RE: Development… Why we should stop giving people what we think they need

By:

Jun 28, 2017

A majority of development programs are obsessively focused on providing needs to poor people. Poor people need food. They need water. They need schools. They need clinics. They need infrastructure. They need good governments. They need a lot of things. It is precisely because they don’t have, and perhaps need, these things that they are poor. The development industry, understandably and to their credit, is focused on providing these needs. It has been doing so for over six decades and has spent more than $4.3 trillion in the process. The global development industry is now roughly a $200 billion a year industry, more than twice the size of the global coffee industry. And we drink a lot of coffee.

The industry is filled with experts who are skilled at researching, publishing, and executing projects that fulfil the needs of the poor. Needs such as water wells, schools, mosquito nets, and so on are provided year over year. But many of these needs go unused or are impossible to maintain. And while some progress has been made, many countries that were poor in the 1960s are still poor today. In fact, some are poorer. So, how is it that the poorest and most vulnerable people who so desperately “need” these things voluntarily forgo them when they are provided? The answer lies in understanding the difference between needs and jobs.

The subtle difference between Needs and Jobs

Needs are things that exist independent of time or circumstance, while jobs arise at discrete moments in time based on our present circumstances. To illustrate, we can have both health needs and health-related jobs. We always have the need of being healthy, regardless of our circumstances or the time in our life. We may not want to address that need, but it exists nonetheless, and its consequences will affect everyone equally. Jobs, on the other hand, arise when our present circumstances motivate us to make progress in our lives. For example, the job of “help me alleviate back pain so I can play with my grandkids” arises when the present situation (grandkids) highlights the need to do so. Such a person may have recognized the need to improve their back and their overall physical health, but it wasn’t until the job arose in their life that they felt compelled to act upon that need.

Now, think about this from the context of someone living on less than five dollars a day who decides to spend most of his savings on a seemingly “frivolous” item, such as a television. On the one hand, one might consider that person irresponsible for purchasing a television, thinking, “that person has real needs, such as an education, better health, or a safer home, but is purchasing a television which offers little to no value in the person’s life.” However, when assessed through the “needs versus jobs” lens, the decision begins to make perfect sense. Perhaps a job arose in the person’s life that amplified his desire for a television into a job that would enable the person to make progress. Maybe, and this is not an unrealistic proposition, the person just started a new and very difficult job, and the television is the only source of entertainment in the person’s life. And without the new “frivolous” television, the person might become unproductive at work due to stress. The decisions that many of us make may seem random, but when assessed through the “needs versus jobs” lens, you find that they are quite rational.

How needs get converted or amplified into jobs

The question then becomes, how do we amplify needs, such as education, healthcare, infrastructure, and so on, so that they become jobs in poor countries? Take the very important need—education—as an example. The proliferation of schools in many poor countries is not having the transformational impact that many experts predicted. The schools that are being built lack the adequate resources to be effective. And in the rare circumstances when they are effective, they are producing graduates who are either too poor to continue their schooling, or who cannot find employment.

The reason many of our investments in education, and several other conventional development programs, such as healthcare, infrastructure, and so on, do not yield superior results is because these things are still treated as needs that poor people must have, and not as jobs. Many people, especially in poor countries, go to school because they need to get an education, not because education has any material value in their lives. For example, over the past few decades, Chiapas, the poorest state in Mexico, invested in education, roads, ports, and even credit, but the state still recorded subpar economic performance. The way you convert education from a need into a job is by considering the circumstances that arise in people’s lives where education can help them make progress—like providing gainful employment. And thereafter, designing an education program that helps them do just that.

For example, consider the success of Pohang University of Science of Technology (POSTECH). POSTECH was founded by Park Tae-joon, an entrepreneur who also founded South Korea’s largest steel manufacturing company. Observing that he could import coal and machines but not talent, he led the company to establish POSTECH to provide education in science and technology. The school’s graduates would be absorbed into the fledgling Korean steel industry, as well as other technical industries. Park Tae-joon not only knew that POSCO, and Korea, would need technical graduates, but he also understood that the education at POSTECH would help the average Korean make progress. They wouldn’t only be going to school because it satisfied a societal need. They would be going because it would help them become more successful.

POSTECH produced graduates that went on to work for some of Korea’s most notable companies, such as Samsung, POSCO, and Kia. Today, the school consistently tops domestic and international university rankings and has been rated number one by the London-based Times Higher Education’s “100 Under 50,” a ranking of the top 100 universities under 50 years old.

If the development industry focuses more on understanding people’s jobs, and not simply their needs, they will be able to create markets that serve those jobs profitably. Only when that happens will development become sustainable.

Efosa Ojomo is a research fellow at the Clayton Christensen Institute for Disruptive Innovation. Efosa’s work focuses on using disruptive innovation theory to fundamentally change the discourse in the global development community, thus enabling nations to engender their own path to long-term growth and prosperity.