Category Archives: Poverty

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

 

Innovation, a path for improving our societies?

”The greater danger for most of us lies not in setting our aim too high and falling short; but in setting our aim too low, and achieving our mark.” (Michelangelo)

 

In recent years the magical word for generating development has been productivity, and it has been said that the path to it is innovation. Taking on this idea, in this article we ask ourselves a

 

bout the situation of the countries of Latin America in terms of innovation, the idea of innovation that predominates, the other perspectives about innovation that are seen, and with that the type of society that we want to build.

Situation of innovation

GII table article 1

 

 

The Global Innovation Index (GII) of 2014, based on input indicators (institutions, human capital and research, infrastructure, market and business sophistication) and output indicators (knowledge and technology, and creativity), shows the positions of 143 countries, and within it, the ranking of the countries of Latin America: see table. Barbados is the most innovative country of Latin America, but on the world level it is in position 41, followed by Chile and Panama; while Nicaragua is in last place of the Latin American countries and in number 125 on the world level, followed closely by Venezuela and Honduras. In 2013, one year ago, Costa Rica was the most innovative country in Latin America, occupying position 39 on the world level, Guatemala at 87, El Salvador 88, Honduras at 107 and Nicaragua at 115. In other words, Latin America as a whole dropped in their positions, particularly the countries of Central America.

The World Bank, studying Latin America from 2006 to 2010 (Lederman, Messina, Pienknagura, and Rigolini, 2014, Latin American Entrepreneurs: Many Firms, But Little Innovation) expressed doubts about the sustainability of their growth, that is due more to the rise in prices of raw materials, and that the emergence of many firms reveals, in comparison with other regions, high entrepreneurship, but independently of their size they show a deficit of innovation, expressed in their investment in Research and Development (R+D), patents, introduction of new products and management practices.

Idea of innovation and conditions that contribute to generating it

What does innovation mean for both institutions? The World Bank thinks that the economy in Latin America is growing slowly because of a lack of innovation in companies, including the Latin American and Multinational Enterprises that operate in Latin America. So the companies are introducing new products less frequently, invest little in R+D, their patent activity is low, and they hire people with less studies at the university level. To have an impact on innovation, the WB suggests legal rights, transparency, industry and commerce policies, quality human capital, policies for supporting R+D, and policies for increasing competition and narrowing the gap in human capital (more engineers and scientists and less sociologists and macroeconomists). Taking up again the work of Schumpeter (1911, The Theory of Economic Development), they think that “the successful entrepreneurs are people who transform ideas into profitable initiatives,” and that it is a matter of “entrepreneurship that emphasizes novelties for the market”, which is in line with the neoliberal approach, of freeing markets in protected sectors, and that the private sector is the motor of innovation.

Under these liberalization policies and investment enviroments for promoting innovation, the GII states that innovation is no longer restricted to the R+D laboratories and to the publication of scientific articles, and thus takes on the OECD-2005 definition (Oslo Manual): “An innovation is the 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.” If previously innovations were done by experts in closed places, now the GII thinks that the capacity to innovate is a skill of exploiting new technological combinations, and that it is incremental innovation “without investigation.” For that reason the GII proposes that innovation centers be created under the leadership of the large corporations that are the local “champions” with the participation of the government, enterprises, academics and society, in order to develop innovation capacities in clusters, inter-regional networks and value chains; these “champions” would support the innovations with capital and connections, facilitating the creation of knowledge, and with bridges to the commercialization of ideas; and that policies might exist to attract these “champion” companies that will invest in businesses, ensuring the participation of experts.

Seen in this way, the international ranking rewards those who are seeking markets, adapt to the system, with an individualistic vision, directed by large capital enterprises that include expert engineers around technologies. Is this the type of society that we are looking for with the innovations?

Different perspectivas on innovations

Let us review some innovations. The invention of the wheeel in prehistory shortened the distances between places, the telephone reduced our dependency on the wheel, internet eliminated geographic borders and connected people around the world…Florence (Italy), with the support of the Medici brothers, brought together a group of geniuses like Da Vinci and Michelangelo that drove the Renaissance. The Apaches resisted invaders for centuries because of the igalitarian and decentralized social organization, that when a leader (nant’an) fell, another and another would appear. Bill Wilson and other alcoholics understood that it was easier to fool the experts than those who were in the same situation as they were, and based on rules of free entry and exit, a commitment to not drink for 24 hours, no one in charge and everyone in charge…they created Alcoholics Anonymous (AA). Toyota revolutionized the car industry with team work mechanisms, quality incentives, continuous improvement, and the search for the balance between centralization and decentralization. A family from Paysandú (Uruguay), together with others, dealt with the theft of their fencing wire, understood that wire was sold in rolls, which is why they cut the wire, nailing a piece from one post to the next. Ron Rivera (Nicaragua), along with dozens of artesans, innovated Filtrón (ceramic filter for potable water) that is saving the lives of thousands of people around the world.

These innovations challenge the status quo and are done in collective environments. They appear as something technical, but they challenge what is conventional and logical, are “absurd” in the beginning (Albert Einstein), connect things (Steve Jobs), see a different world in which they want to live (Anthony Robbins); associate things, question, observe, experiment and create networks (Dyer, Gregersen, and Christensen, 2009, The innovator’s DNA); and have high aspirations, as Michelangelo says. It is not going after the market, seeking profit, individually, directed by large capital enterprises, competing with products, or – as Peter Drucker said – with “business models” and believing that there is only ONE path, but changing the way of living itself (Steve Sheppard), pushing the limits of reality in any area, following different paths, and doing it in families, networks, friendships, companies, clusters…In Latin America these forms of innovation call us to seek equity, contribute to the climate and build paths with societal models.

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

 

What Should We Do With the Stranger?

I read many reflections, blogs and printed materials over the course of each week, mostly having to do with Nicaragua and various forms of aid and development work being done there.  Some are very good and others less so, but I came across one a few days ago that I think bears repeating here.  It is taken from the newsletter published by the Center for Development in Central America (CDCA),  which has worked in Nicaragua for the past twenty years as of 2014.  CDCA has worked tirelessly on behalf of impoverished Nicaraguans on many fronts, and Winds of Peace has been able to work with them on several projects over the years.

I have reproduced reflections from their newsletters in the past, and I do so here with an analysis for your consideration which gets straight to the heart of a major U.S./Central American policy issue, the immigration of Central American children.

There are many issues around the response of the government of the United States and many of its people regarding the children crossing the border: immigrants vs. refugees, corrupt Central American governments (and yes they are still propped up by the U.S. government as they have been for 100 years), drug trafficking, gangs, Democrats vs. Republicans.  

So many issues bandied about and yet- in reality- the only issue that exists is: do we welcome the stranger?  The child?  Or do we not?  That’s it.  Simple.  Clean.  Do we or do we not?

People frequently ask us why we like living in Nicaragua.  Well, this is one reason: Nicaragua DOES welcome refugees.  Let’s face it, people fleeing their poor countries have to be mighty desperate to come to Nicaragua, the second poorest country in the Western Hemisphere.  But they do come and they are coming and Nicaragua, more than any other Central American country, affords them more access to their social safety nets- such as they are.

What does that say when the second poorest nation is receiving refugees while the richest is turning children away?  What does that say about the soul of the richest nation?

The leaders of the Nicaraguan government, who are not perfect by any means, understand what it means to live under dictators, death squads, terror and horror, and they translate that understanding into action by welcoming others who are living it now.  

Why would you send your children on such a dangerous journey with strangers?  Mine are grown, and the only reason I would send them thousands of miles away, riding on top of trains, would be if I thought…no, if I KNEW…they would die if they stayed.  Do the people in the States who debate this “crisis” and advocate deporting the children really believe in their hearts that Central American families love their children less than they love their own?

Frankly, the only actual crises are the crises in the nations from which the children come… not in the U.S.

In Honduras, the city of San Pedro Sula has more murders per capita than any other place in Honduras, which has more murders per capita than any other country in the world.  During July alone, in this small country, 87 teens and children were murdered, some tortured, and the vast majority of the culprits were not found.  

And this is where the first nine children were deported to… San Pedro Sula.  Depending on accounts, 5 or 7 of the nine were killed soon after landing.  Killed.  We, the U.S., sent children back to be murdered.  Does this mean that the deportation will stop?  No, it does not.

Choosing whether or not to welcome these refugees is easy.  Choosing whether or not to deport these children to die is simple.  This is not a complicated issue… we are not in muddy water here, folks… it is a clean issue, because there is really and truly only one right place to stand… with the kids… we need to stand with the kids.

Who are the strangers we encounter?  And what should we do with the stranger….?

The Surplus Population

In response to a recent blog essay, I received a comment from a friend in exasperated empathy for the predicament of the poor.  His note read, “The poor just don’t matter.  They are throw-away people.”  The comment wasn’t a reflection of his own feelings, but rather an indictment of a significant share of the world that refuses to see the plight of this significant share of the world; the poor are everywhere and yet they seem to be invisible.   His comment got me to thinking about the poor, and the rest of us.

If his comments are all too true, my friend has made observation of a curious truth.  Why wouldn’t the poor matter to the rest of us?  After all, The United Nations Food and Agriculture Organization estimates that of the 7.1 billion people in the world, one in eight were suffering from chronic undernourishment in 2010-2012.  (That’s about 870 million human beings, so it’s not an easy number of people to simply forget about.)  And, we humans can be an empathetic lot, caring deeply for our own families, expressing our support and concerns via social media for victims of natural disasters, donating to an enormous array of charitable causes, even mourning the loss of our beloved family pets when they have aged and gone.  So why do the poor continue to pose such a difficult and unmet challenge, especially when statistics bear out the fact that sufficient resources exist (at least today) such that poverty need not be?

The reasons are likely complex and daunting to consider.  But in my reflections about “throw-away” people, I surfaced some thoughts which, not necessarily complex or daunting at all, might at least offer some insights as to why we allow this pestilence of degradation, suffering and unnecessary need to persist.  I’ll admit up front that my observations have a great deal less to do with economics and external forces than they do with the internal workings of our hearts and emotions.

For starters, maybe we simply suffer from the inexperience of having walked in the shoes of the poor.  Nearly any new perspective becomes easier to understand and accept when we have the advantage of personal experience.  And reality is that most of us have never known real poverty.  It’s very hard for us to truly recognize the urgency and the desperation of hunger, homelessness, and habitual want.  If we cannot know the depths of panic and hurt, those two accompanists of poverty, then it is far less likely that we will know the need to respond.

Sometimes, we sense that the problem of the poor is too immense to solve, that the forces which converge to create the circumstances of the poor have long historical, political and social roots that are beyond our full comprehension.  And without that previously-mentioned personal experience on which to base our opinion, we regard the plague of poverty as one of those existential realities that has no beginning and no end.  In essence, it’s easier for us to contemplate ongoing poverty for millions of people than it is to create a solution.  (A curious reaction, in an age where curatives for biological viruses receive copious funding and attention.)

Then, as intensely curious as we are to solve the inscrutable puzzles of our earthly past, the genesis of the cosmos and the intricacies of sub-atomic particulates, we are nonetheless troubled by problems that seem irreconcilable.  Such is the fate of “the problem of the poor.”  We may intuitively know that it is wrong for human beings to be in want of life-sustaining, basic necessities.  But the fact that not all human beings have been granted those basics makes us uneasy, leads us to speculate about what such victims might have done to warrant their condition, and allows us to conclude that the only possible reconciliation of their circumstance is that they somehow have deserved it.  Or that we, on the other hand, somehow have not deserved it.  That’s an answer which fits our need for a cause-and-effect logic and our own sense of innocence.

The poor make us very uncomfortable.  They represent the lowest economic status to which any of us might fall.  They present a picture of what any of us could become, of who we might be but for the vagaries of chance.  It’s a frightening look, one that is so despairing and yet so possible that we cannot bear to see.  Like turning our heads away during the most frightening scene of a horror film, we must escape.  That which we choose not to see cannot infect our consciousness or our memories.  And so we do what we believe will keep us safe, deny the existence of what is before us.

Finally, the denial of poverty in our lives- insofar as it impacts us– is merely the expression that it is not our problem.  Whether we are a compassionate people or not, we can too easily defer the issue of the poor by touting our own good fortunes in the face of the poor, by relegating the problem to the poor alone.  It is far easier to conjure a sense of compassion in the fantasies of literature, as in Dickens’ “A Christmas Carol” than in our real lives.  We can see the tragedy of an Ebeneezer Scrooge as he coldly turns his back on what he deems “the surplus population” of the poor at Christmas; it is much more difficult to recognize our own indifferences to a matter which impacts all of us, whether we choose to recognize it or not.

The calendar reminds us that we’re approaching Fall once again, when students of all ages return to their academic lives.  High school and college campuses are coming to life.  As I overhear the shouts of energy today on the campus behind my home, I wonder about what they are about to learn.   I know that upcoming classes will explore economic theories, social constructs and geopolitical analyses relating to our world.  I can only hope that there will be as much emphasis on the causes of continued poverty that reside within each of us.  For if those who have the capacity and the resources to address the disgrace of poverty do not do so, then we are all subject to a re-thinking about who truly constitutes the surplus population….