In his famous TED talk “Plutocrats, Pitchforks are coming”, the venture capitalist Nick Hanauer says “Capitalism awards problem solvers. That’s why the system works”. The system incentivizes creating solutions to a society’s problems.
Developing the third-world countries must follow a similar approach. The challenges these countries face are not different from those more developed economies once faced. Much of the services and life style we now enjoy in developed countries originate from problem solvers who saw the opportunity to make a difference. When Alexander Graham Bell founded the Bell Telephone Company in 1877, I don’t imagine him having the faintest idea of the impact the company would have on the American society and rest of the world. Based on Walter Issacson’s “Innovators”, the company (then AT&T) went on to start Bell Labs division, which has developed technologies that revolutionized the American society, its economy, and started a world-wide digital revolution.
Foreign Aid can never develop countries. Often it has just the opposite effect. Aid can cripple local productions and keep poor countries dependent on developed nations rather than striving for self-reliance. In the other hand sustainable creative entrepreneurship can help resolve much of the issues facing the third world countries.
First of all, we need to focus on potential financial incentives these issues offer. According to a report released by the World Bank’s Multilateral Investment Guarantee Agency (MIGA) in 2014, between 2006 and 2011, the average rate of return on foreign direct investment in challenged economies was as high as 14.5%. That is more than twice the global average of 6.2%. We need to reframe the narrative about poor countries challenges.
Creative entrepreneurs learn to adapt
It would be inaccurate to say starting a business in a third-world country is without challenges, due to lack of existing infrastructure. That is why a business idea has to be creative enough to adapt to these environments. The founder of Irokotv in Nigeria, Jason Njoku, who was born and raised in England, said after starting the company he quickly realized that he had to adjust his approach in order to be successful. Now the company dubbed “Netflix of Africa” is worth between $80 to $100 million, and could soon go public on the London Stock Exchange (LSE) Alternative Investment Market.
Those ahead of the curve
According to surveys, of the annual graduates in Nigeria about 45 percent remain unemployed. The main reasons employers often reject graduates is for lack of professional skills; critical thinking, entrepreneurship, and decision-making. In October 2014, Chris Kwekowe, a 23 year old computer science graduate from Lagos, Nigeria turned down a high paying software engineer position at Microsoft to start Slatecube. The startup specializes in training and internship placement for Nigerian university graduates.
Slatecube offers virtual internships in courses ranging from corporate finance to anger management. Once a candidate completes a course in their chosen discipline, Slatecube pairs them with a company for a local or virtual internship. The company has worked with enterprises like Cisco, accounting firm Grant Thornton, Google and Forbes.
Time to reframe the narrative
When I left Haiti in 2000, to make an international call, one had to go to what we then called a Teleko (a government-owned communication center) nearby and wait inline for hours. But now people call their loved ones living overseas, from their farms in different corners of the country. Technology is developing and changing our cultures at rates we can barely keep up with. The world has gotten much smaller and more connected than ever before. It’s time to re-evaluate our views of the underdeveloped economies.