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Can Disruptive Innovation Be The Solution for Developing Countries?

By: Caleb Tiam-Lee

September 30, 2021

Over the course of the last century, development and innovation have become the center of human focus. The rise of the internet and social media services have allowed new technologies and products to enter into the marketplace, changing one’s perspective of the ever-globalizing world. 

As current society is more connected than ever, images and stories about certain key issues have flooded the walls of social media, bringing awareness to the inequities present in current society and calling upon people to give aid. Despite numerous efforts, communities in developing nations still struggle with the aftermath of these unfortunate events.

Many of the Typhoon Haiyan (Philippines: Super Typhoon Yolanda) survivors have yet to receive benefits from the government housing program, despite over PHP 11.19 billion in donations received from numerous countries in Asia, Europe, and North America. Though rebuilding efforts have been underway in the city of Tacloban, there is still a long way to go to fully bring back normalcy to this tight-knit community.

With prolonged lengths of rehabilitation hurting all aspects of society despite millions of donations in these efforts, turning to a new concept can help shift the tide for many of these communities and developing nations, to be able to catch up to the rest of the world.

Problems with Donations & Charity Work

A lot of the time, those with money and power believe that handing out cash and their wealth will help eradicate poverty in a certain community. However, most of them do not consider the economic and social implications of their actions in the long-term.

Though donations may temporarily help out people by giving out basic needs or necessities, the effect on the local economy may be detrimental to business owners and aspiring entrepreneurs. Because of the dependency on aid, many start to inhibit self-sufficiency to drive themselves out of their situation. Therefore, the progress of moving out of these problems stagnates, leaving people in the same condition as they started in.

Moreover, a lot of these initiatives have proven to only enhance the economies and wealth of richer countries. In 2012, developed nations profited over USD 2 billion from the charity work that was done in developing societies. Rich in natural resources, corporations in the United Kingdom have been repatriating roughly USD 30 billion from African nations, allowing themselves to profit in the process.

What this means is that these initiatives are not sustainable, and oftentimes are taken advantage of by other nations. If these people truly want to help, developing nations must be helped to legally control foreign investments and apply certain policies to be able to properly manage the money.

The Potential of Disruptive Innovation

With the problems highlighted, exploring a different strategy which involves the transformation of previously thought expensive, sophisticated and complex products to something that is more accessible for the broader population.

Following an innovator’s business model, disruptive innovation challenges current societal worldviews and thinking. Coined by American academic and business consultant Clayton Christensen, it offers a strategic approach to shift a certain market.

Through the use of technology and creativity, the pursuit of radical change in disruptive innovation offers new insights and concepts that depart from past paradigms offer the chance for many developing nations to lift themselves out of the problems that they have been trying to solve.

Instead of a quick fix to a particular problem, solutions offer more long-term sustainability and success, leading to a better society. Over the past thirty years, companies have challenged and broken the current status quo, breaking new barriers along the way in an attempt to change society.

Developing Countries to Superpower Countries

In the past few decades, previously considered countries have risen their way up to the level of world powers the United States and United Kingdom, by implementing a series of changes allowing for innovation to thrive and become the spotlight.

Recognizable brands such as Samsung and Hyundai have come from the tiny-island nations of Korea. Despite the economic and political implications brought about by the end of the World Wars still taking effect, policies on modernization and technology have allowed both countries to become global players and superpowers in the 21st-century. 

Moreover, a strong business environment in Korea has fostered growth in the domestic market, attracting foreign investors into the aforementioned countries. With a ranking of 4th in the world in terms of the overall Ease in Doing Business Index in 2018, this in turn encourages investment and production, which leads to economic growth as well. 

Aside from this, the devotion to technology development and innovation have become the norm for Japan and Korea. With these countries belonging in the top of the rankings in innovation, this is proof that disruptive innovation is the key for success in any country.

What Should We Do?

Many of the problems that we encounter in the world today are a result of society's arrogance to adapt to change. In doing the same things and activities over and over again, society is only prolonging the agony and struggle for the people that are affected by this problem.

In many third-world countries today, a lot of these societies continue to use outdated policies and technologies, which decrease efficiency and output in the country. Moreover, current government structures in these countries are not tuned into technology and innovation at all, rather focusing it’s resources on other aspects of the country that they deem “more important.”

Though all aspects of the economy are important, disruptive innovation and exponential technologies provide an avenue for third-world societies to improve and rise. In the past, we have seen countries such as Singapore and Korea turn into economic powerhouses from the wars that ravaged their society in the 20th century. 

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