Phenomenal Education Development

Africa, most of South East Asia and Latin America has showed phenomenal progress in education already; having 1,000 times more academic graduates than 50 years ago. There are now thousands of Universities across those continents, which created millions of well trained people – but with no equivalent job. What would a math degree do if you can’t work with it? Today there are more than a million graduates in in each of the three continents. The best they can do would be try to get to Europe or the US. Yet – that would be a devastating brain drain and remove all hopes, those nations have today. Before the inception of development aid, education was a function of having better employees to handle the jobs – but here we have better education but no jobs. We realized we needed to find out how exactly did developed countries develop.

The Rise of Developed Countries

In the early and mid 1800’s, Switzerland was the poorest country in Europe. Germany was a poor country, South Korea was one of the poorest countries in Asia, California was a desert and the most western farmland in the US. If not for the Gold, California would hardly be on the map. Yet the natural resources died out quickly. A similar risk the Arabian peninsula is facing. However something changed above and beyond natural resources and tourism: Innovation and entrepreneurship. When Carl Benz, Robert Bosch, Werner v. Siemens and Friedrich Krupp, crazy entrepreneurs with useless ideas, started to engineer, develop, produce, market, sell and scale their businesses, Germany became a wealthy nation. There is nothing else that propelled the German economy as much as these crazy entrepreneurs. At the same time period, Alfred Escher wanted to build a railroad in Switzerland. But since this was a low priority for the very poor Swiss population, he could not raise any capital. So he asked for foreign investment, the sheer amount he raised, required him to create a more international bank, Credit Suisse. Since he needed more talent, he created the Zürich based University, ETH, today one of the most renowned Tech Universities in the world. Did you know the jet engine was invented in France? Now you know why France is still one of the world’s leading aerospace nations. Did you know that Silicon Valley was essentially based on five entrepreneurs? Almost all developed countries started poor, had an environment where crazy entrepreneurs just could do their thing, no matter how useless and money could flow in from foreign investors. The US, Germany, Switzerland, South Korea, Japan, and all others have been based on that very principle. Thousands of years before that it was war, theft and the financing of their armies to do the very same: invent, grow, sell and come to prosperity. Since thousands of years, the nations that carried their goods in foreign countries and received investment from foreign countries rose. And there is no reason to continue that path with an ever larger number of nations. We never tried to answer the question, how can we get 3.5 Billion people out of poverty with the help from the West? We wanted to know what made the developed countries so prosperous and if we could apply that learning to eradicate poverty.

Economic Development 4.0

We realized that nearly all developed countries, on three different continents rose to prosperity through innovation and entrepreneurship. Moreover, in understanding that entrepreneurship is not a western ‘invention’ but a universally applicable concept, for thousands of years across all cultures. We began to look for such entrepreneurs in developing and emerging countries. And we found jar dropping entrepreneurs and their startups in Argentina, Ghana, Nigeria, Peru, Vietnam and many other countries. With those results, we decided to turn economic development towards a direction that was probably not very well understood before: innovation and entrepreneurship.

We envisioned entrepreneurial journeys from local to global enterprises in most nations. We developed unique tools like the Innovative Thinking Model, Digital Engagement Methods, and explored Next Generation Digital Stock exchanges that could make a huge difference to those entrepreneurs embarking on a catch up race with developed nations. These measures have a good chance to play a defining role in enabling fast growing innovative companies. They will develop far more environmentally friendly products, find new ways of packaging, new ways to turn deserted land back to green land, turn abundant energy like wind or solar heat into usable energy or even mechanisms to leverage those energies directly. We see entrepreneurs working on biological material and AI solutions, like in Nepal, in a way nobody ever thought about. We will not come with technology and ideas that they can execute but with ways to stimulate their ingenuity to do the impossible – and radical different things. Those new businesses can create hundreds of thousands of jobs quickly absorbing the already waiting academics. This is not an idea or concept. Again, this is exactly how developed countries emerged. And since today’s startups no longer take 30 years to rise but already after 3 years have somewhere around 50+ employees and rise to the top within 7 to 10 years, we have a good chance to turn 20 to 50 nations into prosperous developed countries by 2030. The only key task to perform is the work with governments to enable three things: Foreign Direct Investments, Infrastructure development, and Investor/Entrepreneurship friendly policies.

Economic development 4.0 is all about inspiration, education, stimulation – and letting the local entrepreneurs do what they think, what they want and what they believe is the right thing to do. If nobody wants to develop tools to structure their overwhelming city traffic, well, than there maybe no need and we may learn from the way that flow is going – very much like the flow of our blood does not need signs and stop lights ;) Economic Development 4.0 was created to prevent our developed experiences from influencing their development. You may also notice that none of the fastest growing economies these days such as China, Vietnam, Rwanda… are democracies. And we have no right at all and under no circumstances to change that. The only ones who may want to do that are the respective countries themselves – no matter what.

We are starting end of this year with “Seeding Innovation 2020” in 17 countries in Africa, Latin America and South East Asia. This is an open invitation to join us. Https://wiforum.org/join

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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 EDUCATION ON WEALTH DEVELOPMENT

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 (Materials & 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.

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 develop prosperity 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.

Tag Archive for: poverty

Economic Development Aid 4.0