Innovation in Latin America: worldvisions and the force of markets

Discovering consists in looking at the same thing as everyone sees it, and thinking something different

Albert Szent-Györgyi, Nobel in Physics

 “It is not ideas, but interests, material and ideal, that immediately govern the conduct of men. But the “images of the world” created by the “ideas”have with great frequency determined, like switchmen, the rails on which action has been pushed by the dynamic of interests.” (Max Weber, 1946, Essays in Sociology, 280). World visions, like switchmen, have given form to the “rails” (interests) that move human action like innovations. In this article we review close to a dozen innovative experiences systematized by the Latin American Center for Rural Development (RIMISP) between 2011 and 2014, experiencies referring to fruit of the forest, raw sugar, fresh vegetables, crafts, local currency, infusions, coffee and environmental services, implemented by cooperatives, associations, NGOs, donors, financial institutions and businesses. As we review them we ask ourselves what worldvisions made them emerge – and read them – as innovations?

World visions

RIMISP says that the objective of these experiences is to “obtain economic success through the conquest of broader markets” and “increasing income through an improvement of prices and the increase of quantities produced and sold” (Cheaz e Isa, 2012, Empoderamiento económico en América Latina, 5). The leaders of these experiences say: “we grew to have a greater impact”, “we are 25% of exports”, “we are in supermarkets with organic products”, “we invested US$600,000 in infrastructure”, “we are empowering them so that they might be rural enterprises”, “we are the first Small and Medium Enterprise in the stock market”… The desire of a first tier cooperative to be part of a second tier seems natural, as well as a rotating fund to become a microfinance agency, and then a financial entity, for small ranchers to become businessmen and to export cheese, or a professor to become a consultant and to found a business or an NGO. All rivers run to the sea.

That “sea” is the market and the longing to “grow” is being big, getting to the ocean (supermarket, large capital enterprise) following its rules. The credit, marketing and technical assistance services, as well as physical investment, are aimed at this purpose, to access the market: volume, product quality, administration, individual values and organization. (Inter)national aid, also sharing this perspective, talks about “assisting”, “financing” and “empowering”. The approach for systematizing them is synchronized, it assumes that the economy is the basis for everything, it says how much and how they access markets and businesses are made, it defines the experiences as “islands of success” when they are not large corporations, and ponders policies in terms of markets, because “without market conditions nothing happens.”

Thus market is the vision and guide to experiences and systematizations, looking more like economic understakings. How is entrepreneuriship and innovation different? Entrepreneurship is enterprising and deals with the creation of businesses, where the entrepreneur contributes capital and coordinates economic and human resources (Solé, Aguirre y Areyuna, Emprender o innovar ¿Dónde está la diferencia?). Innovation is “implementation of a new or significantly improved product (good or service), a new process, a new method of marketing, or a new organizational method in business practices, place of work or external relations” (OECD-2005, Oslo Manual), it assumes new ideas, their implementation and acceptance by the market (Nemeth, 1997, Managing innovation: When less is more).  Both coincide in the creation of new things and in assuming risks, a context of uncertainty and economic impact; entrepreneurship requires something of innovation and vice versa; they differ in their scope, entrepreneurship focuses on the interior – and in the creation – of businesses, in the magnitud of the innovation which is incremental or radical, and in that entrepreneurship has economics as its basis, and innovation has multiples bases (social, economic, political, cultural). Seen from the financial perspective in terms of the market, the systematized experiences seem more like entrepreneurial undertakings.

Unseen effects

Accessing markets is laudable, subjecting oneself to it hides other elements of equal or greater importance. The rancher succeeds in exporting cheese without leaving milk for cheese in his home, nor trees in his pasturelands. The rotating fund that works in rural communities becomes a microfinance organization and then a financial organization, tending to grow for the commercial sectors and large producers. Producer organizations become exporters and see their members only as providers of products. They strive to put organic products in supermarkets, while they exploit them for profit; the “fair trade” organization wants the large companies to buy that brand. When a corporation accepts buying fruit from an organization for profit, this is seen as the big novelty. Correspondingly, services (credit and technical assistance) are so that the families might produce what the market wants; organizations revert their attention, they look to the market (companies or donors with a lot of capital), and no longer at their communities; rules and values are remade to serve the market. It is assumed that growing is aligning up with large capital enterprises, and having sale volume, physical investment and technical-administrative staff. What is unperceived is that the larger an organization gets, the more it centralizes, the more it bureaucratizes, the more it limits itself to the economics, the more it distances itself from its members, and the less democracy it has. The “iron law of the oligarchy”, developed by Michels in 1911 seems to get enforced.

Not all rivers run to the sea. Some cooperatives told Pope Francis, as he said in the 2013 III Festival of the Social Doctrine of the Church, that in the face of the economic crisis they decided  to reduce their margin of profit to save jobs; while “for the economy and markets solidarity is almost a bad word” – concluded the Pope. Nakauchi and his friends organized a retail distribution network maintaining some small family stores within the vision of a chain and with a key social role after the earthquakes in Japan. The philosophy of “good living” of some of the Andean countries sees the markets as a means and not an end. In other words, the economy is not the basis for everything; there are multiple “bases” and “visions”; not everyone are resigned to the “law of the chicken coop”,  that the chickens on the higher stoop defecate on those on the lower stoop.

Re-discovering innovations

The tragedy is reading innovations as if they were only economic enterprises, and as if they were only one rail leading to the market without “switchmen”; how much ideas matter so that “paper notes might speak” for multiple visions! Growing is not just becoming large in capital, volume and bureaucracy, it is “thinking differently” and building visions like collective “switchmen”, even getting smaller in order to catalyze greater changes. Some of the experiences reveal glimpses of novelties not picked up by the systematizations: infusions and organic products; combination of homemade products using historical means (milling) and a nostalgic transnational market in raw blocks of sugar in an adverse context of plantations of sugar cane; social networks of women in fresh vegetables and in the incubation of companies mediated with e-markets; balance between exogenous and endogenous factors in many experiences.

Rediscovering these experiences reveals glimpses of visions with the potential to change the world. Building and capturing these visions, in an adverse and uncertain context, is the greatest challenge to “thinking differently” in our times.

René Mendoza has a PhD in development studies, is a collaborator of the Winds of Peace Foundation (http://peacewinds.org/research/), an associate researcher of IOB-University of Antwerp (Belgium) and of the Research and Development Institute, Nitlapan-UCA (Nicaragua). rmvidaurre@gmail.com

 

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