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Sustainable Livelihoods: The Central Issue of Human Security and Sustainable Development

Ashok Khosla, August 1993.

In many ways, the world is a better place to live in than it was, say, a hundred years ago. Many diseases have been largely eliminated, and life expectancy has risen significantly. Transportation and communication have opened opportunities for work and leisure that could not have been dreamt of earlier. We now have more, control more and know more than ever before.

But few societies today have escaped the widespread scourges of growing pollution, waste accumulation, social alienation, drugs, climate change, and a wide range of generally unsustainable production and consumption patterns. Rampant unemployment and accelerating inflation; growing supplies and depleting resources; stagnant demand and unmet needs -- these are the paradoxes and hallmarks of many economies today, no less in the North than in the South.

Human security is the first casualty of these paradoxes. Very few people, rich or poor, can feel secure under the tension of these social forces.

The modern economy would appear to be headed for a world where cheap machines produce ever cheaper products for other cheap machines to use. As a consequence, human beings have less and less to do. It is common to see more and more automation in the face of more and more unemployed people -- followed by more and more products chasing less and less purchasing power. Today's labour saving technologies and mechanistic economic structures can only lead to growing supply and stagnant demand -- until, of course, we reach the catastrophic environmental transition when supplies collapse altogether and both human populations and their demands collapse with them.

To pass the time, a few privileged people are able to acquire some of the more sophisticated machines to transfer larger and larger amounts of notional money over longer and longer distances. This game yields a lot of real money for those on the inside, but nothing for the more than two billion people who remain outside the formal economy, eking out of nature the best living they can.

The lives of some people, in almost every country, are better; the lives of many are much worse. Either way, human security, and no less human welfare, whether at the level of the individual, the household or the community, does not appear to be improving, overall, in the world.

The economic theories on which our current systems of production and distribution rest just do not work.

Unfortunately the assumptions underlying neo-classical economics -- and the machineries of the modern marketplace that they naturally lead to -- are not sufficiently solid to support the common platforms of human values on which societies must stand to benefit collectively and equitably. Growth, they have claimed, must come first, even at the expense of distributive injustice and human misery. Efficiency over equity. Machines over people. The rich before the poor.

But the global economy, which is based on these assumptions, is in a mess. No fine tuning of the neoclassical doctrines, no more of the same medicines -- that, after all, are causing the problems in the first place -- can get us out of it. When the social, environmental and natural resource costs of the past century's experiments with "modernisation" are all counted, it will become obvious that the current form of "development" is not sustainable. The widespread social and economic ills of today are just the early symptoms of a terminal disease that human society can avoid not by a change of dosage or even a change of the medication, but by a fundamental change to an altogether different system of social (and economic) medicine.

Sustainable livelihoods

The central issue facing society, North, South, East or West, is the need to create sustainable livelihoods. Large numbers of sustainable livelihoods.

Any simple solution proposed for a complex set of social and economic problems must inherently be suspect. Yet, if there is a One-Point agenda for sustainable development, it has to be the large scale introduction of sustainable livelihoods.

Sustainable livelihoods create goods and services that are widely needed in any community. They give dignity and self-esteem to the worker. They create purchasing power, and with it greater economic and social equity. Especially for women and the underprivileged. And they do not destroy the environment.

In short, a sustainable livelihood is a remunerative, satisfying and meaningful job that enables each member of the community to help nurture and recreate the resource base.

Sustainable livelihoods, and the human security they engender, underlie the one set of issues that is common to all nations and societies, at all stages of development. They provide a powerful synthesising, unifying concept that can bring the most disparate interests together to design more viable economic systems for the future in any country, rich or poor.

Neither today's economic policies, nor our current technological choices are geared to promoting sustainable livelihoods.

"Global competitiveness", "comparative advantage", "economies of scale", "environmental externalities" and other such shibboleths -- the ultimate being the "free market" -- based on simplistic (and entirely unrealistic) assumptions are concepts of neo-classical economics that do not easily translate into the language of sustainability. In fact, they do not translate at all, since economists have been unable to recognise the issue of sustainability in the first place presumably because it would complicate the mathematics of their elegant models.

And, ultimately, how can a profession that coined the term "human resources" reconcile itself to the meaning and implications of a term like sustainable livelihood? People are surely the subject of development, and not merely the "factors" of production.

The theories of global trade and comparative advantage have no meaning unless the full environmental and resource costs of transportation are included in factor and product prices. Till today, such costs have been ignored, as have the social and human benefits of widespread employment. To complicate these calculations, barriers to trade in various guises today (under such pretexts as human rights, child labour, low wages, lack of environmental standards) distort international transactions to an extent that was not envisaged even in Mr. Ricardo's rich, original framework.

The economies of scale depend directly on the technological, organizational and infrastructural choices available to a production unit. It is easy to show, as I will attempt to do below, that with a small change in any of these choices, the economies of scale can be quickly turned into diseconomies of scale. Recessions in some of the industrialised countries have forced many large corporations to learn this lesson the hard way, a process Japanese and American companies these days often refer euphemistically to as "downsizing",

By definition, sustainable livelihoods bind people to their communities and to their land. Not only do they thus have a positive impact on health, fertility, migration and other demographic behaviour, but they also permit a far more effective use of resources for the benefit of all.

But without improved productivity and better management and marketing systems, they can never lead to the quantum changes in lifestyle that people everywhere now desire. For this, the large scale success of sustainable livelihoods will depend on three factors:

1. sustainable technologies
2. sustainable enterprises
3. sustainable economies

Sustainable technology

The poor have many basic needs - food, water, energy, shelter, clothing, transport, health care, education and productive employment. Above all, they need income. Almost all these needs have a close relationship with environmental values, and all have largely been left unmet by past development strategies. The cycle of poverty is made more vicious by the lack of access of the poor to financial capital, to raw materials and, most important, to technology appropriate to their needs and skills.

With the evolution of societal perceptions, aspirations and conditions: and with recent developments in science, design, new materials and production processes, technological innovation is becoming increasingly important for solving the problems of poverty. New products and technologies, many with significant, positive social and environmental spinoffs, are now possible for mass distribution as a result of the application of sophisticated scientific and technological knowledge. Examples are given below.

Technology which serves the goals of development is defined as "sustainable technology." Sustainable technology springs from indigenous creativity, in response to local needs and possibilities:

• It is relevant and ready for use by the common people, and aims directly to improve the quality of their lives.
• It derives maximum leverage from the local cultural environment, by drawing upon the existing managerial and technical skills and providing the basis for extending them.
• It uses the physical potential of an area, and maintains harmony between people and nature.

The imperatives of sustainable development make it possible for us to combine modern scientific tools with traditional knowledge and to translate the results into forms useful to mankind: a method, a process, a design, a device or a product which will open up new possibilities and potentials for improving the quality of life.

In addition to a full scale delivery system, including the functions of promotion, distribution, sales, training, maintenance and after sales services, and market analysis, mass diffusion of sustainable technology requires:

• Economic viability, in production, marketing and use, as the prime criterion of "sustainability" or "appropriateness" for a technology.
• Strong linkages, almost non-existent in a developing country, between the processes of innovation, production and marketing.
• Active participation of the people affected by the design of technologies, to take full account of local needs, resources and constraints, and to obtain maximum advantage from traditional knowledge.
• Maximizing its positive social and environmental spinoffs, by appropriate design and without loss of product marketability.
• Systems Science for the inclusion of the variety of factors relevant to the design of successful institutions and technologies.
• A critical mass of effort, providing economies of scale in innovation, manufacturing and marketing, to bring market or environmental conditions to a new takeoff, beyond an existing threshold.
• Adaptive management to fit organizational practice to local conditions and requirements.

Throughout the Third World, there is an evident and pervasive need among both rural and urban poor for a whole variety of technologies ranging from cooking stoves and lamps to producer gas plants and windmills.

Why have these needs not led to a more widespread demand?

Moreover, tens if not hundreds of designs are available for each such technology, scattered in laboratories, workshops and archives throughout the world.

Why has the existing technical capacity not led to supply?

The answers to these two questions are complex, and interlinked. A combination of economic, social, political and cultural -- not to mention scientific, technical and institutional -- factors have greatly inhibited the supply and demand for sustainable technology. They apply, in varying mixes, to all rural technologies. The more important among these factors are:

• capital/operational costs efficiency of the technology
• evidence of improvement over traditional methods
• ease of operation and ergonomic design
• availability of spare parts and ancillaries
• ease of repair and maintenance
• problems of production
• adaptation to local conditions
• existence of marketing organizations
• availability of information
• promotion, training and extension services
• management skills and social organization
• social, class, political and cultural attitudes

Above all, the "appropriateness" of a technology must be measured by how well it satisfies the needs of the end client and with what success It takes advantage of the opportunities and constraints of the production and marketing processes.

Given the magnitude of the problem of disseminating a technology widely, and the limits to the public resources likely to be devoted to it, any successful delivery mechanism must be self-financing and self-supporting at each stage of the product cycle.

It must pay someone to make the products, it must pay someone to sell them, it must pay someone to maintain them; and of course it must be worth someone's while to buy and use them.

If the premises listed above are accepted, several conclusions follow more or less logically:

• the innovation process must link design of the technologies much more closely to the needs of manufacturing and marketing than it has generally done in the past (see Figure 1).
• No matter how efficient a design may have been shown to be in laboratory tests, or how well it is claimed to fulfil socio-economic criteria, it cannot be considered complete or acceptable until it has been productionised and field-tested
• "productionising" requires full design specifications and blueprints; material specification taking account of local resources, skills and substitution possibilities; and tooling needed for systematic production all tested for the conditions under which the production is expected to take place
• "field-testing" requires detailed studies of the technology in use, accelerated life-cycle tests, and iterative re-adaptation and redesign until the technology has a demonstrated market acceptability
• widespread dissemination of sustainable rural technologies requires new types of institutional structures carrying out new kinds of functions.
• the production and marketing activities (and indeed the innovation process also) must be decentralized to be responsive to the local needs and conditions
• the product range and territorial coverage must be large enough to provide significant economies of scale in each of the three functions, innovation, manufacturing and marketing
• clusters and packages of technologies need to be developed to take advantage of standardized modules and components for facilitating production, marketing, spare-part availability and maintenance.
• the levels of "technicity" need to be understood, so as to provide continuity with existing methods while introducing new technological perceptions and possibilities in the village.
• the methods of modern business management, appropriately adapted to the rural milieu, have much to offer in achieving the goals of mass dissemination

Figure 1: Strong links between Innovation, Production and Marketing

The relevance of the links depicted in Figure 1 is commonly acknowledged, but rarely understood: the design of an appropriate technology, no less than that of a new electronics product or automobile model, must be carried out within the framework of an organization whose broader activities include manufacturing and marketing. Otherwise its market success can only be a matter of pure chance.

In this light, Development Alternatives has developed a product range that includes devices for energy, water, agriculture, shelter, transport, employment-generation and other human needs.

Specific examples are:

• cooking stoves
• stabilized soil brick machines
• paper and board making equipment
• producer gas units
• acetylene lamps
• knitting machines
• water pumps
• solar devices
• biogas generator kits
• food storage bins
• multi-purpose hand presses
• integrated Village Energy Systems

Sustainable enterprises

Sustainable livelihoods using sustainable technologies will require sustainable enterprises. Sustainable enterprises produce goods and services that are needed to better the lives of the people. At the same time, being environment-friendly, they minimize waste, use renewables and residues and generally conserve resources.

To break out of the present poverty- pollution -population trap, we need to create new kinds of corporate institutions that integrate considerations not only of economic efficiency, but also environmental soundness and social equity into business decisions. Neither the current policies for national development, nor the activities of the corporate sector are geared to achieve this kind of goal.

The way needed lies far outside the imagination of our planners and decision-makers, Much of it lies in small scale, decentralized industries of a new kind. Such (mini or micro) industries must use good technology to raise productivity and local resources to make products and services that satisfy the needs of local people without destroying the environment. To be viable, they will need to evolve substantially modified market mechanisms that can take account of full-cost pricing and social impacts.

Traditionally, corporate response to social issues has largely been influenced by fear -- the fear of jail, of markets lost or of monetary liability. This must change, and the broader social good has to be internalised in decision making no less than the bottom line of cash profit. To bring about this change, the sustainable enterprise will have to strike a radically new synthesis across sectors and institutions, either by redesigning itself or through partnerships with other entities that have complementary strengths.

Taking the complete cycle from biomass generation to end-product use, entire jobs can be created at costs of a few thousand rupees, the environment can be enriched at no cost at all, and the basic needs of whole communities can be met through the additional purchasing power created. The hand-made, recycled paper unit of TARA demonstrates the possibilities in this direction .

In comparison with a large scale paper mill, the TARA unit has been able to show that the small paper enterprise has many environmental, social and even economic advantages:

Cost of creating a workplace = 1/10
Capital investment per Kg of paper = 1/3
Energy consumption per Kg of paper = 1/10
Water consumption per Kg of paper = 1/2

All that the small enterprise needs to beat the large corporation at its own game is better access than it has today to technology, finance (not necessarily cheaper finance), and marketing channels. The primary role of the public sector in facilitating these is to provide basic infrastructure for communication and transportation.

The myth of the "economies of scale" that justifies the bulk of national investment going into urban infrastructure and institutions is as hollow as it is deeply embedded in a bankrupt theory of development economics.

The design and operation of rural enterprises is a complex, still unfamiliar business. They have to master the technology-environment-finance-marketing linkages, while keeping their overhead costs low. They must do this without access to engineers, management specialists, friendly bankers or market infrastructure, either for buying raw materials or for selling products.

An interesting solution to these seemingly insuperable obstacles lies in building franchised networks of small, private enterprises capable of growing and processing biomass to manufacture products for both the urban and local markets. To be successful, the franchise arrangement will have to provide high technological and marketing inputs and access to capital.

Sustainable economies

The possibility of improving equity, efficiency, ecological harmony and self-reliance - and thus of achieving sustainable development - rests on how quickly and effectively innovations can be introduced into the economy. Given the size, spread and poverty of the rural population, which must now comprise the primary target of any effort aimed at sustainable development, it becomes immediately clear that any viable approach must be:

• highly replicable
• locally accessible
• self-financing

These criteria imply that the strategies of development must now turn many of the earlier paradigms upside down: technologies must be economically viable, institutions must be decentralized, and the environment's capacity to supply resources must be conserved. To achieve these attributes, we will need whole sets of new concepts: participation, networks, appropriate technologies, the diseconomies of scale, environmental and social appraisal of projects, rapid resource surveys, corporate research and development, and non-governmental action.

Yet development of sorts has taken place in some parts of the world, and management approaches that have succeeded can yield valuable ideas which, appropriately generalized and adapted, can also be made to work in the rural business environment. Among these, the most important for effective organization of rural technology efforts are:

• organization of innovation in high technology industries, such as the manufacturers of electronics components.
• the decentralization of production and marketing through franchising, such as the fast food chains.
• the management of complex systems and projects, such as space programmes.

The urban markets of a developing country like India have so far provided sufficiently attractive business opportunities to entrepreneurs to have prevented them from fully appreciating the possibilities offered by the rural areas. However, given the magnitude of the potential markets among the lower income "peripheral" groups, and the entrepreneurial opportunities these can offer if a sufficiently systematic corporate approach is taken to the problems of generating both supply and demand, it can safely be expected that the next few years will see new entrants into the field.

These initiatives will have to come from the non government sector and, more widely, the "Independent Sector", hopefully with direct encouragement and support from Government.

Also:
Technologies | Resources