Making profits for a purpose

The center’s founder and director, Iqbal Z. Quadir, has set a powerful example for his students to follow. He built Grameenphone in his native Bangladesh from a cellphone start-up in the 1990s into a business serving more than 20 million subscribers. The company’s Village Phone program has set up more than 270,000 rural women in small businesses selling phone calls. Grameenphone, now valued at more than $3 billion, goes public next week with an initial public offering in Bangladesh.

Quadir won’t benefit. He sold his interest five years ago, and plunged into creating his entrepreneurship center at the Massachusetts Institute of Technology. The Legatum Center for Development and Entrepreneurship holds its second annual conference at MIT today with speakers including Tim Berners-Lee, inventor of the World Wide Web.

The heart of the Legatum Center is its fellows, who must already be enrolled in a graduate program at MIT to be eligible for a fellowship. Many are earning MBA degrees at the Sloan School of Management; others are scientists and engineers. The center enlisted its second crop of 16 graduate student-fellows this fall, each armed with an idea for launching a Third World business they hope might become another Grameenphone.

“We want to be the Silicon Valley for the poor world - here in Cambridge,’’ Quadir said in an interview.

From 2001 to 2005, Quadir taught courses at Harvard University’s Kennedy School of Government on how technologies can transform poor countries. But the entrepreneurial, inventive bent of MIT has been an even better fit for a man who distrusts the ability of governments to deliver jobs and wealth to the poor.

MIT offered a comfortable home for Quadir’s institute within the School of Architecture and Planning, which also houses the school’s famed Media Lab. And Quadir found an apt funding source for his vision in Legatum, an investment firm founded by global investor and philanthropist Christopher Chandler, a publicity-shy New Zealander.

Among the first crop of fellows are some formidable apprentice entrepreneurs:

■Nada Hashmi, a second-year fellow, is developing a venture that she plans to start in Saudi Arabia, where she grew up, that will run high-tech health vans to allow city hospitals to treat patients in rural areas. Hashmi, who is earning a doctorate from Sloan in technology innovation entrepreneurship and has a background in computer science, said the center’s weekly meetings with successful entrepreneurs helped the fellows see ways past the obstacles to creating a company in a poor country.

“It’s really important to learn it from people who have done it themselves, in the field,’’ Hashmi said. “In classes, we learn the ABCs. But these people are out there.’’

■Robin Bartling, from Kassel, Germany, who also studied at Sloan, used his fellowship last year to prepare the launch of a business marketing high-potential foods from small producers in Latin America. He made a product-scouting trip to Peru and Colombia, where he gathered 80 or 90 ideas. He learned that the traditional quinoa plant, grown in the Andes, yielded a gluten-free grain alternative for people with celiac disease. Bartling and his wife have launched a company, VICO Brands, that will work with farmers to produce quinoa-based products such as cereal and energy bars.

Bartling said the fellowship connected him with mentors, including Ben Cohen, of Ben & Jerry’s Ice Cream, who spent hours with him testing elements of his emerging-business plan. “Iqbal has connected us with great examples of social entrepreneurs, and just talking to them, and learning how they started, and how they kept on walking and eventually succeeded - that was truly amazing,’’ he said.

■Craig Doescher, an American who has worked in Africa, Asia, and Latin America, studied innovations in supply chains, and used his fellowship to go forward with a wooden toy company he cofounded in Honduras that uses sustainable hardwoods. He and his partners are setting up a factory in Honduras that is starting to produce wooden blocks with magnets, marketed in the United States through his website, www.tegu.com.

Doescher, who is from Detroit, said the fellowship’s travel allowance let him visit Honduras and South Africa to test several start-up ideas, and that brainstorming with Quadir and other MIT professors helped him understand that the best opportunity for his company was in Honduras.

Quadir, who lives in Lexington, grew up in rural Bangladesh and emigrated to the United States, where he became a banker in New York. In 1993, he set out to help bring cellphone service to rural areas of his homeland. He persuaded his countryman Muhammad Yunus, a Nobel Prize recipient who founded the Grameen Bank, to align his micro-loan enterprise with a profit-making mobile phone firm.

Quadir argued that telephones would empower poor people with a tool for commerce and communication.

Grameenphone is now 38 percent owned by Grameen Bank, and its profits are a key source of capital for the bank’s vast small-loan network in poor areas of Bangladesh.

MIT Economics Professor Bengt Holmstrom, a member of the Legatum Center executive committee, said there is merit in Quadir’s view that pouring more aid money into Third World governments will simply feed and empower politicians and fuel corruption. Holmstrom said the center’s “focus on entrepreneurship and self-help, and its bottom-up approach, are really distinguishing features.’’

Ira A. Jackson, a member of Legatum’s advisory board who is dean of the Drucker School of Management at Claremont Graduate University, in California, said Quadir’s MIT center taps into the rich academic and entrepreneurial energy of Greater Boston, “with potentially transformational impact’’ for poor countries.

“To take the credibility of MIT, and the smarts of their graduate students, and to layer it [with] the game-changing idea of for-profit innovation, can be part of the salvation and the path out of poverty for literally tens of millions of people,’’ Jackson said.

“It is simple but profound: Entrepreneurship and innovation can change the world.’’

James F. Smith writes about Boston’s global links. His blog is boston.com/worldlyboston. He can be reached at jsmith@globe.com.