In development, there is considerable debate and uncertainty about two related concepts: whether the poor can pay for important health products and whether paying customers value these goods more than recipients of hand outs. The first is a question of whether or not people have the resources and are even willing to pay for basic health products like anti-malarial bednets or water purification filters or tablets. 

As an investor in a long-lasting bednet manufacturer in Tanzania, we know that people are not willing to pay the full cost of the bednets, but they are willing to pay for subsidized nets.  Just how big a subsidy is required is a question that we are exploring right now with Professor Pascaline Dupas of Dartmouth. With the support of Sumitomo, the Exxon Mobil Foundation, and an anonymous donor, we are conducting a randomized trial to find the price at which people will buy them. We are also reviewing the literature to see if there is a definitive opinion on whether people who buy nets vs. those who receive them for free are more likely to invest the time and energy into figuring out how to use them properly, and ultimately receive the health benefit of reduced exposure to mosquitoes with proper use of the bednet. 

This study from the Poverty Action Lab takes up the same set of questions for water purification tablets in Zambia. The findings are fascinating, and show that in this experiment, people who paid for the Clorin were more likely to use it than those who were given it. The next step is to study whether a market for public health products can be an important complement to other essential government and NGO strategies to reach those in need with access to clean water or preventative health products and medicines.

In Friday’s New York Times (subscription required), columnist Thomas L. Friedman writes about his visit to Acumen Fund investee Advance Bio-Extracts (ABE) in Nairobi along with our Kenya country team. His column sends a powerful message about the need for patient capital in building sustainable, scalable enterprises that serve poor people and create jobs. We are proud to be part of a growing movement of individuals and institutions that recognizes the entrepreneurial spirit in Africa and is focused on pragmatic, action-oriented solutions.

PDF of article here with the gracious permission of Tom Friedman.

James Surowiecki does a great job in last week’s New Yorker underlining the critical skills gap faced by India as it moves powerfully into the future.  We at Acumen Fund are seeing the same skills gap the world over – especially in the sector focused on using private sector initiatives to solve public problems.  The biggest single constraining factor to our investees’ ability to scale is talent.  They need senior management as well as middle management capabilities – and their needs are often compounded by an inability to pay premium salaries.

Increasingly, we are convinced of the need both for a global recruiting firm as well as for an expanded fellows-like program, likely created and executed by many organizations across the globe. Building not only a workforce but a corps of great managers and, especially, leaders who understand how businesses work and can navigate across international borders is key to the future we all want – and need – to create together.

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