CHAMPAIGN, Ill. — A little more than a third of the world’s population lives on less per day than the amount of money most Americans spend on their morning cup of coffee. That fact alone should make understanding and alleviating poverty crucial to the development of sustainable marketplaces, a University of Illinois business professor says in a recently published e-book.
Madhu Viswanathan, the Diane and Steven N. Miller Professor in Business at Illinois, studies poverty and marketplaces. He is the author of “Subsistence Marketplaces,” which seeks to provide readers with a fundamental understanding of the life circumstances of low-income customers and entrepreneurs while also offering a sense of how solutions can be designed for those marketplaces.
“The book focuses on the intersection of poverty and marketplaces,” said Viswanathan, who directs the Marketplace Literacy Project, a nonprofit organization that helps to enable marketplace literacy among low-literate, low-income people.
“Our work on subsistence marketplaces over the course of many years has created unique synergies among research, teaching and social initiatives. In all three arenas, our work involves deep engagement in low-income communities, as well as interactions with students, businesses and social enterprises, and a diverse set of faculty and campus entities across different disciplines. The material presented in this book draws on this rich set of experiences.”
Although many scholars and researchers study poverty from “a more macro-level,” Viswanathan said his research begins with understanding the life circumstances of individuals, consumers and entrepreneurs, and builds up from there.
“We explore subsistence marketplaces from a bottom-up perspective and consider what these micro-level insights mean for designing products, for enterprise plans and for sustainable development,” he said. “For instance, we want to understand how to enable entrepreneurship within a low-income community.”
The second piece of the book is how to design solutions – “whether it’s designing products or developing business plans,” he said.
According to Viswanathan, the text was intended to be an immersive experience. Both the e-book and its accompanying website were created for multiple audiences – students, educators, managers and policymakers – as a starting point for learning about subsistence marketplaces.
“You’ll find rich sets of materials to explore through the Web portal, including very comprehensive reports of yearlong projects that serve as intensive case studies,” he said. “There are also videos produced to provide insights about subsistence marketplaces, and immersion exercises to understand needs and generate ideas for solutions.”
The bottom-up approach has been the key to fully grasping the on-the-ground reality of subsistence marketplaces, Viswanathan said.
“It means understanding things at the micro-behavioral level in terms of what happens, rather than from the macro-economic level, which is one way to think about it,” he said. “Another way to think about it is, when you don’t know much and when each context is so different, it’s all-the-more important to be grounded in that reality.”
But first and foremost, the aim was to understand people.
“I have never experienced poverty, so I’m very fortunate,” he said. “But poverty is very complex, and each subsistence setting is different, ranging from urban to rural and tribal, in very different cultural contexts around the world. That’s why you really need to dive in and understand these marketplaces in their own right. Because my life is full of certainties, I need to be exposed to their reality. In the book, we start off with the individual voices from these contexts, and then we move to understanding consumers and entrepreneurs and products and the local environment.”
But it’s important to keep in mind that businesses live and operate in reality, and this reality is inherently particularly messy, Viswanathan said.
“Which is why if you want to engage in these marketplaces, you had better understand them,” he said. “You want to deal with people one-on-one, because they may not know what it is to deal with entities. They know what it is to deal with people.”
And when an area of research is still in its emergent phase, “it’s not like we have well-established theories to fall back on,” Viswanathan said. “That’s why our understanding has to come from the ground up.”
From this micro-level understanding, Viswanathan was able to formulate aggregate-level insights about designing solutions.
“I think that it’s important to hold your beliefs and preconceived notions at bay and truly try to understand the context as it is, and then use that understanding to craft solutions,” he said. “In other words, don’t think of this as new markets for existing products, because then you automatically think that you have the answer. And don’t presume that you already have the answer just because you want to do good. In reality, it’s better to come at it from the opposite direction.”
An overarching lesson of the book is that “in subsistence marketplaces, it is essential to do good in order to do well,” Viswanathan said.
“Humanity has to be at the heart of a business,” he said. “I don’t mean to imply that businesses are charitable organizations, nor do I treat this as an exercise in corporate social responsibility. But I mean do good as it relates to your product and the individual and the community. And the way you do that is by engendering trust.”
For Viswanathan, the e-book chronicles his own more than 16 years in-the-making academic journey studying subsistence marketplaces.
“It started in 1997, so it’s very nice to see it culminate in an e-book,” he said. “I like the e-book medium because it can be priced for wide accessibility.”
Viswanathan has also created an eight-week open online class based on the text. So far, 9,000 students around the world have enrolled.
“It’s very nice to be able to say, ‘Here’s the curriculum. Go and take it,’ ” he said. “Right now, we have professional MBA students taking the class with the book as background, followed by an international immersion experience. The e-book fits very well in a blended learning environment.”