How entrepreneurs can help developing countries hard hit by climate change – Georgina Campbell Flatter

Georgina Campbell Flatter, Executive Director at MIT Legatum Center, Senior Lecturer in Technological Innovation, Entrepreneurship, and Strategic Management

From Entrepreneur

Discussions around climate change solutions regained steam last November when a federal report indicated the negative impacts on public safety and the economy are now being felt across the United States. Even if governments are able to implement policies that reduce carbon emissions and mitigate this trend over the long term, countries must build resilience now for increasingly extreme weather events, shifting energy demands and new challenges for industries like insurance, tourism and agriculture.

In terms of both economic losses and human casualties, climate change affects developing countries most acutely because they lack the infrastructure and resources that help richer countries endure. Consider, for instance, that from 1997 to 2016, extreme weather events like flash floods killed more than half a million people, and of the 10 countries hit hardest, nine were in the developing world. Technologies like radar, satellites and weather stations are expensive to implement, so large swaths of the world still lack access to modern weather data. The result is that the world’s most weather-sensitive communities also have the lowest quality weather information, a disparity which climate change will only exacerbate.

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Why entrepreneurs in the developing world need new funding models – Fiona Murray

MIT Sloan Associate Dean for Innovation Fiona Murray

MIT Sloan Associate Dean for Innovation Fiona Murray

From City A.M.

Increasingly, it is innovation-driven entrepreneurs who are providing effective and scalable solutions rather than aid agencies or governments.

Traditionally, the focus of entrepreneurship in the developing world has been on creating small- and medium-sized enterprises serving local markets. However, that emphasis must shift from small firms to what MIT calls innovation-driven enterprises: start-ups that can scale for significant impact.

Building an innovation-driven enterprise is full of challenges for any entrepreneurial team. They must find an appropriate beachhead market, prototype and pilot, and recruit and retain top talent. They also require specialised entrepreneurial finance at each stage.

For development entrepreneurs, access to appropriate types of capital is a significant constraint.

Their challenges are not just about the limited availability of institutionalised venture capital, but to the full range of “risk capital” options, from initial financing by friends and family and angel investors to VCs, private equity and commercial banking. The creation of a pipeline of financial instruments is a critical bottleneck.

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M-PESA: Kenya’s fast-growing mobile payment system

MIT Sloan Asst. Prof. Tavneet Suri

I grew up in Nairobi, Kenya, and so my research on M-PESA, the cell phone-based payment system that has spread like wildfire across the country, strikes a deeply personal chord. Most of my research on this has been in collaboration with William (Billy) Jack at Georgetown who lived in Kenya himself for a few years. We both experienced the frustrations of what in the US would be the simplest of money transactions, and felt that M-PESA could fulfill a need of many Kenyans.

In practice, the adoption of M-PESA has been faster than we, and most other observers, had anticipated. In four short years it has been widely embraced by Kenyans, and has already had a big impact on the lives of people I’ve known for years. I did my dissertation on the adoption of farming technologies in Africa, and it’s still a subject that interests me a great deal. I’ve looked at the implementation of seed technologies in Kenya, and the diffusion of improved coffee farming practices in Rwanda. It often takes decades for these kinds of technologies to fully penetrate a population.

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