There's a business opportunity amid HIV and the third world

Tue, 2 Aug 2011 14:08:38 -0400

Gilead Sciences, an important manufacturer of HIV/AIDS drugs, joined Unitaid’s Medicine Patent Pool recently – and in so doing, will let generic pharmaceutical companies copy four of its drugs to sell in poor countries at very low prices. In exchange, Gilead will get small royalties for every drug sold.

Policy wonks and healthcare advocates have rightly claimed this as a victory, though they point out that Gilead’s victory is that they’ll generate a lot of good will for their efforts.

This is shortsighted.

A business opportunity exists here that Gilead is right to pounce on – and other pharmaceutical companies should do the same.

By expanding access to their product in a completely untouched market, Gilead has the ability to brand themselves as the sole medical supplier to many countries and markets. By lowering their prices, or allowing generic drugs, they’ve provided vital help to struggling peoples and communities. Those people, as their health improves and they are able to return to productive workforce, will be able to contribute back to Gilead’s sales as they pursue their regular health needs.

Similarly, hiring workers in such countries – for competitive wages – would serve several purposes. It would fine-tune how their drugs are delivered and ensures that they will be used properly by trained employees (and for the lowest expense), it would produce economic stability in areas that most need it, and these in turn create a better market for Gilead’s products and services.

Beyond good will, the moral and ethical responsibility that businesses have to the common good is a perfect reason to distribute needed HIV drugs to impoverished communities. But Gilead, and companies like it, shouldn’t be so quick to dismiss business potential as well.

A policy that creates more business revenue while serving the public is a policy that can expand, develop, and ultimately do far more to help the third world than originally envisioned.

Coupon: Economic solutions, 90% off

Mon, 1 Aug 2011 19:08:30 -0400

We can slash unemployment in this country, and we can do it cheaply. But to do so, we need to understand why the most recent recession was so destructive, how it affected our recovery (or lack thereof), and what solutions we have to work with.

And then, like every proposal, we have to find the cheapest way to do it, and how to get the biggest return for our money.

The stimulus package headed off what could have been depression-level unemployment, but did so to the tune of $787 billion in taxpayer money. These solutions are about 90% cheaper – and that’s before they start paying us back.

The Labor and Housing Recession

The recession that started in December 2007 was different than most that predated it. People were laid off work much more quickly, and hired back much more slowly – but why? During the deep recession of the 1970s, the output of good and services in the US fell by 5%. But employment only fell by 2.5%. Companies held onto employees.

During the 2007-2009 recession, the output of goods and services fell by 4.5%. But employment fell by a staggering 8.3%.

Companies today are becoming more successful at finding ways to continue their business with fewer workers. Which means fewer jobs, slower hiring, and a prolonged recession. In fact, the percentage of Americans with jobs had lowered throughout the 2000s, despite rising in the 1990s.

Take a look at the telecommunications industry. They shed about 28,000 jobs in the last year. But over the last decade, they’ve shed 560,000 jobs. As technologies change, this industry needs fewer people; the people they do hire have to be trained with a new set of skills. There’s less focus on copper wires, more focus on fiber optics.

And don’t forget the worst factor in the recession: the housing market collapse.

Construction and manufacturing are typically the first drivers to bring jobs back after a recession. This time, however, people were losing their homes and loan-dealing banks were collapsing. The environment was poisonous to any housing developer.

Global recessions can take five years to churn up a strong recovery and create jobs at a fast pace. What can be done to speed that up?

Infrastructure Bank

The first suggestion, which has already been proposed several times by President Obama, is that we create an inexpensive (well, comparatively) public-private partnership that can offer loans to cities and states for infrastructure projects.

And here’s the thing: it’s work we have to do anyway.

Not only do we spend (waste?) $73 billion on projects that sometimes gets re-directed to special interests, but our roads and bridges are nearly falling apart.

Consider this report released last week by the American Society for Civil Engineers: they project that our failure to improve our transportation infrastructure will cost us $3.1 trillion in lost GDP growth by 2020.

That’s unacceptable. It’s dangerous. And it’s fiscally unwise.

A national infrastructure bank might run us $50-60 billion at first, which could then leverage $250 billion over the first few years as we draw investors and $1 trillion over the next decade.

No one would borrow $50-60 billion now to pay back $3.1 trillion in nine years. But by neglecting these vital changes, we’re essentially ringing up a charge of that much money by failing to invest the comparatively low cost now.

Here’s what’s in it for the economy and the middle class: our construction is dropping workers left and right, but this would immediately bring them back to work and start pouring new revenue into the pockets of low- and middle-income families. Their spend drives growth upward.

Our economy is 70% consumer-based, which means that the average American having more money to spend is the biggest possible driver we can see to our flagging recovery.

More fun: this pulls people out of unemployment insurance, out of food stamps and poverty – and means less spend from the taxpayer on the whole.

Job Training Micro-Loans

We do this in some fashion in dozens of third world countries, and we do it on a bigger scale for college and graduate students across the nation.

Let’s loan people money to get jobs.

The idea is actually simple: rather than large, blanket federal loans that cover a four-year education, we open a loan agency (publicly and privately run) that is available to connect unemployed workers with companies that need to hire.

We can pull manufacturing jobs back to the US over time, and there are even jobs available now, but the problem is that workers have to have a combination of high skills and willingness to work for less.

So what do they do? A company that needs people with training in setting up fiber optic cables could contact the loan agency, which then sets up an unemployed worker who is willing to work for agreed upon wages. A third party can offer training – under the guidelines of the loan – and when they’re guaranteed the job, they can slowly pay back the taxpayer.

Ultimately, it actually becomes profitable to help people train for jobs. It also means that skills can be honed and perfected to apply to the job in question. There’s no doubt that anyone who wants a college education should be enabled to pursue it, but not every job needs that level of education and not every citizen wants that level of debt.

A small amount of debt, easily paid back, for a specific, detailed education in the skills required for a secure job.

That’s my solution to the jobs crisis. What’s yours?

John Saveland's Open Salon Blog

There's a business opportunity amid HIV and the third world

Coupon: Economic solutions, 90% off