IBM is investing $70 million in building digital, cloud, and cognitive IT skills among youth in Africa in order to support a 21st-century workforce. The initiative, “IBM Digital – Nation Africa,” will provide a cloud-based learning platform offering free skills development programs for up to 25 million African youth over the next five years. The IBM investment is part of their global push to equip the next generation with the skills needed for “New Collar” careers, a term used by IBM to describe non-traditional careers that require sought-after skills in cybersecurity, artificial intelligence, data science, cloud and more, rather than a traditional four-year college degree.

The IBM investment will offer programs ranging from basic IT literacy to advanced IT skills development to enable digital competence and sprout innovation in Africa. The platform is geared to raise overall digital literacy, increase the number of developers able to tap into cognitive engines and enable entrepreneurs to grow businesses around new digital solutions.

The program will run through a free, cloud-based online learning environment delivered on IBM Bluemix and will allow users to learn a wide range of skills, from basic IT literacy to highly sought-after advanced IT skills. Users will even have access to career-oriented topics including programming, cybersecurity and data science. The initiative aims to empower African citizens by giving them the educational tools to design, develop and launch their own digital solutions. The program will run in English and is completely free of charge.

In Africa, just 25% of people have a bank account, but 75% have access to a mobile phone. There is no doubt that technology plays a huge part in Africa’s future development, and that with this much-needed technological revolution will come an influx of job opportunities. Programs such as that from the IBM investment will ensure that the youth of Africa are equipped for such opportunities that are quickly arising.

Mayan Derhy

Photo: Flickr

Zero Hunge
On Dec. 6, 2016, the United Nations Food and Agriculture Organization (FAO) released the first post-Millennium Development Goals (MDGs) report, 2016 Asia and the Pacific Regional Overview of Food Insecurity — Investing in a Zero Hunger Generation. According to the report, although the Asia-Pacific Region met the MDG target of halving the proportion of people suffering from hunger, “the overall rate of progress is less than desired, and there are several countries and sub-regions where the prevalence rates are still very high.”

Sustainable Development Goal (SDGs)

In September of 2015, world leaders adopted the Agenda for Sustainable Development, which features 17 new Sustainable Development Goals (SDGs). The second goal (SDG2) of the agenda reads, “End hunger, achieve food security and improved nutrition and promote sustainable agriculture.” The report warns that progress towards achieving zero hunger has slowed, and must increase in order to reach SDG2’s target by 2030. In addition, the report says fully eliminating the prevalence of undernourishment, as well as reducing other forms of malnutrition across the Asia-Pacific region will be a challenge.

5th Global Forum

The U.N. FAO report was featured at the 5th Global Forum of Leaders for Agricultural Science and Technology (GLAST-2016), a three-day event in December that took place in Hainan, China. The theme of the forum was “Eliminating poverty and hunger through Science and Technology,” and discussions focused on solutions to the challenges facing agricultural development. One of the attendees was FAO Assistant Director-General and Regional Representative for Asia and the Pacific, Kundhavi Kadiresan, who said, “Most countries in this region are spending too little on agricultural research…we will, collectively, need to put our money where our mouths are to ensure we can meet these twin challenges [SDG2].”

Achieving Zero Hunger

According to the report, although economic growth is part of achieving SDG2, it is not nearly enough. Agriculture and food sustainability face resource scarcity and a changing, often unpredictable, climate, and growth in the agricultural sector is much more important. Investing in ways to improve agricultural production in order to enhance food availability is essential. Therefore, these should be the focus of government programs and policies that are intended to increase food and nutrition security.

Kristin Westad

Photo: Flickr

Social Investment Fund Tackles Poverty in Ghana
Ghana is an African country roughly the size of Oregon and home to around 27 million people – approximately seven times the population of Oregon. In Ghana, around 24 percent of people live in poverty as of 2013 estimates, and the country’s 2012-13 Gini index score of 42.3 shows the country has moved away from economic equality since the 2005-06 score of 41.9. With such a disparity, the people of Ghana need a sound plan for moving people out of poverty. Ghana’s Social Investment Fund (SIF) is meant to do just that by investing in people to promote the projects they need most.

SIF works to directly improve the lives of people living in rural and urban poverty in Ghana, particularly women and children through various regional projects. They support economic and social infrastructure by funding irrigation, livestock raising, family planning services, nutrition and vocational and technical education. Some of the non-governmental organizations (NGOs) SIF has worked with include the African Development Bank, the OPEC Fund for International Development (OFID) and the Arab Bank for Economic Development in Africa (BADEA).

The goal of SIF’s work is to put people living in poverty in Ghana in the driver’s seat of poverty reduction, making them “proactive and reactive” partners with “a sense of ownership” in the project.

In order to reach this goal, one of the requirements of the organization’s support includes ensuring donors make a minimal number of interventions in the community, and resources already existent within the community are given priority of use over imports. This policy, similar to import substitution in economics, ensures that when the funding from SIF is no longer there, the people will still have access to the products they need and, just as importantly, the local economy will be stimulated. In addition, the entire community is pushed to be actively involved in an intervention, which helps to build the community’s sense of ownership and empowerment.

To date, since its establishment in 1998, SIF has made over 1000 advances in socio-economic infrastructure and services in areas of education, health, sanitation, roads and income generation. Its microfinance credit schemes have been implemented using NGOs and local banks to grow the revolving fund of one scheme to almost five times the starting amount, reaching 9.34 million Ghanaian cedis (GHC) and 20,000 beneficiaries, 80 percent of them female. In another scheme, 1,583 beneficiaries were lent 3.08 million GHC.

Curiously, while females constituted 89.26 percent of the beneficiaries in this scheme, only 46.3 percent of the funds were disbursed to females. SIF’s website does not offer any reason for this occurrence.

SIF’s current program is the Integrated Rural Development Programme, an OFID and BADEA-funded project targeting infrastructure and agribusiness across several regions of Ghana. The four-year program is projected to benefit around 25,000 low-income households and include targeted funding for socio-economic infrastructure as well as micro-lending and training programs.

Though challenging issues surround poverty, SIF’s strategies have succeeded in raising people out of poverty in Ghana. But funding is not the easiest asset to come by when approaching development issues, and for Ghana to truly succeed on a larger scale than has been seen, it needs steady, programmatic support from the international community, such as is found in USAID programs.

Lucas Woodling

Photo: Flickr

Social Impact Consulting
The world of investment banking, financial services and management consulting has always had a one-dimensional image: profit maximization. Since the 2007 recession, the financial services industry has seen a decline in trust from the public, given the widespread lack of responsibility shown during the mortgage loan crisis.

In response to harsh criticism and a less than ideal image, many of these companies have funneled millions into corporate social responsibility programs that donate to charities, invest in poorer communities and create scholarships for the underprivileged, among other things. In the past few decades, however, a new business sector has begun to emerge: social impact consulting.

According to Statista, the global consulting industry is estimated to be worth more than $250 billion and is still quickly growing as new consulting fields, such as political risk and technology consulting, become more popular. Among these new fields is social impact consulting, which focuses on aiding non-profits and social enterprises. Rather than helping businesses simply make more money, social impact consulting firms help companies by maximizing the good they do for society.

Unlike the average corporate social responsibility program, social impact consulting is a business that makes money. In many ways, corporate social responsibility programs are purely reputation boosters. Many such programs simply donate money or promote internal change. They promise either to limit companies’ ecological footprints or to ensure proper treatment of employees, rather than providing external services to the public. Social impact consulting, on the other hand, makes money from the good it does for the world.

Many independent companies such as The Bridgespan Group and TMI currently exist, and social impact consulting branches can also be found within more well-known consultancies, such as Bain & Company or Deloitte. In many universities, there are even pro-bono student organizations that consult for non-profits and social enterprises.

180 Degree Consulting and Enactus are both student organizations with branches in universities all over the world. They involve thousands of millennials who are “more concerned with fulfillment and purpose than earning a fat paycheck” and provide millions of dollars‘ worth of consulting to both local and international organizations, including The Salvation Army and Kiva.

As social impact consulting continues to grow, the future of non-profits will change for the better. More and more young people are choosing to make careers out of doing social good as they realize that it’s possible to make a decent income doing so. Given these trends, non-profits can expect to optimize their businesses and continue to work for the public good.

Henry Gao

Photo: Flickr

Relief, Investment and Infrastructure: 10 Ways to Stop Poverty
Though there are many ways to combat global inequity, this list of 10 ways to stop poverty addresses several primary concerns, including providing relief, investing in communities, and setting up the infrastructure necessary to further development.

  1. Improve national and international responses to natural disasters. Though just 26 percent of storms take place in lower income countries, these same countries account for 89 percent of storm-related deaths. The World Bank estimates that 26 million people are forced into poverty as a result of natural disasters, each year. Early warning systems, improved building codes and emergency preparedness strategies can save lives and help save $100 million in damages each year.
  2. Address water quality and improve sanitation. The entire workforce in France works 40 billion hours per year — the same number of hours spent just collecting water in sub-Saharan Africa. In addition to the value of work and school time lost to water collection efforts, an adequate supply of clean water is essential for agriculture and basic sanitation.
  3. Address hunger and nutrition. Malnutrition early in life can make children more susceptible to lasting physical and mental disabilities, preventing them from fully participating in the social and economic spheres as adults. The U.N. Development Program (UNDP) aims to end hunger and malnutrition by 2030 through supporting small farmers with land, technology and market access.
  4. Provide access to healthcare. Every day, 16,000 children die from preventable diseases like measles and tuberculosis, and in Sub-Saharan Africa, AIDS is the leading cause of death among teenagers. Healthcare services including immunizations, disease prevention and treatment are essential to UNDP sustainable development goals.
  5. Improve gender equality. Combating gender-based discrimination improves agricultural productivity and school attendance, and leads to increases in income. In the long run, gender equality contributes to the family, community and nation-wide development, and is vital to the effort to stop poverty.
  6. Invest in transportation infrastructure. The availability of transportation is important for access to jobs, education and healthcare. Better transportation infrastructure can also prevent traffic accidents. Worldwide, 90 percent of traffic accidents and resulting fatalities occur in low and middle-income countries, and constitute a larger health risk than malaria or tuberculosis.
  7. Make microfinance options available. Microfinance provides banking services to people with minimal access to such services. Loans, bank accounts, insurance and help with financial literacy may all be offered by microfinance companies. This allows people living in poverty to participate in economic activities like opening businesses. Currently, microfinance is available to only 20 percent of the world’s three billion people living in poverty.
  8. Make education accessible. In many countries, students may not be required to pay tuition, but other costs are still associated with school. The cost of textbooks and transportation, plus the money that children might otherwise earn from working, can all keep children out of school. The benefits of education are huge: Child Fund International says that “Education can be the catalyst needed to pull families and communities out of the cycle of poverty.”
  9. Combat climate change. Life and livelihood are on the line with changing precipitation patterns, rising sea levels, higher temperatures and extreme weather threatening agriculture, food supplies and water quality. UNDP argues that “It is still possible, with the political will and a wide array of technological measures, to limit the increase in global mean temperature to two degrees Celsius above pre-industrial levels. This requires urgent collective action.”
  10. Gather more information. Individual communities’ development goals must be a part of the effort to stop poverty. To this end, information must be collected regarding the location, necessities and priorities of people living in poverty to correct old or inadequate data and provide meaningful assistance.

Madeline Reding

Photo: Flickr

Investing in Developing Countries
While some view developing countries as hopeless, others see in them the potential for investment. Despite their struggles, many developing countries are growing at faster rates than wealthy and middle-income countries as their working age populations increase and larger shares of people gain access to education. Below are five American companies that are investing in developing countries.

  1. Amazon
    In June 2016, Amazon’s CEO Jeff Bezos pledged that Amazon would up its planned direct investment in India from $3 billion to $5 billion. Amazon has already built 21 fulfillment centers and has employed large numbers of Indians in positions ranging from courier to researcher and developer. According to Bezos, India is Amazon’s fastest growing market.
  2. Enviro Board
    Enviro Board is a New Jersey-based company that specializes in producing cheap and environmentally friendly panels, “e-boards,” that can be used to construct houses. In 2014, Enviro Board agreed to launch a joint venture with a local Zambian corporation, Africapaciti Investment Group. The agreement involved building over 6,000 houses a year and re-investing a significant portion of the profits into worthy causes.
  3. Cummins
    Cummins is an American manufacturer of power generation equipment. Since 1962, it has been present in India via a joint venture, and today it employs almost 10,000 workers there. It also has a broad footprint in Africa, with representation in 51 out of 54 African countries. It has supported technical education and gender equality in Africa as well.
  4. IBM
    In 2012, IBM set up a global research lab in Nairobi, Kenya. The lab’s researchers focus on finding solutions to the challenges Africa faces, particularly those relating to education, human capital development and sanitation. In 2015, IBM Research Africa added a South African branch through collaboration with a local university. The researchers there are making use of Watson, IBM’s signature cognitive computing system, as they address the continent’s major issues.
  5. Coca-Cola
    Reduced to being one of the poorest countries in Asia by decades of autarkic military rule, Myanmar has courted foreign aid aggressively since it began to open up to the outside world in 2011. In 2012, Coca-Cola entered Myanmar after a 60-year hiatus by opening a new bottling plant there. The plant put the cap on an ambitious plan for $200 million in direct investment in the country over five years.

Whether it be through research and development, direct investment in production facilities or support for training programs, American companies investing in developing countries can help improve people’s lives. As potential consumers, people living in developing countries may also become major assets to the American economy in the future.

Jonathan Hall-Eastman

Photo: Flickr

Combating Poverty in Haiti

When the 2010 Earthquake left 1 million Haitians homeless and more than 600,000 injured or killed, the international community responded en masse. That response has continued over the years, as the effects of the earthquake continue to compound the preexisting battle with combating poverty in Haiti.

As that response evolves, many aid sources are focusing on entrepreneurial aid which produces business. Micro-loans for mobilizing small-scale chicken farms are one example of the business-aid model in action that exists to combat poverty in Haiti.

KORE Foundation supports impoverished Haitians by doing just that. Their investments enable families to establish chicken farms, with the generated business often increasing their annual income by 400 percent or more.

When these families are then able to repay the initial loan, the funds are reinvested in other Haitian families. In keeping with the foundation’s mission of going “beyond relief,” this model is combating poverty in Haiti by funding self-sufficiency. In addition, it keeps relief funds at work by promoting a cycle of reinvesting dollars into the community.

Supporting small-scale chicken farmers does more than allow Haitians to provide for their families as entrepreneurs. In a country where two-thirds of children are malnourished, the increased availability of poultry and eggs represents an invaluable source of dietary protein.

Organizations active in offering micro-loan aid in Haiti often provide business skills training as well, like the partnership between Love a Child and Open Hand. The duo provides micro-loans to other Haitian business owners interested in economic growth.

Through financial mentorship, the organization provides recipients management skills as they grow their businesses and repay their loans. These micro-loans support the average Haitian who would not otherwise qualify for bank loans, preventing them from having to turn to micro-loans that charge interest rates approaching 40 percent.

Combating poverty in Haiti represents no small task. As the poorest country in the Western Hemisphere, the need for investment in families’ ability to generate a stable income is dire. With 78 percent of the country’s inhabitants living on only $2 per day, generating sufficient income is an everyday difficulty. Two-thirds of the country’s labor force hold informal jobs, making stability an important goal for aspiring business owners.

In the six years following the earthquake in Haiti, many members of the international community have questioned how to offer effective humanitarian aid. Among the largest concerns are the well-meant actions (like rebuilding local schools and offering free health services) out-competing local laborers and unknowingly robbing these locals of an income.

Organizations offering micro-loans for sustainable business like chicken farming seek to circumvent these concerns. Investment in self-sufficiency enables local laborers and thus an entire community.

Charlotte Bellomy

Photo: Flickr

Husk Power Systems Fostering sustainability is at the forefront of the world development agenda. For a long time, corporations have taken part in facilitating sustainable development by engaging in corporate social responsibility (CSR) initiatives. The companies are, however, faced with an ocean of need when it comes to fulfilling their societal obligations and they often find that CSR cannot adequately rise up to meet these challenges.

Corporations have now realized that they can yield social, financial and strategic returns by investing in inclusive entrepreneurial ventures targeted at individuals at the base of the pyramid (BoP) in what is known as corporate impact venturing.

The largest problem that social entrepreneurs face is accessing adequate financing to enable them to develop and grow their businesses. Traditional financial models such as donations and grants often serve to stultify their development. Most start-ups also lack managerial and business expertise and adequate scalability.

Corporations, on the other hand, lack insight on low-income markets. They often have rigid and bureaucratic structures in place, expect high returns on investment and are generally risk-averse. These are all qualities that make it difficult for them to invest in BoP Markets.

Corporations and social entrepreneurs are quickly realizing that numerous benefits can be realized from working together.

When a corporation invests in a social business, it gains a foothold in low-income markets and increases its brand visibility with BoP individuals. In addition, it acquires valuable market insights and is able to gain access to top local talent. Inclusive businesses gain much-needed capital, scalability and business acumen required to firmly establish their enterprises.

A report by Endeva highlights the three different models that are currently being utilized by corporations engaged in corporate impact venturing: direct investments, third-party funds and self-managed funds.

Direct investments involve organizations funding inclusive businesses from primary accounts, with the investment amount being listed on the company’s annual balance sheet. Self-managed funds involve corporations setting up separate investment companies, while corporates that use the third party method for corporate impact venturing are limited partners in third party funds such as venture philanthropy funds.

This alliance of convenience is not only a win-win for both corporates and inclusive businesses. The biggest beneficiaries are the low-income earners to whom the products and services are geared.

Husk Power Systems is an innovative, inclusive business that was founded by Gyanesh Pandey, Manoj Sinha, Ratnesh Yadav and Charles Ransler in the Indian State of Bihar. The organization provides off-grid energy solutions for people living in rural areas in India and East Africa. They do this by designing, installing and operating small power plants that convert agricultural waste into electricity.

The venture has managed to install more than 80 mini-power plants which provide energy to over 200,000 people in 300 villages in India and 6 villages in Uganda and Tanzania.

The growth that Husk Power Systems has achieved since its inception has been fueled by its strategic partnership with the Shell Foundation. The foundation has provided the start-up with funding, recruitment supervision and research and development guidance.

The Shell Foundation was founded in 2000 by the multinational corporation Royal Dutch Shell as part of its sustainability strategy to deliver environmental and social impact.

“At a time when many companies report that they are stuck on their ascent to sustainability, engaging in venturing through impact investing is a powerful opportunity to achieve results of consequence for both business and society,” says Dr. Maximillian Martin, the founder of Impact Economy. “Companies can become profit-making shapers in a changing world—rendering their businesses future proof while delivering positive impact.”

– June Samo

Sources: Business Fights Poverty, HBR, Husk Power Systems, Impact Economy, Shell Foundation, The Guardian, The Practitioner Hub 1, The Practitioner Hub 2
Photo: Flickr

Millennium Challenge Corporation
The Millennium Challenge Corporation (MCC) is seeking approval from Congress to expand its operations over the coming years via the Millennium Compacts for Regional Economic Integration (M-CORE) Act.

In a recent testimony before the Senate Foreign Relations Committee, MCC CEO Dana Hyde argued that the organization would be more effective if given the authority to make regional investments, in addition to the single-country investments it is currently authorized to make.

“By making coordinated regional investments across multiple eligible countries, MCC can help countries work together to build and grow regional markets…and help generate new business and market opportunities for U.S. and other companies,” Hyde said.

The MCC has a singular mandate: reduce poverty through economic growth. The organization does this by initiating joint public-private investment projects in countries working toward democratic governance, open markets and human development.

Since its creation in 2004 by President Bush, the Millennium Challenge Corporation has committed $10 billion in over 58 projects in 25 countries. Around 70 percent of this investment has gone into infrastructure projects like highways and ports and an increasing percentage is being invested in energy.

The organization is currently only allowed to initiate projects within single countries, which, according to Hyde and other experts, is an impractical development strategy.

According to Hyde, countries cannot develop economically if they are unable to trade with their neighbors. Regional projects like cross-border highways and railways could make a bigger impact – especially among groups of small states.

“It’s easy to think about how regional engagement might be beneficial in the context of electricity,” said Center for Global Development President Dr. Nancy Birdsall. “The logic of a shared grid across borders is clear. To work, countries involved need to commit to a strong regulatory and financial structure outside the auspices of a single government for power trading and pricing.

However, initiating projects across multiple countries also poses a number of challenges. One such challenge occurs because neighboring countries are often not at the same level of development. For example, if the MCC wanted to begin a project across two countries, one may meet the required indicators for open governance and human development while the other might not.

The organization currently bridges this gap by undertaking threshold programs designed to assist near-eligible countries to become ready for investment.

Now, it wants the additional authority to conduct threshold programs at the same time it begins investment projects – meaning countries can begin projects before they are fully eligible to do so.

It may seem counter to MCC’s mandate, but Hyde argued that it is a necessary.

In her testimony, Hyde said the Millennium Challenge Corporation has a proven record of implementing successful country projects and is well equipped to take on the challenges of regional investments without straying from its mandate.

Ron Minard

Sources: American Progress, 1, 2, MCC
Photo: Wikipedia

Many Americans are wary about investing in emerging markets simply because they do not know how international investments help the U.S. economy as well as the developing world. Below is a list of the top three ways that global investments can positively influence the United States and beyond.

Job Creation
According to a study by the U.S. Chamber of Commerce, American companies that invest overseas create a greater number of higher paying jobs within the United States than those that only invest domestically.

These jobs tend to be high-skilled and provide financial stability for American citizens. U.S. exports to Africa reached a record-high of over $50 billion in 2013, supporting 250,000 U.S. jobs.

During the 2008-09 financial crisis, 50 percent of global growth came from economic progress of emerging markets in developing countries.

The World Bank invested $3 billion in international labor programs and social protection in order to improve employment rates that year. In fact, 172 different cooperatives were able to offer jobs to those in the developing world throughout 85 different countries.

New Markets and Consumers
According to the U.S. Global Leadership Coalition (USGLC), 1 out of every 5 American jobs is export-based, with half of our exports going to developing nations. Once a company invests overseas, that nation’s economy strengthens, which leads to new markets for those in the developing world to participate in as consumers.

Since 95 percent of potential consumers live overseas, Americans should return investments so that those in the developing world have the chance to become more than just consumers, but also small business owners and professionals who will be able to invest in different American markets.

This growth in consumers will lead to larger sales figures, boosting markets back at home. Jim Yong Kim, President of the World Bank Group, explains how investing in the quality of life overseas is possible.

He writes, “We need to find economic growth strategies that will help all segments of society in emerging markets – reaching even fragile states striving to put years of conflict behind them and create good jobs for the people.”

Poverty Solutions
Investing in the emerging markets of developing countries offers social solutions to the world’s poor who are struggling to survive due to limited access to food and water – two basic human needs.

One can look at the experience of Salman Khan, a former hedge fund analyst turned teacher who created the One Acre Fund in order to serve farming families in Eastern Africa, as an example of such social change can be made through foreign aid.

Over 203,000 farm families were helped just last year in sustainable cropping techniques and food supply. Not only does this program create jobs for farmers living in these regions, but the profits also allow for consumer activity within the American market.

In 2013, Kenya’s One Acre Fund resulted in a 70 percent increase in farm income; Burundi’s fund wasn’t far behind with a 65 percent income growth.

These farmers represent the base of the framework of One Acre’s model to success. Once farmers are able to support themselves financially, they have the opportunity to invest more valuable assets via the American market.

Investments overseas lead to more jobs in America and in the developing world. These jobs allow for new products and markets to emerge, creating a larger customer base. To maintain that these jobs and markets positively affect the economy, the developing world needs to be provided the tools to succeed as consumers.

Kelsey Lay

Sources: One Acre Fund, Social Impact Investment Taskforce, The White House, The World Bank, U.S. Chamber of Commerce, U.S. Global Leadership Coalition
Photo: Forbes