Tuesday, June 29, 2010

What if development were an iPhone?

In my last post, I argued that the "operating system" used by the current international aid agencies is still in the dark ages.  I compared it to the punch cards we used when I first went to college.  We had to type our programs into a stack of hundreds of punch cards, walk them down to the computer center, hand them to an "operator," and wait in line for them to be processed.  The lower you were in seniority, the longer you had to wait.

Contrast that with today, when hundreds of millions of people have their own desktop (or laptop) computers, and several billion people have access to cell phones, which are beginning to emulate computers in many ways.  The advent of the iPhone and Android platforms also provide a way for hundreds of thousands of individuals or small companies to create and distribute new software.  That software may or may not succeed in the marketplace, but at least it has a chance of being downloaded and used, and there is a mechanism whereby the most popular new applications get flagged to other users.

So what would an analogous distributed operating system look like for the aid business?  The design of any such operating system has to address five questions:
  1. Who is eligible to suggest what problems should be addressed?
  2. Who is able to suggest the best solutions to those problems?
  3. Who can fund those solutions?
  4. Who can compete to implement those solutions?
  5. Who is able to give feedback on how well the solutions work?
The existing system is closed.  It assumes that most of these questions will be answered within one of the "mainframe" organizations such as the World Bank, ADB, UNDP and bilateral agencies.  It even holds true for some large NGOs.  In each case, the organization tries to hire the best experts it can find to answer these questions.

A new aid system - a decentralized and distributed system - is now possible.  The expertise, resources, and technology all exist.  Unlike sixty years ago, large numbers of people (and not only experts) have relevant experience for the challenges faced by developing countries.  For example, the Peace Corps alone has over 250,000 alumni, but only the relatively few who work in aid agencies or large NGOs are able to contribute the expertise and knowledge they have.  And regular Americans alone give over $250 billion away each year to charitable causes - of which about 10% or $25 billion goes overseas - about the same amount as the US aid budget.  And the emergence of the PC, internet, cellphones, and related technology now make it possible to connect all of these people and resources directly to the people who need help.  If the existing agencies that run closed systems don't adapt, they will quickly become as irrelevant as the old IBM mainframes we used to use.

GlobalGiving shows that a distributed aid operating system can work.  We allow any qualified group in the world to post a project, and anyone (individual, company, foundation, or even aid agency) to fund it directly.  Projects have to post updates quarterly, and funders are allowed to ask questions and make comments.  We also allow other interested parties to visit and comment on the projects.  Most recently, we have begun to pilot ways of getting feedback directly from the beneficiaries via text messaging and even storytelling (thanks to support from the Rockefeller Foundation). Based on all this feedback, the projects that seem to be making the most difference get displayed higher on our search listings, which generally results in more funding - allowing the cream to rise to the top. 

The results have been that 2,700 projects in 110 countries have been funded over the past few years. Over 108,000 individual donors, combined with many leading foundations and companies around the world, have provided $30 million to these projects.  And many of these projects provide impact at a fifth of the cost of official aid projects (for example, irrigating land), while others pilot dramatic new ways to address such challenges as de-mining and tuberculosis, for example by training rats.

But that is only the proof of concept - and the tip of the iceberg.  In my next post, I will talk about why we keep innovating so fast at GlobalGiving, and how the GlobalGiving "operating system" could be adopted by the official aid sector, so that billions of dollars flow to the best projects in the most efficient way.

Wednesday, June 23, 2010

A New Operating System for Aid

Is it time for a new operating system?
DOS Operating System, circa 1982

That was the question I posed at a conference in Sydney last week hosted by the Lowy Institute and AusAID (Australia's foreign aid agency).  The topic of the conference was how AusAID might catalyze the innovation needed to create much greater results with their aid programs in developing countries.  The Australian government has pledged to double its foreign aid budget in the coming years, and AusAID wants to make sure it is well spent.

I began my presentation by talking about innovation in others fields, such as the computer industry.  I first showed a picture of a punch card, which was the way we put information into the (mainframe) computer when I went to college in the late 1970s.  I then showed how, over the next thirty years, competition led to rapid innovation.  Many people recall what a huge leap forward the DOS operating system was in the early 1980s, since it allowed people to use PCs on their own desktops.  Roughly ten years later, Microsoft released the Windows operating systems, which provided a graphical interface - another big advance.

All along, Apple had been selling its own graphical interface, but it struggled to avoid bankruptcy.  Once Apple released its beautiful Mac OSX operating system, however, it rapidly gained market share, forcing Microsoft to develop (after several failures), a powerful new release of its Windows system.  At the same time, Apple released the iPhone, a real game changer, especially when combined with Apple's App Store, which provided a distribution platform for hundreds of thousands of small, independent developers to release software applications.  As a result of its competitive success, Apple's market value overtook that of Microsoft in May 2010, and Apple recently released the iPad, which some people think could revolutionize the industry again.
iPad, 2010

The competition between Microsoft and Apple was based on what the customer wanted and liked.  Both companies experimented with many products, some of which failed and some of which succeeded.  They got rid (mostly) of the failed products and continually and incrementally enhanced the successful ones.  Every once in a while (as with the graphical interface and of the iPhone), they made giant leaps.

Contrast this with the aid industry, which, ironically, is managed in a centrally planned way even as it promotes market-based solutions to developing countries.  The big aid agencies get very little feedback from the ultimate beneficiaries - the people they are trying to help.   There has even been a recent trend around "partnerships and collaboration," whereby agencies agree to divide up their business and not compete.  For example, the World Bank might agree to concentrate on telecoms in a set of countries, while the ADB handles health.  This further insulates them from competition.  The result has been little innovation over the past decades.

In my talk, I asked "What operating system is the aid industry using right now?"  My answer was that, over the past sixty years, it may have not have progressed much beyond punch cards.  Even though there have been improvements to the various processes, the aid business is still based largely on a "mainframe" model, with a small number of mainframes such as the World Bank, ADB, UN, and bilaterals such as USAID, MCC, DfiD, and AusAID dominating the market.  What will it take to move toward a distributed "desktop" model of aid, and to stimulate the parallel creation of the DOS, Windows, Mac OSX, and even iPhone operating systems?

In my next post, I will talk about how GlobalGiving shows the possibilities of a distributed operating system for aid, and how pressure from our own competitors forces us to get better and better.
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Friday, June 04, 2010

The UK's new Transparency Guarantee

The UK Government is introducing a new ‘Aid Transparency Guarantee’, which will make our aid fully transparent to citizens in both the UK and recipient countries.

Aid transparency is critical to improving the effectiveness and value for money of aid. Making information about aid spending easier to access, use and understand means that UK taxpayers and citizens in poor countries can more easily hold DFID and recipient governments to account for using aid money wisely. Transparency creates better feedback from beneficiaries to donors and taxpayers, and helps us better understand what works and what doesn’t. It also helps reduce waste and the opportunities for fraud and corruption.
That is from a recent press release by DFID, the UK's aid agency.  Very impressive.  What I like about it is that they are publicly holding themselves accountable to do things (such as beneficiary feedback) that are not yet done at any scale - which means they will have to invent it.  (We are piloting beneficiary feedback at GlobalGiving and are excited about the possibilities.)