Around the turn of the 20th century, the world was abuzz with dreams of manned flight. Inventors like Alexander Graham Bell, Alberto Santos-Dumont, and even Thomas Edison were among those tinkering with the idea, and dozens more had joined in a hotly contested race to build the world’s first manned flying machine.
One of the favorites to win this race was notable astronomer, physicist, and inventor Samuel Pierpont Langley, who served as the Secretary of the Smithsonian Institution. With the backing of the United States Congress, Langley spent more than $50,000 (about $1.4 million today) on his efforts. Langley believed that if he could figure out how to generate enough power, he could shoot a plane into the air, causing it to fly like an arrow flung from a bow. However, each time he tried to propel his aircraft across the Potomac River, his catapult-like mechanism put too much stress on the lightweight aircraft and caused it to break apart and plummet into the water.
Langley was so convinced that power was the key challenge to overcome that he neglected to consider whether there were other obstacles in his way. In contrast, Orville and Wilbur Wright, without a high school diploma between them, approached manned flight from a completely different angle. Both bicycle enthusiasts, they wondered whether balance—in relation to both lift and drag—was as critical to flight as it was to bicycles.
Their question turned out to be the right one. No matter how powerfully an aircraft is thrust into the air, if it isn’t balanced it won’t fly. After spending just one fiftieth of Langley’s budget, the Wright brothers made and documented the first successful controlled manned flight on December 17, 1903. The key was asking the right questions and reframing the problem.
Much like Langley’s propulsion-based attempts at flight, many modern attempts to fight poverty have been unfortunately ineffective due to a misdiagnosis of the problem. Among the most visible outcomes of poverty is the lack of adequate infrastructure, food, shelter, and other key resources, so in response, the development community has attempted to reduce poverty by injecting trillions of dollars in official development assistance over the last several decades.
However, many of the poorest countries from several decades ago remain poor today, and at least 20 countries are poorer now than before. In fact, fewer than 1% of people cite anti-poverty programs as the reason they escaped poverty. Despite this, many still believe the answer to eradicating poverty lies in devoting more resources to the cause.
What if, like Orville and Wilbur Wright, more economic development practitioners reframed the problem?
Just like balance proved to be the critical missing link in achieving flight, our research suggests a similarly counterintuitive approach to solving poverty. Rather than work to alleviate poverty by addressing its symptoms (primarily a lack of resources) we’ve discovered that the creation of new markets is pivotal to building and sustaining prosperity in low- and middle-income countries.
To that end, entrepreneurs and innovators can create new markets by transforming previously expensive, inaccessible products into ones that are simple and affordable, thus allowing new populations of people to begin consuming them for the first time. These market-creating innovations kick off a virtuous cycle of development that creates new profits and jobs in the communities that need them most. It’s what happened when Henry Ford made cars affordable for average Americans, or Mo Ibrahim created an affordable, accessible mobile phone service for Africans. We’ve uncovered hundreds more examples throughout time and across the globe. Market-creating innovations have been a key causal mechanism in the creation of prosperity in many of today’s wealthy countries, and they offer an effective path forward for others to follow in their footsteps.
After the Wright brothers’ initial success, they continued to iterate and create better planes as they learned. By asking the right questions, they enabled the creation not just of one plane, but an entire aviation industry that spans the globe today. Similarly, ending poverty won’t occur in a day, but reframing the problem will enable us to dramatically pick up the pace in the race toward global prosperity.
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