Compassionate Capitalism: Serving the Poor Profitably with David Green

Tina Tam

By Tina Tam, Erb MBA/MS student, class of 2011.

An Ypsilanti native who now lives in Berkeley with his family, David Green’s warm and approachable style made it easier to picture him as your friendly, lawn-mowing neighbor than a legendary social entrepreneur who has impacted the lives of millions.

Green is best known for making healthcare affordable for the poor by significantly reducing the manufacturing costs of medical technologies. Green is an Ashoka Fellow and VP, a MacArthur Fellow, and a globally recognized leading social entrepreneur. A University of Michigan alum, he came to Ann Arbor to receive his well-deserved Alumni Humanitarian Service Award a few weeks ago. Although his visit was short, he graciously squeezed in a breakfast with a small group of students through the Ross Emerging Markets Club. Among those inspired by Green were several Erb students in attendance.

Bringing Affordable Cataract Surgeries to the Poor

Green’s work was key to the success of Aravind Eye Hospital in India. A well-respected example of social entrepreneurship, the work achieved by Aravind is nothing short of amazing. The hospital serves the poor by performing hundreds of thousands of cataract surgeries a year, the majority of which for free or at a very low cost, all the while maintaining financial sustainability.

By targeting the problem areas along the supply chain, Green was able to reduce the prohibitive cost of the surgery technologies dramatically. An example: Green found a way to produce state-of-the-art surgery replacement lenses for under $10.00 a pair, instead of the previous $150.00. Aurolab, the manufacturing facility behind the Aravind operations, now delivers intraocular lenses to 109 countries, close to 10% of market share globally.

Compassionate Capitalism in a Nutshell

My in-a-nutshell attempt at defining Compassionate Capitalism based on Green’s enlightening talk: for-profit social enterprises with a low margin, high volume business model that seek to reduce manufacturing costs by maximizing production capacity, combined with a tier-pricing strategy to ensure affordability to the poor, while using surplus revenue to maintain financial sustainability and forming a lasting impact by “tilting the industry competitive landscape”.

Sutures, Solar, and Stress (or the reduction thereof)

Green has continued to use Compassionate Capitalism to change lives. Some of his latest ventures involve sutures and hearing aids, a social investment fund on eye care delivery, and a solar fund designed to invest in the bottleneck areas of the solar technology supply chain in order to bring affordable solar to low-income communities in the developing world.

But those are just a few examples; Green’s current project list was so incredulously long that jaws were dropping over the breakfast table. One student could not help but ask how he dealt with the stress of this volume of incredible work. Green expressed that his competitive nature kept him going, and running and meditation also helped relieve some of the stress from juggling seven to eight startups simultaneously. One day, he joked, he might enjoy a full-time role sharing his “grandfather’s wisdom” with students like he did that morning.