An Ethical Dilemma of Inequality and Exclusion

The readings for this week made me think about an ethical dilemma between poverty, inequality and social innovation. In the New York Times’ article In Arabian Desert, a Sustainable City Rises, by Nicolai Ouroussoff, after presenting the innovative city-project of Masdar and its benefits, the author reflects about “the growing division of the world into refined, high end enclaves and vast formless ghettos where issues like sustainability have little immediate relevance”. Ourousssoff stresses an important point: innovation can entail exclusion and inequality.

During these seven weeks of course, I have learned the basic principles about l Innovation. Well, I think that the discipline focuses in poverty reduction, but inequality is hardly mentioned. Actually, I am concerned that some innovations reduce poverty, but they increase inequality. To clarify my point let me divide the successful cases of social innovation into three categories: 1) Social Innovations that reduce poverty; 2) Social Innovations that reduce poverty, but increase exclusion; 3) Social Innovations that reduce poverty and inequality.

In the first category, I would include for instance the French peanut butter paste to battle hunger in Africa. It is a social innovation who fights against poverty, even if it not reduces inequality directly.

Regarding the second category, this is which I distrust for a matter of ethics. It refers mainly to products that are price discriminating. For example, the DANONE yoghurts of 10 cents in Africa, or the adjustable glasses for poor people. In my opinion, they increase exclusion in the long term, because there would be two kinds of goods, one for the rich people and one for the poorest. It is unfair. The solution should be that both (poor and rich) can afford a visit to the optometrist, or both can buy the fancy yoghurt. The solution in this case should be policies to improve health and jobs. In the long run, these kinds of social innovations are not solving the sources of the problem. Contrary, they increase the sense of exclusion in poor people, and it can be dangerous for social stability.

The projects that reduce both poverty and inequality are the third category of Social Innovation. In this category, I would place the initiative of Aravid Eye Care Systeme in India, to make eye surgeries. People receive the same service, independently of their income, and it serves to reduce at the same time inequality and poverty.

Moreover, most of innovations related with information technology fall into this category. One of the biggest sources of inequality in developing countries is the unequal access to information. Poor people don’t have complete information from the markets; indeed they cannot take the best decisions. Without information, markets don’t work properly. Innovations that increase the amount of information available for marginalized people, or increase the education level to interpret that information, succeed reducing both poverty and inequality. For example, the new uses for mobile phones, such as the Farmer’s Friend or Google Trader or banking services follow this pattern.

To conclude, in the conceptual frameworks we studied at the beginning of the course, I did not find an explicit distinction of projects in function of inequality reduction, neither in the readings about how to measure social impact. Nevertheless, to attain long term solutions to development problem, it is essential to distinguish between social innovations, or social enterprises that reduce inequality from those who do not. Social impact measures should take this into consideration. Did I miss something in the readings? Do you think that Social Innovation should focus only in poverty reduction and not inequality?