we want to change the world
Bringing dignity to individuals, communities and nations through meaningful employment sounds like a lofty vision. The question is, how can we achieve this on a massive scale? After years of working in the developing world, we at Newdea discovered a little-known economic model that has had a dramatic effect in creating millions of jobs and getting even more people out of poverty. The following White Paper will explain this model in detail – where it has been successful and how Newdea, with the use of technology and additional methodologies, intends to build on it to speed up economic growth while providing bottom-up accountability. In this note I will introduce some of the key concepts that the White Paper explores in depth.
The Convergence Theory
In the early 1960s, the economist Clark Kerr introduced three theories of economic development that described the developing world. The first theory was the Dependency Theory. In it, countries that rely on aid and loans from the developed world’s governments for survival experience a loss of sovereignty and the reduction of their people to a managed state of poverty and dependency, robbing them of dignity. The second theory, he called the Convergence Theory. Convergence is where countries look to the developed world’s private sector for financing. This paradigm requires countries to converge with the needs of the private sector to attract their investments. Create the right economic environment and business and investors will come. Jobs will be created, tax revenues will increase, new infrastructure will make life easier. The last theory, Kerr called the Divergence Theory. This is where, due to conflict or dictatorship, countries cut themselves off from the developed world. In this case, poverty usually becomes extreme and corruption prevails.
The Perfect Storm
We hear from many doubters about how corrupt leaders in developing countries are and how they will never change. At Newdea, we see things differently. Dependency creates the perfect environment for corruption and short-sightedness. The pressure for leaders to change is becoming very loud. This pressure is caused by four major trends:
1) Media reports are beginning to question the conventional, decades-old approach to aid and dependency and, after trillions of dollars of aid and loans, the results are appalling;
2) The debt of the developed world is growing and pressure to reduce foreign aid is now causing aid to plateau;
3) Aid organizations are being pressured to show better private sector solutions;
4) The developing world is young (Africa’s median age is 17.6 years old), has access to social media and sees the world differently – they want jobs, not aid, and are going to the streets and ballot boxes to demand it; and
5) Globalization of business requires new resources of skilled labor, raw materials, and consumer markets; private capital has an estimated $1.3 Trillion to spend in developing markets – but only where the environment is right for business. In the 1960s Singapore, Taiwan, and South Korea were some of the poorest, most corrupt countries in the world.
Their leadership chose to pivot toward convergence and after 35 years these countries caught up to, or surpassed, many of their former aid providers. Today countries/city states such as Rwanda and Dubai are proving that the model still works. We find that many leaders from the developing world have traveled to these countries to explore “how” they did it. As we talk to these leaders we find that they are missing the main point. The key is not to invest in infrastructure, but to create the business environment which encompasses it.
The Newdea Approach
For over a decade, Newdea has been active in over 190 countries providing software to facilitate governments’, business’, charities’, and foundations’ tracking of social impact. The relationships we have built with heads of state, the CEOs of major corporations, and leaders from the social sector have helped us to gain insight from each perspective on a better model for convergence, leaving the company uniquely situated now to help countries pivot from dependency to convergence and begin on the path towards true, sustainable economic freedom.
The Data Component
On top of our international reach and deep experience, we have methodically analyzed countless efforts to provide economic prosperity in these countries. Global trends in big data have become a feature of those analyses, disclosing the specific opportunities for the developing world that driven our investigations into the new possibilities in this area. This work on both the data and development sides of our organization has culminated in Newdea’s new approach: one that melds policy – always that of the government in question – cutting edge technology and user communities to jump-start the convergence process. Our approach is based on the power of big data, its significance as a sovereign resource, and the growth and vast potential of blockchain technology.
At time of writing, several countries from Africa and Eastern Europe are ready to partner with Newdea. We have also secured key partnerships to help scale and implement convergence. One such partnership is with Smart Africa, an organization comprised of 24 African heads of state whose mission is developing and deploying information and communications technology across the African continent with the goal of rapid economic development. The Smart Africa member nations have mandated Smart Africa as their representative with respect to its stated mission. This means that Newdea’s partnership with Smart Africa necessitates the implementation of Newdea’s new initiative across all 24 member nations. These countries alone present over 155 million broadband users who will be mandated to join the constituent platform to receive e-gov services. This number is growing at over 20% per year, providing Newdea the ability to grow its user base, tokens, and revenue model rapidly, and ensuring the success of this project for all stakeholders.
Reinforcing that insurance is the team that is already in place. Newdea is led by management that is both visionary and experienced in developing large-scale companies. The depth of knowledge of these individuals forms a powerful foundation for this innovative culture. Management in turn is strengthened by the support of a strong board with deep roots in international investments and operations. Where contractors are concerned, Newdea has secured contracts with some of the top data scientists, blockchain, and change management experts now working. Our partnership with PwC Africa will assist in implementation on the ground. Rounding out the picture is our skilled and diverse advisory board, bringing together executives from Fortune 100 companies, former government ministers and blockchain industry leaders, as well as experts in social media and crypto. I began this note by posing a question: “How can we, through meaningful employment, bring dignity to individuals, communities and nations on a massive scale?” I conclude it with a reply to that question: Convergence, generated by political will, attuned to local influence, spread by community development, enabled by our support, and facilitated, moved and accelerated by technology. After years of engagement with the developing world which has exposed numberless failed and still failing models for development, and a contemporary climate in which the future of foreign aid shows only precipitous decline, I say to you that convergence, now, is the answer. Troy Stemler