“Starving children on street corners. Slums without adequate clean water and sanitation. Hopeless prospects for employment amid a growing youth population.” Most of us are moved by the painful signs of poverty, and we want to help.
But we only need to look at the billions of dollars that have been channeled into poor countries with the aim to improve education, provide access to healthcare, build infrastructure, or eradicate corruption – to see that the results unfortunately don’t match the good intentions. In some cases, providing a flood of resources have exacerbated the problems.
In The Prosperity Paradox, Christensen, Ojomo and Dillon reveal why so many investments in economic development fail to generate sustainable prosperity, and offer a disruptive solution for bringing about lasting positive change. “What if we considered this problem through a different lens? What if, instead of trying to fix the visible signs of poverty, we focused instead on creating lasting prosperity? This may require a counterintuitive approach to economic development, but one that will cause you to see opportunities where you might least expect them.”
Delving into the stories of successful American entrepreneurs, they show how similar approaches to innovation have also worked in Japan, South Korea, Nigeria, Rwanda, India, Argentina, and Mexico. The Tolaram Group, for example, is a Singapore-based conglomerate that created the instant-noodle market in Nigeria, selling 4.5 billion packets and generating revenue of almost $1 billion a year. Other examples include British businessman Mo Ibrahim’s pan-African Celtel, which built a cellphone network across 13 African countries and gained 5.2 million customers in 6 years, and India’s Narayana Health, which has brought the cost of open-heart surgery down to $1,000.
The authors’ analysis of the catalysing effects of market-creating, behaviour-changing and culture-forming innovation is especially insightful. By providing products and services people didn’t know they needed, non-consumers are converted into consumers. In so doing, they argue, “investors and entrepreneurs inadvertently engage in nation-building”. This is the book’s central idea – that widespread economic development takes root when innovation harnessed to the entrepreneur’s ambition pulls in the resources a society needs to become prosperous.
“We do not know the answers to all of the development puzzles in our world,” the authors admit. Instead of glib answers, they present something more powerful – a fresh, practical take on how to unleash extraordinary economic growth, even in the most desperate parts of the world.
Review by Lise-Marie Keyser