In 2014, I attended a Global Innovation Competition gala in Nairobi, Kenya hosted by Making All Voices Count; a social activism and government accountability platform incubated by Ushahidi. I met a number of young innovators from all over Africa and Asia working to resolve social issues that were not being adequately addressed by their local governments. It was also an opportunity to learn about other innovations that were solving issues that were unique to the developing world. One great example is M-pesa, a mobile phone based money transfer service that has allowed millions of users to securely exchange money for goods and services without the need to have a bank account or credit card. There’s also the SMS/text based mobile product authentication (MPA) being used by drug manufacturers to combat counterfeit medications in several African countries. Another application allows farmers access to market price for their crops so they can avoid being ripped off by middlemen that usually offer prices significantly below the market price.
As access to mobile technology is growing even in areas with no electricity and running water, it’s opening the door to the democratization of innovations that promote social change. However the glaring absence of investment by the world’s largest companies on such innovations could be a missed opportunity for their longterm growth.
There are three reasons why businesses should consider investing on innovation for social change initiatives in the developing world and emerging markets:
- Millions of people are entering the middle class every day with the global middle class expected to grow from 2 billion today to almost 5 billion by 2030. Most businesses that focus heavily on North American and European markets will miss out on getting an early foothold in global regions where the spending power is expected to rise with the creation of this large middle class mainly in the developing world and emerging markets.
- Companies that do not innovate will eventually die but those that branch out could live for another day. 88% of the fortune 500 companies in the last half century no longer exist mainly because of stiff competition or the inability to innovate fast enough. Globalization and technology is helping more parts of the world emerge from poverty and the demand for products and services will only increase in those regions which gives businesses a better shot at surviving the competitive squeeze.
- Businesses that get into a new market early tend to build trust and brand loyalty than those that arrive late. Direct investment in various innovations promoting social change or indirect funding of other organizations dedicated to social change can be a great way for companies to make their mark in the developing world as a longterm strategy to build trust and loyalty.
This blog post is part of a series authored by IdeaScale employees. It showcases how they’re thinking about crowdsourcing and innovation as part of their daily routine. Feel free to ask questions or make comments.
This post is by Beniyam Kebede, Innovation Architect at IdeaScale.