a longer version of this blog post is available on the MIT Media Lab’s Digital Currency Initiative platform
With Google Trends data showing that searches for the word “blockchain” have exponentially increased, we may be entering the peak of the hype cycle for blockchain and distributed ledger technology.
But here’s the thing: the blockchain is a major breakthrough. That’s because its decentralized approach to verifying changes in important information addresses the centuries-old problem of trust, a social resource that is all too often in short supply, especially amid the current era’s rampant concerns over the security of valuable data. It turns out that fixing that can be a boon for financial inclusion and other basic services delivery, helping to achieve the global objectives laid out in the Sustainable Development Goals (SDGs).
Sorting out hype from reality may depend on how well we identify where institutions that have until now played a role in mediating trust between people are falling short, especially in the key area of money. Deploying the blockchain in those settings to generate secure, decentralized trust could achieve great strides in inclusion and innovation.
What do we mean by decentralized trust? The concept is unfamiliar in part because its converse -- centralized trust – is something that we often take for granted, at least while it’s working. But if we look at the history of transactions since the early barter systems to modern-day digital money exchanges, we can see how different trust protocols for keeping track of our exchanges of value have evolved and how, in each case, centralizing trust within particular institutions has periodically caused problems.
As strategies for dealing with this challenge evolved and as the complexity and frequency of transactions grew, different trust bearers emerged. We went from relying on the memory and discretion of tribal leaders, to central governments issuing currencies in the form of precious metals, to commercial banks acting as trusted intermediaries and issuing their own bank notes, to central banks managing a hybrid system in which sovereign fiat banknotes circulate alongside a debt/credit form of money managed by regulated banks and internal ledgers.
In addition, development professionals must become knowledgeable about the reality of the communities in which they work to avoid designing implementation plans that don’t always work out as intended. For example, we have all heard the stories of cook stoves or toilets that are introduced into communities, but are used as storage objects. This attention to personal, political, and social factors affecting project design and implementation is precisely what the Collaborative Leadership for Development Program helps operational teams achieve and maintain, to get desired results.
In the 2015 World Development Report on Mind, Society, and Behavior, the World Bank identifies three kinds of thinking we all do by reflex.
- Thinking automatically, rather than carefully and deliberatively – we typically do not bring our full analytical prowess to bear on the issues and experiences of our daily lives;
- Thinking socially, or in ways that are related to how others around us think – the influence of peer-pressure on our thought process is an example; and
- Thinking with mental models generated by societal norms and the culture in which we live that tacitly influence how we perceive and think about our world.
These ways of thinking, research suggests, are implicit and fundamental and they shape human behavior, including interpersonal and collective interactions and decision making. This insight has enormous implications for our development work. If we do not account for and bring to the surface such social, cultural, and psychological realities in the design and implementation of projects, we can expect to be setting ourselves up for failure. Most challenges today are a complex mix of technical problems and behavioral or adaptive challenges.
Rania Anderson talks about her book Undeterred, The Six Success Habits of Women in Emerging Economies. Rania walks us through the habits.
- to be undeterred, not to give up in the face of obstacles;
- to prepare yourself with your confidence and courage, and externally through the skills;
- to be focus, having goals and plans;
- work and life integration;
- accelerate, taking the actions that propel you forward and advance and
- lead, from wherever you are and whatever you do.
For the book, Rania interviewed ordinary woman who in normal environments and circumstances are being successful. She purposefully wanted to showcase women from emerging economies who have overcome the challenges around them to build successful ideas. Rania wanted to share her findings and the ideas that apply for women in developing countries.
The International Labour Organization estimates that 73.4 million people aged 15-24 do not have a job (43% of global youth), and three times as many young people are underemployed. At the same time, 40% of employers report skills shortage for entry level vacancies, according to McKinsey (Social Initiative 2015). Hence, skill gaps have become an issue to both employers and the unemployed. This trend is exacerbated by technological advancements which are rapidly replacing manual jobs, leaving millions of young people unprepared to participate in the 21st-century knowledge economy.
Three aspects of the skills gap problem need to be addressed in order to find a sustainable solution: urgency, proficiency in technology, and job market readiness. The 2016 World Development Report finds that returns to education are particularly high for ICT-intensive occupations. The wage premium for working in ICT-intensive occupations is around 5% for both men and women in developing countries (WDR 2016). This suggests a tremendous potential of technology education for reducing poverty and boosting prosperity in the developing world.
Susan McPherson is one of those inspiring women working at the wonderful intersection of business and social impact. Susan explains why storytelling is fundamental for success, in the business and nonprofit worlds.
Susan believes in the power of information and knowledge to drive more positive change in the world. Susan and I talk extensively about the power of storytelling for successful communication campaigns. And she gives important tools to effectively implement communication strategies for nonprofits and social entrepreneurs. Susan develops the fundamental communications advice: make it simple, shareable, and fill with empathy. And, most importantly, set up goals and measures of success from the very beginning.
Susan also talks about the great things going on in diversity and inclusion, and also the challenges ahead. She thinks that we know what to do to make more young women embrace math and sciences, and that now is time to move to action. Susan says that you “can’t be what you can’t see” and that more funding is needed for women-led tech companies and ventures.
Call it “secular stagnation,” or the disappointing “New Mediocre,” or the baffling “New Normal” – or even the back-from-the-brink “contained depression.” Whatever label you put on today’s chronic economic doldrums, it’s clear that a slow-growth stall is afflicting many nation’s economies – and, seven years into a lackluster recovery from the global financial crisis, some fragile economies seem to be lapsing into another slump.
As policymakers struggle to find a plausible prescription for jump-starting growth, a tug-of-war is under way between techno-utopians and techno-dystopians. It’s a struggle between optimists who foresee a world of abundance thanks to innovations like robot-driven industries, and pessimists who anticipate a cash-deprived world where displaced ex-workers have few or no means of earning an income.
To add a bracing dose of academic rigor to the tech-focused tug-of-war, along comes a data-focused realist who adds a welcome if sobering historical perspective to the debate. Robert J. Gordon, a macroeconomist and economic historian at Northwestern University, takes a longue durée perspective of technology’s impact on growth, wealth and incomes.
Gordon’s blunt-spoken viewpoint has caused a sensation since his newest book, “The Rise and Fall of American Growth,” was launched at this winter’s meetings of the American Economic Association. His analysis injects a new urgency into policymakers’ debates about how (or even whether) today’s growth rate can be strengthened.
When Gordon speaks at the World Bank on Thursday, March 31 – at 11 a.m. in J B1-080, as part of the Macrofiscal Seminar Series – economy-watchers can look forward to hearing some ideas that challenge the orthodoxies of recent macroeconomic thinking. His topic – “Secular Stagnation on the Supply Side: Slow Growth in U. S. Productivity and Potential Output” – seems likely to spark some new thinking among techno-utopians and techo-dystopians alike.
To watch Gordon’s speech live via Webex – at 11 a.m. on Thursday, March 31 – click here. To dial in to listen to the audio, dial (in the United States and Canada) 1-650-479-3207, using the passcode 735 669 472. For those telephoning from outside the United States and Canada, the appropriate numbers can be found on this page.
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