Five Questions With: Steve Daniels

By Mark S. Murphy
PBN Editor

Steve Daniels graduated from Brown University this spring with a bachelor’s degree in technology for emerging markets (a combination of engineering, economics, and development studies), but not after spending three months in Kenya, Tanzania and Ghana on a fellowship from the Brown International Scholars Program. The result was an honors thesis that forms the core of “Making Do: Innovation in Kenya’s Informal Economy.”

PBN: What got you started investigating innovation in Kenya?

DANIELS: My initial involvement in the field started with the idea of getting technology out to places that need it most — places with more poverty than industry. But the challenge in the field of humanitarian technology has always been how to design and deliver the technology in the most appropriate way so that it is really integrated into the culture of the people you’re working with and so that it can sustain itself by creating livelihoods. For decades that’s been the holy grail of the field of appropriate technology.

I went to Kenya in search of that holy grail — perhaps some aspect of culture or an innovative business model. But when I got there, the most shocking lesson was that there was this huge group of technologists already there that no one was talking about — craftsmen of all sorts of trades. They’re very hardworking and exceedingly resourceful.

In Kenya they’re called jua kali, or “hot sun,” because they work on the roadside often without sheds. But they’re found all throughout Africa — both urban and rural. When I met the jua kali, I thought, “Wow, this could be the missing link in humanitarian design!”

PBN:How do you define innovation in a developing world economy such as Kenya’s? How is it different, if at all, from what we see as innovation in the United States?

DANIELS: The innovation I’m talking about in Kenya doesn’t take place in huge R&D labs. It happens in the small makeshift sheds of what’s called the informal economy.

In the informal economy, businesses of one to five people go unregulated and unprotected by the government, which makes for a huge research challenge because so little is known about these enterprises though they comprise as much as 90 percent of non-agricultural employment in countries like Kenya.

When I got into the workshops, I saw new kinds of tools and products that I’d never seen before. For example, some entrepreneurs had built modular workbenches out of scrap metal that they could weld new custom tools to as needed. They had also built as diverse objects as welding machines and windmills all out of scrap parts. It’s the kind of innovation that happens under severe resource constraints. It has been referred to as constraint-based innovation, bootstrapping, or bricolage.

What we’re talking about is invention that emerges from necessity and innovation that emerges from a deep understanding of the local resources and markets — of which Western designers know very little.

PBN: What are the biggest lessons that entrepreneurs in the developed world can learn from Kenya’s innovators?

DANIELS: In my book I stress the need to revise our notion of efficiency in two ways. Firstly, we must recognize that efficiency doesn’t necessarily come from boundless resources. The way many Western companies view natural resources depletes our global ecosystem and produces significant waste. In the informal economy, however, resources form a closed loop.

Scrap pickers and materials traders collect used materials from factories, cars and consumers, sell them to entrepreneurs in the informal economy, and then the materials get reused indefinitely until they’re sold back to formal recycling plants. This is a much more efficient use of resources.

Secondly, efficiency doesn’t necessarily come from vertical integration. Large Western corporations assume that owning the entire supply chain will reduce transaction costs and make their operations more efficient. However, in the informal economy many small enterprises work cooperatively by pooling technology, money and labor to form an efficient kind of hive economy.

In the Western creative economy, we are seeing more cooperation among smaller businesses, as new advances in ICT and social media reduce transaction costs even further. It’s a model that has been adopted in Rhode Island by enterprises like the Steel Yard and Keeseh Studio, which work efficiently while remaining embedded in the community.

PBN: Are there connections that Rhode Islanders can make with developing world innovators that help both the parties?

DANIELS: We’re now seeing really interesting connections being made among Rhode Islanders and African entrepreneurs, particularly in three areas of exchange: technological, academic and financial. Technological exchange has occurred through the spread of events called Maker Faires — sprawling craft festivals staffed by do-it-yourself types and attended by anyone interested in technology and art.

Both Rhode Island and Africa held their first annual Maker Faires last year. For both places, it was an attempt to empower individuals by forming a community around do-it-yourself technology, or making, which has become simpler in recent years with the advent of easy-to-use fabrication equipment.

Through technology incubators like Fab Labs (there’s one at AS220 in Providence and two in Kenya), makers have been able to turn their ideas into products and businesses, while connecting with others around the world to solve problems.

The second trend is in our universities, where students and faculty are making more connections among one another and with institutions abroad to foster cross-cultural exchange.

For example, at Brown University and RISD we started the annual Better World by Design conference in 2007, now a forum for innovators from around the world to share their experiences and engage in critical conversations. Brown’s Office of International Affairs provided the funding for my research abroad through the International Scholar’s Program, an opportunity I hope universities will increasingly extend to their students.

Finally, it’s easy now to support entrepreneurs throughout the developing world financially due to the expansion of microfinance and fair trade networks. Through the website Kiva you can offer interest-free loans of as little as $25 to entrepreneurs you choose, and the loans are virtually always repaid. The fair trade organization Ten Thousand Villages engages with artisans around the world to bring their products to Western markets.

PBN: How do you plan to use the information that you have gleaned from your travels and from writing this book? What is your next step?

DANIELS: So far the feedback from readers has been very positive, because people understand immediately why it’s so important to learn more about informal economy innovation. It’s the type of innovation that occurs in most of the world and, if leveraged through microfinance and business development services, could lift millions out of poverty.

However, literature on the sector is scarce, and reliable quantitative data nonexistent. I hope this book will motivate people to learn more about constraint-based innovation and find effective models for collaborating with entrepreneurs like the jua kali.

To generate more cross-cultural dialogue, I’ll be officially launching my book jointly at this year’s Maker Faire Rhode Island at Providence’s Bank of America Skating Center and the Maker Faire Africa in Nairobi, both slated for August 28. In the future, we’re hoping to foster more exchange between the two groups through bi-directional visits and workshops.