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MEMORANDUM

TO:               Gayle Smith, EOP/NSC
FROM:             Philip Auerswald, George Mason University and Harvard University
                  Michael Fairbanks, The Seven Fund
                  Bruce McNamer, TechnoServe
                  Jacqueline Novogratz, Acumen Fund
                  Julia Novy-Hildesley, The Lemelson Foundation
                  Paul Polak, International Development Enterprises
                  Iqbal Quadir, The Legatum Center for Development and Entrepreneurship, MIT
                  Christine Eibs Singer, E+Co
CC:               Thomas Kalil, EOP/OSTP
                  Pradeep Ramamurthy, EOP/NSC
                  Lorraine Hariton, U.S. Department of State
                  Michael Curtis, USAID
                  Robert Schneider, USAID
                  Patricia Bartlett, Smithsonian Institution
                  Christopher Broughton, EOP/NSC
                  Hillary Chen, EOP/OSTP
DATE: 1/13/10
RE: Policy Options for Accelerating Entrepreneurship as a Driver for Development [External
Input to PSD-7]

         In reaffirming the greatness of our nation, we understand that greatness is never a given.
         It must be earned. Our journey has never been one of shortcuts or settling for less. It has
         not been the path for the fainthearted, for those that prefer leisure over work, or seek
         only the pleasures of riches and fame. Rather, it has been the risk-takers, the doers, the
         makers of things—some celebrated, but more often men and women obscure in their
         labor—who have carried us up the long rugged path towards prosperity and freedom.
                                                             —Barack Obama, President of the United States
                                                                                Inaugural Address, January 21, 2009

         Nobody owes Rwandans anything. Why should anyone in Rwanda sit back and feel
         comfortable that taxpayers in other countries are contributing money for our own well-
         being or development? Why should we not be doing what we are able to do and raise
         ourselves up to higher standards and achieve more and better and get out of this poverty
         that we find ourselves in? Change has to start in the mind. And that is what we have been
         working on over time. Once the mind gets correct, the rest becomes simple.
                                                                         —Paul Kagame, President of Rwanda1




1
 “The Backbone of a New Rwanda.” In Michael Fairbanks et al., eds. In the River They Swim: Essays from Around the World on
Enterprise Solutions to Poverty Today. West Conshohocken, PA: Templeton Press, 2009.
Policy Options to Accelerating Entrepreneurship as a Driver for Development [PSD-7]


Motivation for Policy Proposals
During our lifetime, the majority of the world’s population will join the global economy. This is
not just good news; it is a singular and defining transition in human history. Furthermore, as the
revolution in mobile communications in this decade has evidenced, global economic
inclusiveness will take place, in one form or another, with or without the active engagement of
the United States and its citizens. The fact that the technologies driving such change were
originally developed in our country—often with funding from the federal government—does not
guarantee our nation’s continued centrality. As President Obama stated in his inaugural address,
“Greatness is never a given. It must be earned.”
An approach that both advances the national interest of the United States and is relevant to the
21st century must begin by asking: How does the process of development actually work? How
can citizens of the United States benefit from the tremendous change that is taking place in the
world today? Who are the agents of positive change elsewhere in the world, and how can we
work with them? How can the U.S. government contribute to this process in a way that makes
the most of its unique capabilities and reflects our nation’s core values?
We are fully supportive of the commitment expressed by President Obama and Secretary of State
Clinton to move away from policies of development that amount to the U.S. saying, “You are
broken, we will fix you,” and toward policies based on long-term partnerships that support
bottom-up and enterprise-oriented initiatives in developing countries.
In our view, U.S. policy with regard to global development should at once leverage and seek to
increase the nation’s most valuable national asset: its global leadership in technology,
entrepreneurship, and innovation. This leadership is based on knowledge, networks of capability,
a habit of entrepreneurial thinking, and considerable know-how pertaining to the support and
expansion of entrepreneurship and innovation in key sectors and on specific challenges. These
are the assets we should be sharing—and in so doing, further developing—with the rest of the
world.
We maintain that entrepreneurial thinking and national systems that reward positive
entrepreneurship are the greatest potential tools to advance development by overcoming the
related curses of external dependency—in particular, the extraction of natural resources, illicit
traffic, and aid—creating broad-based economic activity, and supporting an economically
engaged middle class.
Throughout the developing world, entrepreneurs who can change their societies already exist,
and in many cases are thriving. These individuals and organizations are creating knowledge-
based products, offering jobs that pay high wages, paying their taxes, not spoiling and frequently
even working to protect the environment. We need to find them, learn from them, and give them
“rocket fuel” by providing mentorship, access to global networks, and investment capital—as
required and subject to market-comparable terms.
The policy proposals that follow are organized into two categories: Driving Development by
Enabling Entrepreneurship, and Fostering a New Generation of Inventive Global Change
Leaders.
Policy Options to Accelerating Entrepreneurship as a Driver for Development [PSD-7]


1. Driving Development by Enabling Entrepreneurship
Policy Proposal 1.1: Undertake a National Initiative on Global Entrepreneurship and
Innovation to enable the growth of markets that address global challenges
Proven, scalable, market-based solutions to global challenges are being developed daily by
entrepreneurs and innovators in both the United States and the developing world. These solutions
provide “Henry Ford–size” opportunities to create new markets that will drive increasing
prosperity, with a focus on the 40 percent of the world’s population that remains on the periphery
of global markets, and with attention to the mitigation of the adverse consequences that will
inevitably result from intensified economic activity.
The Overseas Private Investment Corporation (OPIC) has supported U.S. investments and
partnerships for decades. Its functions can be expanded to support private-sector investments in
entrepreneurship, and in innovative technologies that address such global challenges as water
and sanitation, energy and climate, access to financial services, and educational innovation.
We proposed either a re-chartering of OPIC or the creation of a new National Corporation for
Global Entrepreneurship and Innovation to act as a singular vehicle, working in collaboration
with the U.S. Agency for International Development (USAID) and drawing resources and
capabilities from across the federal government—notably the Department of Defense (DoD), the
Department of Health and Human Services (HHS), the Department of Energy (DoE), and the
Department of Veterans Affairs (VA)—for support of partnerships between U.S. and overseas
entrepreneurs that are working to address global challenges. Investments would be comparable in
scale and intent to awards from the National Institute of Standards and Technology (NIST)
Technology Innovation Program (formerly Advanced Technology Program), and would similarly
encourage partnerships between entrepreneurs (particularly those located overseas) and U.S.
multinational corporations.
The objective of the fund in its first five years of operation should be to seed the creation of 10
markets that serve 50 million customers each among the 2 billion people in the world who earn
less than $2/day—what might be termed “ascending markets,” in contrast with conventionally
defined emerging markets. The investment portfolio will include projects aimed at building a
manufacturing capability in the United States that is focused on the sort of low-cost, high-
reliability, and, in many cases, income-generating products increasingly in demand among
ascending-market consumers and entrepreneurs.
The Aspen Network for Development Entrepreneurs (ANDE) provides one model for such an
initiative, in which capital is secondary to risk management and access to networks. Groups such
as the Acumen Fund, E+Co, Endeavor, and TechnoServe have expertise to offer in support of
high-impact entrepreneurial ventures in the developing world. Within the federal government,
the CIA’s In-Q-Tel is a model of another sort, one that demonstrates how equity investments in
technology-based entrepreneurial ventures can be utilized to advance U.S. national interests.2
The U.S. government could seed the creation of a $1.25 billion Global Entrepreneurship and
Innovation Fund with $200 million in first-loss capital or loan guarantees. When considered
alongside the $750 million already committed to ANDE members, this would represent a $2


2
 In-Q-Tel “identifies and partners with companies developing cutting-edge technologies to help deliver these solutions to the
Central Intelligence Agency and the broader U.S. Intelligence Community (IC) to further their missions.”
Policy Options to Accelerating Entrepreneurship as a Driver for Development [PSD-7]

billion commitment to advance the growth of entrepreneurial ventures with high social value in
developing countries.
The Trade and Development Agency’s capacity to conduct feasibility studies could be associated
with such a facility. Creating innovative technology R&D capacity at USAID (see below) will be
essential to enable the agency to act as a full partner in this initiative.
Agency responsibility: OPIC, in partnership with Department of State, USAID, TDA, and the
Department of Commerce Office of Innovation and Entrepreneurship, in collaboration with
DoD, HHS, DoE, and the VA.
Budget: $200 million in loan guarantees or first-loss capital; $10 million annual operational
launch budget
Timeframe: 36-month launch
Policy Proposal 1.2: Recognize and support outstanding entrepreneurs in developing
countries
In poor places as in rich ones, the majority of jobs and other economic opportunities created by
entrepreneurs ultimately come from the most rapidly growing 10 percent to 20 percent of new
ventures. The entrepreneurs who create and build these high-growth “gazelle” firms thus play a
disproportionate role in economic development.
People are stirred to embrace change when they see others like themselves acting as role models,
when the perceived costs are low, and when the envisioned change is framed as being consistent
with their own deepest principles, goals, beliefs, attitudes, assumptions, and values.
We propose that the U.S. convene an annual summit that brings together outstanding
entrepreneurs from the developing world and leaders from the entrepreneurial and venture capital
community in the United States. Such an event would increase the impact made by outstanding
entrepreneurs currently working to advance development by telling their stories as iconic
examples of entrepreneurial leadership. These convenings would result in productive new
relationships between outstanding overseas entrepreneurs and partners in the United States.
The ideal host for such a convening would be a newly created Smithsonian Center for
Entrepreneurship and Innovation on the National Mall, in collaboration with USAID, the White
House Office of Science and Technology Policy (OSTP), and leaders in international
entrepreneurial education, such as MIT’s Legatum Center for Development and
Entrepreneurship. The Pioneers of Prosperity Awards Program and the Skoll Awards for Social
Entrepreneurship (SASE) provide two models for the process of identifying outstanding
entrepreneurs in the developing world and celebrating their achievements.3
Agency responsibility: Department of State and Department of Commerce, working closely with
the OSTP, potentially in collaboration with the Smithsonian Institution (see below)
Budget: $2-$5 million in new funding
Timeframe: 18-month launch




3
    See <http://pioneersofprosperity.org/> and < http://www.skollfoundation.org/skollawards/index.asp >.
Policy Options to Accelerating Entrepreneurship as a Driver for Development [PSD-7]

Policy Proposal 1.3: Strengthen the capacity of USAID to support entrepreneurship and
provide technological oversight and support, and ensure a close working relationship
between this capacity and operational relationships with DoD, including investments in
innovative technology with development applications
USAID’s capacity to provide innovative investment in technology, and to effectively oversee the
applications of technology, to meet development goals has been hampered by inadequate
investment in bilateral development assistance resources, in support of a culture of technology
and innovation, and a depletion of technical and engineering personnel at the agency. We
propose a marked increase in USAID resources that are dedicated to technology and innovation,
thus allowing for the development of a technology-based innovation/entrepreneurial capacity at
the agency (on the In-Q-Tel and/or ANDE model; see policy proposal 1.1 above) and significant
addition of personnel in the areas of technology, science, and engineering. USAID should have a
separate fund to make innovative investments in new technologies that have development
applications. These investments would be on a smaller scale and have a more exploratory nature
than those supported by the National Corporation for Global Entrepreneurship and Innovation,
which are focused on developing an "absorptive" capacity for technology and innovation.
Furthermore, support for USAID's distance-learning platforms and technology enhanced
entrepreneur development programs should be expanded , with the specific goals of increasing
the efficiency with which entrepreneurs' capacity is built, and of expanding investment in and the
impact of these entrepreneurs.
The DoD has, through its broad investment in research and development, supported private-
sector innovation in many technologies that have dual-use applications that could provide a basis
for entrepreneurial initiatives in developing countries. USAID needs to create links with DoD’s
innovations, including those that may have grown out of DoD programs in Iraq and Afghanistan,
to find ways to bring such innovations into development applications. In turn, USAID
innovations and the applications of innovative technologies should be infused into programs and
areas in which DoD has temporary responsibility for economy-related investments.
The military also has core competencies in logistics, command and control, monitoring and
evaluation, operations research, training, and program management, all of which USAID or other
agencies could leverage as part of their development efforts. Formal funded processes need to be
put in place to enable the military to help USAID develop these capabilities within their own
organizations, or to lend assistance when they share a common footprint in various countries.
Finally, shared strategic planning that will help predict post-conflict requirements and shape
future strategies is a necessity. Particularly important is the need to emphasize strategies for
reconstruction and renewal in post-conflict environments that engage in-country entrepreneurs as
central actors early-on, rather than late in the game and on the periphery. Such strategic planning
will have little weight if not backed by a structure that enables DoD and USAID to make jointly
considered investments in technological capabilities and organizational development that will
permit successful mission hand-off and will seed entrepreneur-based social renewal in places
where the United States is compelled, for whatever reason, to have a military presence in the
future.
Agency responsibility: USAID, DoD, NIST
Budget: $20/year million in new funding + $20/year million redirected from existing staffing
commitments
Timeframe: 36-month launch, ongoing thereafter
Policy Options to Accelerating Entrepreneurship as a Driver for Development [PSD-7]

Policy Proposal 1.4: Deploy crowd-sourcing and social networking technologies to identify
outstanding entrepreneurs and facilitate partnerships
The U.S. government has valuable information, which is in the public domain, regarding new
technologies and the entrepreneurs who are working to bring them to market. We propose that
the government work with national leaders, such as LinkedIn and the Kauffman Foundation, to
employ crowd-sourcing and social networking technologies to help identify and recognize
outstanding entrepreneurs who are working to advance development in both the U.S. and in the
developing world. This could be based on the model of USAID’s Development 2.0 Challenge,
but on a considerably greater scale.
Seeded with data that is in the public domain, this secure site would offer not only a validated
database of technology entrepreneurs who have received federal funding (e.g., through the Small
Business Innovation Research program, ATP, or other federal programs), but, more important,
would enable users to initiate new connections and establish collaborative arrangements based on
shared objectives and complementary capabilities. As the site develops, it would serve as a “back
office” to facilitate partnerships between U.S. entrepreneurs (including student entrepreneurs),
their counterparts overseas, and the business process and financial resources available to support
those partnerships.
This platform could also complement support for a global series of National Business Plan
Competitions focused on identifying entrepreneurs with compelling business ideas and providing
them technical and business building skills to scale their enterprises—much on the model
currently used by TechnoServe, the Unreasonable Institute, the Seven Fund, and Ashoka’s
Changemakers.com.
Agency responsibility: USAID, OSTP, Small Business Administration
Budget: $2 million in new funding
Timeframe: 24-36 months
Policy Proposal 1.5: Actively encourage national governments to adopt policies that favor
entrepreneurial entry
A key element in accelerating entrepreneurship as a driver for development is to understand the
factors that enable and inhibit entrepreneurial entry and the growth of new firms. These factors
are less a function of the policy absolutes (e.g., whether or not a business-friendly climate exists)
than of the relative “price” of entry—the ease with which new entrants can exploit opportunity,
as compared with incumbent firms (or, where relevant, the government). The World Bank has
provided a substantial service by beginning to track policies favorable to entrepreneurs. The U.S.
government should support governments elsewhere in the world that would like technical and
other assistance in implementing policies favorable to entrepreneurial entry and the growth of
entrepreneurial firms.
Agency responsibility: Department of State
Budget: $1 million in new funding + $1-$2 million/year redirected from existing staffing
commitments
Timeframe: ongoing
Policy Options to Accelerating Entrepreneurship as a Driver for Development [PSD-7]

2. Fostering a New Generation of Inventive Global Change Leaders
Policy Proposal 2.1: Seed a global network of universities with the capability to design for
development
We propose that the U.S. government seed the creation of 100 university programs focused on
design for the global majority,4 that would drive the creation of breakthrough innovations to
advance development. They would also prepare university innovators worldwide to lead
entrepreneurial efforts to effect positive change. We term this initiative DR-100, for the creation
of 100 programs to drive development through a design revolution.
Programs that provide hands-on extracurricular opportunities for service in learning have
become widespread, through the efforts of organizations like Engineers Without Borders, which
now has over 200 chapters at universities in the U.S. that give students opportunities to work
with poor communities, typically to address infrastructure and public health needs.
A number of U.S. universities have developed strong, successful programs that enable the
creation of breakthrough technologies that provide services in ascending markets. MIT’s D-Lab
is an example of such a program. Each year, 30 MIT undergraduates learn about village
problems in countries like Haiti, Zambia, and Ghana, design practical solutions for these
problems, and then test them in the field. MIT’s Legatum Center for Development and
Entrepreneurship is similarly training MIT students to design and deploy entrepreneurial
solutions to global challenges. Another model, in the D-School at Stanford University, provides
design-driven hands-on opportunities for multidisciplinary teams to create and launch
breakthrough products. These three programs have launched student-led products and ventures
that develop high-impact solutions to address basic needs, such as fuel and lighting.
The most successful programs share the following priorities:
1. Building participation and developing quality capacity in technology innovation for the poor
in higher education institutions in both developed and developing countries
2. Developing model courses in design for the poor in North America, Europe, and developing
countries, and providing initial financial support for this development
3. Building an infrastructure for effective communication and learning among faculty, students,
and industry mentors, including sharing successful strategies for continued productive mutual
learning between institutions of higher education and the specific settings where key global
problems exist
The proposed DR-100 initiative will capitalize on student interest and engagement in service-
oriented programs, such as Engineers Without Borders, and broaden their opportunities for
learning to include an entrepreneurial approach and a focus on the application of cutting-edge
technology to create affordable breakthrough innovations. It will foster the next generation of
innovators, with a focus on high-impact breakthrough technologies (beyond implementation of
existing solutions) to reach underserved markets.
Again, if created, the Smithsonian Center for Entrepreneurship and Innovation on the National
Mall could serve as a hub for this initiative. The National Collegiate Inventors and Innovators


4
 As a point of reference, see exhibit at the Cooper-Hewitt Museum, sponsored by the Lemelson Foundation, on “Design for the
Other 90%” < http://other90.cooperhewitt.org/>.
Policy Options to Accelerating Entrepreneurship as a Driver for Development [PSD-7]

Alliance and D-REV5 (founded by Paul Polak) have an expressed commitment to advancing the
DR-100 initiative. The Lemelson Foundation has been a consistent supporter of design for
development.
Agency responsibility: USAID, NIST, NSF, DoD, DoE, HHS, VA
Budget: $20-40 million in new funding
Timeframe: 36-month launch
Policy Proposal 2.2: Create a Smithsonian Center for Entrepreneurship and Innovation on
the National Mall to showcase the leadership role of the United States in developing
entrepreneurial solutions to global challenges
The still-vacant Arts and Industries Building on the National Mall would be the ideal location for
the founding of a Smithsonian Center for Entrepreneurship and Innovation that would
• Celebrate and support the inventiveness and entrepreneurship of all Americans;
• Communicate and advance America’s vital role in the 21st century as a source of solutions to
    global challenges.
By nurturing a culture of innovation both at the Smithsonian and throughout the United States,
the Center would encourage the development and deployment of entrepreneurial solutions to
global challenges and reaffirm America’s positive role in the world community.
The original purpose of the Arts and Industries building—to showcase and celebrate American
ingenuity—could be adapted fluidly for this new mission. Exhibits, educational programs, and
convenings would catalyze and convey transformational new ideas, thus creating value for
society.
The Arts and Industries Building would:
• Provide an integrative, forward-looking platform for the unparalleled content in the
    Smithsonian’s collections
• Realize potential synergies that exist among the diverse entities that comprise the
    Smithsonian Institution
• Promote new external partnerships that will extend, on a global scale, the reach and impact of
    communities of learning to which the Smithsonian is a vital contributor (see 1.2 and 2.1
    above)
Designed to be operationally self-sustaining, the Smithsonian Center for Entrepreneurship and
Innovation would be a lasting resource for the nation and the world.
Agency responsibility: The Smithsonian Institution, in partnership with the National Academy of
Sciences; leading universities in the Washington, D.C., area, elsewhere in the United States, and
around the world; private foundations; not-for-profit organizations such as Engineers Without
Borders and Maker Faire; and U.S. corporations
Budget: $50 million in federal funds, matched by $250 million in private commitments, to
refurbish and repurpose the Arts and Industries Building; $10 million/year additional annual
funding thereafter to support programmatic activities
Timeframe: ongoing




5
    See <http://www.d-rev.com>.
Policy Options to Accelerating Entrepreneurship as a Driver for Development [PSD-7]


Annex 1. Policies to harness the mobile revolution for development, security,
and human rights6
The mobile revolution is well underway.7 Current trends suggest strongly that with or without
the involvement of the U.S. government or major multilateral organizations, the mobile
revolution will continue for the foreseeable future, bringing significant benefits to the majority of
the world’s population that until recently has remained on the margins of the global economy.
Nonetheless, we, the authors of this memorandum (see note below), share the view that the U.S.
government can make significant beneficial contributions to both the rate and the direction of the
global changes effected by mobile communications.
Indeed, it is possible that such an initiative, properly directed in the next 2-3 years, could
positively affect the lives of more people in the coming decade than any other action the U.S.
government could undertake.
We envision three broad areas of engagement for the U.S. government in harnessing the mobile
revolution:
A1.1. Convening leaders in the mobile industry (e.g., via the GSM Association),
international organizations (e.g., UNCTAD, IFC), and major consumers of
telecommunications and financial services in developing countries (e.g., multinational
corporations)
    • To accelerate the adoption of leading mobile services, such as mobile payments;
    • To develop shared standards for data exchange, facilitating interoperability (including via
        “cloud computing”);
    • To encourage and strengthen flexible regulation that does not impede innovations that
        could transform delivery of essential products and services to the poor;
    • To ease the process by which remittances can be transferred via mobile phones; and
    • To seek approaches that lower the price of SMS messaging.
Agency responsibility: The Department of State (Global Partnerships Initiative), the Department
of Commerce National Telecommunications and Information Administration (Office of
International Affairs)
Budget: $10-$20 million
Timeframe: 18 months
Direct Benefits to the United States: U.S. corporations have been among the leaders in
innovation via open architectures. By decreasing the costs of doing business in developing
countries and increasing the potential for more active forms of customer engagement, advances
in mobile communications will facilitate increased trade and commerce with those parts of the
world that will drive global economic growth over the coming quarter century
A1.2. Actively supporting the development and deployment of open-source, interoperable
mobile applications (in particular SMS) in a range of areas, including health, financial


6
  This set of recommendations was drafted by Philip Auerswald, George Mason University and Harvard University; Ken Banks,
kiwanja.net; Menekse Gencer, mPay Connect; Erik Hersman, Ushahidi; Ben Lyon, FrontlineSMS:Credit; Josh Nesbit,
FrontlineSMS:Medic; Jan Chipchase, Nokia.
7
  Thomas Kalil. “Harnessing the Mobile Revolution.” Innovations: Technology | Governance | Globalization 4, no. 1 (2009): 9–
23.
Policy Options to Accelerating Entrepreneurship as a Driver for Development [PSD-7]

services, election monitoring, and human rights through direct funding, prizes, and the
facilitation of advance-usage commitments, with an emphasis on connecting U.S. and in-
country talent, and on nurturing entrepreneurship among youth with programming skills.
Agency responsibility: Department of the Treasury (Fighting Illicit Finance Program), National
Institutes of Health, VA, DoD, OPIC
Budget: $50-$250 million
Timeframe: 24-36 months
Direct Benefits to the United States: Mobile health case services delivered over wireless
broadband infrastructure have the potential to contribute significantly to reductions in the cost of
providing health care to the elderly, and to improving care for veterans located in rural areas in
the United States. Such services may also improve delivery of health care and financial services
in a variety of crisis contexts, thus increasing national resilience.
3. Convening leaders in the mobile industry (e.g., via the GSM Association), United Nations
High Commissioner for Refugees, and leaders of open-source mapping initiatives (e.g.,
openstreeemap.org) to develop and deploy mobile and GPS-enabled mechanisms for
mobile-based tracking of identity and property rights
Agency responsibility: Department of State (Bureau of Public Affairs; Bureau of Population,
Refugees, and Migration), National Institute of Standards and Technology, National Geospatial-
Intelligence Agency
Budget: $50-$100 million, including resources dedicated from existing budget lines
Timeframe: 36-48 months
Direct Benefits to the United States: Documentation of individual identity and property rights is
a prerequisite for rule of law and the growth of market exchange. The United States benefits
directly from the increased security afforded by the extension of formal systems of identification.
Furthermore, by lowering the costs to citizens and consumers of developing and maintaining a
formal identity, and by increasing the benefits of developing a mobile identity (e.g., through
actions accelerated by policy initiatives A1.1 and A1.2 above), the mobile and related industries,
with support from the U.S. government and international organizations, can draw even illicit
economic transactions onto the grid. This is of great significance to maintaining the integrity of
the global financial system, as an estimated $500-$800 billion in illicit capital flows from
developing to developed countries every year—10 times the amount of aid that flows from
developed to developing countries.
Policy Options to Accelerating Entrepreneurship as a Driver for Development [PSD-7]


Annex 2: Additional Reading
Ibrahim Abouleish and Helmy Abouleish. “Garden in the Desert: Sekem Makes Comprehensive
Sustainable Development a Reality in Egypt.” Innovations: Technology | Governance |
Globalization 3, no. 3 (2008): 21–48.
Philip Auerswald. “Creating Social Value.” Stanford Social Innovation Review (Spring 2009):
51–55.
President Paul Kagame. “The Backbone of a New Rwanda.” In Michael Fairbanks, Malik Fal,
Marcela Escobari-Rose, and Elizabeth Hooper, eds. In the River They Swim: Essays from Around
the World on Enterprise Solutions to Poverty Today. West Conshohocken, PA: Templeton Press,
2009. [attached]
Thomas Kalil. “Harnessing the Mobile Revolution.” Innovations: Technology | Governance |
Globalization 4, no. 1 (2009): 9–23.
Julia Novy-Hildesley. “By the Grace of Invention: How Individuals Power Development.”
Innovations: Technology | Governance | Globalization Tech4Society special edition (2010): 7–
24. [attached]
Paul Polak. Out of Poverty: What Works When Traditional Approaches Fail. San Francisco, CA:
Berrett-Koehler, 2008.
Paul Polak, Peggy Reid, and Amy Schefer. “2.4 Billion Customers: How Business Can Scale
Solutions to Poverty.” Innovations: Technology | Governance | Globalization Tech4Society
special edition (2010): 163–178. [attached]
Iqbal Quadir. “Foreign Aid and Bad Government.” Wall Street Journal, January 30, 2009.
http://online.wsj.com/article/SB123327734124831471.html
Carl J. Schramm. “Toward an Entrepreneurial Society: Why Measurement Matters.”
Innovations: Technology | Governance | Globalization 3, no. 1 (2008): 3–10.

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Ad hoc-working-group-on-entrepreneurship-for-development psd-7-input-01-13-10

  • 1. MEMORANDUM TO: Gayle Smith, EOP/NSC FROM: Philip Auerswald, George Mason University and Harvard University Michael Fairbanks, The Seven Fund Bruce McNamer, TechnoServe Jacqueline Novogratz, Acumen Fund Julia Novy-Hildesley, The Lemelson Foundation Paul Polak, International Development Enterprises Iqbal Quadir, The Legatum Center for Development and Entrepreneurship, MIT Christine Eibs Singer, E+Co CC: Thomas Kalil, EOP/OSTP Pradeep Ramamurthy, EOP/NSC Lorraine Hariton, U.S. Department of State Michael Curtis, USAID Robert Schneider, USAID Patricia Bartlett, Smithsonian Institution Christopher Broughton, EOP/NSC Hillary Chen, EOP/OSTP DATE: 1/13/10 RE: Policy Options for Accelerating Entrepreneurship as a Driver for Development [External Input to PSD-7] In reaffirming the greatness of our nation, we understand that greatness is never a given. It must be earned. Our journey has never been one of shortcuts or settling for less. It has not been the path for the fainthearted, for those that prefer leisure over work, or seek only the pleasures of riches and fame. Rather, it has been the risk-takers, the doers, the makers of things—some celebrated, but more often men and women obscure in their labor—who have carried us up the long rugged path towards prosperity and freedom. —Barack Obama, President of the United States Inaugural Address, January 21, 2009 Nobody owes Rwandans anything. Why should anyone in Rwanda sit back and feel comfortable that taxpayers in other countries are contributing money for our own well- being or development? Why should we not be doing what we are able to do and raise ourselves up to higher standards and achieve more and better and get out of this poverty that we find ourselves in? Change has to start in the mind. And that is what we have been working on over time. Once the mind gets correct, the rest becomes simple. —Paul Kagame, President of Rwanda1 1 “The Backbone of a New Rwanda.” In Michael Fairbanks et al., eds. In the River They Swim: Essays from Around the World on Enterprise Solutions to Poverty Today. West Conshohocken, PA: Templeton Press, 2009.
  • 2. Policy Options to Accelerating Entrepreneurship as a Driver for Development [PSD-7] Motivation for Policy Proposals During our lifetime, the majority of the world’s population will join the global economy. This is not just good news; it is a singular and defining transition in human history. Furthermore, as the revolution in mobile communications in this decade has evidenced, global economic inclusiveness will take place, in one form or another, with or without the active engagement of the United States and its citizens. The fact that the technologies driving such change were originally developed in our country—often with funding from the federal government—does not guarantee our nation’s continued centrality. As President Obama stated in his inaugural address, “Greatness is never a given. It must be earned.” An approach that both advances the national interest of the United States and is relevant to the 21st century must begin by asking: How does the process of development actually work? How can citizens of the United States benefit from the tremendous change that is taking place in the world today? Who are the agents of positive change elsewhere in the world, and how can we work with them? How can the U.S. government contribute to this process in a way that makes the most of its unique capabilities and reflects our nation’s core values? We are fully supportive of the commitment expressed by President Obama and Secretary of State Clinton to move away from policies of development that amount to the U.S. saying, “You are broken, we will fix you,” and toward policies based on long-term partnerships that support bottom-up and enterprise-oriented initiatives in developing countries. In our view, U.S. policy with regard to global development should at once leverage and seek to increase the nation’s most valuable national asset: its global leadership in technology, entrepreneurship, and innovation. This leadership is based on knowledge, networks of capability, a habit of entrepreneurial thinking, and considerable know-how pertaining to the support and expansion of entrepreneurship and innovation in key sectors and on specific challenges. These are the assets we should be sharing—and in so doing, further developing—with the rest of the world. We maintain that entrepreneurial thinking and national systems that reward positive entrepreneurship are the greatest potential tools to advance development by overcoming the related curses of external dependency—in particular, the extraction of natural resources, illicit traffic, and aid—creating broad-based economic activity, and supporting an economically engaged middle class. Throughout the developing world, entrepreneurs who can change their societies already exist, and in many cases are thriving. These individuals and organizations are creating knowledge- based products, offering jobs that pay high wages, paying their taxes, not spoiling and frequently even working to protect the environment. We need to find them, learn from them, and give them “rocket fuel” by providing mentorship, access to global networks, and investment capital—as required and subject to market-comparable terms. The policy proposals that follow are organized into two categories: Driving Development by Enabling Entrepreneurship, and Fostering a New Generation of Inventive Global Change Leaders.
  • 3. Policy Options to Accelerating Entrepreneurship as a Driver for Development [PSD-7] 1. Driving Development by Enabling Entrepreneurship Policy Proposal 1.1: Undertake a National Initiative on Global Entrepreneurship and Innovation to enable the growth of markets that address global challenges Proven, scalable, market-based solutions to global challenges are being developed daily by entrepreneurs and innovators in both the United States and the developing world. These solutions provide “Henry Ford–size” opportunities to create new markets that will drive increasing prosperity, with a focus on the 40 percent of the world’s population that remains on the periphery of global markets, and with attention to the mitigation of the adverse consequences that will inevitably result from intensified economic activity. The Overseas Private Investment Corporation (OPIC) has supported U.S. investments and partnerships for decades. Its functions can be expanded to support private-sector investments in entrepreneurship, and in innovative technologies that address such global challenges as water and sanitation, energy and climate, access to financial services, and educational innovation. We proposed either a re-chartering of OPIC or the creation of a new National Corporation for Global Entrepreneurship and Innovation to act as a singular vehicle, working in collaboration with the U.S. Agency for International Development (USAID) and drawing resources and capabilities from across the federal government—notably the Department of Defense (DoD), the Department of Health and Human Services (HHS), the Department of Energy (DoE), and the Department of Veterans Affairs (VA)—for support of partnerships between U.S. and overseas entrepreneurs that are working to address global challenges. Investments would be comparable in scale and intent to awards from the National Institute of Standards and Technology (NIST) Technology Innovation Program (formerly Advanced Technology Program), and would similarly encourage partnerships between entrepreneurs (particularly those located overseas) and U.S. multinational corporations. The objective of the fund in its first five years of operation should be to seed the creation of 10 markets that serve 50 million customers each among the 2 billion people in the world who earn less than $2/day—what might be termed “ascending markets,” in contrast with conventionally defined emerging markets. The investment portfolio will include projects aimed at building a manufacturing capability in the United States that is focused on the sort of low-cost, high- reliability, and, in many cases, income-generating products increasingly in demand among ascending-market consumers and entrepreneurs. The Aspen Network for Development Entrepreneurs (ANDE) provides one model for such an initiative, in which capital is secondary to risk management and access to networks. Groups such as the Acumen Fund, E+Co, Endeavor, and TechnoServe have expertise to offer in support of high-impact entrepreneurial ventures in the developing world. Within the federal government, the CIA’s In-Q-Tel is a model of another sort, one that demonstrates how equity investments in technology-based entrepreneurial ventures can be utilized to advance U.S. national interests.2 The U.S. government could seed the creation of a $1.25 billion Global Entrepreneurship and Innovation Fund with $200 million in first-loss capital or loan guarantees. When considered alongside the $750 million already committed to ANDE members, this would represent a $2 2 In-Q-Tel “identifies and partners with companies developing cutting-edge technologies to help deliver these solutions to the Central Intelligence Agency and the broader U.S. Intelligence Community (IC) to further their missions.”
  • 4. Policy Options to Accelerating Entrepreneurship as a Driver for Development [PSD-7] billion commitment to advance the growth of entrepreneurial ventures with high social value in developing countries. The Trade and Development Agency’s capacity to conduct feasibility studies could be associated with such a facility. Creating innovative technology R&D capacity at USAID (see below) will be essential to enable the agency to act as a full partner in this initiative. Agency responsibility: OPIC, in partnership with Department of State, USAID, TDA, and the Department of Commerce Office of Innovation and Entrepreneurship, in collaboration with DoD, HHS, DoE, and the VA. Budget: $200 million in loan guarantees or first-loss capital; $10 million annual operational launch budget Timeframe: 36-month launch Policy Proposal 1.2: Recognize and support outstanding entrepreneurs in developing countries In poor places as in rich ones, the majority of jobs and other economic opportunities created by entrepreneurs ultimately come from the most rapidly growing 10 percent to 20 percent of new ventures. The entrepreneurs who create and build these high-growth “gazelle” firms thus play a disproportionate role in economic development. People are stirred to embrace change when they see others like themselves acting as role models, when the perceived costs are low, and when the envisioned change is framed as being consistent with their own deepest principles, goals, beliefs, attitudes, assumptions, and values. We propose that the U.S. convene an annual summit that brings together outstanding entrepreneurs from the developing world and leaders from the entrepreneurial and venture capital community in the United States. Such an event would increase the impact made by outstanding entrepreneurs currently working to advance development by telling their stories as iconic examples of entrepreneurial leadership. These convenings would result in productive new relationships between outstanding overseas entrepreneurs and partners in the United States. The ideal host for such a convening would be a newly created Smithsonian Center for Entrepreneurship and Innovation on the National Mall, in collaboration with USAID, the White House Office of Science and Technology Policy (OSTP), and leaders in international entrepreneurial education, such as MIT’s Legatum Center for Development and Entrepreneurship. The Pioneers of Prosperity Awards Program and the Skoll Awards for Social Entrepreneurship (SASE) provide two models for the process of identifying outstanding entrepreneurs in the developing world and celebrating their achievements.3 Agency responsibility: Department of State and Department of Commerce, working closely with the OSTP, potentially in collaboration with the Smithsonian Institution (see below) Budget: $2-$5 million in new funding Timeframe: 18-month launch 3 See <http://pioneersofprosperity.org/> and < http://www.skollfoundation.org/skollawards/index.asp >.
  • 5. Policy Options to Accelerating Entrepreneurship as a Driver for Development [PSD-7] Policy Proposal 1.3: Strengthen the capacity of USAID to support entrepreneurship and provide technological oversight and support, and ensure a close working relationship between this capacity and operational relationships with DoD, including investments in innovative technology with development applications USAID’s capacity to provide innovative investment in technology, and to effectively oversee the applications of technology, to meet development goals has been hampered by inadequate investment in bilateral development assistance resources, in support of a culture of technology and innovation, and a depletion of technical and engineering personnel at the agency. We propose a marked increase in USAID resources that are dedicated to technology and innovation, thus allowing for the development of a technology-based innovation/entrepreneurial capacity at the agency (on the In-Q-Tel and/or ANDE model; see policy proposal 1.1 above) and significant addition of personnel in the areas of technology, science, and engineering. USAID should have a separate fund to make innovative investments in new technologies that have development applications. These investments would be on a smaller scale and have a more exploratory nature than those supported by the National Corporation for Global Entrepreneurship and Innovation, which are focused on developing an "absorptive" capacity for technology and innovation. Furthermore, support for USAID's distance-learning platforms and technology enhanced entrepreneur development programs should be expanded , with the specific goals of increasing the efficiency with which entrepreneurs' capacity is built, and of expanding investment in and the impact of these entrepreneurs. The DoD has, through its broad investment in research and development, supported private- sector innovation in many technologies that have dual-use applications that could provide a basis for entrepreneurial initiatives in developing countries. USAID needs to create links with DoD’s innovations, including those that may have grown out of DoD programs in Iraq and Afghanistan, to find ways to bring such innovations into development applications. In turn, USAID innovations and the applications of innovative technologies should be infused into programs and areas in which DoD has temporary responsibility for economy-related investments. The military also has core competencies in logistics, command and control, monitoring and evaluation, operations research, training, and program management, all of which USAID or other agencies could leverage as part of their development efforts. Formal funded processes need to be put in place to enable the military to help USAID develop these capabilities within their own organizations, or to lend assistance when they share a common footprint in various countries. Finally, shared strategic planning that will help predict post-conflict requirements and shape future strategies is a necessity. Particularly important is the need to emphasize strategies for reconstruction and renewal in post-conflict environments that engage in-country entrepreneurs as central actors early-on, rather than late in the game and on the periphery. Such strategic planning will have little weight if not backed by a structure that enables DoD and USAID to make jointly considered investments in technological capabilities and organizational development that will permit successful mission hand-off and will seed entrepreneur-based social renewal in places where the United States is compelled, for whatever reason, to have a military presence in the future. Agency responsibility: USAID, DoD, NIST Budget: $20/year million in new funding + $20/year million redirected from existing staffing commitments Timeframe: 36-month launch, ongoing thereafter
  • 6. Policy Options to Accelerating Entrepreneurship as a Driver for Development [PSD-7] Policy Proposal 1.4: Deploy crowd-sourcing and social networking technologies to identify outstanding entrepreneurs and facilitate partnerships The U.S. government has valuable information, which is in the public domain, regarding new technologies and the entrepreneurs who are working to bring them to market. We propose that the government work with national leaders, such as LinkedIn and the Kauffman Foundation, to employ crowd-sourcing and social networking technologies to help identify and recognize outstanding entrepreneurs who are working to advance development in both the U.S. and in the developing world. This could be based on the model of USAID’s Development 2.0 Challenge, but on a considerably greater scale. Seeded with data that is in the public domain, this secure site would offer not only a validated database of technology entrepreneurs who have received federal funding (e.g., through the Small Business Innovation Research program, ATP, or other federal programs), but, more important, would enable users to initiate new connections and establish collaborative arrangements based on shared objectives and complementary capabilities. As the site develops, it would serve as a “back office” to facilitate partnerships between U.S. entrepreneurs (including student entrepreneurs), their counterparts overseas, and the business process and financial resources available to support those partnerships. This platform could also complement support for a global series of National Business Plan Competitions focused on identifying entrepreneurs with compelling business ideas and providing them technical and business building skills to scale their enterprises—much on the model currently used by TechnoServe, the Unreasonable Institute, the Seven Fund, and Ashoka’s Changemakers.com. Agency responsibility: USAID, OSTP, Small Business Administration Budget: $2 million in new funding Timeframe: 24-36 months Policy Proposal 1.5: Actively encourage national governments to adopt policies that favor entrepreneurial entry A key element in accelerating entrepreneurship as a driver for development is to understand the factors that enable and inhibit entrepreneurial entry and the growth of new firms. These factors are less a function of the policy absolutes (e.g., whether or not a business-friendly climate exists) than of the relative “price” of entry—the ease with which new entrants can exploit opportunity, as compared with incumbent firms (or, where relevant, the government). The World Bank has provided a substantial service by beginning to track policies favorable to entrepreneurs. The U.S. government should support governments elsewhere in the world that would like technical and other assistance in implementing policies favorable to entrepreneurial entry and the growth of entrepreneurial firms. Agency responsibility: Department of State Budget: $1 million in new funding + $1-$2 million/year redirected from existing staffing commitments Timeframe: ongoing
  • 7. Policy Options to Accelerating Entrepreneurship as a Driver for Development [PSD-7] 2. Fostering a New Generation of Inventive Global Change Leaders Policy Proposal 2.1: Seed a global network of universities with the capability to design for development We propose that the U.S. government seed the creation of 100 university programs focused on design for the global majority,4 that would drive the creation of breakthrough innovations to advance development. They would also prepare university innovators worldwide to lead entrepreneurial efforts to effect positive change. We term this initiative DR-100, for the creation of 100 programs to drive development through a design revolution. Programs that provide hands-on extracurricular opportunities for service in learning have become widespread, through the efforts of organizations like Engineers Without Borders, which now has over 200 chapters at universities in the U.S. that give students opportunities to work with poor communities, typically to address infrastructure and public health needs. A number of U.S. universities have developed strong, successful programs that enable the creation of breakthrough technologies that provide services in ascending markets. MIT’s D-Lab is an example of such a program. Each year, 30 MIT undergraduates learn about village problems in countries like Haiti, Zambia, and Ghana, design practical solutions for these problems, and then test them in the field. MIT’s Legatum Center for Development and Entrepreneurship is similarly training MIT students to design and deploy entrepreneurial solutions to global challenges. Another model, in the D-School at Stanford University, provides design-driven hands-on opportunities for multidisciplinary teams to create and launch breakthrough products. These three programs have launched student-led products and ventures that develop high-impact solutions to address basic needs, such as fuel and lighting. The most successful programs share the following priorities: 1. Building participation and developing quality capacity in technology innovation for the poor in higher education institutions in both developed and developing countries 2. Developing model courses in design for the poor in North America, Europe, and developing countries, and providing initial financial support for this development 3. Building an infrastructure for effective communication and learning among faculty, students, and industry mentors, including sharing successful strategies for continued productive mutual learning between institutions of higher education and the specific settings where key global problems exist The proposed DR-100 initiative will capitalize on student interest and engagement in service- oriented programs, such as Engineers Without Borders, and broaden their opportunities for learning to include an entrepreneurial approach and a focus on the application of cutting-edge technology to create affordable breakthrough innovations. It will foster the next generation of innovators, with a focus on high-impact breakthrough technologies (beyond implementation of existing solutions) to reach underserved markets. Again, if created, the Smithsonian Center for Entrepreneurship and Innovation on the National Mall could serve as a hub for this initiative. The National Collegiate Inventors and Innovators 4 As a point of reference, see exhibit at the Cooper-Hewitt Museum, sponsored by the Lemelson Foundation, on “Design for the Other 90%” < http://other90.cooperhewitt.org/>.
  • 8. Policy Options to Accelerating Entrepreneurship as a Driver for Development [PSD-7] Alliance and D-REV5 (founded by Paul Polak) have an expressed commitment to advancing the DR-100 initiative. The Lemelson Foundation has been a consistent supporter of design for development. Agency responsibility: USAID, NIST, NSF, DoD, DoE, HHS, VA Budget: $20-40 million in new funding Timeframe: 36-month launch Policy Proposal 2.2: Create a Smithsonian Center for Entrepreneurship and Innovation on the National Mall to showcase the leadership role of the United States in developing entrepreneurial solutions to global challenges The still-vacant Arts and Industries Building on the National Mall would be the ideal location for the founding of a Smithsonian Center for Entrepreneurship and Innovation that would • Celebrate and support the inventiveness and entrepreneurship of all Americans; • Communicate and advance America’s vital role in the 21st century as a source of solutions to global challenges. By nurturing a culture of innovation both at the Smithsonian and throughout the United States, the Center would encourage the development and deployment of entrepreneurial solutions to global challenges and reaffirm America’s positive role in the world community. The original purpose of the Arts and Industries building—to showcase and celebrate American ingenuity—could be adapted fluidly for this new mission. Exhibits, educational programs, and convenings would catalyze and convey transformational new ideas, thus creating value for society. The Arts and Industries Building would: • Provide an integrative, forward-looking platform for the unparalleled content in the Smithsonian’s collections • Realize potential synergies that exist among the diverse entities that comprise the Smithsonian Institution • Promote new external partnerships that will extend, on a global scale, the reach and impact of communities of learning to which the Smithsonian is a vital contributor (see 1.2 and 2.1 above) Designed to be operationally self-sustaining, the Smithsonian Center for Entrepreneurship and Innovation would be a lasting resource for the nation and the world. Agency responsibility: The Smithsonian Institution, in partnership with the National Academy of Sciences; leading universities in the Washington, D.C., area, elsewhere in the United States, and around the world; private foundations; not-for-profit organizations such as Engineers Without Borders and Maker Faire; and U.S. corporations Budget: $50 million in federal funds, matched by $250 million in private commitments, to refurbish and repurpose the Arts and Industries Building; $10 million/year additional annual funding thereafter to support programmatic activities Timeframe: ongoing 5 See <http://www.d-rev.com>.
  • 9. Policy Options to Accelerating Entrepreneurship as a Driver for Development [PSD-7] Annex 1. Policies to harness the mobile revolution for development, security, and human rights6 The mobile revolution is well underway.7 Current trends suggest strongly that with or without the involvement of the U.S. government or major multilateral organizations, the mobile revolution will continue for the foreseeable future, bringing significant benefits to the majority of the world’s population that until recently has remained on the margins of the global economy. Nonetheless, we, the authors of this memorandum (see note below), share the view that the U.S. government can make significant beneficial contributions to both the rate and the direction of the global changes effected by mobile communications. Indeed, it is possible that such an initiative, properly directed in the next 2-3 years, could positively affect the lives of more people in the coming decade than any other action the U.S. government could undertake. We envision three broad areas of engagement for the U.S. government in harnessing the mobile revolution: A1.1. Convening leaders in the mobile industry (e.g., via the GSM Association), international organizations (e.g., UNCTAD, IFC), and major consumers of telecommunications and financial services in developing countries (e.g., multinational corporations) • To accelerate the adoption of leading mobile services, such as mobile payments; • To develop shared standards for data exchange, facilitating interoperability (including via “cloud computing”); • To encourage and strengthen flexible regulation that does not impede innovations that could transform delivery of essential products and services to the poor; • To ease the process by which remittances can be transferred via mobile phones; and • To seek approaches that lower the price of SMS messaging. Agency responsibility: The Department of State (Global Partnerships Initiative), the Department of Commerce National Telecommunications and Information Administration (Office of International Affairs) Budget: $10-$20 million Timeframe: 18 months Direct Benefits to the United States: U.S. corporations have been among the leaders in innovation via open architectures. By decreasing the costs of doing business in developing countries and increasing the potential for more active forms of customer engagement, advances in mobile communications will facilitate increased trade and commerce with those parts of the world that will drive global economic growth over the coming quarter century A1.2. Actively supporting the development and deployment of open-source, interoperable mobile applications (in particular SMS) in a range of areas, including health, financial 6 This set of recommendations was drafted by Philip Auerswald, George Mason University and Harvard University; Ken Banks, kiwanja.net; Menekse Gencer, mPay Connect; Erik Hersman, Ushahidi; Ben Lyon, FrontlineSMS:Credit; Josh Nesbit, FrontlineSMS:Medic; Jan Chipchase, Nokia. 7 Thomas Kalil. “Harnessing the Mobile Revolution.” Innovations: Technology | Governance | Globalization 4, no. 1 (2009): 9– 23.
  • 10. Policy Options to Accelerating Entrepreneurship as a Driver for Development [PSD-7] services, election monitoring, and human rights through direct funding, prizes, and the facilitation of advance-usage commitments, with an emphasis on connecting U.S. and in- country talent, and on nurturing entrepreneurship among youth with programming skills. Agency responsibility: Department of the Treasury (Fighting Illicit Finance Program), National Institutes of Health, VA, DoD, OPIC Budget: $50-$250 million Timeframe: 24-36 months Direct Benefits to the United States: Mobile health case services delivered over wireless broadband infrastructure have the potential to contribute significantly to reductions in the cost of providing health care to the elderly, and to improving care for veterans located in rural areas in the United States. Such services may also improve delivery of health care and financial services in a variety of crisis contexts, thus increasing national resilience. 3. Convening leaders in the mobile industry (e.g., via the GSM Association), United Nations High Commissioner for Refugees, and leaders of open-source mapping initiatives (e.g., openstreeemap.org) to develop and deploy mobile and GPS-enabled mechanisms for mobile-based tracking of identity and property rights Agency responsibility: Department of State (Bureau of Public Affairs; Bureau of Population, Refugees, and Migration), National Institute of Standards and Technology, National Geospatial- Intelligence Agency Budget: $50-$100 million, including resources dedicated from existing budget lines Timeframe: 36-48 months Direct Benefits to the United States: Documentation of individual identity and property rights is a prerequisite for rule of law and the growth of market exchange. The United States benefits directly from the increased security afforded by the extension of formal systems of identification. Furthermore, by lowering the costs to citizens and consumers of developing and maintaining a formal identity, and by increasing the benefits of developing a mobile identity (e.g., through actions accelerated by policy initiatives A1.1 and A1.2 above), the mobile and related industries, with support from the U.S. government and international organizations, can draw even illicit economic transactions onto the grid. This is of great significance to maintaining the integrity of the global financial system, as an estimated $500-$800 billion in illicit capital flows from developing to developed countries every year—10 times the amount of aid that flows from developed to developing countries.
  • 11. Policy Options to Accelerating Entrepreneurship as a Driver for Development [PSD-7] Annex 2: Additional Reading Ibrahim Abouleish and Helmy Abouleish. “Garden in the Desert: Sekem Makes Comprehensive Sustainable Development a Reality in Egypt.” Innovations: Technology | Governance | Globalization 3, no. 3 (2008): 21–48. Philip Auerswald. “Creating Social Value.” Stanford Social Innovation Review (Spring 2009): 51–55. President Paul Kagame. “The Backbone of a New Rwanda.” In Michael Fairbanks, Malik Fal, Marcela Escobari-Rose, and Elizabeth Hooper, eds. In the River They Swim: Essays from Around the World on Enterprise Solutions to Poverty Today. West Conshohocken, PA: Templeton Press, 2009. [attached] Thomas Kalil. “Harnessing the Mobile Revolution.” Innovations: Technology | Governance | Globalization 4, no. 1 (2009): 9–23. Julia Novy-Hildesley. “By the Grace of Invention: How Individuals Power Development.” Innovations: Technology | Governance | Globalization Tech4Society special edition (2010): 7– 24. [attached] Paul Polak. Out of Poverty: What Works When Traditional Approaches Fail. San Francisco, CA: Berrett-Koehler, 2008. Paul Polak, Peggy Reid, and Amy Schefer. “2.4 Billion Customers: How Business Can Scale Solutions to Poverty.” Innovations: Technology | Governance | Globalization Tech4Society special edition (2010): 163–178. [attached] Iqbal Quadir. “Foreign Aid and Bad Government.” Wall Street Journal, January 30, 2009. http://online.wsj.com/article/SB123327734124831471.html Carl J. Schramm. “Toward an Entrepreneurial Society: Why Measurement Matters.” Innovations: Technology | Governance | Globalization 3, no. 1 (2008): 3–10.