Designing Change in Chile

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Designing Change in Chile

Pratt Graduate Design Management program works with professors in Chile to develop industries and support economic growth.

By Rebecca Paul and Dr. Mary McBride
Case Study Team: Dyanis DeJesus, Jahanzeb Khan, Jennifer Laga and Rebecca Paul
Issue 11 Winter 2012

Executive Summary
This case illustrates one example of how triple bottom line by design (TBLD) practices can add economic value, increase equity and enliven our ecosystem. It is one example of how to catalyze design-driven change and innovation. It demonstrates that there is no necessary “trade- off” between what is important for human health and development and what is important for economic development. There is money to be made in meeting human need and in restoring and renewing the biosphere upon which we all depend. We can profit by profiting life.

Introduction
I selected the Design Management Graduate program because I wanted to learn how to design a Triple Bottom Line (TBL). I wanted to create economic value, increase equity and enrich our ecosystem. I discovered that designing for a single bottom line profit is easier, but not necessarily more strategic. Since starting this program, “Strategic” has become my new favorite word; and when it comes to business, “strategic design” is what is going to make the difference when creating a sustainable advantage.

Tapping into the value of design is strategic design. Strategy that is TBLD offers advantage.

TBLD is not about “greening products,” but rather about creating strategies that are benign by design, eventuating in products, experiences, services and structures that not only generate profit, but also support life. TBLD values life, and by doing so, creates economic value.”

DM program participants work full time, and on the weekends we learn how to enable our organizations to be more innovative and to create life-affirming strategies. We learn how to incorporate TBLD practices into challenges we address in each class.

The Chile Challenge
Last spring, in our International Environment of Business course, we were presented with a unique opportunity to work with professors at the University of Valparíso (UV) in Chile, and took a strategic look at Chile in the context of a global economy and helped to developed local industry. In collaboration with the professors from UV we took on the challenge of how to develop tourism that can create economic value, but also increase equity and safeguard the local ecology of place.

The Discovery Phase
To successfully develop new types of industry in any country, city or community, interested parties need a scrupulous understanding of the cultural, environmental, political and economic factors present within the perspective region. As a team, we used this idea as the framework for our approach to the Chile Challenge. We focused on identifying opportunities to develop industries in Chile that would support their growing economy, while simultaneously serving the Chilean population and preserving the integrity of their abundant natural resources.

When starting this project we knew that our limited time frame would pose additional challenges. As we got deeper into our research we discovered that our initial ideas and perceptions about our potential solution were far from reality. We continued to dig, discover and debate. Finally, we were able to identify specific areas of industrial development in Chile that also had the cultural elements needed to support their growth. At times, this process felt aimless and frustrating. However, each period of frustration was followed with what is referred to as an “Ah-ha” moment. But that is the moment where the frustration of the discovery process results in a new way of forming or defining the challenge – the moment when a problem becomes a potential opportunity. Because we recognized the value of our discovery process, we wanted to create a tool to easily communicate this value to others.

We all want to find better, more sustainable solutions for furthering economic stability when developing industry in any region, but we need examples and cases and tools. What follows is an attempt to provide these.

Defining the Opportunity
To create strategic advantage, we must have a strategic framework. With this in mind, we began by looking not only at Litoral de los Poetas, the location our clients were focused on, but also in the country of Chile. We looked at its history, its economy, and its aspirations.

We started our process by concentrating on key indicators including: Chile’s GDP, demographics related to employment rates, economic inequality, education, and the population. We explored how and why these numbers have changed over the past 20 years, and how they compare to other nations in both South America and the OECD. This evaluation gave us a richer comprehension of the nation’s development and helped us to define potential areas of focus. Our first step was to define how Chile might take on these economic challenges using strategic design to create economic value and equity while protecting its environment.

We discovered that in the last fifty years the Chilean government has gone through several extreme changes, and their unique past and volatile ecology have shaped the social, political, and economic aspects responsible for the nation’s current status and economic growth. As of November 2010, Chile was the first South American nation to become a member of the Organization for Economic Co-operation and Development (OECD).

Since this induction, research has identified a series of goals that will push Chile’s economic development as expected by the OECD including:
1) improve labor participation by creating more and better jobs, and increase female contribution to the labor force,
2) increase public spending on areas such as education and targeted poverty programs,
3) improve economic productivity through human capital advancement (education) and knowledge capital growth (innovation and technology).

Equity and Workforce Development
The percent of the working population in Chile will increase by 1.6 million people by 2020, and this number will continue to expand consistently up through 20401. Given this rate of growth in the working-age population, and considering Chile’s current issue of unemployment, the country will need to accommodate the new volume of workers immediately.

As of 2011, approximately 47 percent of Chilean women work, versus an average of 53 percent across Latin America2. In higher education, as of 2002, women had similar attendance rates as men, with women at 47.5 percent attendance, versus men at 52.5 percent. Taking the previous statistics into consideration we acknowledged potential opportunities in female labor force development in Chile, both locally and internationally. Identifying how to utilize this portion of the working population could be financially, culturally, and possibly environmentally beneficial for the Chilean people.

Environment: Natural Resources and the Chilean Economy
One third of the Chilean government’s revenue comes from its copper industry1. While the country will be able to rely on copper to sustain itself in the immediate future, continuing to take copper from the earth is detrimental to the quality of their land. In addition, the smelting of the copper ore emits arsenic and carbon monoxide, which pollutes the air and water close to the mines and is harmful to people nearby. Another equity issue, when compared with OECD averages, Chile’s proportion of value added by services is lower than most other member countries.

Using Triple Bottom Line by Design to Create Economic Value

Strategic design requires toggling back and forth between the discovery phase and tighter definitional framework. Although designers are comfortable with this process, clients and businesses often want us to simply design and deliver, but when we do only that we are not fully using the strategic power of design. Strategists need to understand the concept deeply. They need to understand not only users needs but the broader needs of the community, the business, and the industry. Based on this phase of our research we were able to determine that Chile would benefit from a TBLD strategic approach to economic development on the Litoral de los Poetas our research determined that:
1) Chile needs to increase employment opportunities to accommodate the projected increase in their working population over the next few decades.
2) The female participation in the Chilean labor force is low in comparison to other nations in the OECD and South America.
3) Chile needs to decrease their economic dependence on copper, in order to achieve this goal they need to increase profits from other industries.

Designing Women In: The Economic Value of Working Women
Though women were emphasized in the OECD goals, further research confirmed them as a key-determining factor in Chile’s emerging economy.

Diversity and inclusion in any society’s value system will help it flourish economically, and gender diversity has proven to enhance the bottom line in the workplace.”

For example, in the United States, the increased percentage of women participation in the workforce has equated to a 25% increase in the country’s economy. By understanding the relationship of cultural norms and society within Chile, a case for integrating women into the labor market became evident as an economically viable and socially progressive solution.

Our team determined that women’s participation in the labor market in Chile has the potential to aid in economic development and poverty alleviation, and thus far has not been fully leveraged. Major progress continues to be made to expand women’s contributions to their families, country and economy. After defining the issue and discovering the angle, we began the process of designing women in and around sustainable strategic ecology in doing so.
Designing and Delivering a Tool for Female Participation in the Workforce & GDP
There is a direct relationship between increased female participation in the workforce and increased GDP in countries. But we could not discover a framework or tool that would assist strategies while attempting to increase female participation and to make visible the value of female participation in the workforce. Our next step was to design a framework for assessing the obstacles to and opportunities of developing female participation in the labor force.

A tool that will enhance these practices for use in the case of Chile, ultimately for any country, would be the best way to extract value from our findings. Our next step was to compare the female labor force in different countries, at different stages of economic development.

We identified several complex elements essential to designing a practical framework for increasing women’s participation in the labor market. These elements summarize many of the obstacles and opportunities that that we prioritized for consideration. Our research identified women’s integration in the labor market, regardless of a country’s economic stage of development. We also identified the variables and how both should be taken into account to ultimately design a functional tool.

 
Delivering the Value of Work
As we had previously anticipated, our limited time frame hindered our ability to deliver an immediately viable and deployable solution for developing industry in this region. When designing any program to drive economic growth, especially on an international level, it is important to take the time to fully understand the region, its people and its needs. Place based research is essential. We knew this and also knew that without traveling to Chile to continue with our research we could only make preliminary conclusions. Our hope was to develop a TBLD framework that could enable strategic thinking across regions.

In spite of the constraints of time and geography, we were able to discover and validate key factors that would need to be designed into any Triple Bottom Line by Design strategy. The TBLD strategic framework we created for designing development in Chile demonstrates that it is possible to create economic value and advance equity by increasing employment opportunities for women and harnessing the economic value of the female labor force. Economic value can also be created through the design and development of service industries to preserve Chile’s natural resources.

We believe that this work can serve as a model for decision making for development projects. If we want to create economic value, equity and enrich environment, this level of thinking can enhance already existing economic models for calculating return on development. Triple Bottom Line by Design development strategies can reshape economies that are more fully representative of a region’s demographic riches while safeguarding its social and natural capital.
 

 
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CATALYST INSIGHT:
The 4D process of defining, discovering, design, and delivering, is a strategic approach to the creation of TBLD solutions. Designers often find themselves working within their comfort zone of design; clients and organizations often place their emphasis on the delivery phase. Designing any program to drive economic growth, especially on an international level, requires the time to fully understand the region, its people and its needs, therefore the defining and discovery phases should be emphasized. As the Chile project demonstrated, a viable solution cannot be designed without first defining a challenge and discovering the legitimate problem in need of a solution.

STRATEGIES IN ACTION:
Dig, discover and debate in order to define the challenge and turn it into an opportunity
Employ strategic design in order to make the difference when creating sustainable advantage.
Identify opportunities to develop industries that support a growing economy, while simultaneously serving the population and preserving the integrity of abundant natural resources.
Extract value from the defining and discovery phases by utilizing TBLD tools and frameworks.

References
Rutstein, Carrie. (2010, November 19). Chile 2040: An Analysis of the Population,
Economic and Socioeconomic Dynamics of Chile through 2040. University of Denver, Korbel School of International Studies.
Women in Chile – Wikipedia, the free encyclopedia. (n.d.). Wikipedia, the free encyclopedia. Retrieved March 28, 2012, from http://en.wikipedia.org/wiki/Women_in_Chile
Krasnow, J. (1997, January 11). Chile Copper Exports. TED Case Studies. Retrieved March 27, 2012, from http://www1.american.edu/ted/copper.htm
Shriver, M. & The Center for American Progress, edited by Boushey, H. & O’Leary, A.
(2009, October 16). The Shriver Report: A Woman’s Nation Changes Everything. Economy: The New Breadwinners. Retrieved March 28, 2012 from http://www.americanprogress.org/issues/2009/10/womans_nation.html
Barsh, J., Yee, L. & McKinsey&Company. (2011). Unlocking the Full Potential of
Women in the U.S. Economy. Special Report produced exclusively for The Wall Street Journal Executive Task Force fro Women In The Economy 2011. Retrieved March 28, 2012 from http://online.wsj.com/public/resources/documents/WSJExecutiveSummary.pdf