I finished reading this book about “How Innovation Can Lift Nations Out of Poverty”

I finished reading The Prosperity Paradox and I would like to share to you some of the events, insights, and facts I highlighted and quoted from the book that add lenses to my view about how we can help transform a nation. Some of them I twitted. Set aside your religious insights and debates. Instead, put these lenses on and focus on the society— how gifted individuals can introduce what they picked up from the current situation, how the present government leaders can learn from the past (and present) who sailed from both humility and pride, and how citizens can contribute their responsibilities that eventually add value to the society…and to the nation. Each of their roles is a response to building innovation–this innovation that can lift them out of poverty or move them upward and forward.

“Some countries may be rich but not particularly prosperous, such as nations that are endowed with valuable resources.”

“Prosperity is the process by which more and more people in a region improve their economic, social, and political well-being.”

“Riches are supposed to breed a culture of inquiry, innovation, and a diversity of markets.”

I thought I have heard all the sad and successful stories about South Korea when I was still in graduate school. Not until I read the personal testimony who left the poor country in 1973 to return to the United States, I realized that how such a country could host the 1988 Summer Olympics and the 10th Asian Games in 1986? Mathematically, that was 15 years of hard work and more years of resiliency and miracles. These days, upon visiting South Korea, the author finds almost no visible signs of the pervasive poverty that he originally associated with the country. Before I even read this book, I already visited South Korea twice. I enjoyed the places in Seoul, Gangnam, Pyeongchang (where I learned how to ski in Yongpyong) and the islands of Nami and Jeju. South Korea becomes one of my favorite destinations during winter.

Africa in the 1990s had zero mobile phone. Today, it is the home of the sophisticated mobile telco industry with a forecast of providing 4.5 million jobs, provide $20.5 billion in taxes and $214 billion value in African economies. In his credit, Mo Ibrahim represents a solution  to what it is called the Prosperity Paradox despite the mocks, negative feedbacks and disbelief of the people to his vision.

“But in reality, no matter how many good efforts we invest in, if we are not improving our understanding about what creates and sustains economic prosperity, we will slow to make progress.”

“Singapore started out with a government that prioritized economic development and wealth creation, while others like the United States began their march toward prosperity a long time ago and more gradually.”

The book clearly explains that investing in innovations, and more specifically market-creating innovations, has proven a reliable path to prosperity for countries around the world.

“Market-creating innovations” transform complex and expensive products and services into simple and more affordable products, making them accessible to a whole new segment people in society whom we call “nonconsumers”.

The Market-creating innovations is one of the three types of innovations (the other two are sustaining and efficiency innovations) that is most likely the answer in a long term the process to prosperity. This type of innovation generates local jobs that are more sustainable. It may dramatically grow yet it dynamically fills in the carts. Hence, produces sub-categories, new markets, and new jobs. Other outcomes will be profits and cultural change. The cultural change begins the next step of growth and triggers the difference towards prosperity.

“By investing in market-creating innovations, investors and entrepreneurs inadvertently engage in nation-building.”

I also learned about this new term “resource curse”. “Resource Curse is a phenomenon that explains how many nations endowed with natural resources such as oil, gas, gold, diamonds, and many others often end up with less democracy, less economic growth, and effectively less prosperity than nations without these natural resources. It is sometimes referred to as the paradox of plenty.” 

This sounds familiar to me.– “In the 19th century, America’s governments shared many of the characteristics of poor-country governments today. Local states, and federal government officials engaged in rampant corruption, taking kickbacks and bribes from legitimate businessmen and illicit actors alike. Bosses ran big-city political organizations and indirectly controlled city services such as utilities, police protection, security, trash collection, and transportation. Some gave handouts to the poor in exchange for votes.”

As mentioned in the book,  “the real revolution in America after the Civil War was not political, but economic”. The transformation  was clearly seen with the vast degree of market-creating innovation started by innovators like Isaac Singer of Singer sewing machine, George Eastman of Kodak, Henry Ford, and Bank of America’s Amadeo Giannini, who found opportunities in noncomsumption market. Today, innovation in America becomes a norm regardless of your educational level. And today’s entrepreneurial culture becomes openly massive and even influences other countries. It attracts both radical thinking and believers of patience to success. Startups backed by venture capitalists and big tech companies in Silicon Valley continue to flourish and generate opportunities.

Decades ago, Singapore was poor and down. It was way poorer than the country I live in. The government led by Lee Kuan Yew constantly met with American executives in the East Coast and not with the aid community. “Singapore was not begging for handouts–they were asking for investments. It didn’t focus on simply creating jobs, but jobs through innovation, which is a more dynamic and sustainable way to develop an economy.” It has been attracting investments in biotech, aerospace, electronics, the new technological opportunities.

Another thing that adds lenses to me is about fighting corruption. Fighting corruption may be an all-objective of a nation. Most likely the third world countries’ problem is corruption. The question is why is there a corruption? Or why is it (secretly) allowed? The problem occurs not only in the government but also in the business and religious sectors. The book says, “enable the creation of new markets that help citizens solve their everyday problems instead of continuing to aggressively fight corruption…”. Depending on the level of the everyday needs, but I agree that it must start from providing the mass level–by creating new opportunities to them.

“Enable the creation of new markets that help citizens solve their everyday problems instead of continuing to aggressively fight corruption…”.

On “Corruption Is Not The Problem; It’s A Solution” chapter of the book. Using creative access by practicing the opposite of the real purpose sends a wrong signal (not necessarily bad or good) that tolerates the precedence until it becomes a habit which eventually turns into a corporate pecularity. It is a form of corruption whether in government or in church or in business. These sectors consider it as a solution. It is an escape (bad or good) for whatever reason. The question is, does it help eradicate corruption? However, transparency brings positive feedback (also, not necessarily bad or good) that allows a sector or a nation to be recognized in another level. Transparency is what today’s generation is demanded that turns out to be admissible. Europe in the early centuries was slower and more painful than America in transitioning from corruption to transparency until it engined new innovations and offered to nonconsumers that created new markets. In that way, the governments became more creative as well on how they taxed and governed their citizens. Therefore, enable the creation of new markets that help citizens solve their problems instead of fighting corruption because as mentioned, “asking people to fire corruption without giving them anything else to hire is not very realistic, and often doesn’t work.”

“Development often precedes successful anticorruption programs, not the other way around.”

On “Good Laws Are Not Enough” chapter of the book. “Institutions reflect a culture. They don’t cause it.” This reverses my opinion and probably the majority that no matter how good or non-corrupt the person is when he steps in and works in a government agency, he will be influenced by the culture through an existing system. Institutions reflecting a culture reveals the true personality of the person until he quits. You may or may not agree with me on this.

On “Mexico’s Efficiency Problem” chapter of the book. A nation can be thriving but not prosperous. It shows that a country like Mexico that is situated in the boundaries of two great nations like the United States and Canada can still hardly prosper despite being the closest nation that has the opportunity to catch the immediate requirements of the those two countries.

Transformation Fact: North Korea was more industrialized than in South Korea in 1950s. Look at them today. South Korea is one of the most innovative and educated nations in the world. The government’s tourism agency exports even the K-Pop culture through music and fashion influences. This validates my previous discussion to some friends that K-Pop is not like a music festival. It is a lifestyle.

Another example of transformation is what happened to Japan after the World War 2 from dire straits to prosperity. What Sony did —“The mission of Sony is to design products  for markets that don’t exist yet (Akio Morita, CoFounder of Sony).”

Noodles brings prosperity to Nigeria. It helps building its infrastructure. Are you surprised?

“By investing in market-creating innovations, investors and entrepreneurs inadvertently engage in nation-building.”

Other countries mentioned in the book are Nigeria, India, Afghanistan, Philippines, Ghana, China and Rwanda. It does not only add lenses to how I view innovations in another dimension of creating, marketing, and becoming successful in products. It magnifies my knowledge that innovation can really lift nations out of poverty. It amplifies my thoughts about transforming the nations not only by sharing the good news but by enabling actions leading to the progress. In the end, through available resources, and risen culture, corruption can be positively transformed into prosperity with good leadership, collaboration within and with the outsiders, and providing solutions for people the government serves.

It does not only add lenses to how I view innovations in another dimension of creating, marketing, and becoming successful in products. It magnifies my knowledge that innovation can really lift nations out of poverty. It amplifies my thoughts about transforming the nations not only by sharing the good news but by enabling actions leading to the progress. In the end, through available resources, and risen culture, corruption can be positively transformed into prosperity with good leadership, collaboration within and with the outsiders, and providing solutions for people the government serves.