Technology: A Pathway Out of Poverty?

Below, you'll find information and insights to support my hypothesis: Technology and the Internet can lift families from poverty in developing countries.

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  1. Introduction

  2. To set the stage here, I'd like to examine a question posed during the 2012 Clinton Global Initiative conference:
  3. How can we advance women owned businesses in the developing world?
  4. Conference participants shared similar ideas to create social impact. It would seem the recipe for success includes technology, microfinance and strong social networks (online or off). Let's first look at some innovative models that work.

  5. Case Study: Computer Training Centers Positively Impact Communities

  6. Committee for Democratization of Information Technology (CDI) pioneered a model for computer training in hard-to-reach, communities living in poverty. In 12 countries, they've now impacted about 1.5 million people. This video, from 2006, offers a glimpse of their operation before reaching scale:
  7. dropping knowledge QUESTION: Rodrigo Baggio, Rio de Janeiro
  8. To further sustain their organization, CDI established a for-profit social enterprise that transforms pre-existing Internet cafés into hubs for social and economic development. This venture, CDI LAN, engages additional stakeholders within the community. In doing so, they're confident the community will have even more power to develop their own initiatives for social change.

    In the journal below, Rodrigo Baggio, CDI's founder, says 'Teaching IT skills isn't enough; we need to increase understanding of how these technologies could be used as tools to improve lives and transform communities:'
  9. Technology in itself cannot solve the world's problems - it's how we apply technology that facilitates change. For example, the Arab Spring unfolded as people leveraged digital resources to build a social movement and disrupt society. History books of the future will include many stories about technology's role in social change. The Internet is a platform for creation, one that provides contexts for the unexpected.  Unfortunately, billions of people today are without access to the digital world - and its respective potential to dignify marginalized communities. 

  10. Case Study: Entrepreneurship for Development

  11. First pioneered with door-to-door health workers in Bangladesh, BRAC cultivated "a network of like minded people from poor communities who are driven to help both their neighbors and themselves. About 5,000 BRAC-trained microentrepreneurs currently work in Uganda. Each is an independent enterprise; BRAC does not pay them wages or salaries, but it does give them the opportunity to make money on their own by reselling goods at a small markup. These entrepreneurs are, essentially, one-person social enterprises whose activities serve a dual purpose: they generate income, and they also reduce the barriers others face on the path out of poverty." - Susan Davis, President and CEO of BRAC USA in MIT's Spring 2012 innovations journal.

    For microfranchising like this to work, microentrepreneurs must buy products at a price low enough to earn profit on resale margins. If the system is to avoid dependence on external subsidies that might not be there for the long haul, the producer at least has to break even. BRAC’s end-to-end value chain approach includes a system of mass production. BRAC Uganda, for instance, set up its own seed production and processing enterprise early in 2011.

    Another organization, LivingGoods, uses what they call ‘Avon-like’™ Health Entrepreneurs who go door-to-door teaching families how to improve their health and wealth while selling low-cost, high-impact products like simple treatments for malaria and diarrhea, fortified foods, water filters, de-worming pills, clean cook stoves, and solar lights:
  12. Taking the 'Avon' way to fight poverty and disease.

  13. Fresh Idea: Combine The Models Above

  14. A computer training center or Internet café is an excellent place for microentrepreneurs to grow a business. We should partner with an existing computer facility, apply CDI's sustainable model for community development, and implement LivingGoods' model for microfranchising.

    We should leverage CDI's model, but align community hubs around social issues that affect a country or region. With multiple hubs working together, we can encourage and incentivize participants to generate social impact. In addition to computer training, the centers can facilitate engagement between marginalized communities and the health workers, entrepreneurs and business leaders hoping to reach them. Through cross-cultural, cross-sector collaboration, the centers will create value for all parties.

    We have an opportunity to close the global digital divide while addressing specific issues related to water, sanitation, food security and nutrition. 

    Through mentorship, coaching and even direct investment, we could shape the initiatives community members participate in. To address malnutrition, for example, desired outcomes might include a more robust RUTF distribution network, greater access to fortified foods in stores, raised awareness of micronutrients and greater demand for nutritious foods.

  15. Similar centers already in action

  16. Worldwide, we've seen an unprecendented number of shared office spaces open their doors. "Co-working" spaces charge per day, week or month to use a desk. Venture capitalists setup "incubators" for their portfolio of startup companies to collaborate. "Accelerators" run competitions before doling out investments, mentorship and cash prizes to young teams of would-be-entrepreneurs.

    Venture capitalists and high-tech entrepreneurs recognise innovative ideas are born from collaboration and mentorship.

    Impact investment funds and corporates are following suit to fund social entrepreneurship and foster social innovation.

    Microentrepreneurs working on different projects, under one roof, overcome barriers with greater efficiency. Here's just a few examples of collaborative spaces that seek to solve social issues, create jobs and empower communities:
  17. Welcome to the Branson Centre of Entrepreneurship - Caribbean

  18. It's time for an NGO-launched "Innovation Center" to sustain development

  19. We've established that an Internet-connected, collaborative meeting space fosters innovation. From numerous models we can select the best strategies, management structures and codes-of-conduct. With significant capital flowing to social innovation projects around the globe, isn't it time for non-governmental organizations (NGOs) to participate?

    An NGO-launched, for-profit "Innovation Center" can address social issues sustainably, strengthen private-public partnerships and spur new funding pathways.

  20. Aren't these masters of private-public partnerships better positioned than impact investment firms to leverage relationships and capture the attention of funders?


    Aren't NGOs well positioned to intermediate and facilitate "deal flow" from multilaterals to social entrepreneurs and microentrepreneurs?

    'The social entrepreneur is the economic agent that identifies those priorities before they become visible for everyone, starts developing solutions for them, and then alerts businesses & government: "You should help here!"' - Filipe Santos (INSEAD)
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