Quite a lot of the readers of this blog actually are one of the top 1% wealthiest people in the world. But because the majority of our readers lives in developing or emerging countries, they are not. There have been countless discussions why or why not, what we can do to stop the rapid widening of the gap between rich and poor. But what can we actually do? How can somebody help while in their own career stress?

Source: Washington Post chart

Enjoy your wealth – seriously do. Just also recognize your share of responsibility.

Since 2017 we are working on that question. Since 1960,  $4.7 Trillion have been donated to development aid with little result. The number of annual donations is growing rapidly to approx $ 1 Trillion per year now. An income of $32,400 per year would allow someone to be among the top 1% of income earners in the world. Multi billionaires today are what was a multi millionaire in the last century.

As part of our work, we met with many members of emerging – or developing countries and realized some shocking situations. We selected the top three reasons and some conclusions together. In late 2018 we completely reworked our approach of helping entrepreneurs. And we realized a path in development aid that has never been touched before.

Identifying the root cause(s)

We were working hard to identifying root causes. We realized, it didn’t happen just randomly. It happened because of many individual reasons. And there are three reasons with the biggest negative impact as far as I can see.

  1. GROWING DONATIONS
    Mankind donated enormous sums of money to help the poor. Over time as some got richer, they donated more and more. MOre NGOs have been created to help distribute the aid. All in the very best intentions. Only rarely money goes elsewhere. On the surface it looks good. But when looking under the hood, it looks very different – even dramatic. The money donated did not make a difference. Nobody really know where to start, whom to give it to and so it was given t the poorest. They consumed it, survived, but did not change the economy. A dramatic development happened. As long as donations were flowing into the country, the people got smarter about what to do to get donations and even more donations. Not because they are greedy and lazy – simply because that has become part of their “economy”. The system that we (the developed countries) instituted was simply wrong. Instead of helping the strongest to build an economy we helped the weakest and built nothing. I feel this is the hardest part to admit – but we have to. I spent time with people in Vietnam, Nepal, South Korea, Peru, Germany, Switzerland, Albania…. In the end I came to the conclusion: We have to slowly but steadily stop random donations and make impact specific donations to help build economies if they are actually wanted.
  2. ZERO WEALTH DEVELOPMENT EDUCATION
    Children have on average 20,000 hours of school. This is true for developed countries as well as many emerging countries including Ghana, Nigeria, or Peru. They learn reading, writing, calculating, and learn about history, geography, physics, biology and so forth.
    However – not a single hour is given on how to acquire wealth. Creating wealth can now be easily found on the Internet. It’s used by some and the number of rich people is growing rather quickly. In accordance to Investopedia, 75% of the wealthiest people created their wealth as entrepreneur. Every nation is hungry for innovative entrepreneurs. Not because when rich they pay a lot of taxes but their business will fill the tax pockets. In contrast, those who do not know, coming from a background where getting rich is still equal to be “bad and greedy” are obviously falling behind.  My conclusion: Offering just one hour to explain that the rich “invest” their money, while the poor “spend” it. Giving some basic information and how to search it on the web would make a huge difference.
  3. DEPLETION (Material & Talents)
    The developed world and now the top emerging countries are big in exploiting natural resources from foreign countries for peanuts. But the biggest problem – by order of magnitude – is to get the top talents of the poorest countries out and invite them to more attractive nations. With that we not only steal some top brains but the very foundation of a nation to create their own economy. The top nations in the world had only a very few super smart brains like Alfred Escher, Robert Schindler or  Henry Nestle in Switzerland — Carl Benz, Robert Bosch or  Werner v. Siemens in Germany — Lee Byung-Chul, Koo In-Hwoi or Chung Ju-Yung in South Korea — or William Shockley, Gordon Moor and Steven Jobs in Silicon Valley. Today it’s easy because most politicians – even in the developed world – simply don’t understand the impact.
  4. DEVELOPMENT FROM WITHIN
    With all that said, I personally and wholeheartedly trust that we need to broadly start inspiring and supporting the strongest entrepreneurs in each nation to stay there and realize their entrepreneurial dream, building successful businesses and export their ware as soon as possible. Their genuine creativity, coupled with their few of the local problems and the problems of other developing countries will bring solutions that can turn any of the nation into a developed country – and it won’t take much longer than 20 years. Yes, this goes against all the artificially created ideologies of inclusion and helping all the the ideas of equality and so forth. But the past 70 years has proven that this model did not work – despite 4,700,000,000,000 (4.7Trillion)  Dollars investment. At the same time the best of the best get nurtured and funded in Silicon Valley who then continue the rich/poor widening process. If we continue diluting the capital of the rich to just provide charity for the poor, instead of taking at least some money to build out economies that help them get rich from within their society and provide education how ALL members of any given society can participate in that wealth – we will never have enough money to donate.

There are certainly more problems that cause the rich/poor gap. One of the biggest reasons is often pointing to corruption. The more we have been analysing that issue, the more we came to realization it is simply just another loud cry for helplessness, based on poverty and hunger to survive. I’m not defending corrupters but we can do better than pointing at them to find a somebody we can blame (Prosperity Paradox by Clayton Christensen (Harvard), is a good read). And then there are hundreds of tiny issues. But all those issues have been very present in the 1800’s Germany or Switzerland, in the 1950’s farmland of Northern California and even more so in one of the poorest Asian countries: South Korea in the 1960’s.

Consequence

Of course we do not expect that the world is following our concept. For us, the consequence is to build strong and innovative entrepreneurship from within the countries. This is a long and painful path as any startup in the west or in the east, north or south, is taking approximately 10 years to grow from zero to an economy relevant size. But we feel it’s better to start now than hoping for a majical shortcut to become “rich in 30 days”. NGO projects usually go 1 – 4 years. Far too short to actually get anything notable done. And so we are looking for philanthropists, donors and other giving organization that go this long path with us. If you like to help as a volunteer, donor, international investor (investing in promising startups) or in any other capacity – your support is deeply appreciated.

 

Meeting with the ITP leadership team of the University of Ho Chi Minh City. An impressive presentation where Vietnam is planning to go what innovative businesses concerns.  We also had some great meetings with students, who are very ambitious and eager to learn everything possible about innovative thinking and entrepreneurship.

Entrepreneurs Workshop with roughly 20 top startups and scaleups from Ho Chi Minh City. It was great fun to work with these super engaged and highly competitive teams. One of the things that all of them have in common with any top startup in the world: determination to win.

Investors meetings at the Kova facility. We discussed investor strategies, ways to select startups, due diligence processes and post investment mentoring. We also talked about the necessity to keep top companies in the country to not loose the innovative edge to somebody else.

A wonderful and very personal dinner at the Kova house. We enjoyed traditional Vietnamese food cooked by the lady of the house herself. This was an unforgettable evening.

Great discussions about innovative thinking, investment opportunities, ways to stimulate more innovation and getting startups better supported to be able to compete on a global scale. It was an amazing evening with amazing people.


HANOI

The future of innovation in Vietnam, Conference. Great and an amazing diverse speakers, high energy and very ambitious. We talked about the innovation paradigm and the value of going global for the national prosperity and wealth development.

We were invited by the University of Hanoi to speak about the Innovation Paradigm, the value creation for the national economy and what Vietnam can do to create an innovation economy within the country.

Interesting discussions about how to stimulate innovation and making innovation an even stronger point within an economy. Also we spoke about the value of speaking English as a prerequisite to participate in the global economy.

Meanwhile, Marita ran a workshop for female entrepreneurs. The interest to participate was so overwhelming that the initial 12 people roundtable had to be turned into a 70 attendee  presentation and podiums discussion.

Full house at the female entrepreneurs meeting in Hanoi

A very interesting meeting at one of the largest mobile phone providers. The organization is determined to innovate and bring all new ideas to their customers. It is absolutely amazing to see how Vietnam turned from a rather poor country, dependent on donations, just three decades ago, into a vibrant emerging country.


An equally great meeting at one of the top business banks of Vietnam. Also here, business transformation, innovation and moving from an industry follower to an industry leader is an amazing transition. We talked about how innovative thinking is not just improving the status quo but how to get to an idealistic model and back to reality.

One week with great teams, jar dropping innovation spaces and top notch universities.

Our work in South Korea, with our ambassador and team was very exciting. South Korea is certainly no longer an “emerging country”. It bypassed many of the developed countries.

Startup ecosystem of the superlative. South Korea’s brand new Innovation hub is certainly the most mondain, most modern and best equipped incubation campus in the world. Startups, scaleUps and SME’s on hypergrowth don’t miss anything here. Whether its a photo and video studio, conference rooms of any size, offices of any shape, restaurants and countless other amenities. This is very hard to top.

Introduction to the Seoul Innovation Ecosystem, it’s focus to take business global and its quest to build more Samsung, LG or Hyundai type companies.

Entrepreneurs Workshop at the University of Seoul. A variety of students, even from foreign countries participated to learn all about innovative thinking, the innovation paradigm and how most innovative companies became the core of a country’s economy.

Investor Workshop for South Korean Angel Investors, Venture Capitalists and institutional investors.

A great view onto Seoul by night from one of the largest towers in the South Korean metropoly

Private World Innovations Forum Dinner with industry leaders from both Asia and Europe. We were discussing how Innovation is not just a way to build new technologies but innovation being the economic foundation of any leading nation.

And a final Entrepreneurs Event with pitching contest in the Seoul Startup Hub. This incubator just complete the expansion and is now good for almost 1,000 startups. Five selected startups pitched in front of an audience from the SSH and showed their ability to innovate.

A week with very promising teams, brilliant people from the local universities and amazing supporter – less amazing government actions.

Our work In Nepal was a great finish for our five week Asia Tour on one side and a disappointment at the very last day, at the investor summit.

After an impressive pitch event, the winner teams and organizers, judges and investors all together. The creativity of entrepreneurs is universal. And so is their spirit to find solutions for their local markets first.

Private World Innovations Forum Dinner with representatives from the private and public sector, entrepreneurs, investors and enablers. It’s also a thank you to the amazing work the team has performed in Nepal.

With the introduction of Private Direct Investments, private investors should now able to invest in private businesses, explained Minister for foreign affairs, Pradeep Kumar Gyawali. This would make a huge difference to Nepal’s startup ecosystem.

Nepal’s government representatives explain the new investment strategy, in which industries investments are welcome and up to 7 years tax exemptions to attract as many investors as possible. It was made very clear that with the new investment policies and regulations, the government is introducing major changes, trying to turn to economy around. For the past decades, Nepal was depending on donations. Now that shall change and Nepal will want to stand on their own feed.

However, weeks later the website to register and get approved as an investor did not work. Trying to get support was hopeless. It was difficult enough to figure out which site a prospective investor is supposed to register. Attendees of the event never heard back from the event organizer. Neither how to register nore any next steps. Even our local connections could not figure out whether the new rules are even in effect. So far no progress at all.