy potential employers would be reluctant to let random applicants tend their gardens or their newborns. To deal with the connectivity problem, Babajob pays anyone, from charities to Internet cafe owners, who finds job seekers and registers them online. (Babajob earns its keep from employers’ advertisements, diverting a portion of that to those who register job seekers.) And instead of creating an anonymous job bazaar, Babajob replicates online the process by which Indians hire in real life: through chains of personal connections. In India, a businessman looking for a chauffeur might ask his friend, who might ask his chauffeur. Such connections provide a kind of quality control. The friend’s chauffeur, for instance, will not recommend a hoodlum, for fear of losing his own job. To re-create this dynamic online, Babajob pays people to be “connectors” between employer and employee. In the example above, the businessman’s friend and his chauffeur would each earn the equivalent of $2.50 if they connected the businessman with someone he liked.”

This is a classic case of globalization using rather than displacing cultural norms. Duke University’s Krishna, according to Giridharadas, is intrigued by this innovation but fears that those most in need of help don’t have the kind of social connections that permit them to take advantage of the system. Babajob is still quite new, with only 2,000 job seekers currently signed up. Nevertheless, it provides a glimmer of hope for millions. Giridharadas concludes his article with the hope generated in the house painter.

“In Mr. Blagsvedt’s apartment one morning, Mr. Manohar, the painter, professed hope. He earns $100 a month. Jobs come irregularly, so he often spends up to three months of the year idle. Between jobs, he borrows from loan sharks to feed his wife and children. The usurers levy 10 percent monthly interest, enough t
o make a $100 loan a $314 debt in one year. Mr. Manohar does not want his children to know his worries, or his life. He wants them to work in a nice office, so he spends nearly half his income on private schools for them. That is why he was at Babajob in a swiveling chair, staring at a computer and dreaming of more work.”

Sean Blagsvedt would not have been in a position to provide hope to the likes of Mr. Manohar had he not had sufficient resources to start Babajob. One of the reasons that Enterra Solutions’ Development-in-a-Box™ framework keeps me excited is that I see it as an approach that holds out hope. It’s aimed at helping sustainable economies in developing countries — which means it helps encourage entrepreneurs, helps create jobs, and helps connect local businesses to the global economy. People like Sean Blagsvedt are helping identify best practices that can be used in situations where normal business practices don’t work well. As Development-in-the-Box continues to evolve, such rules will be incorporated into its implementation. That’s why I refer to Development-in-a-Box’s “flexible framework.” Enterra Solutions and our growing list of strategic partners will continue to search for lessons learned and best practices that can help make the development process ever more effective.