Giving the Poor a Means to Work

(page 2 of 2)

His case is bolstered by examples of traditional poverty initiatives gone awry: a program to help Somali refugee women make and sell soap that was so expensive the business had little hope of surviving once the subsidizing organization had moved on; a promised giveaway of 20,000 treadle pumps that never materialized but nonetheless put existing pump manufacturers, dealers and well-drillers out of business; the donation of village hand pumps that, when they broke, were never fixed because "nobody had assumed ownership."

For every failed initiative Polak mentions, leaders of the World Bank and the United Nations Development Program could no doubt point to a program that did make a measurable impact on poverty. But at what cost? "We have invested a staggering $568 billion in development aid in Africa over the past 42 years, and have very little to show for it," says a World Bank economist quoted in Out of Poverty.

From Maverick to Expert

Ultimately, the strength of IDE's approach is its return on investment. "Total investments by IDE and its donors…over the past 25 years were $78 million," writes Polak. "During the same period, dollar-a-day farmers invested a total of $139 million in income-generating tools promoted by IDE. Their investments generated $288 million per year in permanent new net income." It's hard to argue with numbers like that.

IDE's successful track record has transformed Polak from a maverick to a sought-after keynote speaker. IDE's measurable results have earned it two grants from the Bill and Melinda Gates Foundation. The most recent, announced at the 2008 meeting of the World Economic Forum in Davos, brought IDE $27 million over four years to expand its micro-irrigation program in India.

A Broader Range of Solutions

While many development organizations still follow traditional approaches, IDE's success has inspired some imitators, and Out of Poverty seems to have been written to attract more. Polak tells the stories of individual farmers like Krishna Bahadur Thapa, a Nepali who increased his family's annual income from an average of $100 to more than $500. Such anecdotes are woven together with charts of hard data showing IDE's impact, and practical, straightforward advice for organizations, businesses, and governments wishing to follow IDE's approach. The book is part policy rant, part case-study, part how-to, and it is anything but depressing.

Polak, meanwhile, is moving on. In 2007 he founded D-Rev: Design for the Other Ninety Percent, a hybrid nonprofit organization and for-profit company that will focus on the 300 million dollar-a-day people living in urban areas. One D-Rev project, for instance, is a solar-powered water purification technology capable of delivering 1,000 gallons of marketable drinking water a day at an investment cost for an entrepreneur of less than $300. Projects like these will provide opportunities for those living in urban slums as well as rural areas. "At IDE, our focus was on increasing the income of small-acreage farmers," he says by phone. "I want to take what I've learned at IDE and apply it to a broader range of problems."

For more, see BusinessWeek.com's slide show.

Jessie Scanlon is the senior writer for Innovation & Design on BusinessWeek.com.