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To foster innovation, let a hundred flowers bloom?

Jean-Louis Racine's picture


Helen Mwangi and her solar-powered water pump in Kenya © infoDev/World Bank

Managers of initiatives that support innovative entrepreneurs have a choice to spread their resources (and luck) among many opportunities or focus them on the most promising few. In developing countries, public and donor programs can learn a lot from how private investors pick and back innovative ventures.

In the early days of infoDev’s Climate Technology Program, our thinking was very much about letting a hundred flowers bloom: supporting a large number of firms with the hope that a few would emerge as blockbusters. Firms were selected on the basis of objective metrics tied to the innovative nature of their ideas and their economic, social and climate-change impacts. For example, while infoDev’s partner the Kenya Climate Innovation Center has more than 130 companies in its portfolio, a $50 million venture-capital fund in California would have at most six. Inspired by private investors, we have since rethought our program objectives for these centers, as well as the way we select and support businesses. The Kenya center is going through a rationalization of the firms it supports.

Like many public programs, infoDev and its network of Climate Innovation Centers had good reasons to support large numbers of companies. The main reason is the need to spread the entrepreneurship risk through a diversified portfolio. A recent infoDev literature review found that up to a third of all new firms do not survive beyond two years, let alone grow. Out of those that survive, data from high-income countries suggest that fewer than 10 percent become high-growth firms. So casting a wide net increases the chances of hitting the jackpot. The opposite approach, picking winners, is seen as destined to fail and distort the market. 

Steps to Better Data on E-Trade for Developing Countries

Michael Ferrantino's picture
UNCTAD’s E-Commerce Week took place recently in Geneva, Switzerland. This third E-Commerce Week was the largest ever, with over 900 registered participants, plus walk-ins from the Geneva community. This is nearly triple last year’s attendance. The large turnout reflected the heightened interest of developing countries in e-commerce as a tool for promoting economic growth and opportunity. Highlights of the week included the launch of the online platforms for the multi-stakeholder E-Trade For All initiative  and its private-sector partner Business For E-Trade Development, and a special panel on digital transformation for small businesses and entrepreneurs, featuring Alibaba’s Jack Ma.

Pushing the development boundaries – Morocco’s intangible pathway to inclusive growth

Jean-Pierre Chauffour's picture
 Ermakova Nadezhda | Shutterstock.com

In his 2014 annual address known as the ‘Throne speech’, King Mohammed VI of Morocco focused on the less visible but critical aspects of development such as the quality of institutions, the quality of learning, and the quality of interpersonal relations in society. This speech set wheels in motion that have culminated in the launch of the 2017 Economic Memorandum, entitled Morocco 2040 – Emerging by Investing in Intangible Capital.

Helping Firms Diversify, One Incentive at a Time: the Experience of Nepal

Gonzalo Varela's picture
Policymakers care about export diversification. High product and market concentration increases a country’s vulnerability to external shocks. Sudden closure of export markets triggered by regulatory changes or dramatic changes in international prices, for example, could even threaten macroeconomic stability when export baskets are concentrated.

Measuring Poverty in 60 Minutes

Utz Pape's picture


Designing programs and policies to eliminate extreme poverty and boost the income of the bottom 40% of the world’s population requires reliable data. The data is gathered through using household surveys that typically collect information on consumption and expenditure on a comprehensive set of 300 to 600 items in the household. A list of items includes anything that a household potentially consumes, for example, typical items like maize, milk, and soap, as well as rare items like mustard.

Weekly links May 12: the ‘stans, how publishing might hurt you, list experiment discussion, and more…

David McKenzie's picture

To promote peace and development, let’s talk about government spending on security and criminal justice

Ede Ijjasz-Vasquez's picture
Governments spend a lot of money to contain violence. In 2015, some $1.7 trillion was spent on defense by governments worldwide . While the primary responsibility for the provision of security and justice services lies with governments, those functions may carry a heavy fiscal burden as they often make up significant portions of national budgets. Yet little work has been undertaken on the composition of security sector budgets, or on the processes by which they are planned and managed.

In an effort to address this issue, the World Bank Group and the United Nations embarked on a three-year partnership that led to the publication of a new report titled Securing Development: Public Finance and the Security Sector. It is a sourcebook providing guidance to governments and development practitioners on how to use a tool called “Public Expenditure Review (PER)” adapted to examine the financing of security and criminal justice institutions.


 

Charting a new path to income convergence

Margaret McMillan's picture

Developing countries made considerable gains during the 2000s, resulting in a large reduction in extreme poverty and a significant expansion of the middle class. More recently that progress has slowed—and the prognosis is for more of the same, given an environment of lackluster global trade, a lack of jobs coupled with skills mismatches, greater income inequality, unprecedented population aging in richer countries, and youth bulges in the poorer ones. As a result, developing countries are unlikely to close the development gap anytime soon.

What our government clients think in fragile countries: A perspective from the Country Surveys

Sharon Felzer's picture
The World Bank Spring Meetings have just come to a close with much emphasis placed on the fragile states.  Sessions at the meetings focused on a range of relevant topics including “Financing for Peace” and “Supporting Private Enterprise in Conflict Affected Situations.”  The challenge that the Bank faces in the fragile states is considerable, with donor expectations high for the institution post IDA 18 replenishment.

The World Bank’s Country Survey Program has been surveying key influencers, in nearly all of its client countries systematically, since 2012, in order to assess and track their views over time. These respondents come from a range of stakeholder groups including government, media, private sector, civil society and academia.  The views of respondents from government (i.e., the offices of presidents/prime ministers/ministers/parliamentarians, employees of ministries, including PMUs, and other governmental bodies) are the focus of this blog (and how their views compare to those outside of government), because this group is one that Bank Group interacts with the most in ‘client’ mode.  In a sense, the Country Surveys are really ‘client satisfaction’ surveys when it comes to the thousands of government respondents who participate.


How do these government ‘clients’ think the Bank Group is faring in fragile and conflict states?  How do they perceive our engagement on the ground?  How can the Bank do better? Where is the perceived Bank Group niche, according to those who own the projects and programs that the Bank supports?

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