US News and World Reports recently released its list of the best 10 countries for entrepreneurs in 2018. In addition to developed nations, like the United States, United Kingdom, Japan, and Germany, a variety of other regions around the globe were represented in the rankings. See the list at this link: https://www.cnbc.com/2018/02/05/us-world-news-report-2018-top-10-best-countries-for-entrepreneurs.htmlutes 

The survey used ten different attributes to evaluate how different countries promote and sponsor entrepreneurship. Although economic factors, such as access to capital, development of infrastructure and skill of the labor force, seemed to be the primary components of the study, the development of the legal framework was also considered in each of the countries. I was encouraged to see that the impact of the law on entrepreneurs was considered by the study as the law has been viewed in many ways as a mechanism that gets in the way of entrepreneurs. Lawyers in traditional law firms are also seen as inefficient and expensive in how they conduct their business, so I think it is important for an entrepreneurial mindset to apply pressure to the legal profession to think more creatively about the intersection of law and business.

 

While watching the Super Bowl I noticed an ad for Stella Artois where if you buy their limited edition chalice they would donate $3 which would be used to provide clean water to someone in a developing country. During the ad, I wondered how the charity worked and whether it was an example of a NGO that initially helped people but when they left the people were worse off. Specifically, I wondered if the NGO used the money to provide well digging services for free that would hurt local well digging and water service companies. However, this does not seem to be the case. I found this article providing more in depth on the organization Water.org. The NGO uses the money to provide people with loans to purchase appropriate water and sanitation for their homes. Interestingly, they found building wells was not an appropriate solution because it is expensive and once the organization leaves the wells become contaminated within a year. This allows the money to pay local infrastructure and jobs in the water services industry instead of crippling the market by offering free services. Additionally, the pay back of the loan allows additional residents to obtain a loan to help with their water infrastructure needs. I think this NGO is the type Poverty Inc. highlighted as positive similar to the bracelets example. This is because it does not devalue the local water service companies while helping families access to funding to meet their water and sanitation needs. The link below does a great job of explaining how the organization works. I would like to hear others opinions on this NGO and whether they believe it is closer to the model the movie recommends.

https://www.npr.org/sections/goatsandsoda/2018/02/02/582664769/fact-checking-matt-damons-clean-water-promise-in-a-super-bowl-ad

 

One of the big issues mentioned by Poverty Inc. was the need for job creation.  A group of social entrepreneurs built this website in order to help solve both that problem and the problem of plastic waste build up–a problem we saw many images of in the film.  Their design is low-cost and enables anyone to start a DIY recycling program which allows the entrepreneur to both break plastic down and to craft it into anything they want (bowls, ladders, etc.).  I think investing in these machines would be a great way to provide people with the means to start their own businesses and become manufacturers.  They could hire other locals to find the plastic, work the machines, and/or sell the goods.

This article discusses China’s 40th anniversary of its transition from a planned to a market economy. In the last few decades, China has risen to a world power and as Trump pursues anti-globalization policies, a distinct opportunity is granted to China.

This is a cool article that talks about SpaceX and the launch of their newest rocket, the Falcon Heavy, the most powerful rocket in the world. The article talks about how SpaceX created a disruption the rocket industry by achieving rocket reusability. SpaceX was able to tailor its initial products to low-end market consumers, by launching commercial satellites and research payloads for NASA. Since, its beginnings SpaceX has continued to drive up market and is now one of the main providers for high-end launch services clients, namely the Department of Defense and United States Air Force. #OccupyMars

 

https://www.huffingtonpost.com/entry/whats-wrong-with-poverty-inc-a-critical-review_us_59c1b313e4b0c3e70e7428cc 

This is a link to an article critiquing “Poverty Inc.” in an academic sense not a normative one. I see it as offering further ideas for exploration.

Like the article mentions, I think the best part of the movie was its informative value. Like mentioned in class, I do not think willing donors should be chastised for development problems. A giving heart is the most important quality for helping developing countries and should be respected. I think in large, the problem lies in lack of understanding: particularly in economics (i.e.: how shipping a subsidized and already cheaper crop into a country with tariff restrictions can destroy a market in an African country). Donators cannot be to blame but at a point those in charge of such organizations after having been told of the troubles by locals should eventually result in different action on their behalf. And if there is no change I think it reasonable to explore why.

The article also discusses an important part of development – financing. The article mentions ways developed countries might work with developing nations in this area. “Working with,” denotes the “partnership,” over “paternalistic” paradigm of development argued for in the film. I don’t see how help can be much other than a partnership if we believe people in developing countries know what they need which I think is the case.

I do not know a whole lot about financing but more about the law as a law student. I think financing issues for middle class business men could potentially be helped by better laws though. If laws were established to promote well-being for the average person in developing countries I could see how finaciers would be more comfortable giving loans to medium sized businesses: small loans impute less risk because of the small amount loaned and large loans are likely to the “well-connected” in those countries whose  risk of default is much lower. The uncertainty for the middle class might be at part to blame for exorbitant and seemingly userous interests rates for the middle-class business.

A way to get better laws for the average person in developing countries,  including the kind promoting middle-level lending might be to tie economic interests of countries willing to lend with interests of the developing countries. This is just the idea of international trade – the blocking off from which was often used describe poverty by the main speakers in the film.

If developing countries received training to produce commodities they have a competitive advantage in – commodities that allow for them to produce that good more efficiently compared to other countries (an example in Africa might be involve use of its vast natural resources) – then in theory developing countries could create an economy. At first it could be based on working its way to production (teaching, building etc.). Then the economy could transition into actual production and engage in international trade. Help from developing countries would be integral in the development stage – the right kind of aid (resources education, medical attention: physical and psychological). Furthermore I believe people in these developing countries are adequately prepared to handle the change to development. This was evidenced in the film and I personally know several people from developing countries in Africa working in incredibly complex professions in the States, such as neuro-surgery). I also don’t know how the guy in the film developed a solar panel with the limited access to high-technical training and the internet. Limited access to both of those things I can only assume is the norm over there.

If developed countries are open to investing in development in these countries and engaging in trade with them, developing countries may experience shifts in resource allocation in different sectors (in the short-term) but in theory, hopefully that problem could be alleviated with sector subsidies or tax deductions and in the long run, with education and training. Also, in the long run, economic theory suggests persons abroad and at home would be better-off because efficiency (cheaper production) and trade which means higher net profit for both countries (all else equal). Of course this situation also assumes some of a commitment to altruism and not playing the economic game in a monopolistic, status-maintaining over adjusting manner. The result of such action could be better laws in developing countries. Investors need the security of laws for their investments and money talks – produces action.

 

 

https://www.forbes.com/sites/tseedward/2016/04/05/the-rise-of-entrepreneurship-in-china/#25665ebd3efc

This article talks about the spur of entrepreneurship in China in the wake of the 1980 Deng Xiaoping economic reforms. Government officials left their careers to pursue entrepreneurial ventures (often at the criticism of those who felt they should stay in the safety of their position) and many were largely successful and have since become industry leaders.

Today, China is 2nd in the world for “unicorns”, non-listed companies that value over $1Bn:

“A unique phenomenon is taking place in China today. While its political system is inherited from a top-down planned economy hierarchy, its leading entrepreneurial companies, especially the younger, more dynamic ones found in the Internet industry, adopt much of their mindset, culture and organizational principles from Silicon Valley. In fact, many are closer to Silicon Valley than they are to Beijing. For these companies, China’s political and economic structure is mixed with Silicon Valley culture, each influencing the other and creating something new. This osmosis is changing China in a way that we have not seen before and would lead China into a new era.”

The Poverty, Inc documentary showcased many methods to combat problems within developing countries, including aid organizations and clothing companies like TOMS.

As the popularity of fast fashion giants (such as H&M and Forever21) increase, people are buying more clothes and also donating clothes after one or two wears. A growing problem is what to do with recycled clothing. Without help from outside sources, a small town in India found their own innovative way to solve the problem and profit from it. In 2000, they began to recycle woolen garments into blankets for about $2 (significantly under market price). The practice blossomed into a $4 billion used clothing trade.

Unfortunately, China realized the success of woolen blanket sales and is now producing the blankets in factories–but not from recycled material. They are offering brand new blankets with a larger color selection. Those that were buying from the Indian town can now buy it brand new from Chinese manufacturers at the same price.

 

The Schumpeter reading brought to mind other readings I had for Law 2.0 regarding the Innovator’s Dilemma. Schumpeter’s “creative destruction” and Clayton Christensen’s “innovator’s dilemma” appear to be closely linked. The innovator’s dilemma suggests that the relationship of value and innovation is an S-curve. Thus, large incumbent firms that are far along in the product development iteration process struggle to catch up with smaller, more nimble, start up companies that have targeted a different customer base and are reaching the peak of their iterative value. Essentially, large companies lose their edge and smaller companies can come along and disrupt their stranglehold on the market (see Kodak example).

This article discusses how Facebook is currently facing the innovator’s dilemma. The main point is that Facebook cannot wait around and do nothing about the drawbacks to its platform. “For all its vaunted lock-in, if someone can deliver a version of social media that satisfies the market’s needs better than Facebook without its drawbacks, it will supplant Facebook as quickly as Facebook supplanted MySpace.” For now, it appears that Mark Zuckerberg is taking the need to continue innovating very seriously.

Poverty Inc. gave me a completely different perspective about the results of the work done by aid organizations. Also, I agree with Professor Laura when she says that the approach taken by some of those organizations towards indigenous communities can be negatively paternalistic.

Being from Brazil, I have seen that most people usually stand that indigenous people should be kept apart from the rest of society, in order that they can keep their own costumes (like in this article). It is true that the indigenous people have suffered a lot during the colonization period and continue to suffer from the lack of protection of their reserves.

However, I have not seen yet a public policy designed to offer the indigenous people the opportunity to integrate the rest of society in a way that they can keep their culture and also  benefits from the goods of a modern society, such as better health care treatments. Searching the internet about the topic, I realized that Australia and Canada have taken a different way to deal with their indigenous community, promoting opportunities to indigenous become entrepreneurs. I even found this organization in Canada, which goal is to improve the quality of work with indigenous people.