2019 was a milestone year for the Global Prosperity team. In January, along with Clayton Christensen and Karen Dillon, I published The Prosperity Paradox: How Innovation Can Lift Nations Out of Poverty and soon after, began traveling across the globe to present the ideas in the book. Our travels took us to Europe, West Africa, Asia, and Central and South America. We also shared our ideas at several major organizations, including the World Bank, Harvard Business School, MIT, Yale, Oxford, the Aspen Ideas Festival. In June, I had the opportunity to give a TED talk in New York on how innovation can serve as an antidote to corruption. In addition to our traveling and speaking, we published articles in and were covered by publications such as The Wall Street Journal, Harvard Business Review, Forbes, and NPR. Our goal for the year was simple: spread the ideas in The Prosperity Paradox and describe the transformative power of market-creating innovation in as many places and to as many people as possible.
What we learned
In our book we explain a simple, yet counterintuitive idea that enduring prosperity for many countries will not come from pushing resources into impoverished communities. In fact, many countries that have received billions of dollars in foreign aid have a lower GDP per capita today than they did in the 1960s. Our suggestion? What if instead of trying to fix the visible signs of poverty, development organizations and governments focused more on building robust economies that create lasting prosperity? This will require an entirely different approach, one that leverages the power of innovation and entrepreneurship.
The Prosperity Paradox explains how market-creating innovations, which transform complicated and expensive products into products that are simple and affordable so many people in society can access them, provide a strong foundation upon which societies generate prosperity. Over the past year we’ve shared countless examples of these powerful innovations noting their unique ability to create many jobs, provide taxes, pull in necessary resources and infrastructure, and as a result, have outsized development impact. For example, Celtel made cell phones simple and affordable enough for the average African to afford, and the industry the company created has grown to almost one billion subscriptions on the continent. In addition to helping people lead more productive lives, this new sector generates billions of dollars in taxes annually and supports close to four million jobs.
In sharing different ideas from our book, we began to notice a recurring theme. While our book, blogs, articles, videos, and presentations helped people reframe conventional notions about development and entrepreneurship, they left people wondering, “How can I put these ideas into action in my country?” In short, those who had come to realize that market-creating innovations could have significant impact wanted to begin implementing them in their region.
Admittedly, we didn’t have a sufficient answer to this question and this began to drive our research agenda. We know, for instance, that large-scale market-creating innovations require the tight integration of entrepreneurs, investors, influential local advocates, and a contextual business model that targets new customers. Yet these do not come together on their own. And so, in 2020, we are embarking on a bold new strategy to develop a Market-Creating Innovation Lab.
The Market-Creating Innovation Lab
While we continue to apply the rigorous research the Christensen Institute is known for, over the next few years the Market-Creating Innovation Lab (MCI Lab) will partner with venture funds, foundations, corporations, and local governments that believe in the power of entrepreneurship. By working with those on the ground, we will gain valuable insights that will enable us to produce and disseminate empirical information about market-creating innovations and their impact. At the same time, we hope our findings will inform and amplify our partners’ efforts. Once again, our goal is simple: to develop a structure that bridges the gap between emerging market entrepreneurs and market-creating innovation opportunities.
Over the next few months, we will share more of our MCI Lab strategy with you in the hopes that together we can catalyze market-creating innovation and entrepreneurship in emerging markets. We believe that investing in market-creating innovations like Celtel, and the many others profiled in our book, provides a viable path for many of today’s low- and middle-income countries to develop sustainably. For up-to-date news on the MCI Lab, our latest research findings, and tailored content for entrepreneurs and investors in emerging markets, sign up for our newsletter.
