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Development Marketplace: A Silicon Valley for Development

IN 1999, AS NEWS OF PROTESTERS BEING SUBDUED with pepper spray in Seattle at the WTO Ministerial Conference came drifting in, we sat explaining our plans for the World Bank’s first Development Marketplace to a senior member of the International Finance Corporation’s innovation team. He agreed that innovation was important, and that the Bank Group had not paid enough attention to this in the past—he was on board. He then turned around to us with an indulgent smile: “How many proposals do you think you’ll get?”

He had gotten us there. We figured that if we could get 400 we could make a credible showing on par with the internally focused Innovation Marketplace that we had also hosted in the face of skepticism in 1998.

“Ha,” he said, “I’ll bet you a car—a nice car, say a BMW—that you won’t get more than 200. You’re crazy. There’s no way there are 400 grassroots groups out there who will respond to a call for innovation ideas and be able to compete the way Bank staff responded to your call for innovation two years ago. I mean, even if they exist, how will they find out about it in time to submit proposals and come to Washington, DC in five months?”

I laughed off the bet—we had enough battles to fight without taking on someone who was basically sympathetic to our cause but disagreed on how to get there. There were other people within the institution who were deeply concerned about what we were doing. Some of their concerns:

  • Did it have to be so public? In 1998, we had broken new ground inside the World Bank by saying any staff member could propose an idea for possible funding. Now the Development Marketplace was being opened up to the whole world. Where did innovation come from anyway? A majority of the people we talked to believed that it would be easier for the Bank to bring together a highly-qualified smart group of people (no doubt including many from its own ranks) to tell us what the smartest innovations in the field of international development could be. 
  • Should the World Bank’s mandate really include innovation? Others still weren’t convinced that innovation was strictly necessary or in the Bank’s remit. In their view, the Bank was in the business of supporting reconstruction and development by member governments, and the business was generating enough revenue to cover the institution’s costs.

Ten years later, those concerns seem almost quaint.

OPENNESS—Technology has not only transformed the way we do business, but the way people relate to each other. Because technology has driven down the cost of disclosure so dramatically, our cultural norms around disclosure have shifted as well—which in turn has led to greater transparency. Ten years ago, it was an important cultural statement for the World Bank to be willing to host an innovation competition in a public space. Today, it would seem odd to suggest that it be held behind closed doors.

SOURCES OF INNOVATION—Some innovations undoubtedly result from solitary invention, and others may come from
smart experts being brought together. But as Mark Granovetter points out:

“…[N]ot all innovations arise from the social inner circle. Indeed, the socially marginal may at times be best placed to break away from established practice…as they are not involved in dense, cohesive social networks of strong ties which create a high level of consensus on standard practice. Thus, studies indicate that the lower an innovation’s champion in a corporate hierarchy, the more radical the innovation (Day 1994).”

The first Development Marketplace brought some unlikely people together—from grassroots community leaders in Uganda to scientists from NASA and Supreme Court justices from Central America. Some in fact fit the bill as coming from a lower point in the development expertise hierarchy. The diversity of the participants, in combination with the culture of openness embraced by the Development Marketplace—led to the Development Marketplace of 2000 mimicking what technology does so seamlessly and continuously today. Just think where we would be if Silicon Valley had turned away Pierre Omidyar, Mark Zuckerberg, or Sergey Brin as being too young to know anything worthwhile—no eBay, no Facebook, no Google.

As of 2010, the average Facebook user has 130 friends, and there are 400 million users of Facebook. 70 percent of those
users are outside of the U.S. It took Facebook 9 months to reach its first 100 million users (by contrast, TV took 13 years to reach 50 million users). And the digital divide, while still a reality, has been narrowed dramatically in the same period—the computer in our cell phones today is a million times cheaper, a thousand times more powerful, and about a hundred thousandth of the size of the one computer at MIT in 1965. And that mobile device by 2020 is predicted to be the world’s primary connection to the web.

This technology-enabled exponential growth of connections makes it possible for ideas to emerge and be transmitted,
tested, implemented and improved upon at a much higher pace than ever before. The credo of the Development Marketplace team ten years ago was Darwin, rather than Intelligent Design. In other words, innovations are akin to genetic mutations that have to be tested against an environment, if we want more successful innovations, we have to widen the top of the funnel and increase the number of trials and experiments. A necessary, if not sufficient condition for widening that funnel is an increase in the number of connections, and the velocity of the flow of ideas and experience.

ROLE OF THE WORLD BANK IN INNOVATION—In 2000, even though there was not consensus inside the World Bank that innovation should be part of its mandate, there was emerging consensus outside that something fundamental in the approach to development had to change: “50 years is enough.” Ten years later, I believe the consensus that innovation is a part of the Bank’s mandate is clearer. For one thing, the Bank’s role in leading by example—particularly when it comes to encouraging clients to create institutions and rules that favor innovation—is difficult to quantify, but palpable.

It can also be argued that even if the Bank cannot make innovation a core mandate—it is after all, the banker to the poor rather than the venture capitalist to the poor—it can play an effective role in dissemination and adoption of innovations that have a huge impact on human welfare. As Charles Kenny has pointed out, “The proportion of the world’s infants vaccinated against diphtheria, pertussis and tetanus –the DPT shot—climbed from one fifth to nearly four fifths between 1970 and 2006.” He also points out that the ‘informed consumer’ has made dramatic shifts possible, i.e., “The increasing demand for education in particular is an important part of the story behind climbing primary enrollments—less than half of primary-age kids worldwide were enrolled in school in 1950, by the end of the century the figure was closer to nine out of ten.” While these improvements may not have led to growth in all affected countries, the welfare gains are undeniable.

So looking forward another decade, what might be the next set of challenges?

GO BEYOND COMPETITIONS—Even though the idea of holding competitions to trigger policy reform has become sufficiently common that books have been written about it, arguably the holy grail of innovation is to move beyond tournaments and competitions. Silicon Valley, after all, doesn’t have to hold business plan competitions to have a seamless continuous flow of ideas, pilots, trials—it’s grounded in a rich, nurturing environment that attracts some of the best minds and most entrepreneurial spirits in the country. It has been argued by some that Stanford University, or Hewlett-Packard, or Xerox PARC anchored the growth of Silicon Valley. Can the Bank become an analogous anchor to an ecosystem that supports innovation in development? It already played that role when we were inspired to leave the World Bank to found GlobalGiving—our idea was to create a missing key link of that ecosystem.

BREAK THE TYRANNY OF STANDARD PRACTICE—In some sense this should be easy. The World Bank, after all, deals with a very diverse client base. But on the other hand the Bank—as the lender of last resort can insist on its own terms, its own standard practice. Even though the cost efficiencies might point in a different direction, some sort of design thinking methodology, such as that practiced by IDEO might be useful as a re-set exercise.

TAKE THE ANALYTICAL LEAD—The World Bank might be one of the few institutions that, in partnership with some other academic institutions, can provide analytical insight into the value of innovation for the field of international development. Ten years ago, we felt pushed into opening the Bank up to innovation—at some level it was a no brainer. But ten years in, the international community is probably ready to sink its teeth into a thoughtful dialogue about the sources of innovation, the conditions that support innovation, and how to effectively monitor and leverage it for the greatest good.

And yes, we should have taken that bet. We ended up getting 1138 proposals from over 100 countries. An Alfa Romeo Spider would have been nice.
 

Mari Kuraishi, Founder and President, GlobalGiving Foundation.

Have your say: Looking forward another decade, what might be the next set of challenges in innovation? 
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open-quotes...ten years in, the international community is probably ready to sink its teeth into a thoughtful dialogue about the sources of innovation, the conditions that support innovation, and how to effectively monitor and leverage it for the greatest good.

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