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April 27, 2007

Comments

Andrew Yang

I believe we should look at this question in light of what have already been said
about more "traditional" development - be it the "wealthy consumer society,"
economic growth, or the MDG and resource redistribution. Many of us have
already indirectly pointed out the inadequacies - focus on bricks and mortar
rather than knowledge, skills, capacity; not enough compliance mechanisms
and watchdogs... etc. One question I find interesting - and here I repeat my
last post - is: "what new development or business models out there are
departing from orthodox development approaches, especially in the way they
utilize the neglected ingredients mentioned above?

Something I found very interesting is the Base of the Pyramid (BOP) concept,
explained at http://www.nextbillion.net/
Check out if you have time, especially their new report: "The Next 4
Billion"
To me, a potentially dangerous concept, but promising at the same time

Aleksander Zidansek

Interesting question. I believe there is no single definition of development, every person has a different idea what development means, so there are billions of different opinions.

The fundamental premise of development I see is the pursuit of happiness. For this purpose, basic human needs must be satisfied (food, shelter, security) as well as freedom to pursue a fulfilling career and associate with other people. While this is something that social organizations (e.g. states) should provide, an even more important part is the realisation of an individual that the only way to be happy is to grow and to contribute.

The basic purpose for development I see is therefore to provide basic security needs, freedom to be, live, do and cooperate with others. This is obviously the task of the state (or whatever institution will substitute it in the future), and if people also learn to grow and contribute, it is a big bonus.

We must of course keep in mind the power of technological development, in particular the ICT, which has a strong effect on the way we communicate, live and associate with others, and will likely in the next few decades redirect the development of social structures (e.g. traditionsl states) in ways that are difficult to even imagine today. But the exciting part is that we determine the direction of this development with our today's actions, growth and contribution.

Lockey

While development goals can have philosophical roots like the pursuit of happiness, ultimately development has failed if people's basic physical needs are not being met. This could be because development eroded the environment so much that people's basic needs are no longer being met due to pollution and resource depletion, or it could be because the development is unbalanced and not reaching the people who need it most.

Either way, food, clothing, shelter, health, and personal freedom and fulfillment are important development goals. Now the models that we use to get to these goals can be vastly different. The discussion started with a discussion about the American consumer model and then many people, including myself, mentioned alternative business and development models without really providing concrete examples. I was hesitant to provide my examples because I know we are in tt30 as ourselves and not as representatives of businesses or organizations, so I feel a little funny talking about my own business and innovations.

But since this question is still being asked, here goes:

Traditionally people didn't need jobs. The land provided. They would hunt, fish, farm, etc. and get what they needed directly without the specialization and structure that we call "jobs". As civilization grew, people specialized and invested in opportunities and the corporate model for development was born. There were the people with money who paid the other people to do the work and make even more money for the people with money. Now everyone is constantly looking for a better job while bemoaning the subsequent life-work separation that follows. What people really want is to live and pursue the things that they enjoy doing. People don't like being in what is legally still called a "master-servant relationship" in American employment law. But we do it anyway because we have few other options and the risks associated with being self-employed and following our talents and dreams where they take us is often just too great. So we live a pretty miserable life doing something we dislike for money. What a lame model for business and development! It really underutilizes people's inherent talents.

So several years ago I was pondering this and other question and started a business based on a totally different model. The business ended up winning an sustainable innovation award from the Youth Employment Summit (Y.E.S.) and getting a great write up in the local business journal (see: http://portland.bizjournals.com/bizwomen/portland/content/feature/item.html?item_id=581&feature_id=64) and a lot of other media attention, but the market really wasn't ripe yet.

The innovation was the "many to many marketplace model" which was a website that enabled many sellers of digital content to sell to many buyers of that content simultaneously online. The idea was that many, many things of value in this day and age can be put into digital form. Songs, pictures, computer programs, games, documents, books, poetry, recipes, blueprints, the list goes on and on. This is the information age. So, if a person can create something that has value, put it into a digital form, and then upload it onto a website with a pricetag attached, the rest of the world can then find that piece of value that the person created and purchase it and download it. The content creator makes money and is self employed, doing what they want to do, while also being a part of a greater web community.

Think about it, thousands of people compete to flip burgers at McDonalds when what they really want is to sing or do art or write poetry etc. It's just too hard to find a publisher, label, etc. to believe in you so you have no way to get your product to market in a meaningful way. With the technology platform that I envisioned and helped develop, these people have a direct channel to a global market without having to develop their own website or distribution channel or give over all their intellectual property rights to a publisher, record company, or other third party reseller. There is very little bricks and mortar to this model, the idea is to be pure digital, pure knowledge economy, the only environmental impact is the resources and energy needed to create the content and run the computers.

When I started this business back in 2000 the market for digital content was not ripe yet. I started it in the legal content market partially because lexis and westlaw were making serious profits off of their pure digital info. divisions, again a high performing, low environmental impact, knowledge-based business model. But they were still publishers so the actual content creators were still getting only 10 - 20% of the revenues from what they created. But the profits for these companies were staggering (Lexis is owned by Reed Excelsior, look at their professional publishing/ digital publishing profits, I don't have the numbers in front of me but it's staggering). Look at microsoft. Look at software in general, it is high margin and can be downloaded. Look at all the digital downloads of music on iTunes. These are all viable business models. Digital content is a high margin, low environmental impact information economy-based business. The trick is to disintermediate the business model so that those profits go to the people who are making the creative inputs in the first place and not to the people who own the companies that already have way more money than they know what to do with.

People with great talents and ideas that can be put into digital form are all over the world and in all sectors of society. If a mother in Ghana has a killer recipe for a traditional stew, she could upload it at a web cafe and sell it and who knows, she might actually make $10 a month from people looking for something as eclectic as ghanian stew recipes. $10 a month in U.S. dollars could actually help that person quite a bit when converted to Ghanian currency. And eBay has shown that people will buy just about anything, the weirder the better sometimes!

So my business, Smart Mediary Systems, never got the funding it needed to really take off but the idea itself I still strongly believe in. When I went to Egypt to accept the Y.E.S. award, I had youth coming to me from all over the world loving the idea and the business model and understanding how it can help them financially and therefore improve their lives in the same way that traditional development efforts try to.

To sum it up, the new model of development should be something that empowers people to follow their talents and their dreams and make money at it in an environmentally sustainable way. Many times this can be accomplished via the internet and computers. The trick now will be to 1) close that digital divide via education and tech access and 2) find a way to actually make the manufacture of computers and associated technologies sustainable.

My next question to you all, if you are still with me, is how do we make computers sustainable? It's still a dirty industry right now as far as I can tell.

Ines Freire

Lockey, I found your business concept very interesting, and I believe that it could have potential in developing countries. The question though is how to reach it to the poorer…there are still many people with no internet access, especially the poor of the poor living in rural areas.
As for the sustainable computer industry, that is actually a good point, and at this moment I do not have a straight forward answer to you, but definitely something to think about.

Continuing on the business models, one of the most known business models that emerged independently of the big development agendas is the famous micro-credit. With its pos and cons, successful and less happy stories, no one can deny that it was quite an innovative concept, and was the first model that emerged and departed from the mainstream development approaches and manages still to exist, after 30-40 years. Due to this long life time and wide spread, it is possible now to evaluate its long-term outcomes and discuss improvements.
If anyone is interested in knowing more, the following readings can be a good starting point:
- http://en.wikipedia.org/wiki/Microcredit
- http://www.opportunity.org/atf/cf/%7B4FDDA71B-2D42-4FAE-84B0-75A6C2E25802%7D/Microfinance-Alleviating-Global-Poverty.pdf
- http://eprint.uq.edu.au/archive/00000397/01/brigg01.pdf

Also, and continuing with Andrew’s question on 'what new development out there is departing from orthodox development approaches', I would like to focus on the post-development approach:

After several decades of development theories and practices, poverty and inequality are still growing in our world, and aspirations to a better future remain a dream. Based on these concerns, in the late eighties and nineties, the post-development paradigm emerged, contesting ‘development’ as being a Westernised concept which should be rejected all together (e.g Sachs, Escobar, Esteva, Rahnema).
Post-development theory is characterized as being anti-capitalist, anti-imperialist, anti-globalisation and anti-market. It focuses on perceiving reality differently and finding the archaeology of development in order to change the discourse. It deconstructs development by emphasising in pluralism, simple living and re-appraisal of non-capitalist societies. The main actors are no more the state, development agencies or markets, but rather grassroot movements.
One of the most well known cases of post-development in practice is the social movement of the Zapatistas, in Mexico (1994).

As S. Matthews (2004) noted, it is interesting is to see that there are no prominent African post-development thinkers and also the African situation is not discussed by post-development thinkers. However, Africa may offer excellent examples of post-development practices.
Several authors condemn the failure of development in Africa due to cultural values’ resistance, and claim that for the success of development a cultural adjustment needs to take place.
One can then wonder, based on the post-development approach, if instead of changing the African cultural diversity and values, would it not an option to consider letting conventional development go and look at new ways to development?
One successful example of this was the Campfire program in Zimbabwe. Top-down and centralised policies on preservation of natural resources have not worked, and when shifting to a grassroot approach and local administration results changed substantially. As the Deputy Director of the Campfire Association (S Kasere) said the success of the Campfire program was due to the revival of the cultural principle of communal ownership and management of natural resources and local participation.

I think that presently post development practice can have an impact in local and context specific areas, but cannot change in a worldwide context and in my view it fails by rejecting globalisation. However and citing Escobar (2000), I see it as a ‘journey of the imagination, a dream about the utopian possibility of reconceiving and reconstructing the world from the perspective of, and along with, those subaltern groups that continue to enact a cultural politics of difference as they struggle to defend their places, ecologies, and cultures.’

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