I recently had the distinct honor of being on the opening plenary of the 2012 Skoll World Forum in Oxford. The panel, “Innovation in Times of Flux: Opportunities on the Heels of Crisis” was moderated by Judith Rodin, CEO of the Rockefeller Foundation. I’ve spent the past six years creating linkages between the humanitarian space and technology community, so the conversations we began during the panel prompted me to think more deeply about innovation in the humanitarian space. Clearly, humanitarian crises have catalyzed a number of important innovations in recent years. At the same time, however, these crises extend the cracks that ultimately reveal the inadequacies of existing humanita-rian organizations, particularly those resistant to change; and “any organization that is not changing is a battle-field monument” (While 1992).
These cracks, or gaps, are increasingly filled by disaster-affected communities themselves thanks in part to the rapid commercialization of communication technology. Question is: will the multi-billion dollar humanitarian industry change rapidly enough to avoid being left in the dustbin of history?
Crises often reveal that “existing routines are inadequate or even counter-productive [since] response will necessarily operate beyond the boundary of planned and resourced capabilities” (Leonard and Howitt 2007). More formally, “the ‘symmetry-breaking’ effects of disasters undermine linearly designed and centralized administrative activities” (Corbacioglu 2006). This may explain why “increasing attention is now paid to the capacity of disaster-affected communities to ‘bounce back’ or to recover with little or no external assistance following a disaster” (Manyena 2006).
Co.Exist: As you point out in your book, modern humanity has arrived at the first phase of an unprecedented “innovation revolution,” yet many are being left behind. Why is that and what are we gonna do about it?
Vijay Vaitheeswaran: First, I think it’s a wonderful time to be alive. Shockingly, this might be the best time to be in the bottom billion because of transformations like mobile telephony and micro-credit. But it’s getting much harder to be in the middle class in places like America. The principal reason for this, I think, is that educational systems are increasingly out of touch with the needs of the ideas economy. The current education system that our and other countries developed was suited to the industrial revolution, a one-size-fits-all model for education that treats people as commodities. But we’re in an innovation age where creativity, individual initiative, willingness to think out of the box and disrupt established business or even lifestyle patterns is much more important than simple manual tasks that produce the next widget. So I think the great challenge for developed economies like the U.S. is to reinvent education. The challenge for each one of us is to keep relearning how to learn.
Not many people think of shantytowns, illegal street vendors, and unlicensed roadside hawkers as major economic players. But according to journalist Robert Neuwirth, that’s exactly what they’ve become. In his new book, Stealth of Nations: The Global Rise of the Informal Economy, Neuwirth points out that small, illegal, off-the-books businesses collectively account for trillions of dollars in commerce and employ fully half the world’s workers.
Further, he says, these enterprises are critical sources of entrepreneurialism, innovation, and self-reliance. And the globe’s gray and black markets have grown during the international recession, adding jobs, increasing sales, and improving the lives of hundreds of millions. It’s time, Neuwirth says, for the developed world to wake up to what those who are working in the shadows of globalization have to offer. We asked him how these tiny enterprises got to be such big business.
Wired: You refer to the untaxed, unlicensed, and unregulated economies of the world as System D. What does that mean?
Robert Neuwirth:There’s a French word for someone who’s self-reliant or ingenious: débrouillard. This got sort of mutated in the postcolonial areas of Africa and the Caribbean to refer to the street economy, which is called l’économie de la débrouillardise—the self-reliance economy, or the DIY economy, if you will. I decided to use this term myself—shortening it to System D—because it’s a less pejorative way of referring to what has traditionally been called the informal economy or black market or even underground economy. I’m basically using the term to refer to all the economic activity that flies under the radar of government. So, unregistered, unregulated, untaxed, but not outright criminal—I don’t include gun-running, drugs, human trafficking, or things like that.
Wired: Certainly the people who make their living from illegal street stalls don’t see themselves as criminals.
Neuwirth: Not at all. They see themselves as supporting their family, hiring people, and putting their relatives through school—all without any help from the government or aid networks.
Wired: The sheer scale of System D is mind-blowing.
Neuwirth: Yeah. If you think of System D as having a collective GDP, it would be on the order of $10 trillion a year. That’s a very rough calculation, which is almost certainly on the low side. If System D were a country, it would have the second-largest economy on earth, after the United States.
Phi Beta Iota: System D is completely separate from straight forward black crime (organized crime) or white crime (Goldman Sachs et al). What this really means is that governments have lost all legitimacy and two thirds of the global economy now considers governments to be at best a meddling (and costly) nuisance and at worst the enemy to be defeated by any means necessary. Governments brought this on themselves.