Developmental Entrepreneurship MAS.965

Development Futures

6 December 2002

Joost Bonsenjpbonsen@media.mit.edu

http://web.media.mit.edu/~jpbonsen/DE-2002Fall.htm

Today’sAgenda

1. Last Class

2. Accomplishments

3. Further Actions

4. Developmental Innovations @ MIT

5. Further References

6. Final “Deliverables”

Doing Our Part in a Global Development Movement

• Global challenge never been clearer or more broadly known

• Development disparities within and between nations and peoples

• Understanding about what works growing

• Politically ripe – consider Mexico’s Fox, Ghana’s Kufuor, Russia’s Putin

Accomplishments

• Live Case-Studies

• Cross-campus connections

• Over half-dozen proposed ventures

• Advancing MIT Development Efforts

Low Cost Eyeglasses

http://www.lowcosteyeglasses.net/

Selco

• Solar Electric

http://www.selco-intl.com/

GrameenPhone

• Rural Telephony• Reselling GSM• Fastest Growing

Cellco in SAsia

http://www.grameenphone.comhttp://www.telecommons.com/

Borrows $350Earns $2/day7,600 VillagePhones

Further Actions• Extracurricular

– Wilson Awards– SEID– Development Club– …many others

• Research– Digital Nations/MLA– Sloan G-Lab– Globalization Project– World Economy Lab– Global Sustainability

• Curricular– IAP 2003 Offerings– Spring 2003 Classes

How Connect with the “Other Side”

• w/ Business Students – Focused projects & tasks, clear end goals, think of & convey at right level of abstraction & detail

• w/ Scientists & Engineers – Show you’re useful, go actively participate, build trust, observe key classes, go to research group meetings

IAP 2003 Classes

http://web.mit.edu/iap/

Spring 2003 Classes

• MIT http://student.mit.edu/catalog/index.cgi

• Harvard

http://www.harvard.edu/academics/

Example MIT Classes on Development

(Current & Historical)

• MAS.963 Development Technologies http://edev.media.mit.edu/class963.html

• IAP Grassroots Development Seminar http://www.media.mit.edu/~nitin/aid/iap/

• SP746 ATF Writing Seminar http://web.mit.edu/sp.746/www/home.html

• SP753 Designs for Developing Countries http://web.mit.edu/sp753/www/home.html

• 21A.336 Globalization: Mercantilism to Microchips C. Walley • 15.040 Development Macroeconomics R Rigobon

http://web.mit.edu/rigobon/www/Cursos/DM_Syllabus01.html • 17.196 Globalization S. Berger

http://web.media.mit.edu/~jpbonsen/MIT-Devel-Classes.htm

http://www.medialabasia.org/

http://www.medialabasia.org/

http://www.thinkcycle.org/

Influencing & Accelerating MIT Development Initiatives

• Currently fragmented

• Sponsorship critical

• Student-influence?

• Faculty commitment

• Appealing to technologists at Institute

GrowingResearchTheme?

• Undergrads• Multi-school faculty• New categories of

sponsors

• Orchestrating broader MIT Research Initiatives…

http://courses.media.mit.edu/2002fall/de/UROP/

http://web.media.mit.edu/~jpbonsen/MIT-Emerging-Technology-Matrix.htm

MIT Development Club?

• Campus-wide

• Tapping Alumni base

• Fastest-action

Development DifficultiesOpportunities

• Social

• Political

• Infrastructural

• Cultural

…through further references…

Systemic Challenges & The Face of Poverty

• No infrastructure• Misplaced priorities• Subjugation of women• No belief in better • Struggle to simply

survive• Child medical ailments

mostly treatable

Dornbusch’s Paradox of Globalization

1. Workers face worldwide competition

2. More financial accidents, more visible

3. Statist protections removed, lowered impression of security

4. Disturbance anywhere felt everywhere

5. Future shock = change outstrips ability to cope

Government Incompetence amid Unrivaled Prosperity

• Difficulty of defending sound currency

• Temptation of protectionism

• Desire for “Third Way” challenging

• Unfinished revolutions• Mixed role of

international institutions

Disrespect of Indigenous Institutions

• Informal credit-rating by association

• Functional illiteracy• Difficulty tapping

community support or social capital nets

• Trust and friendship bonds

• Criminalized market activities

Inefficient & Criminalized Informal Economy

• Substantial Inefficiencies

• Tax “exemption”• Bureaucratic hurdles

to formality – Year in time– Years wages in

“fees”

http://www.ild.org.pe/http://www.economictimes.com/280401/28edit04.htm

Tragedy of the Commons & Illiquid Assets

• Title to otherwise “Dead Capital”

• Assets owned but not formally

• Can’t sell• Trillions of US $

globally• Recent Russian

news…

Nation Building Difficult

• Wealth Inequalities• Ethnic strife• Ownership stakes• Health care system

confidence• Personal Incentives

crucial

Botched Privatizations

• Privatizing the historic commons to benefit of few

• Structural inefficiencies

• Lack of institutions• Popular Ignorance• PEMEX dilemma

http://www.gazprom.ru/

Microfinance v Macrofinance I

• Financial services for poorest of poor

• Very difficult• Credit only or

broader?• Avoiding “driving

poor further into debt”

Microfinance v Macrofinance II

• Poor countries quarter trillion in debt

• Servicing cost exceed social investments

• Structural trauma, hamfisted “adjustments”

Culture Counts

• Ability to adapt is a function of culture

• Virtues of peoples crucial– Work, thrift, honesty,

patience, tenacity

• Wealth gulf may persist

Geography Counts

• Positive feedback loop of:farming domesticated

animals population innovation capacity

• Environmental factors dominate

Grassroots Globalization

• Groundswell emerging from below

• Personal aspirations• “Whatever you’ve

got, sell it, trade it, do something to improve your standard of living”

Balancing Free Market Innovation with Fair & Equal

Opportunity

• Engine of inequality is creative force

• Inequalities transient

Final “Deliverables”

• Individual & Team Feedback– Small write up, paragraph or two

1. Reflect on process this time, what worked, didn’t, what you liked;

2. Highlight any improvements for next time, including thinking outside of box.

• Send to jpbonsen@mit.edu