[music] My name is Madhu Viswanathan, of the University of Illinois, and this is a course on understanding and designing solutions for subsistence marketplaces. Uh, I'm going to start off with the first lesson, which is an introduction to the module. As an overview, we're going to talk about why we chose this topic for this course, uh, we're going to talk about who we are and how we approach the topic, what are the challenges and opportunities in this arena, and we're going to have a short reflection about what the module is about. Now why this topic? Why this topic about understanding and designing solutions for subsistence marketplaces? Let me show you a few images to try to explain why. Here is a marketplace in Haiti where people are buying and selling cookies made out of mud. Now, these cookies have some nutritional value, but they're very harmful as well. These are the choices that people living in subsistence have to make on a day-to-day basis. Here is a typical situation that you'll see around the world of people looking for reusable items and metals and so on. Now, what they do is actually very beneficial to society, when we think about some of the environmental problems that we face and the wastage of resources, but what they do is really not valued at all. This is a scene where women are gathering wood for cooking. This, to me, is a scene that shows interconnectedness between livelihoods, the environment and people. Due to deforestation, there is less and less wood, and as a result, women spend more and more time looking for less and less wood. They use wood indoors for cooking, and that leads to smoke and lung ailments, and they send out girls to look for less and less wood, and as a result, girls don't go to school and get an education. So it's about the economic, it's about the environmental, and it's about the social. This is an optimistic image of a woman in India using a cell phone, and it's amazing to see how people have adapted to different technologies, as long as it serves a useful purpose. Uh, incoming calls are free, so people communicate with missed calls, and sometimes entrepreneurs will close deals based on the number of rings, so if it's one ring, "I agree to your price," if it's two rings, "I don't," and so on. Um, now I have to first say that I have not experienced poverty, and I'm sure there are many people in the audience who have experienced poverty. So keeping that in mind, how does somebody like me explain what poverty is based on my study of this whole area? So I'll describe today where I drove my car over, uh, to record for this particular course. Now, everything I wanted worked very well. The roads worked fine, my car worked fine, my cellphone worked fine, and if something did not work, I always had a cushion; I had another way to achieve my goals. But if I take away all that certainty, then I have poverty. If I take away all that certainty and I'm uncertain about my next meal, I have poverty. If I need to cook my next meal, but I don't know where the staple food is going to come from, if I don't know where the, uh, energy is going to come from, if I don't know the quality of the water in which to do my cooking, that's what poverty is about. It's really about uncertainty. But at the same time, there is the opportunity to create transformative solutions, like the cell phone. For example, for me a cell phone is a cell phone, but for somebody like this woman in this picture, it's much more. Uh, it can be a lifeline in the middle of the night when she has to call the doctor to try to find out what to do about her grandchild, and she lives in a village that's, uh, 30, 40 miles away from a town. Here is an image that shows people doing a lot more with less as well. This is something else that we can learn from subsistence marketplaces, to do more with less, and that's a lesson that all of us need. So why bother? Why do we care about this topic? Am I wasting your time? Well, let's take a look at the income pyramid, and as you can see, there are so many people who are at the bottom of this income pyramid in terms of the, uh, resources that are available to them. When we think about the population of the world and I think about my own life, I was born in 1962, when the population of the world was about 3 billion. Uh, when I turned 50, and it was actually exactly the day I turned 50, that was on October 31, uh, 2012, the official population of the world reached 7 billion. And now, I'm sure it's not an exact, um-eh, count, but that was the official population-it was 7 billion. In about 3 decades, if I give myself a natural lifespan, uh, the population of the world is going to be about 9.5 billion. Many of the people who are going to be added to the world are going to be poor, trying to make it out of poverty. So that's one collision course we are on in terms of very basic things like drinking water and food and so on. And then we have issues of the environment, uh, natural resources and the harm that we may be doing to it in a variety of ways, so that's another collision course we are on as well. This module is really about these two challenges coming together and how we can try to solve some of the issues that arise. Now, here is an image of an income pyramid where people are coming out of poverty in countries like China and India on an unprecedented scale, but if they come out of poverty and imitate the way I consume, at the top of the pyramid, then we are in for really multiplying some of the disasters I talked about. It's a very hypocritical thing to say, because I have the resources and I'm able to consume what I want, but at the same time, this is really necessary hypocrisy. I have to talk about this because of some of the environmental issues we face. So what we need to do is to try to figure out a way to grow, to have people come out of poverty but to do it in a sustainable way. Now what do I mean by sustainability? Now, you've heard a lot of definitions, such as people, planet and profit and so on, um, but what I mean by sustainability is also something that is sustainable for people living at the bottom, or for people living in subsistence. So what is it that they are trying to sustain? It may be culture, livelihood, language, and so on, and so we need to understand that as well. So one of the goals of this course: they are divided into two modules. The first module is on understanding the challenges and opportunities of subsistence marketplaces, and the second module is on designing solutions for subsistence marketplaces. Even though this is an online course, we are going to take a lot of risks. We're going to try to make this course immersive, interactive and hands-on, as if you are right here in class, and as if you're going to be doing an actual project. So who are we, and how are we qualified to approach this topic? There are a number of ways to look at poverty and economics, poverty in the marketplace. You can take a macroeconomic approach, which is a little bit like an airplane flying at the 30,000 feet altitude. Uh, you can take more of a mid-level approach, like the bottom of the pyramid approach where we look at organizations that are working in these contexts. But we take a different approach. We start from the bottom up. We start with people, life circumstances, consumers, entrepreneurs, communities, marketplaces, and we build understanding from there. So our approach is bottom up, so we want to understand the psychology, the sociology, the cultural aspects, the anthropological aspects of people living in subsistence or poverty, but we also want to derive from that an understanding of how to design solutions. I deliberately call it the subsistence marketplaces approach. So the subsistence marketplaces approach starts from the bottom up, so we start with people, life circumstances, consumers, entrepreneurs, communities and marketplaces, and we try to understand how people think and feel and do, and from that we try to derive implications for how to design solutions, how to design products, how to design enterprises, and so on. The word subsistence is very important to me because it connotes the qualitative nature of life circumstances, people barely making ends meet, and that could mean a wide range of low income. The word "marketplaces" is important. Uh, I use the word "marketplaces" rather than "markets." Uh, the word markets, uh, I'm worried will lead to this notion that I already have a product and I'm going to sell it in a new market. The word "marketplaces" emphasizes that these are preexisting marketplaces where people are already involved in exchange, and the idea is first to understand them in order to design solutions for them, and the solutions we design for them may end up being useful for us as well. The idea is to be bottom-up. In other words, we want to gain bottom-up, uh, understanding, but then we want to move up in terms of how to design products and design solutions as well. So what have we done so far? Well, in the last over 15 years, we have done a lot of research on subsistence marketplace. We have created social initiatives to teach people marketplace literacy education so that they can be better consumers and entrepreneurs as well, and we have brought subsistence marketplaces into the curriculum at all levels, at undergraduate, graduate and executive levels, in business and an undergraduate class for engineers as well. So what are these micro-level insights that we try to gain? Well, it's about entrepreneurs, transactions, consumers, uh, relationships, individuals, life circumstances and so on, and it's about how individuals think, how they feel, how they act, how they consume, buy or make or sometimes forgo, how they build relationships, run enterprises, interact with, eh, ecosystems and confront environmental problems. So this is what we try to do, we try to gain understanding at this level. And from this understanding of subsistence consumers and entrepreneurs, we try to understand how to develop enterprises and ecosystems, how to gain insights and design products, and how to develop business models, enterprise models, and really get at sustainable development. Now what has our experience been so far? Our approach has been to be deeply engaged in some communities, and we started with low-literate, low-income consumers in the United States and the problems they face in the marketplace. We moved on to subsistence consumers and entrepreneurs in India, and I use the word subsistence when the poverty is more extreme. We have a team on the ground, now for more than a decade, in India, who are from the communities that we work with. Similarly, we work in Tanzania and in Latin America as well, through deep engagement in the communities. So we don't have widespread knowledge of subsistence around the world, and we should not pretend to, but we do have deep engagement in a few countries around the world. This course is organized to bring out subsistence in your community, uh, and the last thing I want to say about challenges and opportunities is that there are subsistence contexts and there are subsistence contexts. Each one is different. We cannot pretend to know about war-torn areas. We cannot pretend to know about areas which have suffered genocide, and so on. And above all, I want to point out that it's not easy to work in this arena. I don't want to convey the impression that solutions are easy. It is extremely challenging, but we must try.
