February 6, 2010

Technology Innovation & The Velocity of $$$$

Posted in Advance Trip tagged , , , , at 9:24 am by kampala2capetown

The Road Show crew is traveling through the Rift Valley in Kenya in search of our second locale for a space for the big screen set-up. We spent the last two days in Nakuru, a small junction town five hours from the Ugandan border and four hours from Nairobi. While we are yet to find the right partner or place for our event, the people we have met and the problems we have encountered is sharpening our language on why spreading innovative appropriate technologies in Africa could have a global net benefit.

We met one fellow on the side of the road building chicken coops from used car tires. He was a former soldier who now makes his livelihood by selling the coops at around $4 a piece and around 4 coops per day. The sales provide enough money for him to pay his monthly rent and help feed his family. People buy the coops because when baby chicks hatch they are very difficult to keep in one location and losing them means lost time and revenue.

The recycled tire chicken coop is a great innovation and it’s also increasing the velocity of money in Nakuru. Velocity of money is an economic term that describes how fast money changes from one hand to another.  When a farmer uses some of his savings to buy one of the chicken coops, the former soldier receives cash that he in return turn spends at the market to buy fresh vegetables for a family meal. The vegetable seller keeps some of that cash to spend on other necessities, and some of that cash returns to the farmer to buy more vegetables to sell at the market.  Now the farmer has increased his/her income and can potentially afford to support more chickens and may in time buy another coop. If the farmer had not purchased the coop and kept the money in savings, the other purchases would have been possible. The theoretical example shows the faster the velocity of money, the more money spreads around the community, and the stronger the economy gets as a whole.

The micro scale example of the chicken coops strengthening economy and livelihoods came back to us while visiting a large farm in the drier area of Nakuru. We were shown a huge field of weeds, where no vegetables can be supported during the dry months from January to April. During this time the price of vegetables on the market goes high because the supplies are limited. Families cut back on their food spending and less vegetables are sold. The farmers have less income, they hold onto their savings, and the velocity of money slows. When introduced the innovations of rain water harvesting, treadle pumps and slow drip irrigation, the farmer agreed that this could boost production during the dry season. If more vegetables could be grown, the price on the market would become more affordable and more sales could be made. The increased income that the farmer received could be invested into more technologies for increased production.

That still left us to consider how to bring the technology innovations sustainability into the community so that they could be maintained and marketed within the cultural context. We got to talking about building this technology economy at Samwell Kironji’s electronic repair shop. Samwell is also a community leader in a local church and we discussed a model that could bring a 21st century technology upgrade. Samwell loved the concept of the road show as a first step, and agreed as Barack Obama said in Ghana, “Africa does not need strong men, it needs strong institutions”. Samwell will think about what steps would be needed to create some type of centralized institution where innovations like rain water harvesting systems could be taught and then offered as a service to the community.

We finished the day by visiting a local school and greeted the future beneficiaries of technology innovation and the increased velocity of African money. While the term “developing community” may be a bogus from a sustainable development point of view, we can happily accept that many African communities have a lot of room to grow, and we will surely need their economies to become a player on the global marketplace if we are to see a recovery from the world wide slow-down…

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