“Development” is … (2020)
What is “Development”? Professor Alain deJanvry and Angus Deaton define it as the “enhancement of human wellbeing.” Owen Barder, Director of CGD Europe, describes it as “the property of the economic and social system itself.” I believed that the journey of MDP is to get me closer to a consensual definition of “Development.”
Indeed, before joining MDP, my vague understanding of “Development” was centered around improving human living conditions by unlocking economic mobility. I was convinced that during the fourth industrial revolution, providing equitable upskilling opportunities to low-skill workers is essential to creating a domino effect that leads to social and economic development. To walk my talk, I worked hard to develop a PaaS (Platform-as-a-service) startup “Necessiti” that aggregates qualified skill-training programs and scholarship opportunities. Its mission is to bridge the skill gap in the fast-growing technology industry, especially in low-income communities. The upskilling programs are also designed to enable those living in poverty to build confidence in themselves, empowering them to tap into their full potential for creativity, and live a more fulfilled life.
My host family in Hong Kong was my source of inspiration. In the faithful Christian family of three, both parents had lost their jobs as office administrators in 2018. Feeling the pinch after a period of desperate job search, their only child, Alan, had to forgo an opportunity to go to a top-tier private high school, enrolling in a sponsored community school instead. The lack of job opportunities and career prospects facing both parents frustrated the family. They intuitively shifted the blame to mainland Chinese workers who were portrayed by the local media as having taken away their jobs by accepting lower wages. This led them to join the protests to champion Hong Kong’s independence. These tensions eventually even undermined my relationship with them, given my mainland Chinese background.
This experience with my host family is not an isolated case. The rhetoric of blaming immigrants for local unemployment is indeed age-old and is seeing a resurgence in the U.S. and across the world. What’s interesting is that while many are struggling to find jobs, recruiters are struggling to hire people with the right skills and mindsets. After interviewing more than fifty recruiters and social workers, we found out that onerous community outreach and the lack of tailor-made upskilling programs have been the common problems facing the companies and low-income persons. When I first realized the system’s broken chains, I became extremely passionate about aligning my determination for poverty alleviation with solutions to fill this market gap, hence the creation of Necessiti. In two years’ time, my team has helped more than eighty young adults to build coding and design skills. Some started promising careers and some even created their own businesses. While the early success brought me speaking opportunities followed by noticeable public influence in Hong Kong, it urged me to scrutinize my assumptions and be more grounded in proven methodologies.
Rethinking “Development”
Through the experiences thus far with the MDP, my commitment to creating social mobility for financially underprivileged individuals is unwavering, but my roadmap to achieve it has changed (see appendix 1). Although I am still far from getting an absolute answer to “What is Development”, I found that frameworks such as system thinking are exceptionally useful for situating my actions in various scenarios and the long path to change.
By identifying, connecting, and layering the stakeholders and issues, I’ve learned that not even the most disruptive technology could create an expansive change. Namely, no single event can tackle all the approximate causes that contribute to poverty or economic immobility, not to mention address its root causes. As a change agent, to move the needle on social mobility while being conscious about the potential externalities that can result from my actions, I learned the importance of viewing the issue systemically, in as much detail as possible. For example, while my original upskilling platform idea might help close the skill gap caused by outdated-school programs, it would not address the lack of interest among the teaching staff in integrating industrial knowledge and skills into curriculums. Also, even if Necessiti works with the government’s upskilling agencies, their resources may be ill-targeted due to poor program design or a lack of political will for supporting the target population.
Meanwhile, the existing social programs and organizations make up a spectrum of change agents with varying work priorities. Some focus on alleviating adverse phenomena (i.e., social security for low-wage workers). Some work towards making a course-altering intervention in the course of the vicious cycle (i.e., skill training provision), and others strive to address the root causes (i.e., political advocacy). Pinpointing the critical partners to work with could save me tremendous energy and help Necessiti creates a compounding effect.
The socio-political system that created economic immobility, by the nature of its complexity and interconnectivity, takes system thinking and strategic planning to change. That is, while every individual action has a limited impact, a chain of actions in line with a sound theory of change is more likely to lead to a tangible “Development.”
Redefining “Development”
By this point, I realized that there is no single path or common understanding of “Development” simply because every development issue has its solar system of interrelated and interactable chemicals. So I thought of creating a makeshift definition to direct my actions. Going beyond the economic mobility issues, I came to embrace a more complex idea of “Development”: a regenerative process that aims to improve social, economic, and environmental well-being at the system level (see appendix 2). Let me break it down.
Above all, our learning about Development is an empirical process. Take the economic growth theory Since the 1950s, the neoclassical growth model dominated the discussion of economic development until economists in the post-Washington Consensus period profoundly challenged its applicability. Two decades later, comparing the varying levels of economic development in the 1990s and 2000s, some economists argued that good governance is the center of any sustainable development, and its absence explains “why nations fail.” Because our human experience accumulates and our epistemology is constantly evolving, there were no “good theories” and “bad theories,” but only “validated theories” and “invalidated theories.”
Under the guidance of these evolving theories, development practices are regenerative. Professor deJanvry delineated the change of focus for foreign assistance from the GDP growth and job creation in the 50s-60s to poverty reduction in the 70s and macro-adjustment in the 80s. More recently, evaluation of the previous aid programs challenged the aid effectiveness, leading the donor agencies to be increasingly results-driven. This regeneration process of “how could aid be more useful” certainly reflects the debate of development theories, but it has also become more responsive to direct feedback through measurements of social, economic, and environmental performance. Among other things, the cumulative datasets and new data collection technologies played major roles in making this development feedback loop more accessible.
Next, “Development” factors in the improvement of social, economic, and environmental conditions. Creating a sustainable social community necessitates a continued investment in human capital, and is intimately intertwined with the economy’s financial sustainability. At the same time, the threat of climate change could put human society at risk if social and economic development continues to neglect its impact on the environment. At the micro-level, if the government is determined to fund more upskilling programs, it is crucial to measure the programs’ cost-effectiveness. Why? Because the funding could have been used for environmental protection or providing micro-loans to small businesses to generate economic growth, to name a few. Balancing three aspects entails a constant trade-off and resource optimization to achieve maximal accumulative well-being.
Finally, “Development” becomes sustainable when it reaches the system level. The social-economic-environmental system is inherently complex due to interconnected stakeholders and their power dynamics, time-varying factors, and more. Because of these characteristics, a successful development program could be a flash in the pan if it is detached from the larger system. The failures in agricultural technology adoption following the Green revolution is a vivid example. At the time, new harvesting technologies such as this stripper gatherer harvester (see the image on the right) received lots of applause at first. Yet, it turned out that the heavy machinery was difficult to operate on the muddy fields, and despite the low price, the farmers were unwilling to invest in new technologies due to the lack of land insurance and the additional switching cost from cheap harvesting labor.
Conversely, finding the multipliers through identifying the stakeholder and casual relationships could build a small success into a large movement. Suppose my endeavor was able to allow thousands of workers to upskill and break into technology corporations — the momentum will have to touch the root causes substantially to shift the equilibrium. That is, for example, when the platform’s model receives enough public attention where it can persuade government officials and lawmakers to embed the best practices into its social programs and policies. In the case of social ventures, “Development” sometimes means to use private interventions as experiments in innovation that can later be scaled up by governments and other large players with the capacity to make a systems-level change.
Contrasting my initial belief that there is a consensual definition of “Development,” I realized that it is highly personal and especially humbling. As changemakers, we might fall in love with the problems we are solving and get wayward about producing the results. Personally, I was prone to jump to solutions when I see something that’s broken. Ray Dalio used the example of Nature Selection to illustrate that “the reality is optimizing for the whole — not for you.” In the same spirit, the multifaceted optimization problem in “Development” urges changemakers to stay dispassionate in our passionate pursuit, and view our effort as a reiterative process leading to a sustained better future through proven theories of change.
Appendix 1 Issue map of “skill gap-led poverty and inequality”
Appendix 2 Mind map of the key characteristics of “Development”