Michael Oluwagbemi's blog

The subject of innovation is slowly but surely on the rise; as nations realizing the steady shift from resource to the inevitable knowledge based global economy demand high speed innovation to stay ahead of the competition. From Japan to Colombia, Washington DC to Bulawayo - politicians are emphasizing retooling education for innovation.

This means neo-era venture capitalists like Lightbank, incubators and the Y-combinator type camps and resource centers are increasingly popular. National technology initiatives are gradually leaving the pages of white papers to become reality. This goes on even as the youth of the world, in high demand for their technological prowess but left out by the unworthy inexperience of unemployment, are coalescing around innovation as a tool to stay relevant in their various societies.

Lots of money is pouring into innovation, given the successes of the late dot comers who went back to the drawing board and truly invested energy in creating the next wave of dot-com successes which, though slow to come to market, have achieved remarkable successes. Starting with Google, then Baidu, and now Zynga, LinkedIn, Facebook, Diaper.com, Zappos, Foursquare and Groupon amongst others, innovation is back. The Internet is back and as dreams are being made – others will be broken.

Innovation presents a dicey proposition to governments and market actors alike. Here are a few facts:

• Innovation as it is currently practiced is “me” centered
• “Me” centered innovation is risky and expensive (6 out of every 10 start-up fails!)
• Individual innovation may be slow and produce only limited results

The key to broadening the accessibility and usefulness of innovation as a tool for economic development will be flattening it. This will require replacing the “I” in innovation with a “we”. The concept of “Wennovation”, though not entirely revolutionary could hold the key to making innovation cheap, fast and accessible for the world’s poorest and least enabled to achieve maximum impact.

Photo - Fuzzy Success: Web 2.0 before & after. A pink cross means that the company is dead now while green circles mark companies that got acquired. (Source: Labnol.org)

Photo: This photo taken December 14, 2010 shows a map on a page from Facebook. The map displays friendships as lights on a deep blue background. The eastern half of the U.S. and Europe shine the brightest, while China, Russia and central Africa, where Facebook has little presence, are mainly dark. Source: The Wall Street Journal

Just when Mark Zuckenberg was being crowned the king of the world by Time Magazine, he contributes an invaluable insight to African entrepreneurship. A review of the map of Facebook relationships reveals some interesting pointers to where the drivers of Africa 2.0 will be coming from. Can anyone say ECOWAS, SADC and EAC?

Facebook is pointing discerning brands, companies, minds and entrepreneurs to the path of regional growth and integration within Africa. The coast of Atlantic West Africa, Eastern coast outlying the Indian Ocean and the southern edges of the South seem to show brightest. These areas definitely correlate with youthful vigor, energy and rise of a new brand of making runaway entrepreneurs that we call “Afropreneurship.” Is anyone looking?

Recommended Read:
Africa Rising: How 900 Million African Consumers Offer More Than You Think by Vijay Mahajan

The chief criticism of resource companies operating in Africa, and in most developing countries, is their penchant for creating “brief case economies.” This predatory economic model often involves a global major resource player investing cash through a local front, supplying labor via its expatriate staff, and repatriating profit in full with no significant local benefit after greasing the palms of public officers in the host country; corrupting their government and minimizing tax bills at the same time.

The resulting economy is one that hemorrhages resources, but has little or no impact on unemployment, job creation, quality of life and/or development. Such economies, aside from being bedeviled with poverty, are also ridden with the “resource curse” of corruption which ensures a near permanent cycle of conflict over meager perks offered by access to state coffers.

To tackle this unending cycle of poverty, many countries have begun to promulgate local content laws that ensure actual investment in local human resources, industry and infrastructure by global resource firms that wish to partake in the enormous wealth locked in their local natural resources, be it crude oil, gas, diamonds, copper, iron or gold. This involves setting hard local participation targets for exploration, production and refining concessions, employment, contracts or procurement of goods and/or labor. These laws (like the one recently promulgated in Nigeria) often require gradual implementation timelines, as well as punishment for violators.

The goals of these laws are to encourage technology transfer, optimization of labor while encouraging investment and global collaboration. More importantly, local content laws have the ability to curb the spiraling unemployment rate as well as reverse brain drainage. The issue of brain drain particularly offers opportunities for larger developing countries like Nigeria to quickly bridge the technology gap present at home, but clearly absent abroad amongst her Diaspora communities. In the United States, Nigerians are reportedly the most educated immigrants. This fact is repeated across Europe, Asia and South America where very capable Nigerians (and Africans) continue to contribute their professional quota to their host country's economy.

Tapping into this exported immigrant labor is a crucial construct in exploiting optimally the yet-to-be-unlocked potential of local content development. In this vein, a number of Nigerians in Diaspora Technology & Business Development companies partnered to host a key player in the implementation of the Petroleum Industry Local Content Law in Nigeria to a networking meeting in Houston, Texas this October. This event, and other initiatives of its kind, has the potential to connect key policy and business players with one another, and advance the cause of job creation and brain drain reversal.

Photo: Trevor Samson / World Bank

The last one month has seen world leaders in both public and private spheres pledge their abiding commitments to achieve the Millennium Development Goals. Central to these goals are the elimination of poverty and hunger.

It is clear to discerning minds that the goal of eliminating hunger and poverty is a daunting, albeit achievable one.  Incredible strides have already been achieved in the areas of reducing maternal mortality, and providing safe drinking waters for communities across the world. However, the central task of conquering poverty and hunger may be difficult to achieve if clear thinking and an approach seeking radical departure from orthodoxy are not adopted.

One of such strategies that should very well be adopted by both the development and business communities is the Bottom of Pyramid approach to problem solving. The central thrust of such approach is:

• Using little to achieve more—“low cost strategies”
• Community based solutions to problem solving (in prioritization and conceptualization)
• Leveraging hi-tech know-how to low-tech solutions
• Leveraging remote human resources with local connections to achieve success
• Utilizing renewable energy and sustainable paths to creative, commonsensical solutions to everyday problems in struggling communities
• Above all, achieving synergy amongst various components of all of the above
• Factor social gains into profitability analysis and ROI calculations & operational decisions

Bottom of pyramid solutions have encouraged the deployment of low-powered devices that are used for early disease detection and treatments in Africa’s rural communities by Afiya Technologies, an outfit founded and operated by Africa’s Diaspora. The same strategies led to development of a chaff pellets burning stove that produces electricity in rural India, or the UV ray water disinfector that harnesses the hidden disinfecting power of the sun to produce drinkable water for rural communities in Malawi, thus helping to reach one major MDG.

Photo: Arne Hoel / World Bank

Last week, I discussed the problem of the growing cadre of the “dangerously educated.” Many of the dangerously educated I wrote about, live in the poorest nations on Earth, which, driven by politically convenient calculations have achieved modest levels of literacy, but have left a large cache of their youths with little opportunities to use their education. In the same vein, global programs premised on using education to alleviate poverty have driven donor funds to these countries to educate their youths, but have done little to provide essential ladders of opportunities to use their acquired knowledge.

This quagmire makes for being “dangerously educated.” In it, I recommended a number of solutions, the chief of which was “policy prescriptions that straddle innovation and entrepreneurship… (which) maximize (the) use of the pool of highly educated labor force.”

Essentially what this means in concrete terms is what I will be exploring in the coming weeks in my Bottom of the Pyramid (BoP) Solutions series. BoP extends inevitably to how the bottom two-billion of our world live and survive; it is essentially a concept which seeks to develop market solutions which maximizes social impact while optimizing net economic effect on our world: especially in the lives of the impoverished.

BoP stands uniquely at the great intersection where the energies of a potentially “dangerously educated” youth can be harnessed for collective good rather than harm. “In economics, the bottom of the pyramid is the largest, but poorest socio-economic group. In global terms, this is the 2.5 billion people who live on less than $2.50 per day.” The phrase “bottom of the pyramid” is used in particular by people developing new models of doing business that deliberately target that demographic, often using new technology, new market capturing techniques, media as well as products.

The great play on BoP solutions developed by the “dangerously educated” cadre is that they essentially are using their education to develop solutions for a socio-economic group which their education is designed to help them grow out of, but which socio-political factors have kept them in. The great case for this demographic is not only their proximity to the societies that require these solutions, or that they often feel the need for these solutions in their everyday lives, but is also because it offers a bright light out of despondency for those who are still “dangerously uneducated” and returns value for the essential investments in education society have put in them. Not just in monetary terms, but in real social value.

It is for this reason that I am convinced that bottom of the pyramid concepts, if properly applied to innovation, investing, education and even aid can essentially change the calculations for the bottom one billion of our world, and have multiplier effects on the rest of us. Indeed, a world with less “dangerously educated” youths—wrenched from the hands of terror, frustration and fear is one generally safer for the middle class, more prosperous for the upper class and more convenient for everyone in between and below.

Follow me, as we explore using BoP concepts in the next few weeks to solve unique problems that bedevil the world's poorest.