A $300 house

December 1, 2011 § Leave a comment

 Vijay Govindarajan, or VG as he is known, a professor at Tuck School of Business in Dartmouth, New Hampshire. Until recently his books and research have focused on the strategic innovation techniques that companies use to become more successful — he spent a year as chief innovation consultant at General Electric.

Now, though, he is trying to use innovation strategies and techniques to invent a house that can be built for less than $300 (£190).

“I grew up in India right next to a slum,” he said. “I used to walk through it every day to catch a bus and … what I saw were people whose living conditions were inhumane but who had the same aspiration, the same intelligence, the same dreams as you and I. The only difference was access to opportunities. They were condemned because of the conditions in which they lived.”

Allow people to build good houses and the rest will follow, he says. “It’s not just a house. It’s a metaphor for a whole slew of services that the poor need. Think about it as a way to deliver health, jobs, education.” Take health, for example. Millions of people die from tuberculosis, cholera and malaria, so Professor Govindarajan challenged designers to come up with a house that reduces the risk of each of these.

“Tuberculosis, for instance, is an airborne disease. Imagine you are in a hut in a slum with no sunlight or ventilation and ten people sleeping it. If one of them gets TB, the other nine will get infected, but if the $300 house can be designed with proper ventilation we can decrease the incidence.” Likewise incorporating mosquito nets and proper sanitation will help to combat malaria and cholera.

While the $300 figure is eye-catching, he will not mind too much if the final product ends up costing a little more. “It’s not about the price point, it’s about challenging people to think differently.”

Professor Govindarajan, who this week won a Thinkers50 award for his idea, said: “If Christian Sarkar [the marketing consultant working with him on the $300 house] and I had said ‘let’s build a cheap home’, people would not have been galvanised. The $300 price point gets people’s attention because it is such a ridiculously low number. It makes people stop and think about a house in an entirely new way.” He wants designers to face the challenge as if they have never seen a house before rather than coming up with a cheaper version of an existing model.

Collaboration is required between business, government and NGOs for the idea to work. “The $300 house is not a problem for charity. We are not talking about giving this house away free. We are talking about a challenge for commerce: how do you make money building a house for $300?

“The house is of no use unless there is sewage [facilities], for instance, and that is a public good that government should create. Similarly, you need land to build the house and in many parts of these rural areas the land is owned by governments and NGOs, so we must think of a collaborative model here, an ecosystem of partners.

“The key is transparency. This is not going to be easy because we have had such a track record of mistrust between business and government. We have to somehow go from that to an era where we begin to trust. It won’t be easy, so let us start small and learn.”

This attitude of starting small before expanding applies to other practical areas involved in building the house. A team from the university intends to build a prototype in Haiti next year. If all goes well the next stage will be a village and then, Professor Govindarajan hopes, interest from a large corporation that will want to take the idea forward. Two companies in India have already expressed interest in the idea.

“We have tried the charity route and it doesn’t work. There is not enough money to donate your way out of poverty — there are too many people. I have nothing against charity, but this is a business problem,” he said.

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