The foundation for this course lies with unique synergies between pioneering research, teaching, and social initiatives through the Subsistence Marketplaces Initiative. Unique to this approach is a bottom-up understanding of the intersection of poverty and the marketplace. The goals of this course are to help you develop an understanding of marketplace activity in the radically different context of subsistence where much of humanity resides and survives, and for you to design solutions that can be implemented by individuals, businesses, and social enterprises through economically, ecologically, and socially sustainable products for subsistence marketplaces.
Lesson 1-1.1 Introduction to Subsistence Marketplaces
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Do curso por University of Illinois at Urbana-Champaign
Mercados de Subsistência
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Introduction to Subsistence Marketplaces Approach
In this module you will learn about the bottom-up approach to the study of subsistence marketplaces. The module will also discuss cognitive predilections engendered by low-income and low-literacy in subsistence marketplaces.
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Madhu ViswanathanDiane and Steven N. Miller Professor in Business
Department of Business Administration
[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.
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