Innovate, do not donate! The Prosperity Paradox, a development manifesto, makes a convincing case for innovation rather than aid. African poverty could be African potential yet the world has been too blind to see it.
In 2009, Dambisa Moyo wrote a scathing appraisal of foreign aid for The Wall Street Journal. She boldly argued that "Aid is an unmitigated political, economic and humanitarian disaster". But this was not a bald attack. Moyo gave the example of Ethiopia where aid constituted more than 90% of the government budget yet only 2% of the country's population had access to mobile phones.
The big question was, "Might it not be preferable for the government to earn money by selling its mobile phone license, thereby generating much-needed development income and also providing its citizens with telephone service that could, in turn, spur economic activity?"
10 years later, Clayton Christensen, a venerated American thought leader, Efosa Ojomo and Karen Dillon are answering that question with a vehement yes. The trio's book, The Prosperity Paradox: How Innovation Can Lift Nations Out of Poverty, brings the decades-old debate about the effectiveness of foreign aid to its logical conclusion: Innovate rather than donate. It is mouthwateringly counterintuitive to a world used to attacking the superficial manifestations of poverty rather than the root of it all. In fact, it is not an overstatement to imagine this book becoming the African development manifesto if the continent is serious about changing its fortunes.
The model suggested in The Prosperity Paradox is tried and tested. The authors give the example of Mo Ibrahim who conceived the idea of setting a mobile company in Africa at a time when the prevailing idea was, "Africa is a basket case". What sets Ibrahim apart from the rest of the world is how he saw an opportunity rather than poverty. Lack of development simply means unbridled room for development and this is exactly what the book posits.
It is not just innovation that the authors call for but market-creating innovation. They say, "'Market-creating innovations' transform complex and expensive products and services into simple and more affordable products, making them accessible to a whole new segment of people in a society whom we call 'nonconsumers'." These are innovations that make markets out of nothing. They harness the potential inherent in underdevelopment and inaccessibility of goods and services. They make new markets serving people for whom products were either completely inexistent or unaffordable. In the end, market-creating innovations 'ignite the economic engine of a country by creating jobs, creating profits and changing the culture of entire societies.
In America, Henry Ford's move into the automobile sector had far-reaching effects. A country of few roads and few gas stations had to upgrade its infrastructure to meet the demands of the new car-owning population of America. Jobs were created. Gas stations, insurance service providers and other ancillary businesses made profits. The transport industry was jolted to life with obvious effects on agriculture, tourism and other sectors of the economy. Ford did not just make a car, he made a new way of life. Such is the potential in much of the African continent. There is room to lead economic revolutions and Christensen, Ojomo and Dillon's book is the epiphany policymakers, innovators and every other stakeholder has been waiting for. Economic success has been demystified by a text ironically titled "The Prosperity Paradox".
The book is now available in all leading bookstores including Amazon.
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