[SOUND] [MUSIC] My name is Madhu Viswanathan of the University of Illinois, and this is a course on understanding and designing solutions for subsistence marketplaces. 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. We're going to talk about who we are and how we approach the topic. What are the challenges and opportunities in this arena? We're going to have short reflection about what the module is about. Now, why this topic? Why this topic about understanding and designing solutions for substances marketplaces? Let me show you a few images that 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 are very harmful as well. These are the choices that the people living in subsistence have to make on a day to day basis. Here is a typical situation that you will 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. They send out girls to look for less and less wood, and as a result, girls don't go to school and get them 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 cellphone and it's amazing to see how people have adopted the different technology as long as they serve their useful purpose. 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. 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 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. I leave something did my work. I always had a caution. 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 am uncertain about my next meal, I have poverty. If I need to cook. 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 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 as the same time, that is the opportunity to create transformative solutions like the cellphone. For example, for me a cellphone is a cellphone. But for somebody like this woman in this picture, it's much more. 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 30 or 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 market places. To do more with less. And that's a lesson that all of us need. >> There are a number of different approaches to looking at the intersection of poverty. And market places. What is unique about our approach? We start at the micro level rather than at the macro, or 30,000 feet altitude, or the meso or the The mid level. All of these approaches are important but what's unique about our approach is that we start at the micro level in terms of life circumstances of people, consumers, entrepreneurs, communities, and so forth. But we're also bottom up Meaning we use the insights that we gain at this particular level in order to aggregate them, and learn about what it means for higher level, or more meso, or macro level issues, such as how to double up products, or how to design business models, and so on. Our approach is called The Subsistence Marketplaces Approach. By subsistence, we mean the broad range of low income. We don't mean subsistence as in the subsistence farmer, we mean subsistence as in barely making ends meet. We use the term marketplaces to emphasize that these are pre-existing marketplaces which we can learn from in order to design solutions rather than use the word markets to suggest that these are new markets. For the existing products. We also use the term market places, because of the belief that these are in a context that should be studied in their own right. This is where much of humanity does business, exchanges and behaves as consumers and entrepreneurs. So they may look very different, but they're engaged in business as well. And that's why we believe in calling them subsistence marketplaces. >> 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 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. When I turned 50 and it was actually exactly the day I turned 50, that was on October 31st 2012, the official population of the world rates 7 billion and I’m sure it’s not an exact Count, but that was the official population, it was seven billion. In about three decades, if I give myself an actual lifespan, the population of the world is going to be about nine and a half 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, and natural resources, and the harm that we maybe doing toward in a variety of base. So that is the other 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 are. 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're in for really multiplying some of the disasters I talked about. Now, 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 necessarily 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 about definitions such as, people, planet, and profit, and so on. But what I mean by sustainability is also something that is sustainable for people living at the bottom, for people living in subsistence. So what is it that they are trying to sustain? It might be culture, livelihood, language, and so on, and so we need to understand that as well. 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 like an airplane flying at the 30,000 feet altitude. You can take more of a middle 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 be in a wide range of low income. The word marketplaces is important. I use the word marketplaces rather than markets. The word markets, I’m worried to this notion that I already have a product that I'm going to sell it in the new market. The word marketplace is emphasized 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 Designed 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 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 marketplaces,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 under graduate class for engineers, as well. So what are these micro level insights that we try to gain? Well, it's about entrepreneurs, transactions, consumers, 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 forego. How they build relationships, run enterprises, interact with 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 tried 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 a 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 used to work 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. 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 the 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.