This is a transcript excerpt of Andreas Widmer (S.E.VEN.) describing his organization’s prize/competition-based approach to poverty alleviation. He reframes poverty as exclusion from networks of productivity and exchange, advocates leapfrogging ideas by integrating cross-domain insights, and illustrates a crowdsourced competition to identify new SME investment metrics for emerging markets.
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We do everything our organization does is done through either competition or prizes. So we don't actually write grants or something like this. Everything that we do is done competitively. And we have three sort of guiding principles in how we put our competitions together. One is that we'd like to define poverty in slightly different terms. What does it mean to be poor? We'd like to like Dean came, came and said this morning, how you're asking the question or you formulate the problem has a lot to do with where you're looking for a solution. So fighting poverty is really not a very useful problem statement. We say that the state of poverty, being poor is the state of being excluded from networks of productivity and exchange. And so any solutions that we're looking for need to integrate the poor into networks of productivity and exchange and, and specifically into existing networks of productivity exchange. Not to make their own. Often I see that we have a tendency to create their own solutions and they're almost separate from our solutions. The second point is to leapfrog ideas. I'm a software entrepreneur, so I'm not a development expert, I'm an entrepreneur. But in my experience, leapfrog ideas come from integrating insights from different domains, sometimes in each other's business, if you wish. Like when different domains start to mind each other's business, you have to look out because that's where you get leapfrog ideas. And also that innovation often happens at the periphery. Innovation doesn't come from the center. And the third rule or the third idea that we're thinking about is to use appropriate technology. You know, I have a tendency to get a little carried away with technology and so maybe this rule is in there just for me. But just because something, just because there is a technology doesn't mean you have to use that technology at any price to get there. There are still a lot of things and a lot of processes that are better done in person and to actually break down barriers and increase understanding. Sometimes face to face meetings like what we're doing right now here is still very important. If I just may illustrate one competition we have done, please go on our website sevenfund.org to look at all the other things I wish I could talk about, but I just don't have the time today. Just one snapshot. We focus on small and medium sized enterprises. If you're looking at the market, you have microfinance. If you want to do sustainable, you know, agriculture or subsistence agriculture, you know, there is micro finance available. If you find oil in Nigeria, I'm sure you won't have a problem finding financing to go after that. But we all know that in all the OECD countries, 95% of all firms are SMEs and they employ 70% of the workforce. Yet what do we do to encourage them in emerging markets? Especially the financing of them is something that I, when I just looked at the whole thing, I said, there's a gap there. There's very little done to help finance fund invest in SMEs in emerging markets. And I know there is a plethora of reasons why that is, but my attitude was to say, okay, let's just start with one thing. Let's just look at one issue and the question is if you use traditional ways of measuring SMEs for investment in the US you have all kinds of ways to look at this, which the fundamentals of this, the assumptions underneath it, don't apply in emerging markets. So we need to come up with different ways of measuring this. So we created a media wiki platform where we asked the question, what could an investor measure in an emerging market SME to predict future success? And we opened this up. We said, it's a collaboration effort. The best answer is going to get $50,000. Well, we had over 300 active participants of 37 countries participate and as you would expect, we received a whole variety of answers. I just quickly want to give you a couple of ideas of what came out of this. One is to apply evolutionary biology. There's something called the nine factors found in the World Conversation Monitoring center that's used to determine species and at risk for extinction. And this person applied that to the SME market and suggested we use that. Another person wanted to put together a geographic information system that's traditionally used for statistics or to map SME competition, opportunity and resources. Somebody said to use the characteristics of a sine wave, traditionally used in mathematics or music and physics, to predict SME performance. There's even somebody who said to use online gaming rules like Mafia Wars. There's a game called Mafia Wars. They have certain predictions of who performs how in that game to use that to predict the SME outcome. All that I'm saying because just to illustrate what we're doing is to go out and opening it to the world, including the emerging markets, and to collect these ideas that we can then take and go to the more on the ground academics and say test this. But for the out of the box ideas and something very different, we first go sort of to a wiki open collaboration platform.
