Delineating Necessity from Luxury in Emerging Markets

Google is a model of innovation, constantly developing and designing solutions to problems most individuals didn't know they had. In creating a system of cloud based apps designed to satisfy most people's basic online needs--email, calendar and organization, document storage-- they have given customers an efficient and streamlined system that was not necessarily asked for, yet has become indispensable to many. But this habit of providing products that address an unspoken--or at least not loudly voiced--demand isn't necessarily a good model for offering services to developing countries.

I'm referencing, of course, Google's Project Loon: a lofty and seemingly insane idea to provide internet access to unconnected corners of the globe via solar powered balloons. The company has developed a fleet of futuristic balloon devices that they hope to deploy around the globe in order to bring connectivity to the billions of individuals who are currently without it. Although the creativity and innovation demonstrated through the project is laudable, to be sure, and the aim to serve an underserved market is respectable, I couldn't help but question the necessity of the project.

Project Loon has often been presented as a means of providing internet service to developing countries, enabling their citizens to join the "connected world". But this begs the question: is wi-fi access really critical in nations where the majority of the population lacks even the most basic goods and services--critical needs such as water, food and shelter? In places where the economic infrastructure is not merely lacking but in fact non-existent, and where a steady income is a luxury most only dream of, how beneficial could wi-fi access really be?

An article from Wired describing the efforts behind the project asserted that "high-speed Internet is the electricity of the 21st century"--a statement that definitely gave me pause. Even if we will one day attribute substantial improvements in quality of life to wi-fi as we currently do with electricity, we can't talk realistically about providing internet access to countries where the majority of the population lacks electricity. Improving quality of life in developing countries is an incremental process, and it appears to me that Google's Project Loon bypasses several critical steps in that process.

Not that I"m saying Google should be condemned for their efforts to greaten broadband access, particularly in developing countries. I just have to question whether it is an efficient use of resources at this point. In marketing this endeavor as a social venture to address needs in emerging markets, I believe the line between necessity and luxury is being blurred. Wouldn't a more prudent use of time and intellectual capacity be to develop products that enable individuals to overcome a lack of electrical infrastructure? A company such as Google could innovate some truly life-altering products if they really wanted to make an impact around the globe. I only hope that they realize their potential, and shift resources from their X lab to a division more inclined to address the actual needs of the global population. 

Source:
http://www.wired.com/gadgetlab/2013/08/googlex-project-loon/

Lessons Learned From Masdar

It’s hard not to get excited when reading about Masdar, Abu Dhabi’s vision of a futuristic, carbon-neutral city. Driverless cars, extensive use of solar power, an innovative research institute institution: it sounds more like the plot of a bad movie than a realistic plan for a city. Yet Masdar is slowly beginning to make these seemingly far-fetched goals a reality, although some of its plans, such as getting all of its water through desalinization and an extensive “Personal Rapid Transit pod” system, have proven to be nearly impossible to implement (1).

While some express disappointment that Masdar has not lived up to its initial expectations, what it has accomplished is truly impressive (1). If the initial plan of the city had been more conservative, the overall level of innovation would have been curtailed. Better to set goals high and fall slightly short than to continue along with the status quo until the current situation is no longer sustainable. Abu Dhabi is serving itself well by planning for the future rather than being content with its current status as a top oil-producer. Even if not every aspect of the project has been realized, the gains that have been made have the potential to be adopted, adapted, and implemented across the globe.

Masdar is not the only city attempting to capitalize on renewable energy sources. A recent article in The Atlantic, “How Are Those Cities of the Future Coming Along”, provides updates on Masdar as well as similar ventures in Portugal, Kenya, and South Korea. All of the cities have faced significant obstacles in the development process, largely as a result of financial and bureaucratic issues, but each still shows great potential. PlanIT Valley, Portugal’s attempt at a smart city, was delayed due to the Portuguese financial crisis, but the company in charge of the project “will be testing some of its new data toys at the London City Airport, where they will perform such miracles as reducing security lines” (2).  Likewise, Kenya’s Konza Techno City stalled in June, yet a “recent press release said construction was ‘on course’ to begin by the end of the year (2). Has development been progressing as planned for these model cities? No. But despite the myriad obstacles faced, each city is adapting to suboptimal conditions and continuing onward toward their goals.  

While we may still be decades away from fully populated “smart cities,” it certainly seems possible that lessons learned from these projects could have enormous impact on energy use around the world. Which components of Masdar can be applied to more traditional cities? How can we encourage more innovation with an eye to the future when it may be more economically feasible to focus on current resources and needs?

Sources:

(1) http://www.popsci.com/science/article/2013-05/city-light?page=0%2C1

(2) http://www.theatlanticcities.com/technology/2013/09/how-are-those-cities-future-coming-along/6855/

Technology is not cheap for social entrepreneurs

All of this week’s readings are exciting. Technology never stops amazing people and empowering innovative ideas. Even five years ago, no one could believe the idea of eco-city on a dessert would become truth today, though it may not be as perfect as it was expected to be.

However, technology is not cheap. No matter to build an eco-city or to introduce 3D printer to be widely applied, all of these amazing technology and ideas are built on millions even billions of dollars. How to empower people in the developing countries or the disadvantaged communities by technology? Maybe one individual company like Google is capable to provide Internet connection to people in Kenya by Loonproject, but it may not resolve the root problems. They cannot rely on donation for good. After all, finding a way which is more accessible and cheaper for those regions is much more practical. Technology motivates innovative ideas and in turn innovation is powered by technology.

What is Loon? 

I found a quite inspiring film from the 10^th Annual Skroll World Forum’s Opening Plenary--Dare To Imagine. The scientists and social entrepreneurs in the film put lots of significance on connection between people from different parts of the world. 

Dare to Imagine:

It reminds me of the Thomas Friedman’s idea that “the world is flat”. The future of social innovation relies on new technology and collaboration between societies. Collaboration requires more interaction between both parties—the advantaged and the disadvantaged. As a result, social innovation would bring more radical changes no matter for emerging market or for developed market. The question is: are people willing to open their hearts to accept ideas and collaborate? How would it happen years later? 

Also, see 10 Ideas Driving Future Social Innovation

http://socialinnovationmn.com/10-ideas-driving-future-social-innovation/

Ashoka: Innovators for the Public

Bill Drayton established the Ashoka organization to find and support leading social entrepreneurs. Drayton mentioned about the goal of social entrepreneurship, "Our goal is not to give people a fish. It is not to teach them how to fish. It is to build a new and better fishing industry." To create a new industry and strong impact on society, entrepreneurs should have the power of innovation and entrepreneurship and ethics. He thinks a pattern-changing idea can be viable only if a first-class entrepreneurs work on it. Although ideas have a lot of potential to change process and a strong impact on process, if entrepreneurs does not possess passion for social change and share intuitive sensibility for innovation, the innovative ideas are more likely to be unsuccessful. In addition, Drayton emphasizes the power of ethics as a capability of entrepreneurs. Having ethics is significant to keep their business sustainable in a long term. Without ethics, people are more likely to make a one-sided decision regardless of whether it is unethical or not.

Figure 1: Ashoka Fellow

source:: http://www.ashokaseattle.org/what-we-do/ashoka-fellows/

Drayton's basic vision for social entrepreneurs is based on the interrelated conception of "what could be" and "how it could become." For example, if we think about how to provide digital education in developing countries by spending less money and time. To execute this idea, we should focus on what could be. If we want to make a plan for digital education for children in need, what we are providing them would give them a chance to learn knowledge or skills. After identifying what the suggestion could be, we need to consider how it could become. In this case, we can change process of delivering a patter-changing idea.

There are four explanatory criteria: social impact of the idea, entrepreneurial quality, ethical fiber, creativity. I think ethical fiber is more important in that trustworthiness of the social entrepreneur make people believe and trust the social entrepreneurs. Although entrepreneurs are creative and have entrepreneurial quality, they would not persuade others unless they can show their integrity.

Setting up businesses is so adventurous that there are many uncertainty and opportunities. Entrepreneurs are looking for the opportunities instead of uncertainty. By reading about an article about Ashoka organization, I rethink about my value systems and ethics. Since everything changes over time, what I believe today can be different from what I believed yesterday. That is, values we believe firmly can be totally wrong one tomorrow. Therefore, finding myself in this complicated world would be homework we have to finish until we die. Ideas from entrepreneurs should be creative and social impact positively. However, without knowing values of the ideas and about absolute values they believe, there are many potential risks that make the values of the ideas useless. Entrepreneurs should have integrity toward the values of ideas. They ensure that the values  of idea they define can be sustainable and consistent in the world by having a positive influence on societies.

Governments as Buyers of Social Innovation

Government Transformation
Traditionally, governments  are always reluctant to adopt innovative ideas especially when they can make radical changes. However, governments gradually realize that it is time to take the first step on the road of innovation. Factors triggered this innovation may include: 1) tighten financial budget in hard economy period; 2) increased citizens' demand of governmental function; 3) limited internal capability of government to deal with social problems.

In recent years, governments, especially in developing countries, are more award of the importance of their service function. Also, driven by their eagerness to improve efficiency, governments start to transform into a multi-functional and less hierarchical organization.

A Win-win Situation
For most startup social enterprises, it is never easy to get sufficient start funding even though they have a legitimate and intelligent business model. Investors from private sector may not be willing to take risks for ideas that cannot make high financial profits. Thus, public sector become the most suitable investors for social innovation. Governments just need to allocate probably a small amount of funding to the innovative projects, but the results would be tremendous. It is a win-win situation. On one hand, governments use public funding to invest on social innovation would bring creative and effective solutions to social problems. On the other hand, social enterprises would get the supports they need to sustain and expand their organization and innovation.

Main Stakeholder in Impact Investment
Governments can simply purchase products from social enterprises by public funding or budgeting. In other situation, governments can implement the social impact bonds or community bonds, which is a more complicated way to have governments participated in social innovation. However, either of the approaches requires completed policies and regulations before governments get involved in social investment.

Concerns
Governments' purchasing of social innovation may motivate the development of social investment markets, but what if the solution cannot bring big social impacts, who should take the responsibility? The investment failure in social market seems would bring more side-effects.

Programa Oportunidades

            After reading about the cash transfer program I wanted to learn more about it from the Mexico Point of View. Being Mexican and having lived in Texas my whole life I think that I will be able to translate what the “Oportunidades” programs means for the people of Mexico, in a short blog[1].

Recently in Durango, Mexico 1,406 families were initiated into the program. Needless to say the “Duranguenses” were very happy. [2]Initially the program begun in 2002, and  was called “Progresa” today it is called Oportunidades. The main goal is to combat poverty. Not to eradicate or eliminate poverty, but to fight it off. Below is the amount of families that the program helped in 2010, 2011, and 2012.

            The program faces government funding challenges just like any social policy initiative in the states. If a new president does not endorse the program, it is at risk for discontinuing to exist. [3] Mexican economic development must also keep up with the changes the program is developing. More kids are going to school, going to doctors appointments, and staying healthy. The con is that once these kids are graduating from their primary and secondary education but may not be able to offer those grown children, well now adults, an opportunity for a job.

            Although, the program faces these challenges critics do endorse the design and the concept of the program to help reduce poverty. The program overall is doing well and the people of Mexico like it. I could not find criticism on it except that the kids growing up may not be able to find a job. The President Pena Nieto just endorsed a $600 million dollar loan from the Inter-American Development Bank.[4] 
My posing questions is: Would this direct cash transfer program work in the United States? Does it mean this program is a failure if the "educated" kids cannot find a job? What can Mexico do to mitigate for this end result?

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[1] http://opinionator.blogs.nytimes.com/2011/01/03/to-beat-back-poverty-pay-the-poor/?_r=0

[2] http://www.oem.com.mx/elheraldodechihuahua/notas/n3138029.htm

[3] http://books.google.com/books?hl=en&lr=&id=31zD_hBNs4YC&oi=fnd&pg=PP1&dq=program+oportunidades+mexico&ots=FB9AxeOpip&sig=Mtis9r6o5wrfXtHLIzGD5JrBCSs#v=onepage&q=program%20oportunidades%20mexico&f=false

[4] http://eleconomista.com.mx/finanzas-publicas/2013/09/17/bid-presta-mexico-600-mdd-programa-oportunidades