Leading startups in developing countries

This is the third and final article on startups in developing countries based on the book The Business of Changing the World by Raj Kumar. To get the greatest results from aid contributions, I'll look at some special developing country obstacles and how entrepreneurs and organizational leaders can address them, particularly in healthcare and education in developing countries. I'll conclude with Kumar's suggestions for the future in this field and review the earlier parts on developing world startups.

Obstacles in developing countries

Leaders of startups in developing countries have challenges. Countries, companies and special interest groups sometimes do not want their problems exposed. But, by leaders exposing them, solutions can be studied. One organization is working on this exposure and could help startup leaders. It is Publish What We Fund. They want to make aid information transparent and used for effective leadership decision-making, accountability confirmation and lasting local benefit results.

Global health challenges

Some investments specialize in one area, for example, health only. Partners for Health collaborates with national governments to provide care and strengthen public health systems. Healthcare services can be provided based on results only, not looking at it either as a profitable business model or strictly philanthropy. 

If healthcare and pharmaceutical companies look at the developing world as both a rewarding and profitable business model, the leaders in those companies will help expand their customer base on products and services already developed and provided in more advanced nations. On top of that, those corporations could be supported by governments, insurance companies and aid agencies to further market to the poor.

On top of that, in the future, for healthcare services and pharmaceuticals, there are estimated to be twenty billion to thirty billion devices connected to the internet, which will drive down the cost of a wide range of healthcare services, as highly specialized people will not be needed in every location. The devices themselves will offer the expertise required locally. Combine these devices with machine learning and data analytics, then there will be massive advancement in developing countries. Startup leaders could be the promoters of this communication technology. 

Global education challenges

Startup companies now can provide education in developing countries. For example, Nuru International does just that as a nonprofit. It works in mostly Sub-Saharan Africa and provides educational subjects and skills that communities can quickly use, for example farming techniques. They form cooperatives that provide loans, crop selection expertise and potential markets for their produce. They do this by working alongside communities and resourceful local people, educating them and working together to come up with the ideal solution for their situation. That way, the solution is owned at the local level and produces long-term results. 

For complex issues like general education, the solutions have to come from communities, and the subject matter taught must match the skills they need directly. To come up with those subjects, Teach for All is offering support. They develop local leaders and turn them into teachers which will promote their community. Teach for All first taps into industrious college graduates and persuades them to offer teacher training in developing countries under a two-year program. 

Additionally, in the weakest education system in the world, Bridge International Academies is trying to standardize education to make it as efficient as possible by offering the most effective curricula. Where local governments have failed, Bridge promotes to parents, as direct parents know the importance of child education. They have over 500 schools in Kenya, Uganda, Nigeria, India and Liberia. Their success is based on three factors, 

1. There is a standardized, effective system. 
2. Habits and behavior science determine the best teaching method.
3. The programs are human-centered and developed locally.

Looking at the future, virtual learning, gamification and social entrepreneur development will start to disrupt the current developing world educational systems.

Aid in a corrupt environment

In many corrupt environments, aid is simply refused, and people continue to suffer. According to Kumar, if detailed pay for performance programs are in place, the negative impact of corruption can be reduced. Best is working with good governments, but there are cases when a business model has to work around bad governments for the greater good of those communities.

The Millennium Challenge Corporation (MCC) tries to determine which governments are good and which are not, by scoring countries that may be the recipients of funds for infrastructure projects. Their scoring is on a country's record in their governments fighting corruption, local government investments in health and governments providing the overall education to their people.

The World Bank, when providing aid, often works with MCC to determine aid as well as using its own Human Capital Index. On top of that, the International Aid Transparency Initiative is used. 

Kumar's overall recommendations

To reduce extreme poverty to zero, having project data, having project accountability and having transparent information regarding results are needed. To achieve that, here are some considerations Kumar recommends exploring:

Kumar's open source aid proposal must be broadly executed on by dedicated leaders. They should gather and present more real-time data on a regularly updated dashboard for all to see. Here are examples. Present data that shows malaria case reduction, mobile phone use in rural areas, educational improvement, drinking water availability and sanitation systems in operation. Organizations like Premise can gather the data on these goals for better decision-making. With Premise's data gathering technology and with its people on the ground around the world gathering data, taking photos, gathering retail prices, and offering commentary on specific conditions make decision-making easier. Interestingly, currently, their information is used by the World Bank, Gates Foundation and USAID just to name a few. On top of that, as drones, sensors, and satellites get cheaper and more powerful, they will also play a role in local data gathering. With these resources, leaders should present that data to donors, so they will demand this level of transparency. 

Billionaires must be more involved. Those mega-wealthy that aren't giving today should be called out or taxed because of their lack of giving. Their funding must rise substantially to their total net worth, and their level of philanthropy must be made transparent in both dollar amounts and, most importantly, the degree of local improvements achieved. Funds that are just given away are discouraged. Funding impact must be rated and ranked on their results, including failures called out and worked on. Leaders must promote this transparency.

Governments have to move closer to users to observe results. There has to be more data driven pay-for-performance initiatives attached to grants, impact investments and finance projects, thus moving away from the current grant and contract arrangements. Leaders have to encourage governments to study, design, test and discover ideal solutions that deliver the greatest benefits. To do that, they could be supported by the Copenhagen Consensus Center, Center for Global Development and the Overseas Development Institute. With that information, governments should invest in and hold accountable organizations to achieve the greatest good. 

At the corporate and social enterprise startup level, foreign direct investment, with its massive size when compared to official aid, must have greater transparency and risk reduction. This private sector has a major role to play in the least developed countries of the world. Consulting organizations, like Accenture Development Partners (ADP), are working with NGOs, private foundations, public donor agencies and the private sector to create and measure social impact. The creator of (ADP) has written a book on how to develop social entrepreneurs within corporations.

Leading startups in developing countries

Considering the above, it seems very clear that new business startups will be increasing in the months and years ahead. With the examples I gave, hopefully entrepreneurs and organizational leaders will jumpstart a wealth of startup concept ideas.