Finance Roll

This global economic recession is a blessing in disguise. This recession is an opportunity to re-structure the world economy.

Previously, products and services were geared to the "Have-Lots". 1/8th of the world's people (The "Have-Lots") consume and control 7/8ths of the world resources leaving 7/8ths of the world's people (The "Have Nots") only 1/8th of the world's resources.

Soon, the economy will be directed to all of humanity. India is taking the lead by designing products for its lower middle class. In 2010, Tata Motors rolled out its Nano car that sold for only $2,500! The Indian government asked its IT engineers to come up with an inexpensive laptop. HCL Infosystems developed a PC that sells for $225.

The internet has transformed society. Much like the invention of Gutenberg's printing press, the internet has transformed society. As world citizens, we are all looking at much the same thing online. Desires have been whetted desires: everyone wants a Nano, an iPhone and a iPod!

Passionately want to end poverty
Not only do the poor of the world want a "piece of the pie" but the generation in college now passionately wants to help the world's poor get out of poverty.

When Muhammad Yunus got the Nobel Peace Prize in 2006 for advancing micro-finance, there was a stampede of young people headed into micro-finance to "bank on the poor".

Initially, I tried to direct traffic from my role as an international career counselor. "There aren't many jobs in micro-finance; it is more a movement than an employer." But seeing the passion of so many, I predict that his upcoming generation will end world poverty in your lifetime.

We will see the end of economic colonialism. Like the fall of apartheid (the institutionalization of racism in South Africa), I predict that we will see the end of economic colonialism. Additionally, it will no longer be in anyone's self interest to strip resources; as it is not in sync with a growing environmental consciousness.

It is in a business' self-interest to empower those who are currently poor. To empower the poor makes new customers and new markets.

Tongue in Cheek
Lily Tomlin said it well in The Search for Signs of Intelligent Life in the Universe. When Lily was in character as Trudy, the crazy lady, she was consultant to Nabisco crackers:

"I said, "Mr. Nabisco, sir! You could be the first to sell the concept of munching to the Third World. We got an untapped market here! These countries got millions and millions of people don't even know where their next meal is coming from. So the idea of eatin' between meals is somethin' just never occurred to 'em!"

Necessity is the Mother of Invention
This economic recession will spawn new companies with a new ethos. Historically recessions give birth to new companies and start-ups. If there are not jobs to be had, then people invent them. What is the secret to success? Founders identify new market needs and then fill that need.

Examples of now world wide corporations that launched during recessions:
The Hyatt hotel chain and Burger King both grew out of the economic slump in 1954-7. The economic recession associated with the international "oil crisis" in 1973 spawned the legal research service, Lexis Nexis, and FedEx. MTV was launched in the economic slump of 1981.

General Electric was established in 1876 in the middle of a six year recession by Thomas Edison, the inventor of the incandescent light bulb. GE is now the third largest company in the world.

Hewlett Packard was launched at the end of the Great Depression. HP now provides much of the hardware to the ICT boom and operates in nearly every country in the world.

What are the Kind of Companies that People are Inventing? Where Will Jobs Be in the Near Future?

Spin-offs of Micro-finance
Many people first heard about microfinance after Muhammad Yunus received the Nobel Peace Prize in 2006. Yunus' Grameen Bank in Bangladesh which proved to the world that the poor are a good credit risk has generated many applications of micro-credit.

One spin-off is the Village Phone program through which women entrepreneurs can start a business providing wireless payphone service in rural areas of Bangladesh. Additionally, Grameen Energy is making it possible for once-poor villagers to afford electrical power.

Micro-insurance is a new field that aims to provide medical insurance and insurance against crop failures to the poor. Micro-insurance is growing from the ground up and the top down. Allianz, a global insurance company, now sells micro-insurance to the poor in Indonesia, recognizing that they will then have loyal customers when the poor become middle class.

Social Enterprises
There are additionally ways that the economically disenfranchised are becoming empowered.
There is an emphasis shift from "hand-outs" to "hand-ups." (The allure of micro-finance to many people is that it is not a hand-out but a hand-up.) Social enterprises are gaining prominence.

What is a social enterprise? Social enterprises marry a social mission with a profit enterprise. Rather than get money from a foundation or donor for humanitarian work, a "hand out", a social enterprise employs people in local enterprises. Good examples of social enterprises are the private, for-profit companies that marry microfinance (or finance) and clean energy, e.g. "E+Co" which makes clean energy investments in developing countries.

A social enterprise that is gaining world attention is The World Toilet Organization (!?). If you have ever been to parts of Indonesia or India that are dotted with human feces, then you know the urgent need that WTO is addressing.

Jack Sim of Singapore, spurred by the sanitation crisis throughout much of Asia and the accompanying cholera, dysentery and infant diarrhea, has launched a for-profit enterprise that aims to get toilets where there are none. Jack contends that the most viable way to spread the word and the toilet is to have villagers sell and install toilets. Thus more and more for-profits have humanitarian goals.

Humanitarian
I may be biased because I spend so much of my time talking with people interested in doing international humanitarian work. But from my perch, there is growing interest in international humanitarian work.

This fascination with humanitarian work, with helping the disenfranchised, is creating new jobs. The non-profit sector is growing three times as fast as the business sector in North America.

Empowering the Poor: the Poor will be in Power
Most international humanitarian organizations have a mandate to do "capacity building." That is to build the skills of the beneficiaries so that they can eventually take over. When people ask me about getting a job in international development, I say "It is very competitive. All the capacity building has borne fruit. People in the Philippines, Nepal, Brazil, Indonesia...you name it...have gotten good experience in these international NGO's. (non-government organizations.) So now you compete with people from all over the world."

All of the capacity building has truly empowered the poor, like it was intended to do, though not on the scale that was hoped. They now are not just beneficiaries but the staff of micro-finance, social enterprise and humanitarian organizations.

What will that mean for your job prospects? It means that applying to existing humanitarian jobs is and will be very competitive. But not to worry if you are creative and passionate: invent a new enterprise that addresses the veer-changing needs in how we truly help the world's people.

Summary
Like the stampede of people headed into micro-finance and finance to help the world's poor, new opportunities are being and will be created in humanitarian work. Like business start-ups that are created in recessions, I predict that we will see more social enterprises and humanitarian start-ups that emerge to meet the ever-changing challenges of our time.