Confident Innovation for All Nations

6 Radical Ideas to Scale Youth Confidence and Innovation Everywhere

Sean Blagsvedt
Jun 20, 2018 · 14 min read

Summary

Scaling confidence and creating innovation ecosystems are key to fighting poverty and creating economic growth and yet many countries retard these goals through their education, telecommunication, import and immigration policies.

This paper thus advocates six paths to improve the bedrock of innovation…

  1. Recognition that progress arises from building on top of the best ideas of others, wherever they may be.
  2. Cheap Mobile Internet and Phones — so everyone can watch and contribute to the best ideas in the world.
  3. Low Import Duties for Tinkerers and Startups — so they can quickly build new products leveraging the world’s best hardware (as well as software).
  4. Compete for International Talent — so the world’s best and brightest come work in your neighborhood.

…and scale youth confidence.

5. Support Youth Clubs and Affinity groups — so that every young child knows she can be the best at something.

6. Share the success stories of disparate communities back to those communities — because our aspirations tend to be limited to people like us.

Babajob’s Story

India is a country of great promise, hope and yet inequity. When I moved to Bangalore from Seattle with Microsoft Research in 2004, I was struck by that inequity viscerally — unlike the States, India does not separate its rich from its poor. They work side-by-side and live next to each other, with slums adjacent to flats whose price per square foot often exceed Manhattan’s.

And this inequity — doled out usually by birth — bugged me. I had built software for 100s of millions of people in Office and Windows and wanted to use my skills to address the unfairness I saw around me.

How to do so came in the form of a research paper by Anirudh Krishna, a Duke public policy professor, who studied 3,000 families in Rajasthan, India and asked why from 1978 to 2002 did some families escape poverty while others descended into it. His findings: Fully ⅓ of the people who were currently poor were not born that way. Poverty was not a stagnant pool with a few percentages of society coming in and out each year, but churning like a leaky bucket being constantly filled. In some regions, 19% of the population escaped poverty but sadly 20% joined the ranks of the poor, given us the misleading conclusion of only a 1% change in the aggregate poverty level.

The reasons for poverty descent and ascent were radically different as well. People usually became poor because of health-care related debt. For example, when a father gets hurt on the job, he must pay to fix himself, often can’t work and his family can no longer feed, cloth or house themselves. The societies that have largely defeated poverty are those that have created effective insurance systems, be they public and/or private. But good health alone is not the reason most families escape poverty.

According to Krishna, income diversification — getting a different job — was among the most common pathways out of poverty (usually acquired on the strength of an individual’s social network). The WorldBank’s “Moving Out of Poverty” corroborated this finding, adding starting a successful business and importantly confidence to the list of key factors for class elevation.

Upon reading Krishna’s work in 2006 at Microsoft, I joked, “If only we had LinkedIn for the village, we could all go home.” Namely, if we could digitize informal sector jobs, seekers and ideally their social networks, we might be able to catalyze the escape from poverty with a digital intervention.

I fell in love with this promise, quit my job at Microsoft tand spent the next 11 years building Babajob.com — with automated voice, mobile web, app, chat and desktop interfaces — to connect aspirational and often non-literate Indian job seekers to better paying jobs.

In that time, we registered over 8.5 million verified applicants and posted jobs from 500,000+ employers. We found that hired job seekers reduced their commute times by 14 minutes per day and earned 20.1% more money. In 2017, we ultimately sold the company to India’s largest classified site, Quikr, creating a combined platform of over 20 million job seekers.

It was an incredible journey and as I look back at Babajob’s story, there are six ideas that I believe governments everywhere should embrace to improve their innovation environments and scale confidence.

1. Progress arises from building on top of the best ideas of others

Babajob — like virtually every idea — was not a new idea, but a new combination of other ideas. Even in 2006, Craigslist in the US had been running a classified job website since 1990s. LinkedIn had shown how to build a social graph on the web. Callback ring-tones — those songs you hear when you call another in India — had 100+ million paying Indian consumers that navigated automated voice menus to choose their favorite song. At Babajob, we just put them together in a new way to help aspiring workers find jobs.

Perhaps the most important skill of the future is seeing interesting innovations happening elsewhere and then adding your small bit on top of those. This is what Uber did by building on top of the Apple AppStore, Google Maps and digital credit card systems to create a $70bn company. It’s also the way that global health works — researchers publish their latest findings in journals, all the other good researchers read and reference them and continue the research forward. (One of Babajob’s founders once belonged to an elite hacker club; each week, every member had to share a new, never-before-seen software exploit or lose their membership. It was a truly incredible system to designed to enhance and share the latest innovations, albeit for somewhat nefarious purposes).

This model of recombining the best innovations of others is as old as innovation itself. Scientists since at least the Enlightenment have shared their research with other scientists, who then built on top of their research. As detailed in Guns, Germs and Steel, Non-Zero: The Logic of Human Destiny, Enlightenment Now and countless other studies, we see evidence of open societies thriving with new ideas and progress while societies that closed themselves off progressing less.

And yet, most governments have not truly thought through all the ways they are limiting the modern world’s best ideas from reaching their populations.

2. Cheap Mobile Phones and Internet

Most fundamentally, most of the world does not have immediate, cheap and ready access to the largest repository of ideas and innovations humanity has ever known — the Internet. Importantly, if you can’t read journals, watch the latest videos, conduct video calls with global colleagues and know the news, how in the world are you supposed to compete and build new world class ideas?

A quick comparison of worldwide data rates is sobering. Leaving aside purchasing power parity, the differences in the data costs by country are staggering. Assuming that most people want to consume 90 minutes a day of rich video content or video calls (about 1GB) on their phone, below is a comparison of the costs of buying the cheapest prepaid 30GB / month data plan I could find in the following countries:

Source: Prices on respective Telecom monthly data plan websites, taken 18 Jun 2018. Data link

As you can see, India’s Jio is 41 times cheaper/GB than South Africa’s CellC and over 117 times cheaper than data rates in the UAE. Given the fundamental, essential nature of the internet (and its necessity for other industries such as mobile payments, online marketplaces, global outsourcing, etc), this difference in pricing is simply crazy from a policy perspective. It’s literally the same, obviously wrong type of policy decision such as letting middle and lower class people get by with terrible roads.

Efforts to charge nothing or zero-rate certain “socially positive” services have not driven down data rates sufficiently either; the fun parts of the internet — like games, entertainment and video calling one’s friend- are vital to build usage and will likely never be zero-rated. Zero-rating also flies in the face of Net Neutrality principles and makes the telco the arbiter of what internet content should be cheap or expensive.

For countries looking to reduce their mobile data rates, there are alternatives:

  • Free Municipal Wifi — which could be incredibly effective and cost efficient in dense, urban slums and townships, though publicly supported WiFi often pits the government directly against telcos and hence are very threatening to them.
  • Direct subsidy of mobile bills (assuming govt wants to support telco profits), ala US Universal Access Fund
  • Invite disruptors — India’s Jio arose in some ways as part of a brotherly feud inside one of India’s most well-connected billionaire families but that rivalry has ultimately resulted in the lowest data rates in the world with all other carriers forced to match their pricing.
  • Shame — it’s time for public shaming of telcos — and their enabling government regulators — that charge data rates that are orders of magnitude above global competitors.

3. Low Import Duties for Tinkerers and Startups

Software is eating the world and that world is going open source. The question is why. Software and information — unlike physical products — can be re-used and re-consumed instantly, anywhere and usually with little cost (assuming cheap data costs as discussed above). In my home city of Bangalore, a programmer has instant, usually free access to the very latest software innovations. Using sites like npm, she can immediately incorporate millions of reviewed, high-quality bits of free software packages into her own project, add a few changes and get paid to solve a customer’s problem.

Now compare this process to Indian tinkerers or startups that want to leverage the latest hardware innovations. For example, the Bangalore startup NextDrop builds internet-connected water meters to enable governments and office parks to monitor their water consumption in real-time. They can read about the parts they need on alibaba.com in China, but good luck try to get them delivered to their office tomorrow. Customs officials often have no idea how to categorize the latest small batch technical parts and hence, often assess 50–150% duties (150% being the import duty on foreign zero-emission electric vehicles in a country that has 14 of the 15 most polluted cities in the world). Or parts are simply kept in port at the custom office for weeks or months.

These delays and increased costs put an Indian startup at a tremendous disadvantage to startups in Singapore, the US or Europe where the latest parts can be Fedex’d cheaply from anywhere in a day or two. Every venture creating any new hardware product or widget must go through scores of iterations before discovering what combination of parts can economically work in the market; customs costs and delays massively encumber the speed of those improvement cycles.

The difference in tariff policy can partly explain the very different states of the Indian software vs hardware/manufacturing industries; customs were not levied on “imported”, often open source software and the software and BPO industries thrived while the Indian hardware industry — where every imported component is subject to tariffs and custom delays — lags tremendously behind other Asian countries. Babajob itself could also function and react quickly as a website and service because we consciously made the decision to never have hardware dependencies.

In short, in the desire to protect local dominant industry players — often with the stated intention of nurturing fledgling industries — import tariffs stifle local innovation ecosystems that could be built on top of the world’s newest and most innovative hardware products.

The solution? Enable near zero tariffs and reduce custom delays for individual tinkerers and small businesses. Or like API pricing, explore volume based tariffs, which would be minimal at low volumes but increase once a company bought many of a particular widget.

4. Compete for International Talent

The world’s best talent has always had options regarding where to live. Again, history is full of rich, open cities and countries that made immigration easy and attracted the world’s best and brightest. The UAE and historically the US are example countries whose national identities were created as great places for foreigners to come and build better lives. Specifically in Emerging Market countries, immigration is often tremendously difficult, especially for foreigners who want to try to solve a local problem but may not have family or business ties to the country. There are often provisions that make getting a visa easier for directors or investors of a private company, but foreign employees often spend weeks every year waiting at government offices and exiting and re-entering the country to satisfy visa requirements.

Top-ranked universities are brimming with students who want to do meaningful work in social enterprises but the immigration policies of most Emerging Market countries make hiring short-term students as employees tremendously difficult. At Babajob, hiring a foreign research student from Yale or Brown was hard, even when they came with their own funding, because of government quotas on the number of foreign workers the company was allowed to employ and minimum limits on their salaries. Often when they arrived, the students then have to take off 3–5 days of work to visit various registration authorities across India.

Other countries are innovating here. Chile is among the most generous nations to foreign startups; Startup Chile is a incubation program that gives $14,000 grants to the best startups — regardless of where they are from — if they base their company in Chile. Company registration, getting office space and provisioning of a bank account take just a few days after arrival. France’s “Make the Planet Great Again” initiative also gives incentives and eased immigration hassles from companies and students who focus on climate change innovations.

These programs create cosmopolitan, global communities. They allow local people to contribute to and learn from immigrant-run businesses and show that the best run and innovative businesses in the world can be operated at home.

Scaling Confidence

But if we are to tackle poverty in additional to enhancing innovation, we need to scale confidence. Confidence is among the most important factors for success and yet, we do not think of it as an attribute and skill to be cultivated in our school systems.

It’s also delicate. Malcolm Galdwell explores confidence at length in the Outliers, the story and patterns of the many of the world’s most successful people. He details ideas such as the need for putting in 10,000 hours to master a skill and discusses the role of confidence in creating success. In particular, he notes that over 90% of Canada’s hockey players are born in January. Why? Because January 1 is the cut-off date for 6-year-old children to enter youth hockey clubs and hence the kids born in January have a distinct mental and physical advantage over their peers (because they are physically much larger, more developed and smarter) that plays out in their confidence in hockey. In short, children need to feel they are better than their peers to feel confident in a skill before they then put in the hours required to be great at it.

This phenomenon manifests negatively in later years among high-achieving students who enter science programs at elite colleges. As Gladwell discusses in David and Goliath, many students who enter these schools interested in science programs drop out. Now remember these are all kids who were usually the best in their town’s high school at math, science and most other subjects but when they enter an elite college, suddenly their peer group is the best in the country at math and science. Obviously, half of the students who were used to being at the top of their class are now below average and that confidence hit shakes them so badly that most end up studying something else.

And so the challenge is how do policy makers create systems such that everyone feels they can be great at something. Most educational systems do the opposite of this. In India, most 12th grade students take a standardized college entrance exam and the top students (“toppers”) are recognized in newspapers and given access to the nation’s premier universities — the IITs. The problem lies in the fact that virtually every 12th pass graduate is NOT a topper but there exist few opportunities to shine in alternative hierarchies.

5. Support Youth Clubs and Affinity Groups

Germany has a very different and old tradition that appears to scale confidence. In Germany, most towns — even small ones — have a variety of affinity clubs such as mountain climbing clubs, book clubs, chess clubs, riding clubs, etc. At a young age, children are encouraged to find one or two clubs they really like. They enter as novices and are taught by the older kids, but with each passing year, the best (and oldest) kids in the club graduate out to university. With time, the younger ones improve their skills and end up mentoring the new, younger kids. Over the years, everyone learns they can indeed learn a new skill, teach it to others and become the best at something they really like in their community.

The lesson to other countries seems clear; in additional to supporting traditional education, also support sports, drama, women’s and many different local youth community groups so that everyone can realize they can learn a new skill, even if that’s not how everyone is ranked in school.

6. Share the Success Stories of Disparate Communities back to those Communities

Finally, confidence and belief that a new path in one’s life is even possible is often limited by our social networks. As Anirudh Krishna discusses in the Broken Ladder, youth who exit poverty often have a mentor intervention sometime in their formative years that pushes them to study, connects them to financial aid or exemplifies a novel professional direction. In particular, people tend to only dream as big as the people they know. For example, if everyone in my family and village works in farming, then it’s incredibly likely that I too will choose to work in farming, but if there is one person from my community who becomes a teacher or works in an international call center, then suddenly the scope of what I can realistically hope to become significantly broadens; I believe a dream is possible for someone like me because someone like me achieved it.

DigitalGreen video-recording farmers.

The Indian NGO, DigitalGreen extends this principle to encourage rural farmers to share and adopt better practices with their communities. Their core insight is the local testimonial, where farmers who successfully tried a new farming technique are video-recorded as the teachers and advocates to other nearby farmers growing the same crops. They’ve shown that the messenger is of paramount importance and farmers are 4 times more likely to try a new farming practice with Digital Green’s peer advocacy than traditional experts who come from the capital and encourage a new technique. Seeing someone like them risk their livelihood to try something new and succeed gives other farmers the courage to try as well.

Hence, governments should amplify the success stories in many, disparate sub-communities so that people see how they too can realistically dream bigger and have the confidence to succeed.

Conclusion

The modern, mobile connected world is incredibly exciting with numerous opportunities for every nation to create innovation and help everyone, especially the poorest among us. I’m tremendously passionate about ways we can all help achieve this vision. If you’re interested in talking, look me up at sean@blagsvedt.com or blagsvedt.com.

Cheers,

Sean Blagsvedt

Sean Blagsvedt

Written by

Head, Int’l Growth at MarcoPolo.me. Founder of http://babajob.com. Dad. Believer in Tech for Good.

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