The pressing need for a new global development model is highlighted in a recent Devex article titled “A global development wake-up call in 2024.” The article addresses the increasing humanitarian crises and the uncertainty in foreign aid due to upcoming elections in many donor countries. Despite these challenges, there is a sense of hope in constructing a new development paradigm.
This article is a summary. Please read the original article by Sandy Sanchez on the Christensen Institute think tank website, here
The Role of Market-Creating Innovations At the Christensen Institute, particularly in the Global Prosperity sector, there is a strong belief in the power of market-creating innovations (MCIs). MCIs simplify and reduce the cost of products, making them accessible to a larger population. This accessibility creates jobs, increases wealth, and generates taxes. These innovations are sustainable and impactful because they evolve to attract infrastructure, capital, and resources, thereby fostering the growth of their surrounding environments.
Building a New Development Model According to the Devex article, the new global development model should focus on directing funding to local leaders and community-based organizations. It also highlights the importance of alliances between the government, private sector, and philanthropies. This approach closely mirrors the characteristics of market-creating innovations.
Investing in Local Development Market-creating innovations are typically developed at the grassroots level, where local leaders and community members understand the specific needs and challenges. Investing in these innovations equates to investing in local development. They are most effective when supported by partnerships, often requiring collaboration with governments for enabling policies and financing.
The Market-Creating Innovation Bootcamp for Policymakers Recognizing the challenges of working with governments and securing funding, the Christensen Institute launched the Market-Creating Innovation Bootcamp for Policymakers. This initiative focuses on creating an ecosystem conducive to MCIs and finding appropriate financial vehicles for market creation.
Case Study: Manila Water A prime example of a successful market-creating innovation is Manila Water. Born out of a national water crisis in the Philippines, this public-private partnership between the Metropolitan Water Works and Sewerage System and Ayala Corporation aimed to provide affordable and convenient access to safe water. By 2016, Manila Water had expanded its services to over 6.5 million customers, significantly alleviating the water crisis. This success story underscores the importance of collaborative efforts in addressing critical needs through market-creating innovations.
The urgency for a new development model is clear, and market-creating innovations offer a viable path forward. By focusing on local needs and fostering partnerships among governments, private entities, and communities, these innovations can drive significant progress in global development. As we face complex global challenges, the adoption of market-creating innovations provides a hopeful and effective strategy for sustainable development.