Dr Janamitra Devan, World Bank vice president for finance and private sector development. (DST)
Innovation directly implicated social development because it was a fundamental variable that impacted competitiveness, said Janamitra Devan, World Bank vice president for finance and private sector development.
He said that the success of new ideas would be crucial in renewing job growth globally and promoting inclusive growth and shared prosperity, which were especially high priorities for countries where inequality is a major concern.
Devan said the forum was showcasing the top 50 entrepeneuers who had come up with creative ideas, and highlighted the innovative product of South African startup Khaya Power.
"In many rural areas of South Africa, people are 'off grid' and do not have access to electricity. Khaya Power has come up with a technology solution that enables individuals in these areas to plug into a portable power station and light source that runs off a solar-powered battery.
"This is an example of a technology that allows you to leapfrog even though you don't have a permanent energy solution; you are tapping into renewable energy and passing it on to people who would not have it otherwise.
"We're seeing similar products being developed the world over. You don't need to wait for a Silicon Valley to develop for the bottom of pyramid, it needs to come from local entrepreneurs who can bring local knowledge to bear."
Encouraging the youth to be innovative
The World Bank had a mandate to promote long-term economic development and poverty reduction through providing technical and financial support to countries, reforming particular sectors or implementing specific projects such as water and electricity provision, fighting disease, building schools and health centres, he said.
Of particular concern to the World Bank was how unemployment affected specific segments. Devan stated that unemployment globally affected specific groups such as young people and women, which is why it was important to encourage young entrepeneurs to excel in innovative products.
The youth, he said, had the closest connection to technology and were savvy enough to come up with various ideas.
But challenges in women participation were still ongoing, from India to Africa, and more innovative ways and interactions between governments and the private sector were needed to come up with innovative solutions.
He said that it was through forums such as the one where he was speaking that the World Bank (through infoDev) fostered innovation on a global level.
"We have learnt through the years that we need to take a structured approach. Innovation can't take place in complete chaos. It needs some chaos, but at the same time we know innovation takes place in ecosystems, clusters of industry where the language of the private sector is the common one spoken.
"For example, in the horticulture cluster, or electronics cluster, or footwear cluster, where they all speak the same language and understand the same market.
"When you put likeminded people together to solve problems you get significant boosts in the innovation cycle. And you have to have those boosts, and you have to have an education system conducive to creating a creative economy," he said.
Proper infrastructure
South Africa's challenge with education was that it had to become more conducive to innovation. He said the bank looked at the challenge as a multifaceted one and for a nation to be innovative, there had to be enabling infrastructure available to people.
"We believe innovation takes place when there is critical mass, and you have an enclave of likeminded individuals exploring, testing ideas, with protective umbrellas that enable them to take risks. I don't believe you can mandate creativity or innovation. There needs to be a culture of innovation that accepts failure as a rite of passage.
"Edison failed 1 000 times before the bulb was invented — he said it was necessary that he went through that process. In most cultures and societies failure is not tolerated, it's frowned upon. How does the leadership of South Africa begin encouraging people to fail?
"We don't want everyone to fail but we want people to recognise that through failure comes success and institutions that support this need to support entrepreneurs who take the risk. That's a critical dimension.
"Beyond that," he said, "I don't think there is a single model you can point to and say 'everyone should follow that'. Where the bank has been incredibly helpful is that we've been able to show good practices, not best practices, but good examples of what's worked and then it's up to the leadership in public and private sectors."
About the World Bank
The World Bank was formed in 1944 as the International Bank for Reconstruction and Development and tasked with post-war reconstruction and development. It is one of the Bretton Woods institutions (the other is the IMF), named for the town in New Hampshire where 43 nations met to set them up.
The World Bank consists of five organisations:
• The International Bank for Reconstruction and Development, which lends to governments of middle-income and credit-worth low-income countries.
• The International Development Association, which provides interest-free loans and grants to governments of the poorest countries.
• The International Finance Corporation is focussed exclusively on the private sector and helps countries to achieve sustainable growth through financing investment, mobilising capital in international financial markets and providing advisory services to business and government.
• The Multilateral Investment Guarantee Agency promotes foreign direct investment into developing countries to support economic growth, reduce poverty and improve people's lives. It does this by offering political risk insurance to investors and lenders.
• The International Centre for Settlement of Investment Disputes, provides international facilities for conciliation and arbitration of investment disputes.
www.worldbank.org