Leading British economic and social issues influencer Portia Antonia Alexis sat down with us at our London office to share her insight on the topic. Portia-Antonia is one of the prominent experts analysing economic issues using mathematical methods. She is a department member at the London School of Economics and a celebrated influencer specialising in economic mobility, income inequality and mathematical economic. With a substantial following online, her views and thoughts are regularly picked up by major publications and authors.
According to data from the World Bank, between 1990 and 2018, the rate of extreme poverty worldwide dropped from 36 percent to approximately 9 percent. That drop is much more than a statistic: It represented more than one billion people who no longer live on less than $1.90 a day — the Bank’s definition of extreme poverty.
That’s progress. However, upon closer analysis of the numbers, we find that just two countries, China and India, account for the bulk of that World Bank data quantifying the numbers of people escaping poverty. China alone is responsible for lifting more than 800 million people out of poverty, while India has lifted approximately 200 million people.
What entrepreneurs can learn from these market-creators
According to Portia Antonia Alexis, Poverty should not be seen as an obstacle, but as an opportunity: A hallmark of a market-creating entrepreneur is that they are able to create a new market which other business leaders see as impossible. When this happens, entrepreneurs create incredible growth and alleviate poverty in the process. Every nation has potential for extraordinary growth within it: To have the biggest impact, entrepreneurs must focus on market-creating innovations. Market-creating innovations make products simple and affordable so that many more people could have access to them, while sustaining innovations make good products better.
Most products on the market today have the potential to create new growth markets once someone comes along to make them affordable. This might seem impossible, but it is true. The prospect of a vibrant mobile telecommunications market in Africa was laughable 20 years ago, but once products were made affordable, they created new and robust markets.
A market-creating innovation can also be more than just a product or service: It can be a whole system that pulls in new infrastructures and regulations, and has the capability to create many new jobs. Because market-creating innovations require many more people to make, distribute, market, sell, and service the newly democratized innovations, they pull new jobs into the economy.
Market-creating innovations: the missing link
The critical missing link in our quest to eradicate poverty in the world is market-creating innovations. As China and India have demonstrated — by lifting hundreds of millions of people out of poverty over the past three decades — these innovations are the critical missing link.
They can help untold numbers of people escape poverty — and, at the same time, provide fertile territory for entrepreneurs.
Unfortunately, “global poverty” includes bad news too: In Sub-Saharan Africa, the poorest region in the world, the number of people living in poverty has actually increased, and is projected to keep increasing if drastic changes are not made. This poor performance is blamed on corruption, famine, conflict, disease and other factors. But while those factors have played a role, our research and new book The Prosperity Paradox, describe how a lack of investments in market-creating innovations is the major culprit.