FSG is a nonprofit consulting firm specializing in strategy, evaluation, and research. The firm was founded in 2000 as Foundation Strategy Group by Harvard Business School Professor Michael E. Porter and Harvard Kennedy School Senior Fellow, Mark Kramer. Today, FSG works across sectors in every region of the world—partnering with corporations, foundations, nonprofits, and governments to develop more effective solutions to the world’s most challenging issues. FSG’s ideas are frequently published in journals such as Forbes, Harvard Business Review and Stanford Social Innovation Review.
This post originally appeared on FSG's social impact blog.
“More aid to developing countries” is probably not a bumper sticker you’ll see leading into next year’s elections. Bill Gates, who is not up for election, also refuses to make this overly simplistic message. Rather, in a compelling essay in advance of the G20 Summit, he makes a more sophisticated argument for the world (not just the US and Europe) to invest in smarter, shared aid.
Money is important but his message merits a read for its emphasis on the new set of development actors who bring relevant experience and ideas to the global table. Specifically, he outlines a new vision for development based on the following factors:
>New partnerships for innovation: It’s no surprise that Gates talks up investment in new “tools,” such as seeds or vaccines as investment in life-improving technologies is a focus of his foundation. Taking a step further, Gates eyes new partnerships among traditional donors, poorer countries, and the rapidly rising economies of China, Brazil, India, etc. to spur the next wave of innovation in development. For example, China’s “Green Super Rice” initiative is helping to develop new varieties of rice for 15 countries in Africa and South Asia.
> Domestic funding: While we tend to think that development is solely about money flowing from rich nations to poor ones, the biggest potential sources of aid are the lesser developing countries themselves. There has not yet been a wholesale shift but it is heartening to see African governments pledge 10 percent of their budgets on agriculture (eight governments have followed through thus far). Less promising is spending on health – only two African countries have followed through on a 2001 promise to dedicate 15 percent of their budgets on health. However, Gates is hopeful as Sub-Saharan GDP will double in the next ten years.
>Value for money: Conventional practice has evaluators from the developed world critiquing projects in developing countries. Gates spotlights Mexico’s new National Council for the Evaluation of Social Development Policy as a beacon for more localized measurement of development activities. He also suggests public private partnerships between G20 and developing countries to inspire more cost-benefit analyses of development initiatives.
>New forms of impact investing: To spur more investment in infrastructure, Gates recommends that emerging market countries set aside a small percentage of rapidly rising sovereign wealth funds for projects such as roads in developing countries. He also recommends that diaspora communities invest in bonds for developing country infrastructure.
My first taste of development was as a Peace Corps Volunteer in Sierra Leone in the late 1980s. At that time, we had the G7. Over the course of my life, agricultural productivity in developing countries has jumped dramatically and new vaccines have saved millions of lives. It’s amazing to think what an expanded list of countries, many of them with fresh learnings about their own development, can accomplish in the next 20 years.
By Kyle Peterson, FSG Managing Director (Kyle has more than 25 years' experience in international development work and has led many of FSG's global health and global development efforts across the areas of strategy, program design, operations, and evaluation).