Base of Pyramid approach from an NGO perspective using livelihoods skill training as a model

Transcription

1 Base of Pyramid approach from an NGO perspective using livelihoods skill training as a model Keywords: Base of the Pyramid; Skill training; Livelihoods; Service provision Abstract Gram Vikas are a rural development organisation working with the poorest and most marginalized communities. Water and sanitation activities are used as an entry point for whole village development, and implemented under MANTRA (Movement and Action Network for Transformation of Rural Areas) programme. MANTRA is based on five core values, one of these being cost-sharing. Gram Vikas does not simply provide water and sanitation infrastructure, instead they insist on the communities contributing in terms of supplying locally available materials, and manual labour, as well as a cash contribution. A key aspect of this programme is livelihood skills training, which target village youth who have no or very limited formal education. This paper will focus on masonry training, and explore how the training has mutual benefits for both Gram Vikas and the communities. It will use the results from a recent study to assess the economic benefits for the trained masons, as well as evaluating the wider benefits to the community, such as reducing the need to migrate, leading to a more cohesive community. Providing training to villagers is also beneficial to Gram Vikas, as it provides a trained workforce for the construction of the toilets and bathing rooms, and water towers, therefore enabling Gram Vikas to complete the projects in a cost-effective manner. In addition, the paper will analyse the lessons the corporate sector can learn from grassroot organisations, such as Gram Vikas, who have worked with Orissa s poorest and most marginalized communities for more than 30 years. It will look at how an inherent understanding of this sector of the population, and the knowledge of building a healthy community can be applied to developing future BoP models based around service provision for poor communities.

2 Introduction Gram Vikas (GV) are an Indian rural development organisation, working predominantly in the state of Orissa. Orissa is one of India s poorest states with 87% of its population living in rural areas. It also has the dubious distinction of having the poorest coverage of sanitation and protected water supply in India. It is this poor coverage that is predominantly responsible for the appalling health conditions across the state, and in turn the very high poverty levels. More than 40% of Orissa s population live on less than a dollar a day, and can therefore be identified as being at the Bottom of the Pyramid. GV s work is implemented under its MANTRA (Movement and Action Network for the Transformation of Rural Areas) programme, which is based on five core principles: 100% inclusion, Gender equity, Social equity, Cost-sharing, and Sustainability. Under MANTRA, Gram Vikas core activities revolve around the water and sanitation sector, and within these activities, Gram Vikas support the communities they work with to undertake various development programmes with a view to improving their quality of life. Two important sectors of intervention are livelihoods and infrastructure. In the livelihoods sector, Gram Vikas support individuals and groups, who are generally landless, and have no formal skills to participate in skill development programmes. Activities in the infrastructure sector include constructing facilities for a good quality sanitation system, as well as a supply of protected drinking water. One of the major problems in Orissa is the practice of open defecation, resulting in polluted water sources, which in turn causes ill-health from water-borne diseases. Easily preventable water-borne diseases cause 80% of diseases in rural areas. A principle cause of poverty is from ill-health and the inability to work. Therefore Gram Vikas work of combining skill building with addressing the underlying problems of poverty caused by water-borne diseases does much to target the Base of the Pyramid (BoP) population. The BoP population in Orissa accounts for 40-50% of the population, who are generally characterised as being landless, with their main source of income coming from daily wage labour. It is common for this section of the population to have an inherently engrained attitude that they are unable to do any other kind of work. Even when offered training, which includes a daily stipend of Rs.50, equivalent to the daily wage earned as a daily wage labourer, many consider they are not suitable and are unable to become masons or other skilled labourers. Often, organisations implementing livelihood activities focus on the non-vulnerable or less-vulnerable poor, who possess a small degree of entrepreneurial and or risktaking ability. In other words the tier above the base of the pyramid is reached, but not the actual base. The micro credit approach of providing loans and merely monitoring its repayment does nothing to build capacities of people to start new activities or provide business support to groups who have decided to undertake a new activity. Even other livelihoods operations find it easier to focus on those people who are already involved in some kind of livelihood activity, implying that they have displayed an interest and ability to take risks and deal with the marketplace. As a result the true base of the pyramid population is missed out, and is given no support to improve the sustainability of their livelihoods. Livelihood opportunities in the rural areas have been found to be limited, especially with the slow growth of agriculture and no growth in terms of service sector and small-scale industries. This has resulted in large-scale migration of youth from the rural areas to the larger cities of better developed states such as Gujarat and Maharashtra, where they find work as daily wage labourers in the factories and mills.

3 In India there is also a problem with a lack of skilled labourers in the construction industry. Gram Vikas have therefore identified this as an area of intervention where the true BoP population can be targeted and reached, and helped to achieve a more sustainable and secure livelihood. In addition, this skill training benefits Gram Vikas by increasing the size, and improving the skills of the workforce potentially available, thereby enabling them to achieve ambitious construction targets, and maintain the credibility of the organisation. Livelihood interventions and Gram Vikas approach Gram Vikas approach to livelihood interventions is different to many other organisations. GV build a strong relationship and rapport with the communities they work with, and enter into deep and frequent dialogue. The issues preventing people from participating are therefore fully understood and the skill building programme can be tailored, and adapted to ensure the BoP population s needs are met, and this sector can participate fully. The importance of dialogue has been recognised by many people involved in Base of the Pyramid approaches, including Simanis & Hart (2008) who highlight that BoP strategy requires close partnerships with the community, and there is a need for deep dialogue with the poor, resulting in a shared commitment born out of mutual sharing and mutual learning. The main source of income for this tier of the pyramid in Orissa is daily wage labour, and one of the major problems with daily wage labour is its seasonality. It is not uncommon for households of five people to have to live off half a dollar a day during the off-season, and for many, starvation is a genuine threat. It is therefore during the off-season that the training courses are generally run. Another advantage of the training, and one that enables the poorest to participate is the short amount of time the training takes to complete. It only requires a very small outlay of resources and investment for both the trainees and GV. The trainees only need to invest 60 days of time to be able to gain a new livelihood, and GV only pay the minimum wage, as well as the cost of materials. GV firmly believe there is no other way of generating livelihoods for people in such a cost-effective manner. GV s skills training programme is organised into five main areas, all of which can be used in the construction industry where skilled labour is in short supply, and all are skills that GV can use. It is in this context that GV can be viewed as a construction company. GV train local people in skills that are in short supply, and which they also need in order to meet their targets. These five areas are Masonry, Plumbing, Bar-bending, Stone dressing, and Painting. Recently a survey was carried out to assess the effectiveness of the masonry training and to analyse the benefits of the training for masons who completed it between 2005 and This paper will therefore concentrate on the mason training in terms of a Base of the Pyramid approach to service provision. The overall aim of the training is to improve livelihood opportunities for the BoP population, specifically younger men and women with no formal skills or qualifications through enabling them to develop skills that can be utilised for industries/ markets within and outside of rural areas. This aim is achieved through the following objectives: To tap into the latent/ growing opportunities in the industry and service sector, and to help rural unemployed people gain productive engagement in these sectors

4 To equip them with the necessary and relevant skill sets that can be used to gain employment in such sectors To facilitate improvement of better services and infrastructure in the operational areas of Gram Vikas. To provide opportunities for a sustainable secure livelihood for households in areas Gram Vikas are operational. Graph 1: Age distribution of the trainees Number of trainees < >50 Age Graph 2 : Highest level of education attained by trainees 25% 8% 1% 3% 3% 34% 26% <5 5 to 7 8 to 9 10 Plus 2 Plus 3 Illiterate Graphs 1&2 demonstrate how the programme is reaching the target population, by looking at age distribution and highest level of education attained by the trainees. The majority of trainees are in the age range of 20-25, and 81% are under the age of 30. In terms of education attained, nearly 90% have not achieved matriculation (not passed standard 10), meaning they have left school with no form of qualification, and 3% are completely illiterate. The programme aim is livelihood generation, however the programme does also benefit Gram Vikas. The training is very scientific and detailed, which for many training programmes in skill-building is not the case. The masons are also taught to make optimum use of resources and materials, resulting in limited wastage. On completion of training, the masons are highly sought after and are often able to

5 secure very lucrative contracts in urban areas. GV also guarantee the trained masons work on their projects, which many take advantage of, therefore providing GV with a highly skilled workforce. In addition the training of women can be a real advantage to GV as women generally do not migrate and want to work close to home, therefore helping GV meet their Human Resource needs, and meet their construction targets in a cost-effective manner. The training course lasts for 60 days and follows a pre-designed schedule where the emphasis is on practical knowledge along with orientation on basic concepts. Each batch of approximately 25 trainees undertakes a residential course under the supervision of Gram Vikas staff and a trained master mason. They are paid a stipend of Rs.50 per day for the training period and learn all of the key techniques needed for general masonry, and building structures specific to GV s requirements. Components of the course include: Use of tools for construction Basic settlement layout Levelling techniques Foundation and stone work Brick laying techniques with mud mortar and cement Plastering and finishing by mud mortar and cement mortar techniques Basic mathematical calculations required. Foundation laying Roof casting Flooring The Rs.50 stipend is crucial for enabling the BoP population to participate in this opportunity. Too often the tier above BoP ends up being reached, even if the intended target was the poorest section, due to insufficient measures in place to allow BoP to participate. The BoP population is very vulnerable and generally unable to take any risks, therefore the daily Rs.50 stipend (equivalent to one day s daily wage labour) is crucial to enabling the very poor and vulnerable to participate and provide them with an opportunity to learn a skill. After completion of the training course, masons are guaranteed work with Gram Vikas for the foreseeable future, but are also free to take up any other assignment. Many go on to secure lucrative contracts in the construction industry in nearby urban areas, where they can earn up to six times their monthly income before training. To date, over 6000 rural youth, both men and women have been trained in masonry work and engaged in full time work.

6 Benefits of masonry training for the community Recently 210 masons who undertook their training between 2005 and 2007 were surveyed. An overview of these findings will be reported here to assess the benefits to the poorest sections of the community from this training. The survey took results from 10 trainings, of which table 1 provides a summary of the findings. Table 1: Results summary Number of trainings included in this report: 10 Training period: April 2005 November 2007 Total number of participants: 210 (including 7 female) Average age of trainees: 26 Youngest trained mason: 17 Oldest trained mason: 60 Average increase in number of days worked per month: 8 Average increase in daily wage: Rs.67 Average increase in monthly income: Rs.1,763 Of the 210 surveyed, 73% continued to work as masons after training. The remaining 27% went back to what they were doing prior to training, predominantly agricultural work and/or daily wage labour. The main benefits cited by the trained masons were economic benefits. As table 2 shows, generally people after training had a higher monthly income than prior to training. In most cases people were also employed as masons in conjunction with another income-generating activity such as farming or daily wage labour. Table 2: Change in monthly wage, before and after training Training Location and date Average monthly income before training (INR) Average monthly income after training (INR) Difference in monthly income (INR) Percentage change (%) Ganjam (Jun 2005) Keonjhar (Nov 2007) Adendunguri, Bolangir (June 2007) Balijuri, Bargarh (June 2005) Kochila Nuagaon, Dhenkanal (Jan 2007) Kendumundi, Bargarh (September 2007) Dhalpasi, Dhenkanal

7 (October 2007) Machakote, Ganjam (April 2005) Ainlapali, Bargarh (June 2007) Kankadaguda, Gajapati (Feb 2006) On completion of training, trainees are able to earn on average more than three times their monthly income prior to training, although the level of increase varied greatly. For example masons who completed their training course in Ganjam, in June 2005 were able to earn on average nearly seven times their earnings before training. With the exception of 2 people who were unemployed prior to training, everybody was working as a labourer earning around Rs per day, and only able to work about 11 days per month. However, after training their average daily wage increased to more than Rs.150, and the recently trained masons were able to work more than 20 days a month. Women masons Women are a sub-group within the BoP, which are often left out and find it even harder to take advantage of potential opportunities that are made available. Of the 210 masons surveyed, only 7 (3%) were women. This is an area where further work is needed to understand what is preventing women from being able to participate in skill training, and what is needed to enable more women to take advantage of these opportunities. Possible reasons may include: Stigma attached to females taking up masonry Parents or husband not allowing it Inability to attend a residential course away from their village There have however, been some women who have been able to participate in masonry training courses and in all cases they received support and very positive feedback from their family and the wider community, as well as having an increased income, and more money to not only spend on their house and family, but also on themselves. There is evidence to suggest that the number of female masons is increasing. In 2005, there were no records of females being trained, in 2006, 2 females were trained, and in 2007, 5 were trained. It will therefore be interesting to see if this trend is continued in future surveys. There is also recognition by Simanis and Hart (2008) that the target of these approaches is not only to alleviate the poverty of the people in BoP but also to improve the environment in which they live, where traditional utilities such as electricity, water, and gas are lacking and communications and transportation structures are poor. It can be demonstrated how the masonry training benefits the community in a range of ways as well as how it directly strengthens four of the five capital assets necessary

8 for a sustainable livelihood; Human, Social, Financial, Physical, and indirectly strengthens the fifth, Natural. In addition to monetary benefits, and increased employment opportunities, the masons also recognised other benefits, such as Offered a chance to be independent Able to have a more enjoyable source of employment Provided an opportunity for employment in the local area Gained respect from community and family The social benefits identified above can bring great advantages to the wider community. For example, enabling people to work in the local area instead of having to migrate to urban areas, often in other states for menial jobs means families can stay together and not be separated for long periods of time. This leads to a more cohesive, economically dependent community. Gaining respect from family and the wider community leads to increased self-esteem, resulting in happier more satisfied people. In turn, with increased self-esteem, other social problems that are common in very deprived areas such as alcoholism, and domestic violence also dramatically reduce. The human capital of the trainees is improved and strengthened through skillbuilding, providing more options to them in terms of income generating activities. As already discussed, there is much evidence showing how the financial capital of the recently trained masons also increases. For some, their monthly income can increase by nearly seven times. The physical capital is also improved as a direct result of the masonry training. The trainees learn to build the sanitation blocks and water towers needed, therefore at the end of the training, villages not only have many of these important structures started, but there is also a skilled workforce in place to ensure every household can have their own toilet and bathing room. This has an indirect effect on the natural capital. As a result of improved sanitation facilities, in addition to education relating to hygiene and sanitation, open defecation is eradicated from these villages, which dramatically improves the health and state of the natural environment. By enabling all five capital assets to be strengthened, the masonry training not only benefits the 25 individuals who take part, but also the entire villages they come from, thereby truly benefiting the whole BoP population. Benefits of masonry training for Gram Vikas To analyse this, it is perhaps best to consider and view GV as a construction company. As part of MANTRA programme, GV have a very large construction programme, building around 10,000 toilets and bathing rooms every year, and approximately 60 water tanks. To meet targets necessary for attracting and maintaining funding, a large skilled workforce is required. However, as already explained skilled labourers in the Indian construction industry are in very short supply. Therefore by training young, unskilled youth, and paying them a daily stipend, Gram Vikas can maintain a gradually increasing skilled workforce, specifically tailored to their construction needs, and meet their ambitious construction targets in a cost-effective manner. To train a skilled workforce of 25, whose skills are specifically tailored to Gram Vikas needs costs approximately Rs. 97,000 (US$1980), or Rs.3880 (US$79) per mason.

9 Table 2: Cost of training 25 masons Item Cost per training in Indian Rupees (assuming 25 trainees) Cost per training in US Dollars (using an exchange rate of USD1 = Rs.49) Capital Expenditure 10, Master Mason salary 12, Stipend for 25 trainees 75,000 1,530 Total 97,000 1,980 Paying 25 trained masons for a period of 60 days would be considerably more expensive, however it is not really possible to make a straight financial comparison, because trained masons would be able to work quicker, and complete more work to a higher standard per day than trainees. However, there are other benefits of training local people to become masons, which must be taken in to consideration. Gram Vikas work in very rural areas, which would make it very difficult to attract enough skilled labourers away from the urban areas. The urban areas are not only more attractive in terms of facilities, but are more lucrative too. Therefore by training local people, there is a ready workforce who is happy and generally wants to remain in the rural areas, where their home and family are. This is especially the case for female masons. Programme sustainability is another key advantage of training a local workforce. If new households come into the village as a result of marriage or some other factor, to abide by GV s stipulation of 100% inclusion, they too will need a toilet and bathing room. If there are trained masons in the village, the facilities can be constructed quickly and easily. In addition if any repairs are required, these too can be carried out with minimum trouble. Ensuring 100% inclusion and programme sustainability is a key marketing tool GV use when attracting funding, it is therefore crucial this is maintained. In addition to these more practical benefits of enabling Gram Vikas to meet its building targets in a cost effective manner, this programme also helps to raise GV s profile. This is a unique programme, which truly benefits the Bottom of the Pyramid population, therefore it can play a large part in attracting more funding, as well as increasing the credibility of the organisation. The benefits to Gram Vikas are just as applicable to the corporate sector. The economic benefits are perhaps more obvious, but the other, less practical benefits would help to give companies a competitive edge, especially in terms of their Corporate Social Responsibility (CSR) commitments which is so important, particularly in the current economic climate. How can lessons from Grassroot organisations such as Gram Vikas be applied to developing BoP models in the future for the corporate sector? To successfully target the Base of the Pyramid population and not the tier above requires an inherent understanding of this sector of the population, which grassroot organisations, such as Gram Vikas who have worked with this sector of the population for many years have. It requires a clear understanding of what contributes to a sustainable livelihood, what makes people vulnerable, and unable to take risks. Simanis and Hart (2006) as cited in The first learning experience of designing for the BoP highlight this, and state that for a company to be successful in markets targeting

10 the BoP, they must possess a clear understanding of these new contexts, the issues and the opportunities related to the targeted areas. This understanding is required in order to understand what measures are needed to allow BoP populations to participate and take advantage of entrepreneurial opportunities, and ensure it is the Base of the Pyramid benefiting and not the tier above. This is an area that Grassroot organisations can have a huge role to play when designing BoP models. The NGO sector also has a potentially large role in facilitating good dialogue between the corporate sector and communities. Another important concept in BoP design is regular and meaningful dialogue with the community at all stages Gram Vikas have found that constant dialogue with the communities is crucial for the success of the masonry training programme. Regular surveys of trained masons to analyse the benefits, understand areas of weakness within the programme all add to the ongoing success and ensuring it is the poorest and most vulnerable who are able to take advantage of the opportunity. NGOs, such as Gram Vikas, who work and live with these communities can build up a strong relationship and good rapport with them, and are able to communicate far more effectively with these communities than the corporate sector. They are therefore ideally placed to act as facilitators between the corporate sector and the communities when designing future models. Gram Vikas also have years of experience of working with and targeting the poorest and most marginalised communities, and can provide invaluable insight and highlight lessons that have been learnt when working with such communities. The results from the masonry training survey have raised issues and areas that need further research, For example, one noticeable area of weakness is the lack of women participating. Therefore more understanding is required as to how to involve more women. What are the current barriers preventing women from participating, and what can be done to remove these barriers? These are not just questions that need to be answered specifically in relation to the masonry training, but they are important questions to be considered when designing any future BoP model, particularly based around a service provision. The construction industry specifically could perhaps benefit very much from the lesson learnt, and design of the Gram Vikas masonry-training model. Benefits would include increasing the skilled workforce available to them, therefore helping them to meet construction targets in not only a cost-effective manner, but also to a high standard. In addition, organising a skills-training programme based on the GV model, which targets and reaches the Base of the Pyramid population would also work towards meeting CSR commitments, which again are so important in maintaining a competitive edge in business. Its not just the corporate sector who can benefit from the NGO sector though, the NGO sector can learn a lot from the corporate sector when developing BoP approach models. The corporate sector has a lot to offer in terms of ensuring a good business approach, and answering questions such as: Is the model as efficient as it can be? And, are both parties gaining the maximum benefits? With respect to the masonry training model, the corporate sector could have a lot to offer in terms of advising the recently trained masons how best to target and find work with larger companies, establish their own masonry business and help them to develop good entrepreneurial skills. The next step and challenge for Gram Vikas is to start organising trained masons into guilds and cooperatives, so that they are able to meet and take on large contracts.

11 Corporate sector collaboration on this issue would provide invaluable input and suggestions as to the best way to organise these. Construction companies specifically could have a very important and useful role in explaining what large construction companies look for, and what their decisions are based upon when deciding who to award large contracts to. Conclusion When designing future BoP models, collaboration and communication between the NGO sector, the corporate sector and communities is crucial. As Simanis and Hart (2008) highlight, the BoP strategy process requires close partnerships and a deep dialogue with the poor, resulting in a shared commitment born out of mutual sharing and mutual learning. The NGO sector have much to offer in understanding the population at the Base of the Pyramid, and helping to understand what is preventing this sector from taking advantage of opportunities, and the reasons behind them being so risk adverse. The NGO sector can also provide valuable input into what measures need to be taken to ensure BoP are able to participate. In return the corporate sector can offer much in terms of a good business approach, and improving the efficiency of the process to ensure it is as cost-effective as possible, and that both parties benefit from the service / product. Of course, community involvement is crucial too, without their involvement, it is impossible to design something that is really needed, and something they can use and / or fully participate in. When the Base of the Pyramid population is really reached, there can be large benefits for the entire community, and the potential to strengthen all five key livelihood capitals crucial for improving livelihood sustainability and reducing vulnerability is very high. However, so often the base is missed and the tier above, who are less risk adverse end up being reached. Gram Vikas skill building model hopefully offers one way of providing a service that is beneficial to BoP and really targets this sector of the population, and also the organisation delivering the service. GV s model also shows how, in this case, not only those directly participating in the service benefit, but the whole community benefits, and all five capital assets; Financial, Human, Social, Natural, and Physical are strengthened from the service. References 2008, Simanis, Erik & Hart, Stuart, The Base of the Pyramid Protocol: Towards Next Generation BoP Strategy: Second Edition 2008, Jenkins, Beth, Ishikawa, Eriko, Barthes, Emma, & Giacomelli, Marisol, Supporting entrepreneurship at the Base of the Pyramid through business linkages: Report of a roundtable dialogue, June , Rio de Janeiro, Brazil 2003, Boyer, Nicole, The Base of the Pyramid (BOP): Reperceiving business from the Bottom up: GBN working paper (Undated) Diehl, J.C & Christiaans, H.H.C.M, The first learning experience of designing for the BOP