A new book by Clayton Christensen, Efosa Ojomo and Karen Dillon is encouraging innovation and transforming the way the business world, governments, and NGOs think about global poverty – and the mutually beneficial ways they can tackle it together.
In “The Prosperity Paradox: How Innovation Can Lift Nations Out of Poverty” (HarperBusiness, January 2019), the authors use numerous case studies to demonstrate how poverty persists not because of lack of resources but lack of market-creating innovations. As the case studies show, the business or entrepreneur who launches such an innovation in an impoverished nation can reap enormous profits while contributing to global development in a meaningful, sustainable way.
The authors begin by defining the role of entrepreneurs in developing market-creating innovations – new products or services that create consumers out of non-consumers. This may sound counterintuitive; firms generally focus on where they know there will be likely customers, not where they don’t see any. But Ojomo, Dillon and Christensen – the father of Disruptive Innovation Theory and still the foremost authority in this field of thought – note that many of the most successful innovations in the world have created entirely new markets.
The Model T, the first car to be mass-produced, made Ford a global auto giant while generating massive gains in industries from tire-making to road construction. Millions of people who would not have driven before suddenly could buy their own cars inexpensively. Tolaram instant noodles were successfully marketed as a daily food staple in Nigeria due to their affordability and convenience. In both cases, innovators benefitted enormously from being the trailblazers in so-called “frontier economies”.
In addition to offering a new perspective for the business world, the authors aim to influence the way governments and NGOs approach poverty alleviation. Rather than focusing entirely on “pushing” material resources into poorer countries, they must work with firms and entrepreneurs to develop the innovations which “pull” resources into those places.
Can your organization play a role in this evolution of thought? Can you see opportunity where others see nothing? Pre-order “The Prosperity Paradox” to see how poverty is not a barrier to growth but an opportunity to create new markets – all while benefitting millions of people.